Nonprofit organisations (NPOs) are a critical partner for companies to deliver on their social aims. In 2024, 93% of companies surveyed directed funding to NPOs, which on average received nearly three-quarters (71%) of corporate contributions. In this article, Trialogue draws on data from 149 NPOs surveyed online between May and July 2024. Of the 149 NPOs that participated in the 2024 research, only 14% (or 21 organisations) also participated in the 2023 research.
Number and type of nonprofits
According to the Department of Social Development (DSD), there were 295 051 registered NPOs in South Africa at the end of September 2024, up from 280 329 in September 2023 and 266 531 in 2022.
In Trialogue’s sample, the most common forms of registration were as an NPO registered with the DSD (110 organisations, 74%) and as a public benefit organisation (PBO) with Section 18A status registered with the South African Revenue Service (SARS) (80 organisations, 54%). Just under half of the sample (65 organisations, 44%) were registered as both an NPO and PBO. None of the 2024 research participants were registered as a local branch of an international NPO.
NPO income
- The NPO sample was relatively evenly distributed in terms of total income in the 2023/24 financial year, although weighted towards medium to large organisations with an annual income of between R2 million and R20 million (42%). Around a fifth of the sample (22%) had annual incomes of more than R20 million.
- In 2024 over half of NPOs (56%) reported that their income had increased from the previous year, slightly lower than in 2023 (65%), while 26% reported a decrease in their income. No discernible relationship between the nonprofit sector or the size and change in income was found.
- Almost seven in 10 NPOs (69%) expect their organisation’s income to increase in the next two years, up from 53% in 2023.
Sources of NPO income
- The average number of donor types across the sample was 3.9, with the most common being one. The maximum number was 10, reported by one organisation.
- Almost three-quarters of NPOs in the sample (70%) received income from South African companies, with corporate funds accounting for an average of 30% of NPO income in 2024, the largest share of income. Of these, 41% reported that funding from companies had increased in the past year, while 31% reported a decrease from companies.
- NPOs had funding relationships with a median of five South African companies, with responses ranging from one to 361 companies.
- Thirty-nine percent of NPOs receiving corporate funding said they received funding for one year or less, while 24% received funding for two to three years, 11% between three and five years, and 15% for more than five years at a time. The remaining 11% did not know the duration of their corporate funding.
- When asked about income sources, over half of NPOs (52%) reported that 16% of their funding was self-generated on average in 2024; the second-highest income source, higher than the average funding received from South African sources including trusts/foundations (14%), the government (13%) and private individuals (12%).
- Just over half of NPOs (53%) received income from South African trusts/foundations, which accounted for 14% of NPO income on average. Forty percent of these NPOs reported an increase in funding from local trusts/foundations.
- NPOs reported receiving support from between one and 50 South African trusts/foundations, with a median of three.
- More than half of NPOs (56%) received funds from South African individuals, accounting for 12% of NPO income on average. Around a third of these NPOs (35%) said that income from this source had increased.
- The number of funding relationships with South African private individuals ranged from one to 20 000 with a median of 15 individuals.
- Forty-three percent of NPOs received funding from foreign private donors (compared to 49% in 2023), with an average income of 9%. Thirty-seven percent of the NPOs who received income from foreign private donors reported an increase in funding from this source over the past financial year.
- Thirty-two percent of NPOs received investment income, although this constituted a small percentage of average overall income (2%) in 2024.
- Only three NPOs (2%) reported debt as a source of funds, and this contributed less than 1% to the average overall income.
Non-cash contributions
- In line with previous years, most NPOs (126 organisations, 85%) received non-cash donations in 2024 (products, services and/or volunteering time). Of these, 80 organisations quantified the value of their non-cash donations.
- The rand value of non-cash donations ranged from R10 to over R80 million, with a median of R135 000 and an average of R2.2 million.
- As a percentage of NPO income, non-cash donations ranged from less than 1% to 100%, with a median of 3% and an average of 17%.
Reserves
- Worryingly, the percentage of NPOs without any financial reserves increased to 51% in 2024 from 36% in 2023.
- Only 15% of NPOs reported having one year or more of operating costs in reserve.
Fundraising
- Almost half of the NPOs (48%) had at least one part-time internal staff member to manage fundraising, down from 60% in 2023. Most of the rest (50%) had no staff to manage the function, up from 39% in 2023. Only 2% used external consultants for fundraising.
- Less than half of the NPOs (60 organisations, 40%) had a budget for fundraising in 2024. Of those NPOs that provided detailed budget information (50 organisations), 36% allocated less than 5% of their budget to fundraising and one-fifth (20%) allocated between 6% and 10%. Thirty percent of these NPOs allocated more than 20% of their budget to fundraising. The median allocation to fundraising was 14% of the organisation’s budget.
Source: The original version of this article was published in the Trialogue Business in Society Handbook 2024 (27th edition).
