What is a Non Profit Organisation (NPO)?
The Nonprofit Organisations Directorate was established in terms of the Nonprofit Organisations Act 71 of 1997 to essentially administer the Register of Nonprofit Organisations in South Africa.
The Register of Nonprofit Organisations (NPOs) is a voluntary registration facility that enhances the credibility of the registered NPO as it reports to a public office. The NPO Directorate, as a public office, holds information about registered NPOs for the public to access. This thus, increases the transparency and accountability of the organisation beyond its immediate role-plays. This accountability and transparency improves the governance of an organisation as it is also expected that a registered NPO must comply with the requirements of the NPO Act. The NPO registration status is also a funding requirement for most donor and funding agencies. The national NPO registration facility therefore brings NPOs into a public system that allows for information about the sector to be gathered and made publicly available which in many ways increases the confidence of the public in the nonprofit sector.
An NPO is defined, in terms of section 1 of the NPO Act, as a trust, company or other association of persons established for a public purpose and of which its income and property are not distributable to its members or office bearers except as reasonable compensation for services rendered. Nongovernmental organisations (NGOs) and community based organisations (CBOs) are collectively known as nonprofit organisations (NPOs). In some instance, NPOs are also referred to as Civil Society Organisations (CSO).