The Nonprofit Matters Podcast: Legal lowdown - Navigating South African nonprofit law

“Nonprofits can’t afford to ignore the rules — but understanding them doesn’t have to be overwhelming.”

In the latest episode of the #Nonprofit Matters Podcast, host Sarah Scarth is joined by two of South Africa’s most respected legal experts — Nicole Copley (NGOLaw) and Ricardo Wyngaard (Ricardo Wyngaard Attorneys) for an eye-opening conversation on legal compliance, governance, and the everyday realities of running a nonprofit within the law.

Most of us find the issues around nonprofit law and compliance intimidating, if not impenetrable. This discussion however, pulls back this curtain of mystery and explains in simple (but not simplistic) language many legal essentials every nonprofit should know. Between them, Nicole and Ricardo have more than six decades of experience working with nonprofits across the country, and they’ve seen it all -- from compliance confusion and tax myths to the complexities of the Master’s Office and the emerging challenges of AI. Here’s what they had to say on the following topics:

Can your nonprofit trade without losing its tax exemption?

For years, nonprofits have worried that earning income through workshops or services might jeopardise their Public Benefit Organisation (PBO) status. But as Nicole explains, that’s an old fear: “It’s not a problem to trade, as long as you’re still doing what you set out to do on the whole.”

Since 2006, nonprofits can earn “taxable trading income” without losing their tax-exempt standing — as long as their main focus remains their mission. The key is understanding whether the income is directly linked to your purpose or not, and Then recording it correctly. Ricardo adds that trading is not only legal, it’s vital: “Organisations should pursue trading activities. It aligns perfectly with sustainability.”

AI and POPIA: Using smart tools without breaking the law

Artificial intelligence is fast becoming part of every organisation’s daily life — but how does POPIA (Protection of Personal Information Act) apply to our use of AI? Are organisations potentially breaking the law by using tools like AI transcribers or chat assistants?

Ricardo’s advice: AI must now be a governance issue, not just a tech one. “Artificial intelligence should now be an item on every board’s agenda. If your board says, ‘we don’t use AI,’ I can almost assure you that you already do.” He recommends nonprofits do an AI Impact Assessment, use paid or vetted services (not free ones that harvest data), and define clear internal policies.

Nicole not only agrees, but goes as far to say that in some business contexts AI can sometimes do more harm than good: “I routinely ban AI from any meeting I’m in. Boards need to think about whether constant recording inhibits open, honest discussion.” 

“If we don’t have a solid foundation of governance, we are at risk. That’s the foundation for sustainability.” – Ricardo Wyngaard

Stuck in a trust? You’re not alone.

On this point, Nicole and Ricardo didn’t hold back: If your organisation was set up as a Trust, chances are you’ve battled with unresponsive trustees and a Master’s Office (the government body that regulates trusts) that seems stuck in another century.  “The Master’s Office is so far behind that you just cannot continue to operate under those circumstances.”

Their advice? Move to a Nonprofit Company (NPC). It’s online, efficient, and gives your organisation credibility and transparency. “I haven’t set up a new trust since the year 2000,” says Nicole. “The nonprofit company is simply a better, faster, more credible model.” Transitioning takes time, often six to eight months, but once complete, board changes can be done in days instead of years.

POPIA compliance: simpler than it sounds

Our panellists sternly recommended that every nonprofit that handles personal information must have a registered Information Officer. It seems daunting at first, and small organisations especially typically fall into a panic about this. But Ricardo insists it’s quick and easy: “It can literally take you 15 minutes to register both your Information Officer and your PAIA report.”

Nicole added a further note of calm: “Don’t freak out about compliance. Take a breath and just do the thing that needs to be done.” Beyond ticking a legal box, visible compliance helps reassure funders and donors that your organisation operates transparently and responsibly.

Section 18A certificates: know the limits

What about those generous professionals offering free legal or strategic support — can they get a Section 18A tax certificate for the value of their time? Nicole is clear:

“This is not a grey area. The law is extremely clear — you cannot issue Section 18A receipts for time spent or for services provided.” Certificates can only be issued for actual cash donations or tangible goods, not volunteer time or pro bono work. Issuing one incorrectly could put your PBO status at risk. 

We’ve also created a complementary toolkit for this episode — packed with resources, templates, and further reading to help you navigate funding challenges, donor engagement, and organisational resilience. Download it now and use it to help your organisation turn insights into action.

Credits

• Host: Sarah Scarth

• Guests: Nicole Copley, Ricardo Wyngaard

• Podcast Producer: Ruendree Govinder

• Sound Engineering: LIFEBrand https://lifebrand.co.za/

This episode was produced with the support of the LV and Ivy Middleton Charitable Trust.