Smart NGO’s capitalise on BBBEE

JOHANNESBURG SOUTH – Smart charity organisations know how to negotiate mutually beneficial trade-offs with big businesses for investment, asserts CEO of Noah Sustainability Karen Krakwitzer.

Sustaining the financial health of a non-profit organisation (NGO) and improving the bottom line were some of the focal points that organisations like Cotlands have had to cultivate; strategies for development in order to keep their doors open.

Broad Based Black Economic Empowerment was at the forefront of discussions as a viable consideration to attracting interest and buy-in from big businesses into non-profit organisations.

Speaking at the Green Business Platform on February 7, CEO of Noah Sustainability Karen Krakwitzer explored ways in which Cotlands and other charity organisations could effectively transform their approach when attempting to obtain funds, while providing knowledge on how they could adapt to the changing donor environment.

“One needs to look at the context of each NGO and ask themselves: what is the right way going to be for this particular entity,” explained Krakwitzer. She also posed a question to the attendees, whether NGOs and business could partner to be able to create longevity for NGOs, while actually helping businesses with their business objectives.

Broad Based Black Economic Empowerment (BBBEE), Krakwitzer believes, is a way of facilitating a mutually beneficial partnership which opens up both entities to more opportunities.

The next point raised was what would make an NGO qualify to fall under the scope of BBBEE is the predominant broad-based beneficiaries, the bulk of these beneficiaries would be black and from previously disadvantaged backgrounds.

Key opportunities that are widely used by charity organisations that fall under the BBBEE arena desiring access to funding or investment from business are: Socio-Economic Development, Enterprise Development and Black Ownership.

“Now the ability to tap into certain of these areas would depend on the structuring of the entity itself and not everyone can participate in this, some may need to do something special in order to qualify,” added Krakwitzer.

Socio-Economic Development businesses can support social development space through contributions of some sort. “Black empowered NGOs are able to attract economic ECD contributions and they can offer a business five points on their BBBEE score card in exchange for the equivalent of one per cent net profit after tax.”

However, there are other means in which businesses can give to their chosen social space other than making a grant contribution, as they could offer a discount on their services to NGOs or offer their services for free. They could also donate resources to a drive hosted by a particular NGO either by giving their time or contributing necessary resources.

Enterprise Development: “Some NGOs might establish crèches and those would qualify as businesses, or they might choose to run food gardens which would qualify them as an enterprise. The key would be to have an enterprise involved that business could help up with an interest-free loan.

Black Ownership definitely enhances a NGOs BBBEE status; something that could be achieved by getting qualified with silent black directors or black trustees, although this would largely depend on the set-up of the organisation.

Cotlands has a broad base of black beneficiaries and the Cotlands Empowerment Trust has established a broad-based business which obtains some benefits from BBBEE. Businesses can be instrumental in getting their staff involved in partnerships with NGOs, which will create a feel-good initiative platform where the staff can contribute more to campaigns because they believe in the outcomes.