By Ricardo Wyngaard

The advent of Artificial Intelligence (AI) has presented NPOs with numerous opportunities at various levels, including increased operational efficiency, improved fundraising and marketing strategies, advanced data analysis, enhanced stakeholder engagement. AI not only enhances operational efficiency but also strengthens compliance tracking, helping NPOs stay aligned with evolving legal requirements.

Three key themes have in recent years emerged which should be central in the use of AI by NPOs. These key themes are Risk, Information and Compliance.

Risk is an ancient concept and many NPOs have adopted risk management systems. The risk-spotlight was turned on South African NPOs when the Financial Action Task Force (FATF) published its Mutual Evaluation Report (MER) on South Africa during October 2021. One of the MER’s findings provided that:

“The measures implemented for Targeted Financial Sanctions (TFS) and to combat abuse of non-profit organizations (NPOs) are not in line with South Africa’s TF risk profile.”

This resulted in changes to legislation and led to the FIC's publication of the Terrorist Financing Risk Assessment for the Non-Profit Organisation Sector in South Africa.

Information, in particular personal information, became a focus in South Africa when the Protection of Personal Information Act (POPIA) came into operation on 1 July 2020, with a one-year grace period for compliance ending on 30 June 2021. The MER also indicated that beneficial ownership information of legal entities in South Africa is not easily available or, where available, takes a long time to obtain.

The MER concluded that: “The authorities could not demonstrate that they apply sanctions for failure to comply with information requirements.” This has resulted in increased reporting requirements being imposed on NPOs operating in South Africa.

As NPOs integrate AI into their operations, they must navigate these three interconnected themes: Risk, Information, and Compliance

The General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 2022 (the Amendment Act) introduced several Compliance requirements for NPOs as well. On 5 February 2025, the Department of Social Development issued a media statement confirming that a total of 203 279 organisations comprising of non-profit organisations, voluntary associations and trusts across South Africa face the risk of deregistration for failure to comply with the requirements to submit annual reports.

These three themes are now irreversibly part of the South African non-profit landscape. As NPOs integrate AI into their operations, they must navigate these three interconnected themes: Risk, Information, and Compliance, each shaping how personal data is managed, how threats are mitigated, and how regulatory obligations are met in an evolving digital landscape.