BBBEE Act pulls donors away from NGO

Posted by Transcend
Tuesday, 23 April 2013  |  Comments

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Stipulations of the Broad-Based Black Economic Empowerment Act have discouraged private enterprise from donating funds to a Pretoria children's home because most of the children are white, it was reported on Tuesday.

"There's nothing we can do about it... it's a sad situation," Jakaranda Children's Home marketing executive Elzane van der Merwe told The Times.

Most of the children housed at the shelter are white. Under the act, this meant corporate donors did not receive BBBEE points for contributions.

Van der Merwe said the shelter did not choose the children for whom it cared, but that social workers applied to the home and the courts decided which children were placed there.

According to The Times, 70 percent of the home's R25 million annual running costs had been donated by private companies which had withdrawn their support in the past three years.

The act stipulates that BBBEE points be awarded only for donations to charities of which three-quarters of the beneficiaries were from previously disadvantaged race groups.

The Times reported that the shelter received R7.1m a year from the government in the past two years, increasing to R9.1m this year.

-Sapa

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