Asset-Based Income for NPOs

Many NPOs advocate asset-based community development for the communities in which they work, but sometimes don’t realise that they themselves can use their own assets to create income streams for the organisation.

We asked EM Solutions director Michelle Davidson to suggest some practical income-generating ideas for NPOs who are struggling in this difficult South African climate. This is her response.

Take a look at what you have: buildings, vehicles, desks, equipment, property, rentals. Can you sublet extra space? What about setting up desks to create a co-working space with another NPO? Are your vehicles sitting unused on weekends? If so, why not rent them out to a tour company? Can you offer printing services to the community at a realistic cost per page? Can you rent out pots or a venue for a function?

Think about charging yourself for use of assets like vehicles, printers, and phone calls. Assign a mileage charge for vehicle usage based on logbooks.  Remember to set a rate that actually covers the costs and includes a little profit. Put this income into a savings fund for vehicle/asset replacement.

For bigger assets like property, charge your NPO rent (which is often covered by donors when property costs are not covered). Keep the admin for handling rentals to other tenants separate. Make sure that all profit from this rental business is donated to the S18A organisation, which will reduce the tax you pay on property.

Can you set up a business arm for your NPO? Do you have something to sell that your beneficiaries produce? This little business may need some up-front investment to get it going, but the good news is that there are no tax implications if the business is integral to the objective in your founding document. If the business is not integral to the objective, there may be partial tax considerations, but it is still worth pursuing as a source of income.

Do make sure that you have someone on board with a business background who can make the business profitable for you.

With some great suggestions to think about, do get in touch with EM Solutions if you’d like to have a sounding board for your ideas and strategy. We’re passionate about unlocking NPO potential.

25 August 2025
By |2025-12-17T13:12:46+02:00August 25th, 2025|Financial Management|0 Comments

Leveraging Intellectual Assets

NPOs generate a huge amount of intellectual property – research, learning, training material, ways of working and more. How do you turn your intellectual property into an asset that brings in much-needed income to support your projects and programmes?

Here are some suggestions:

1. Can you offer the same service that you give your beneficiaries to paying clients? For example, perhaps you offer free healthcare screenings. Why not approach a local business and offer to provide paid healthcare screenings for their staff? In this way, the business benefits by having healthier staff, and your NPO has a new income stream.
2. Package your intellectual property (training, research, ways of working) into products/offerings for a new market, delivered by your team. This is a great way to share what you have learnt and increase your reach while creating income.  Just a caution: if it takes off, be careful that your team isn’t spending more time on the new products and services than they are on beneficiary programmes.
3. License what you do to other organisations (good for geographic growth), individuals, or companies for a licensing fee. This will bring in passive income from intellectual property once the ‘franchise’ model is set up with legal paperwork and manuals

To make these suggestions work, you will need a dedicated champion who will look for clients and do the sales, so that your income-generating projects launch properly and are well maintained.

18 August 2025

By |2025-12-17T13:13:56+02:00August 18th, 2025|Financial Management|0 Comments

Let’s Talk About Core Funding

In Michelle’s recent blog, she spoke about key sources of unrestricted income and the ultimate ‘unicorn’ donation – unallocated funding. Unallocated funding is not pinned to any one programme or expense. Unallocated funding can be used wherever the NPO wishes, including covering general operating expenses, salaries, once-off expenses or ongoing commitments.

Every NPO dreams of unallocated funding.

I’m guessing you are already thinking of your list… so how would you choose to use a marvellous gift of unallocated funding?

Let’s be real, all NPOs always have “holes” which swallow any extra funding swiftly. Unexpected programme costs, a leaking roof, staff meals, the list is endless. That’s why it’s important to respond, not react.

The next time your organisation receives unallocated funding, put it into an investment account while you decide where and how you want to use it.

Get your team together and ask:

1. Can we invest this gift in strategic initiatives that set us up for future and/or more unrestricted income?
2. Have we thought about buying a building or asset that can be used to generate income?
3. Do we have a strategic plan to use this money in initiatives that will attract donors to support them?
4. How can we multiply this money?

You may choose to plug a hole which desperately needs to be plugged, or perhaps you’ll find a future funds growth investment that will be a blessing in the future.

Whatever you do, save some seed to plant and harvest in the days ahead.

13 August 2025

By |2025-12-17T13:14:50+02:00August 13th, 2025|Financial Management|0 Comments

Leave Pay Provision

Annual leave in South Africa is governed by the Basic Conditions of Employment Act, which states that every employee is entitled to 1 day for every 17 days worked, or 1 hour for every 17 hours, or 21 consecutive days of paid annual leave per 12-month cycle.

What does this mean for you as an employer?

– Annual leave accrues as the employee works, and it must be granted in the cycle in which it accrues.
– If an employee’s contract is terminated for any reason, they must be paid for any unused annual leave that has accrued up to that date.
– The employee must take leave: By law, they may not receive a leave payout (unless their contract is terminated).
– Statutory annual leave carried over must be taken within 6 months of the end of the leave cycle, or it will be forfeited, and the employer is not obligated to pay out or extend leave.

