Fundraising Amendment Bill: DSD & NCOP delegate briefing

Meeting report

Mr Edward Njadu (ANC), Western Cape Delegate to the NCOP, explained that the National Assembly had passed the Fundraising Amendment Bill and the NCOP received it on 16 May 2023. There was a meeting with the Select Committee, and they engaged on the amendment of the Bill.

Department of Social Development Briefing on Fundraising Amendment Bill

Adv Luyanda Mtshotshisa, Specialist: Legislative Drafting and Review, Department of Social Development (DSD),  told the Committee that the Fundraising Act was promulgated in 1978 to provide for control over collections of contributions from the public and to set up the following funds:

• The Disaster Relief Fund: to provide assistance to victims and survivors of disaster. The Fund was active and provided short term relief to victims of disaster in poor communities.
• The State President’s Fund:  to provide short term relief to victims and survivors of acts of terrorism. After 1994, the Fund was activated in 2002 to assist with burying the victim of a bomb blast in Soweto. Two children of the deceased received support until 2010, when they reached adulthood and returned to Lesotho.      
• The Refugee Relief Fund was meant to provide assistance to refugees. It had remained dormant since the new dispensation.
• The Social Relief Fund was meant to provide funding to organisations providing assistance to victims of violence. The Fund was last active in 2001 and has remained dormant since.
• The South African National Defence Force Fund was meant to provide short term relief to members and their dependents who suffered financial hardship arising from the performance of duties that led to incapacity. The Fund was active and was located at the National Department of Defence.

Strategic Focus

Adv  Mtshotshisa said the Fundraising Amendment Bill amended the Fundraising Act of 1978 provisions by removing the duplication of services inherent in the current relief funds.

The Bill aimed to rationalise the Fundraising Act of 1978 by consolidating the Disaster Relief Fund, the Refugee Relief Fund, the Social Relief Fund and the State President’s Fund into the Disaster Relief and National Social Development Fund, to focus on proactive mitigation of disasters and promote the social development of communities. This would contribute to streamlining administrative processes, and rationalise administrative and secretariat costs to the Department of Social Development.

The newly established Disaster Relief and National Social Development Fund should be empowered to raise funds from the public and private sectors, including international donors, to address short term intervention and impact long term developmental issues.

See attached for full presentation  

Discussion

The Chairperson invited inputs. The provincial Department of Social Development indicated they submitted comments on the Bill through their legal services office in July 2021. These concerned uncertainty about the size of the new Fund’s board, ethical principles and social development activities. The comments had resulted in altered wording in the Bill and the presentation had cleared up uncertainties. The Department would like to have another look at the Bill, with all the inputs made, so that they could submit it to the legal services on 29 May 2023.

Mr C Fry (DA) asked about the extent of the dormant funds and why these were only being discussed now, after the COVID-19 pandemic. Why did this deliberation not happen earlier?

Ms N Bakubaku-Vos (ANC) sought clarity on using the Act after 1994. What happened to all the funds that were raised? Why had it taken the democratic government so long to amend this racist Act? What type of disasters would this Act be focusing on? What were the timelines for these amendments? When would the new Act come into effect? What would be the roles and powers of the different provinces within this Act? Were there still funds available from the Principal Act? If yes, how much funding was still available?

Responses

Ms Brenda Sibeko, Deputy Director-General, DSD, said that the Disaster Relief Fund was the only Fund that was not dormant. The reason the amendments were taking so long was because they had to take account of legislation post-1994 which made the 1978 Act dysfunctional. The Disaster Relief Fund was active in the democratic dispensation. The other funds were not as active as many problems were experienced. The legislation was structured in a manner that each different Fund had its own board. This became problematic as disasters did not require all fund groups to be activated. Funds could not be allocated solely to pay board members for attending meetings. The purpose of the funding was for disasters. The Disaster Relief Fund then became the only one to operate under a board. It would only become active once a national disaster had been declared.

Disasters were going to become more prevalent, and it was important to raise funds to be able to assist vulnerable communities. In this way, disaster response would be a proactive response and not reactive. Vulnerable communities were identified, and more was invested in making them resilient.

The timeline for the amendments was out of the DSD’s control as they relied on Parliament to finalise the Act. Hopefully, this would be done by the end of the current financial year. As the Act was not yet in place, funds could not be used, therefore making it very important to have it finalised as soon as possible.

Disaster responses would be region-specific. In the event of a national disaster, the Fund's board and the National Disaster Management Operations Centre, would be consulted. They would not be the primary leader, but they would be there to support them.

Another DSD official said some funds were no longer relevant as their purpose had changed over the years and the need was no longer there. Some of the funds were put in place for acts of violence and terrorism and the last time they were used was back in 2001. The Disaster Relief Fund was actively deployed during the COVID-19 pandemic. The board always intervened and assessed disaster-affected areas to recommend interventions and avoid duplication.

Further discussion

Ms A Cassiem (EFF) said that emphasising that the Act was established in the apartheid era did not explain the delay and failures in the DSD. Funds were inactive, yet board members were still paid. Given the many social issues in South Africa, how have the funds been dormant since 2001? Would social development be limited to victims of violence or would it cover a range of issues in society?

The Department responded that the Nonprofit Organisations (NPO) Act of 1997 impacted the funds as organisations were allowed to register and raise funds. The Fundraising Bill should be amended as soon as possible so that important fundraising issues could be resolved. There might have been an oversight in a review of legislation in 1996 which overlooked some issues, but the current deliberations aimed to overcome these challenges.

The Chairperson commented that the amendments were not lengthy, and the Committee would have many more deliberations on the Bill. Other provinces and government officials would have to be consulted.

Mr Njadu explained that after the meeting that day, a process of public hearings would have to follow. The NCOP would engage with all provinces. Each province would hold its own public hearings.

The meeting was adjourned.