THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

The Independent Code • Is a Code of Governance targeted specifically at non-profit organisations in South Africa • Was developed through an extensive two year consultative process with all relevant stakeholders • Aims to establish and consolidate good governance within the non-profit sector • Is the first step by the non-profit sector towards protecting the independence and uniqueness of the non-profit sector through self-regulation 2 THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

Why the Independent Code is important • To support and encourage the practice of good governance values that are distinct to the non-profit sector in South Africa • To provide the non-profit sector with a Code that is accepted and applicable across the non-profit sector • To unify the non-profit sector behind a single Code of values and principles that is most relevant to the realities and practicalities of non-profit organisations in South Africa • The development of the Independent Code serves to protect the non-profit space against the imposition of governance codes from other sectors that do not speak to the specific nature of the non-profit sector 3 THE INDEPENDENT CODE OF GOVERNANCE FOR NON-PROFIT ORGANISATIONS IN SOUTH AFRICA

What does the Independent Code cover? • The Independent Code includes: • 8 Values • 6 Leadership principles • 5 Legal and Fiscal principles • The Independent Code belongs to the non-profit sector • Is freely available • Commitment to the Independent Code is voluntary 4 THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

The Independent Code • The 8 Values: • Fidelity to Purpose • All resources, energies and activities devoted to promoting a public benefit purpose • Altruism and Benevolence • The purpose underlying an action is a desire to benefit others, without seeking advantage for oneself • Integrity • Commitment to the highest standards of integrity and ethics(fairness, justice, honesty) • Optimising Resources • Care and prudence with regards to resources. “To whom much is given, much is expected” 5 THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

The Independent Code • The 8 Values: • Conflicts of Interest and self-dealing • Particular care and Management, family, friends, associates, beneficiaries • Equality and Non-discrimination • Prevent unfairness in the conduct of the affairs of an organisation • Democracy and Empowerment • Commitment to democratic processes and decision-making • Independence and Impartiality • Particular constituencies, interest groups, communities 6 THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

The Independent Code The Leadership Principles: Vision, Purpose, and Values Clearly defined, instilled throughout the organisation, recorded, reviewed periodically, remain relevant Accountability and Transparency To all constituencies and stakeholders Fundraising, Sustainability and Risk Responsible for monitoring expenditure and appropriation of funds, ensure adequate funding Collaboration and Synergy Should act collaboratively and cooperate to advance a similar purpose The Board and other Governance Structures Position of the Chief Executive on the board, term of board members, recruitment of board members Procedural governance Procedural issues relating to board meetings, formal agenda, Quorum, declaration of interests, minutes, meeting papers 7 THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

The Independent Code The Legal and Fiscal Principles: Establishment and Incorporation The legal structure of an NPO may determine how and when governance responsibilities arise Administrative and Procedural requirements Ensure obligatory administrative and procedural requirements NPO Act – Consequences and Benefits of Registration NPO Directorate PBO Status – Fiscal Benefits and Conditions Exemption from income tax Other Legislative and Regulatory Compliance General laws and regulations 8 THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

Why we need to subscribe to the Independent Code • We need to affirm the non-profit sector’s commitment to the practice of good governance – as custodians of public funds • We need to commit to those values and principles that are most important to the nature of the non-profit sector in South Africa • We need to claim and protect the non-profit space from external codes aimed at changing the uniqueness of the sector and challenging our independence 9 THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

How do you subscribe to the Code • Step One: Secure agreement from your governing body or Board to subscribe to The Independent Code of Governance for Non-profit Organisations in South Africa • Step Two: Access a copy of the Commitment and Undertaking to the Independent Code by: • Downloading and printing a copy from www.governance.org.za or; • Requesting a faxed or posted copy from code@inyathelo.org.za or by calling 021 465 6981. • Step Three: Submit via email or fax a signed copy of the Commitment and Undertaking to the Independent Code to: • Email: code@inyathelo.org.za or; • Fax: 021-465 6953. • Step Four: You will be sent The Independent Code Logo via email 10 THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

THE WORKING GROUP ON THE INDEPENDENT CODE OF GOVERNANCE FOR NON-PROFIT ORGANISATIONS IN SOUTH AFRICA • C/O INYATHELO – THE SOUTH AFRICAN INSTITUTE FOR ADVANCEMENT PO BOX 43276 • WOODSTOCK 7915 • CAPE TOWN • SOUTH AFRICA • TEL: +27 21 465 6981 • FAX: +27 21 465 6953 • code@inyathelo.org.za • www.governance.org.za

FUNDING PRACTICE ALLIANCE • The FPA Membership organisations: • Community Development Resource Association(CDRA) • Inyathelo – SAIA • Social Change Assistance Trust (SCAT) • FPA Activities: • 2010 – NDA/NLB research • 2011 – Good Funding Practice Guidelines research • 2012 to 2014 – How is Civil Society in South Africa resourced • On-going - NLB advocacy

FUNDING PRACTICE ALLIANCE Meeting their Mandates? The Research Reporton the National Lottery Distribution Trust Fund (NLDTF) and the National Development Agency (NDA)

FUNDING PRACTICE ALLIANCE • Report findings: • Accountability • The NLB • The Minister • The DA’s • The civil society sector and the public • The MSC fund • The Minister and the NLB • The Distributing Agencies • Decision-making • Independent – implications for capacity • Appeals?

FUNDING PRACTICE ALLIANCE • Report findings(contd): • Administration • NLB staff for gaming(regulator) and distribution • - Incompatible skills sets • Support to Distributing Agencies • Application process and lack of correspondence

FUNDING PRACTICE ALLIANCE • Draft Lotteries Policy Review: • Deadline for comments is 03 December 2012 to the DTI • Proposes to completely overhaul the structure and purpose of • the NLB and NLDTF • Will guide amendments to the Lotteries Act • Is the first opportunity in an important process for the civil • society sector, that will affect the manner in which over R2 • billion a year of funding to the sector will be disbursed

FUNDING PRACTICE ALLIANCE • Draft Lotteries Policy Review recommendations: • Definition and clarification of roles and functions of the DTI, • the NLB and the Distributing Agencies • Proactive funding • Conduit funding – process and policy • The NLB as an office within a department of government • Conflict of Interest

FUNDING PRACTICE ALLIANCE • Draft Lotteries Policy Review recommendations(contd): • Categorisation of grants in terms of size and nature • Differentiation between the NLB as an entity and as an • oversight body • Receipt of applications throughout the year

FUNDING PRACTICE ALLIANCE www.fpa.org.za Twitter: @FundingPractice

The Independent Code Logo www.governance.org.za/the-independent-code 21 THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA

THE INDEPENDENT CODE OF GOVERNANCE FOR NONPROFIT ORGANISATIONS IN SOUTH AFRICA