Donations and Tax Benefits
Donations and Tax Benefits: What You Need to Know
There are many charities and similar organisations that rely on donations from the public – whether from individuals or private businesses – to continue the work they do. Because of their positive impact of the work of these organisations on our society, certain tax benefits are extended to those who donate. The aim is to encourage more people to support worthy causes. These concessions are, however, subject to certain conditions.
First and foremost, the organisation to which the donation goes, must be a non-profit organisation that is registered as a Public Benefit Organisation (PBO). Only then do donors have the opportunity to enjoy tax benefits. Furthermore, the NGO must issue Section 18A receipts for bona fide donations, which allows for donations of up to 10% of taxable income to be deducted from such income, as stipulated by the law.
Second, it’s important to note that not all donations qualify for tax benefits, even if the recipient is a registered PBO. It must be a bona fide donation, which the law defines as a “voluntary, gratuitous gift disposed of by the donor out of liberality or generosity, where the donee is enriched and the donor impoverished. There may be no quid pro quo, no reciprocal obligations and no personal benefit for the donor.”
The following contributions may qualify:
- Financial contributions, whether once off or monthly – note that it is imperative that the donor provides proof of the donation within the financial year for which they want to claim.
- A gift of goods – this gift must qualify on the provisions provided by the SARS guideline document. Examples can include:
- Non-perishable foods
- Consumable goods
- New clothes
- New capital items, such as televisions, stoves, fridges, etc.
- Trade goods of the donor
- Necessary materials for maintenance work, such as paint, glass, light fittings, geysers, etc.
The following donations do NOT qualify for tax benefits:
- Second-hand goods
- Gifts given to staff members and beneficiaries
- Pro-bono services
- Paying a supplier directly on behalf of Abraham Kriel Bambanani for a service or goods delivered to Abraham Kriel Bambanani
- Payment for goods or events, such as buying a ticket for or an item at a charity auction, or to attend a golf day or fundraising dinner
If you want to make donations to Abraham Kriel Bambanani to help us support children in need and would like to know more about whether you qualify for tax benefits (plus how to go about claiming these), you can make use of the resources available on our website. Alternatively, you can contact the team directly to find out more.