Last year, nonprofit organisations (NPOs) were responsible for some of government’s biggest embarrassments. Section27 left Basic Education Minister Angie Motshekga with egg on her face as it repeatedly took her to court for failing to deliver textbooks to Limpopo students. Equal Education forced Motshekga to concede that schools require a basic standard of infrastructure. They followed organisations that have taken on the ANC and won, such as shack-dwellers’ movement Abahlali baseMjondolo and the Treatment Action Campaign.

With their ability to embarrass the ruling party and the ruling party leaving itself open to embarrassment while President Jacob Zuma and his Cabinet attract scandal, suspicions were raised when the Nonprofit Organisations Directorate, responsible for administering provisions of the Nonprofit Organisations Act, de-registered 36,488 organisations recently. That means they were no longer valid NPOs and could not access funding from the state or the lottery. A further 35,204 were still registered but non-compliant, needing to submit certain documents before accessing funding. Just more than 29,000 organisations were left registered and fully compliant.

Groups like Treatment Action Campaign and Equal Education were moved to non-compliant status, pressuring them to submit key documents before getting access to funding. It looked like a death blow to those pushing the “ideological armoury of the anti-majoritarian liberal offensive”, to borrow a phrase from Communist Party secretary general Blade Nzimande. But industry insiders say it was a sign of a hopeless department and NPO Directorate rather than a malicious strike.

The Department of Social Development says it needed to introduce new systems after years of criticism from the Auditor General for the directorate’s poor oversight of funding given to non-profit organisations. But in the process of de-registering the 36,488 groups it failed to follow the law and inform the organisations, allow them time to rectify the problem and appeal the decision. After public pressure mounted and the Department of Social Development realised it was breaking the law, it said it would re-register all the organisations and give them six months to get their affairs in order.

Colleen du Toit, CEO of Charities Aid Foundation, said there has been a lot of suspicion around the state’s motives but the problems with de-registration are “mostly related to the NPO Directorate and a lack of capacity and lack of effectiveness.” A huge communication problem exacerbates the issue, she added. “The minister’s office says one thing and the NPO Directorate says another.”

Du Toit was skeptical that the situation would improve even after the six-month reprieve. “What is the guarantee that this time they will still upload the documents?” Charities Aid Foundation had received calls from NPOs to assist with restructuring and Du Toit said she had been doing her research on those that had been de-registered. “The vast majority of organisations are up to date and have submitted their documents, but they have not been uploaded.”

Political analyst Steven Friedman also told the Daily Maverick it is unlikely that the de-registrations were politically motivated. He said it was “ridiculous” to “try to turn this into the usual hysteria.” It seems that only a few of the NGOs who have taken the state to court have been deregistered and “you can’t possibly sustain an argument” that the state was trying to intimidate or control NGOs as it had subjected over 30,000 organisations to the same procedure. “It’s a bureaucratic thing,” said Friedman. Having worked on the issue before, he said it was apparent the Department of Social Services was under pressure to change its system due to the danger of fraud.

Ricardo Wyngaard, a lawyer specialising in the nonprofit sector, said there had been worrying signs last year when a policy document from the Department of Social Development suggested increased enforcement on organisations, including blacklisting, but he put the current problem down to dysfunction rather than an attempt to control or intimidate civil society. While acknowledging the need to root out fraud, he said, “For the NPO Directorate to have taken on this task they have to have done more to inform. A public campaign would have been helpful,” he told the Daily Maverick.

He said the few organisations he was working with said they had not been contacted about their pending de-registrations. According to legislation, NPOs must be informed before they are deregistered and offered an explanation.

Wyngaard said it was irresponsible to deregister organisations without an effective appeal panel in place. According to the Nonprofit Organisations Act organisations have the right to appeal to a decision to refuse recognition within three months of the decision. Social Development Minister Bathabile Dlamini has failed to appoint a panel of arbitrators since April 2011, meaning no appeals process is in place if the NPO Directorate rejects an application by an organisation to register. “In the absence of the arbitrator panel organisations are trying to get hold of the NPO Directorate, which is unacceptable,” said Wyngaard.

“I think it’s irresponsible to do it in this manner where there is no panel appointed and there is no public campaign,” added Wyngaard, who said both the minister and the Directorate for NPOs were accountable for the problem. “The issue of compliance cuts both ways.”

Though the de-registration looks to be a product of inefficiency and ineffectiveness, it nonetheless reveals the Department of Social Development’s attitude towards NPOs. They weren’t informed of the plan and the legally required bodies that are needed deal with the matter are not in place. Dlamini announced that all de-registered organisations would be re-registered and given six-months to get their papers in order but, unsurprisingly, when the Daily Maverick checked the database there were organisations that remained de-registered.

The situation is troubling in an industry that often serves to fill gaps in service delivery but is under extreme funding pressure. While NPOs are given the run-around, those who will suffer are their beneficiaries – the South African citizens who rely on them for basic services; those who the state itself have failed. DM

Read more:

• The great NGO funding crisis in Daily Maverick 
• The great NGO funding crisis, Part II in Daily Maverick

Photo: Hlengewi Mthembu massages the hands of her husband Nkosinathi at their home in Esikhawini township, near Empangani, in South Africa’s Kwa-Zulu Natal province October 13, 2005.  REUTERS/Mike Hutchings