PROPOSED amendments to government’s black economic empowerment (BEE) code could have a chilling effect on corporate donations to non-profit organisations that do not have 100% black beneficiaries.
The Department of Trade and Industry (DTI) published the proposed amendments in the Government Gazette last month and the this week Inyathelo – The South African Institute for Advancement warned that one amendment in particular could have a serious impact on charities and the non-profit sector as a whole.
The revised BEE Code of Good Practice says only companies that donate to organisations with 100% black beneficiaries will qualify for full points on the socio-economic development element of the code.
The current code says corporates can qualify for full BEE points if they give to NPOs whose beneficiaries are at least 75%black. And a pro-rata calculation is made if the number of black beneficiaries falls below 75%.
Inyathelo executive director Shelagh Gastrow said the amendments would further racialise poverty and need.
“They provide a perverse incentive to charities and organisations to turn away needy people who are not black or who are refugees in order to secure much needed funds,” said Gastrow.
“It also encourages corporates to do a racial audit of an organisation’s beneficiaries before contributing towards much needed socio-economic development in South Africa (because) the amendments will prevent companies from claiming full points on their BEE scorecard if they give to organisations that assist even one white child or foreign national.”
The proposed changes to the code will affect a number of NPOs in the Ndlambe area which provide assistance to all races.
Companies were reluctant to respond as to how the amendments, if passed, may influence their corporate donations, but several local charities and service organisations expressed concern and dismay.
Port Alfred Soup Kitchen founder Debra Harris said she was “horrified”.
She said the vast majority of the soup kitchen’s beneficiaries were black but they also fed white homeless people.
“It’s almost madness,” she said. “There are needy people across the board. You can’t just put it to that colour or that colour.”
Harris said she was drafting a letter of objection to the DTI together with Barry Mey of Stop Hunger Now.
Anne McCreath, who helps manage the Tiger Titans development cricket club in Bathurst, said as a non-profit trust they also relied on corporate donations.
She said the club, which used to be 100% black, had recently admitted two white home-schooled farm boys who were not allowed to play for any school teams.
“We’re trying to integrate the kids to know sport is a universal language. If we should lose any sponsorship because there are white kids in the club it would be very sad,” said McCreath.
Port Alfred Lions Club president Lloyd Stephenson, whose club has been channelling donations to flood victims of all races, said: “We are naturally very concerned”.
Stephenson said he had alerted the Lions district governor about the issue and “he has assured me it will be on cabinet agenda next weekend”.
“I have my own thoughts and opinions but, as a very small cog in a huge international organisation, would hate to prejudice or embarrass our organisation with them,” he said.
“Some of the top Lions brains, legal included, will issue a report after the general council meeting.”