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BEE proposal could ruin charities

File photo

File photo

Published Nov 1, 2012


Durban - Charities could face ruin over a government proposal that firms could lose black economic empowerment (BEE) points if they donate to charities that do not have 100 percent black beneficiaries.

Some charities believe the proposal means that any firm that donates to a charity that helps a white, coloured or Indian person may not be able to claim points for its BEE scorecard.

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It could also mean that if just one white child or person is among a group of black people the charity is helping, the firm that donates to it could lose it points.

A BEE scorecard is used by the government to measure a company’s BEE compliance. Those that comply do business more easily with other companies also wanting to increase their scorecard and are favoured by the government in all aspects relating to business.

Despite repeated attempts since Monday for a response and clarity from the Department of Trade and Industry, all it would say was: “All stakeholders who have concerns and objections are requested to make use of the 60-day period to make their submission... We will not be in a position to comment/respond to the questions as we do not want to pre-empt the process.”

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The amended changes to the BEE Codes of Good Practice are on the department’s website and up for public comment until December 2.

Legislation that is in place allows for charities to assist all races, but lower points are scored when companies assist organisations where less than 75 percent of the recipients are black.


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Bridget Brun, a Durban BEE agency head, said she hoped the proposed amendment was an error.

“I don’t think they [the department] have realised what they have done. Think of organisations such as Girls’ and Boys’ Town or Childline,” she said.

“This amendment will have a huge effect. It means if the charity benefits any Indian, white, coloured or even a Mozambican or Zimbabwean child, companies will not be able to claim points on their BEE scorecard. We are now going to have segregated facilities.

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“Charities will not help white children if the companies which support them withdraw support because they can’t claim the points.”

Erika Petersen-Holmes, a partner in the commercial and corporate law department at Shepstone and Wylie in Durban, agreed, saying: “Almost all charities have at least one white beneficiary.

“This could result in those charities receiving no corporate donor funding, or those charities rejecting white beneficiaries.”

Karen Hatton-Jones, of retail giant Spar, which gives many charities, orphanages and NGOs large cash and food donations every year, said she was “distressed and disgusted” by the proposed change.

“It’s not going to change what we do. Since when do we put a colour to those in need?” she asked.

Childline head Joan van Niekerk said BEE laws were going from difficult to ridiculous.

“We don’t know the race of the child who phones us. It’s inappropriate to ask, ‘Are you black, and how black are you?’ This is a different kind of apartheid. It’s extremely distressing,” she said.

Van Niekerk said charities were pragmatic about funding.

“There is no such thing as a free lunch. We have to be practical and realistic about funding now. This corporate social responsibility money is something companies are obligated to give and we know the rules up front. If this goes through it will now be far more difficult to deal with.”

Jackie Branfield, of child crisis organisation BobbiBear, said it was the first that she had heard of it.

“Yes, 99 percent of the children we help are black, but we are certainly not going to turn away that 1 percent who could be a white or Indian child. Where’s our democracy, where is our new South Africa?”

Durban Chamber of Commerce CEO Andrew Layman said worthwhile social upliftment projects would suffer. “The implications could be severe,” he said.

To comment on the proposed amendments to the BBBEE legislation, e-mail [email protected] or phone 012 394 1609/1941.

The Mercury

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