South Africa’s non-profit sector is facing a major shake-up, as more than 6,000 non-profit organisations (NPOs) have already been deregistered for failing to comply with their legal reporting obligations. Under Section 18(1) of the Non-Profit Organisations Act, registered NPOs must submit annual reports, including financial statements and narrative reports, to maintain their registration status. However, a staggering 203,279 NPOs, voluntary associations, and trusts are now at risk of deregistration due to non-compliance.
Why Is This Happening?
The Department of Social Development (DSD), which oversees NPO registrations, has intensified its compliance enforcement efforts. Many organisations have neglected to submit their required reports, leading to administrative deregistration. While some may be inactive, others might simply be unaware of the strict reporting requirements.
The Impact of Deregistration
Losing NPO status has significant consequences, including:
- Loss of donor confidence – Many funders require proof of compliance before offering financial support.
- Tax-exempt status risks – Deregistered NPOs may lose tax benefits under Section 18A of the Income Tax Act.
- Legal and operational challenges – A deregistered organisation may struggle to sign contracts, open bank accounts, or operate effectively.
How to Avoid Deregistration
If your NPO is at risk, act now:
- Check your status on the Department of Social Development’s NPO database.
- Submit outstanding reports as soon as possible to avoid penalties or deregistration.
- Maintain ongoing compliance by ensuring annual reports are filed on time every year.
- Seek professional help if you’re unsure about your compliance obligations.
Stay Compliant, Stay Active
South Africa’s non-profit sector plays a vital role in addressing social issues, supporting communities, and driving change. Don’t let administrative lapses put your organisation at risk. Prioritise compliance and secure your NPO’s future today.