As NPOs, leave is paid as part of a salary contribution and often covered by donor contributions. However, if there is unpaid leave when someone resigns, that leave is often not paid by the donor, but by the organisation.

How can you limit your NPOs liability when it comes to leave?

1. Set up a leave policy and ensure your staff are familiar with it.
2. Keep accurate leave records during the year and keep your staff informed as to how much annual leave they have used.
3. At the end of each year, calculate the cost of unspent leave days and include that in your budget for the following year (leave days unspent at year end x daily salary rate).
4. Encourage staff to take leave regularly, for their own mental and physical health.
5. Set up a policy to limit extension of leave (for example, your organisation can choose to have a policy that states that all leave carried over should be used up within 3 months, not 6 months).

 

Don’t get caught unawares by leave pay – make provision up front.

14 July 2025

By |2025-12-17T13:16:14+02:00July 14th, 2025|Financial Management, Strategy|0 Comments

Retrenchment Provision

Every NPO, at some time, will have to restructure and possibly retrench a staff member.  It’s vital that you hold enough funds to meet the legal requirements for retrenchment. Here’s a quick summary of the key things you need to know.

In South Africa, retrenchment packages (sometimes called severance packages) are governed by the Labour Relations Act (LRA) and the Basic Conditions of Employment Act (BCEA).

Under Section 41 of the BCEA, an employer must pay retrenched employees:

– At least 1 week’s remuneration (salary or wages, allowances, benefits and any other regular payments) for every completed year of service
– Accrued leave pay i.e. payment for any outstanding annual leave they have not taken

Employees are also entitled to notice of termination. If retrenchment is immediate, he/she is entitled to payment in lieu of notice as per their contract or the BCEA:

– 1 week if employed for 6 months or less
– 2 weeks if employed more than 6 months but less than 1 year
– 4 weeks if employed for 1 year or more

Lastly, employees are entitled to payment of any other contractual benefits as per their contract (medical aid contributions, pension or provident fund payouts, pro-rata bonus entitlements, other perks).

What does this look like in practice?

Let’s say John receives a monthly salary of R12,000 and has worked for your organisation for 5 full years. He has 10 days of outstanding leave. Here’s the calculation:

John’s minimum statutory benefits = R31,383.55

Severance pay (1 week per completed year) = R13,846.15

Notice pay (4 weeks) = R12,000

Accrued leave (10 days) = R5,537.40

Planning ahead

A wise NPO ensures it has funds in reserve should the worst happen. It’s best practice to put this money into an investment account that earns more than inflation. Every year, when salaries are increased, the calculations need to be updated to stay current.

Retrenchment is not nice, but preparing for the possibility mitigates disaster and turns it into a more positive outcome for both your employee and your organisation.

7 July 2025

By |2025-12-17T13:20:27+02:00July 7th, 2025|Financial Management, Uncategorized|0 Comments

Building Relationships with Donors

In the world of fundraising, it’s tempting to think of applications and proposals as purely transactional. But the truth is, relationships matter just as much as numbers. When you’re building partnerships with donors, remember: real, lasting support is rooted in trust and mutual understanding.

Donors aren’t faceless funding machines. Behind every grant, there’s a real person who cares about making a difference. They want to know who you are, what drives your mission, and why they should believe in your cause.

Start by doing your homework. Ask yourself: What does the donor gain by funding you? How do their values align with your organisation’s? Do they prefer in-kind donations or multi-year commitments? Understanding their priorities helps you tailor your approach and show how your work directly speaks to their mission.

Equally important is letting them get to know you. Don’t just introduce your projects — introduce your people, your community impact, and your passion. Attend networking events, conferences, or even informal meetups. A warm introduction or friendly chat can go a long way in making your application stand out from the stack.

Finally, don’t wait until you’re ready to hit “submit” to start connecting. Proactively reach out and share your story. Building genuine relationships over time sets the stage for more meaningful collaborations and turns your proposal from a faceless piece of paper into a true partnership.

19 June 2025

By |2025-12-17T13:18:09+02:00June 19th, 2025|Donors, Financial Management|0 Comments

The Real People Behind Donor Organisations

It’s easy to think of donors as large institutions, with rigid guidelines and layers of bureaucracy. But at the end of the day, donors are real people who care about creating impact. They’re just like you: driven by passion, motivated by purpose, and eager to see real change.

When preparing your proposals, remember that the person reading your application isn’t just ticking boxes. They’re looking for projects and partners who inspire them — initiatives that align with their own hopes and beliefs. They want to see the heart behind the work.

So, before you send that final proposal, take a moment to consider who’s on the other end. Can you connect with them directly, perhaps through a phone call, an email, or even a brief meeting at an event? Can you show them your story, your team’s commitment, and the human impact of your work?

Don’t underestimate the power of a personal connection.

Knowing the decision-makers, understanding their backgrounds and motivations, and engaging with them authentically can turn a standard application into a conversation. It transforms your project from an abstract idea to a relatable, human story that resonates deeply.

This approach takes effort, but it’s worth it. Because when you build relationships with the real people behind donor organisations, you’re not just chasing funds — you’re building partnerships grounded in shared vision and lasting impact.

