Understanding the differences between NPO, NGO and NPC and the governance policies

NGO, NPO, NPC, PBO – all these acronyms lead to confusion as to where charitable organisations and other similar entities fit into the equation. This also speaks to the funding models and criteria for each of these organisations, interrogating the issue of governance, transparency, and accountability in the organisational operations.

NGO stands for a Non-governmental Organisation and is an international term used to describe a voluntary group or institution with a social mission, which operates independently from the government. Although these terms are not necessarily interchangeable, an organisation similar to an NGO may also be called non-profit, charity, non-profit organisation (NPO) or a voluntary organisation.

A Non-profit Organisation (NPO) is a trust, company or other association of persons established for a public purpose. The income and property of these organisations are not distributable to the members or office bearers except for reasonable compensation for services rendered to the organisation. NPOs are required to register with the Department of Social Development under the NPO Act and must register with SARS as taxpayers. NPOs may apply for approval as a tax-exempt institution (see PBO underneath) if they meet the relevant requirements.

NPC is the acronym for a Non-profit Company and is defined as a company incorporated for a public benefit. Here again the income and property are not distributable to the incorporators, members, directors or any office bearers. NPCs are required to register with the Companies Intellectual Property Commission (CIPC) under the Companies Act, must register with SARS as taxpayers and may also apply for approval as tax exempt institutions (see PBO underneath) if they meet requirements vant require


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