What happens if you have given a donation to a public benefit organisation and then find it is using its resources to support a political party? Gift of the Givers, an aid organisation that operates in South Africa and internationally, has been criticised for providing goods such as blankets and food parcels worth more than R1 million for distribution by the ANC President, Jacob Zuma, during his election campaign in Mpumalanga. Mr Imtiaz Sooliman, founder and chairperson of the organisation, said there was nothing wrong and that they had done it before. Though most newspapers focused on the electoral code which points out that “no person may induce or reward any person … to vote or not to vote in any particular way”, journalists have not picked up on legislation relating to non-profit organisations, and whether they are permitted to support political parties.
If a non-profit organisation (NPO) is an approved public benefit organisation (PBO), it is required in terms of section 30 (3) (h) of the Income Tax Act to commit that it “has not and will not use its resources directly or indirectly to support, advance or oppose any political party”. The reason for this, as reflected by the SA Revenue Service (in its Tax Exemption Guide for Public Benefit Organisations in South Africa) is that: “The promotion of political objects is not considered to be for the public benefit and a PBO may, therefore, not use its resources directly or indirectly to support, advance or oppose any political party. A separate income tax exemption for registered political parties is provided for in section 10(1) (cE) of the Act.”
The NPO Act is silent on affiliations with political parties. However, the question arises whether NPOs (even those that are not public benefit organisations) should support political parties when those registered in terms of the NPO Act operate for a public purpose in contrast to political objectives.
For those individuals who have given donations to organisations for the public benefit, an alliance with a particular political party might clash with their own personal political views. However, it is incumbent on Sars to give clarity on this issue and to indicate if it plans to take any action against public benefit organisations that are involved with political parties. It would be interesting to know what action they will take, if any. It is possible that the thinking behind the Income Tax Act was that public benefit organisations (as civil society) might oppose the governing party rather than support it. However, the law should be applied both ways and it will be interesting to see if it is applied at all.
As a follow-up to the above, Idasa has published an interesting booklet titled Thinking it Through: Corporate Guide to Political Donations written by Lawson Naidoo and edited by Richard Calland and Judith February. Though this does not focus on individual philanthropists who support political organisations, there are some key issues that are raised, particularly those relating to corruption and the expectation that the “donor” will receive special attention after the party has won at the polls.
In South Africa, donations to political parties are somewhat unregulated and this can lead to scandal, corruption, conflict of interest and unethical behaviour. Examples include the Schabir Shaik case, Oilgate, the arms deal and Brett Kebble’s relationship with the ANC Youth League.
Political parties receive funds from the state based on their proportionality in Parliament. Pity the newcomer on the block, such as Cope, which starts the elections on the back foot compared to others that receive state funds (the ANC received the bulk) and often corporate funds. However, all rely on donations from their supporters, but as they are political, rather than public benefit, they have the power, if they become the governing party to assist their own supporters or harm the supporters of their opponents. Hence the request by many donors to opposition parties to remain anonymous.
For those who strongly believe in supporting their party of choice, here are some tips from the booklet:
It is important that South Africans support their political parties to ensure a thriving democracy and it is our duty to ensure that our party of choice is well-resourced. However, care needs to be taken to ensure that our giving does not degenerate into expectations of favours and corruption and that some form of regulation should be encouraged.
i am glad you brought up this issue. Gift of the Givers does excellent work (no doubt about this!) But this incident demonstrates how humanitarian work can be also so strategic. party wins votes and humanitarian organization wins access/favour in times of red tape and visibility in the public eye.
I am very shocked. I had never thought that any donation I gave to a charitable organisation would go anywhere near a political party. And yes, I have given to “Gift of the Givers” in the past, but most certainly won’t ever again, and I will be thinking very carefully about where I give my charity contributions in future.
People are desperate so I accept this sleight of hand tactics. This is Zim style electioneering. Furniture from Malema? Now that is suspect.
Maybe the sneered at “White Intelligentsia” will hark the call of Lindiwe. Whites are now ‘separate’ citizens it would seem. De ja vu Zim a few years ago.
The poor struggling masses will vote again for ANC and help us on the way to ZimSA. There is nothing we can do but watch in shock at how fast we went downhill. Opposition parties need to negotiate for the good of the country. A strong opposition is vital to curb the descent to dictatorship.
I hope in vain.
MMA looked at the use of donations for political parties and other dubious electioneering practices in their daily report from 10 March. http://www.mediamonitoringafrica.org/index.php/news/entry/election_coverage_10_march_2009_-_dubious_electioneering_by_anc/
I was very upset when I heard about this. The Gift of The Givers had had such a good reputation up till now.
Still they are a very new organisation. When they have been around as long as The Red Cross they will understand the importance of neutrality.
A very thought-provoking article. I think the South African population has institutionalised the blind spot of “ignoring sources of political party funding”. This will come back to bite us! Hence Dandala’s move for COPE to declare their funding as a positive one. However, there is absolutely no incentive for cash-strapped parties to reveal their funders as this will reduce the level of contributions!it is a difficult situation!
There has been a very naive approach to almost everything in the “new” South Africa on questions of vested interest of all kinds and philanthropy is no different to any previous time in history.One should be wise and avoid cunicuism and push for legislation to control. A transparent accountingb process for all political party sources of funding.
im given to understand thats why when they “help” or “support” political parties, you cant see it… they dress it up as civic education – and they dont ever endorse a party.
however when they operate fundraising units, those units are registered in terms of the tax-exemption for political parties.
i think the reason for this is that donations made to a political party are not always fully tax-deductable, whereas donations to educational, cultural, atheletic and religious NPOs are certainly tax-deductable up to 10% of your taxable income.
when i say “they” i mean npo’s who support political parties. the gift of the givers is a neutral and apolitical orgaqnisation which works with people and communities from all demographics – across political and religious lines. i object in the strongest terms to your insinuation that GOTG is somehow the tool of the ANC. I have no information that Allah Hu Akhbar has endorsed any of the mainstream partie – however it is clear that GOTG is a continuation of the work of the Prophet Muhammed (PBUH) – Inshallah may you find peace. Shukran.
Alan’s comment says it all.
He will not donate to The Gift of the Givers again, and will now think twice about all charities.
Let us all hope that The Gift of the Givers learn from their mistake.
http://www.politicsweb.co.za/politicsweb/view/politicsweb/en/page72308?oid=120766&sn=Marketingweb%20detail
” The almost R1 million per month is spent on close protection, static protection, overtime, vehicle and telephone costs. This is an extraordinary waste of taxpayers’ money, especially given that the South African Police Service is so chronically underfunded in many essential areas. Indeed, many millions of South Africans are besieged by crime, even while the president of the ANC – who is not, it should be noted, a public office-bearer – receives this kind of largesse. ”
Semantics.
Those with their hands out – desperate humanity – do not need this paltry sum paid out for protection.
Citizens protect themselves, what more do they expect for their tax money.
Besides it is ‘employment opportunities.’
Petty opposition is pointless.
Join forces.
FACT:
HE NEEDS GUARDS WHILE HE HANDS OUT LARGESSE.
He is in danger ! Criminals could hi-jack the operation.
He needs protection – finish and klaar.
I am certainly very disappointed in Gift of the Givers. I did not think there was a hidden agenda.
How naive I was.
Is there ANYONE that is not corrupt?? Is NOTHING to be done in a neutral way? Is EVERYTHING about politics and payback?
Have donated to Gift of the Givers (when they responded rapidly to the xenophobic attacks last year, and when the bravely headed up to Beitbridge to set up cholera clinics).
Their money-for-votes leaves me with a bad taste. End of donations from me to them.