An NPO is defined, in terms of section 1 of the NPO Act, as a trust, company or other association of persons established for a public purpose and of which its income and property are not distributable to its members or office bearers except as reasonable compensation for services rendered. Nongovernmental organisations (NGOs) and community based organisations (CBOs) are collectively known as non-profit organisations (NPOs). In some instance, NPOs are also referred to as Civil Society Organisations (CSO).
This Directorate was established in terms of the Non-profit Organisations Act71 of 1997 to administer the Register of Non-profit Organisation in South Africa.
The register is a voluntary registration facility that enhances the credibility of the registered NPO as it reports to a public office. The NPO Directorate, as a public office, holds information about registered NPOs for the public to access. This thus, increases the transparency and accountability of the organisation beyond its immediate role-plays. This accountability and transparency improves the governance of an organisation as it is also expected that a registered NPO must comply with the requirements of the NPO Act. The NPO registration status is also a funding requirement for most donor and funding agencies. The national NPO registration facility therefore brings NPOs into a public system that allows for information about the sector to be gathered and made publicly available which in many ways increases the confidence of the public in the non-profit sector.
To apply for registration as a NPO, organisations fill-in a prescribed application form and submit it to the Directorate for Non-profit Organisations with two copies of the organisationís founding document i.e. a constitution for a volunteer association; memorandum and articles of association with the companyís registration letter for a not-for-profit company; and a deeds of trust with the trustees authorisation letter for a trust. The founding document of the organisation must meet the requirements of section 12 of the NPO Act.
Once the organisation is registered, it is obligated, in terms of sections 18 and 19, to submit within nine (9) months after the end of its financial year, annual reports (a narrative report, annual financial statement and an accounting officerís report) including any changes to the organisationís constitution, physical address and office bearers.