‘What counts in life is not the mere fact that we have lived. It is what difference we have made to the lives of others that will determine the significance of the life we lead.’
With these words by the late Nelson Mandela top of mind last month, how can you and your family take part in charitable giving?
Many people only give away some of their wealth after they die by way of bequests in their wills to charities of their choice.
Others regard philanthropic giving as vital during their lifetimes. Environmental causes mostly benefit here from in terms of research on the topic, with many donors not only donating money but taking a more hands-on approach, by giving their time and effort to the causes they believe in.
Governments around the world, including South Africa, support giving by granting tax breaks on donations to tax exempt charitable organisations.
It is important to consider the tax consequences of donating to public benefit organisations (“PBO’s”). It is important to confirm if they are tax exempt and comply with Section 18A of the Income Tax Act in South Africa. Donations to such PBO’s will not be subject to donations tax or capital gains tax in the hands of the donor, and will not be subject to estate duty in the estate of the deceased giver. Such donations can be claimed as tax deductions against taxable income by the donor up to certain limits.
The structure to be used to facilitate your family’s charitable giving has to be considered. A charitable trust that meets the requirements to obtain the necessary tax exemptions in the trust deed, or a so-called section 21 company with shareholders and directors, or with no shareholders and only directors for decision making purposes, are the two structures mostly used.
To qualify for approval as a PBO, the PBO has to undertake and support certain public benefit activities, including certain stipulated welfare and humanitarian, healthcare, land and housing, education and development, religion, belief and philosophy, cultural, conservation, environment and animal welfare, and research, activities.
WWF (World Wildlife Fund) South Africa comments as follows:
“Investing in WWF is an investment in our planet.
Investing in WWF South Africa, the South African chapter of the esteemed WWF International, presents a compelling opportunity for individuals who seek to make a profound difference in the world. As a self-funded national office operating independently, WWF South Africa is dedicated to preserving the country’s rich natural heritage and ensuring an environmentally sustainable and socially inclusive future.
South Africa is renowned for its exceptional biodiversity and environmental treasures. The complex socio-economic challenges of the past demand that we simultaneously address both the well-being of our people and the preservation of our natural resources. WWF SA is at the forefront of this crucial mission, working tirelessly to safeguard our oceans, land, and wildlife. By supporting us, you play a vital role in ensuring a future where we can all continue to benefit from essential resources like food, water, and a healthy climate.
At WWF SA, we firmly believe in the power of people. It is through collective action and shared responsibility that we can overcome the environmental challenges we face. By making a donation or leaving a bequest to WWF South Africa, you contribute to the development of innovative and effective strategies that will not only aid in the short-term recovery of our beautiful country but also foster long-term prosperity. By the year 2030, our goal is to witness a transformative shift in the health of our natural world, with nature’s vital signs improving and its decline halted. This ambitious vision can only be realized with your invaluable support.
Investing in WWF South Africa is an investment in the future of our planet. Join us on this remarkable journey and be a part of the positive change. Together, we can create a thriving environment where both people and nature flourish. Your support is more crucial now than ever before.”
If you would like assistance in facilitating a family discussion around the various aspects of giving and creating lasting legacies, setting up a charitable giving programme for yourself or your family, advice on the different charitable causes available, the tax implications of charitable giving, or to assist you in setting up a charitable trust or company, please contact Marteen Michau at marteen@fidelisvox.co.za.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)