Considering to register the work as a Faith-Based NPO
NB. A post script added in blue towards the bottom of the page
I got to carry out the purposed study and now feel I better understand how availing a legal identity should be more beneficial – NPO to be specific. Yes it appears that the Trust under which Mr Muller operated the orphanage also falls under NPOs here in South Africa. Unfortunately, the process of registering an NPO in the country takes upto two months.
Below are the more coveted benefits:
- Being able to open a dedicated bank account for the work as a legal entinty and thereby avoid possible income tax confussions amongst other funds management related benefits.
- Being able to possibly avail offered NPO based funding: It did not prove to be easy to find worthy NPO funders but a legal identity should render this an option should one ever be found
- Payment services: Several online payment processing services we covet to use requires organisational legal identity (the registration number)
- Tax deductibility: Because this entity type is expected feature a ‘Charitable status’, any saint giving to the ministry should be able to have the same sum deductible from their taxable income
- Tax exeption: Again since this entity type is essentially a Public Benefit Organization, we expect it should qualify to be tax exempt. And thereby maximize disposable resources.
What may be viewed as cons certainly exist but it seems the prons are dominant. Dear God have mercy on the whole.
P.S (27/06): While the above was indeed in ernest at the time of the writting, I am now persuated that registering the work should see more material disadvantages – especially during this early developmental stage. A lot more formalities that could potentially hinder effeciency seems to exist. And thus making it far more sensible to proceed as an unregistered body – with nothing more than a separate bank account recommended for optimized funds management as well as allowing more efficient calculations of taxable income. Particularly since I should sadly have to be treated as a sole proprietor (who must register with SARS as a provional income tax payer).
Fortunately, this entity type will still enjoy ‘business related expenses’ tax deduction. And I certainly do expect to have the work registered as an NPO still in near the future, but for the current circumtances and needs, it seems I can say in good faith that doing so should not be conjucive to efficiency.