And that’s how you move from faceless paper to funding that changes lives.

By |2025-12-17T13:19:06+02:00June 10th, 2025|Donors, Financial Management|0 Comments

Tax Day

The tax season is finally open for individuals to submit their tax returns. This year the season is shorter compared all the other years.  Submission of tax returns calls for proper planning to entail a smooth submission of returns.
Taxpayers need to ensure that they have allTaxpayersred documentation handy. These documents include IRP5, medical certificates, pension certificates, proof of medical expenses and all other relevant documents. If you are a first timer make sure you have registered with SARS and have a tax number. Once you get your tax number go on SARS efiling and create a profile. Once the profile has been created you can go ahead and submit your tax return.
Your accountant can help you with your individual tax returns by completing the return on your behalf and filing it through SARS efiling. Some taxpayers are not Tech savvy and prefer to submit their returns at the SARS branch close to them. This is time-consuming as one has to que at SARS to submit the tax return, I would advise that all taxpayers register of SARS efiling so they can submit their returns electronically from the comfort of their offices or homes. This is hustle free and very convenient.
An individual needs to ascertain if they have to submit a tax return. SARS has criteria to determine whether an individual taxpayer must submit a return information can be obtained on the SARS website.
For more information and assistance with your tax returns please do contact your accountant or tax practitioner who should be able to assist you with your tax queries or you can call SARS directly.

By |2018-07-05T15:55:52+02:00July 5th, 2018|Financial Management|0 Comments

Do you need to do your CIPC annual Return?

When we chat with business owners about their CIPC annual return, we too often get blank stares with a small side of fear.  “Oh no, not another compliance issue we need to take care of” is the reply.

Ok, so let’s put things right here and help lay your fear to rest, a bit.

Yes, every registered business needs to submit an annual return to CIPC. It is not a very tedious task and only takes a few minutes of online work. But it can only be done through a person or business that has a registered account with CIPC.  EM Solutions has such an account.

So, what needs to be done? On or as close to the annual anniversary of the registration of your business a submission needs to be made on the CIPC system detailing your last annual turnover, business email address and telephone number and description of the business.

Payment is scaled according to the turnover and ranges from R100 for turnover less than R1 million to R3000 for a turnover of more than R25 million. There are also late payment fees applicable to anything older than 3 months.

This equates to not a huge amount of money, but by not submitting your annual return could result in your business being listed as deregistered by CIPC. Once this happens, your bank will be notified and soon all your contracts, lease and creditors will become aware of this and you will become personally liable for any outstanding overdraft, accounts payable and surety that has been signed for.

Gulp! So please check when last you submitted your annual return or contact us to check for you directly on CIPC and we will advise you accordingly.

Compliance is just one of those things you need to do to run a sustainable business.

By |2018-06-18T09:12:08+02:00June 18th, 2018|Entrepreneurship, Financial Management, Legal|0 Comments

SARS Cuts Tax Deadlines

According to SARS statistics: The 2017 tax season saw 1.6million taxpayers filing tax returns at SARS branches even though they were not required to do so, from 1.8million in 2016. 868,562 taxpayers who are registered eFilers visited branches to file returns even though they could do this online, dropping from 935,269 in 2016. 120,000 tax practitioners visited SARS branches to eFile on behalf of clients (2016:132,000). Employers can register new job-seekers electronically via e@syFile, but still many of these flock to SARS to register manually. A whopping 1 million old returns were filed during 2016, with the number coming down to 733,000 in 2017.

In response to this overwhelming strain on its resources, SARS has shortened the 2018 tax period by 3 weeks. The tax season will start on 1 July and end on 31 October for non-provisional taxpayers. SARS says this will allow them to deal with audits and verifications before the December holiday break. This is also because taxpayers will be unable to attend to any requests send by SARS during the December period, resulting in a technical non-compliance which often results in taxpayers filing objections with SARS. This leads to further traffic in the SARS system.

Non-provisional taxpayers are individuals who earn a salary and do not have any additional income, for example, rental income, interest or any other income. Manual returns will have to be filed by 21 September.

In order to ease the traffic during tax-season, SARS says they have sent direct communication to taxpayers who might not need to file a return informing them of this. However, it is prudent to get a tax practitioner’s opinion before choosing not to file a return as some of these letters have been followed up by letters to disregard the initial directive. It is noteworthy that year-on-year, taxpayer circumstances may change and thus require one to file a return in order to comply.

SARS also promised that verification letters would be more specific; which will make it much easier for taxpayers and tax practitioners. This move will ease tax season headaches as SARS can send two or three verification letters, making it difficult for the taxpayer to understand what exactly SARS wants from them in order to comply.

Provisional taxpayers, however, will have until January 31, 2019, to file their returns.

Well, the goalposts have shifted and we will all have to redirect our aim so that we don’t miss out. The trend has been that most taxpayers procrastinate until the last minute to file returns or send the necessary documents to their tax practitioners and this may result in the late filing of returns, and SARS will not hesitate to charge interest and penalties.

By |2018-06-05T10:48:51+02:00June 14th, 2018|Financial Management|0 Comments
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