Should I start a nonprofit?

Every year, well-meaning people armed with little more than passion and a good idea found nonprofit organisations, and then ask, "Now what?" The heart behind that question is good, but a good heart alone won't build something that lasts. Running a sustainable nonprofit takes more than warmth and intention.

This article will help you think through whether you're truly ready to launch a nonprofit — and if you want a quicker read on where you stand, scroll down to take our quiz!

We have too many nonprofit organisations already

As of September 2024, the Department of Social Development (DSD) lists 295 051 registered NPOs in South Africa, and increase from 266 531 just two years before. That number only counts organisations formally registered with the DSD, and excludes those registered only as as Nonprofit Companies (NPCs), unregistered voluntary associations, community groups and informal structures, and the real number is certainly higher.

That means we have more than 300 000 registered organisations in a sector that is still growing.

Before you register anything, ask yourself a brutally honest question: is someone already doing what you want to do? The answer is almost certainly yes. If they are, what makes you think you can do it better? What unique contribution are you making that isn’t already being made?

The populations you want to serve don’t need another organisation. They need the right organisations to be better resourced, better supported, and better sustained. Sometimes the most impactful thing you can do is volunteer for, donate to, or partner with something that already exists.

The questions you need to answer before you start

Before you register an organisation, you need to be able to answer every one of these questions honestly.

Do you have expertise in the field?

What are your qualifications? What is your lived or professional experience in this space? Good intentions are not a substitute for competence.

What legal structure will you choose, and why?

The populations you want to serve don’t need another organisation. They need the right organisations to be better resourced, better supported, and better sustained.

Do you understand the difference between a nonprofit organisation registered with the DSD and a nonprofit company registered with the CIPC? Would you be better served registering as a trust or function as a voluntary association? Do you need tax exempt status (which means registering as a Public Benefit Organisation with SARS) and Section 18A so you can issue tax certificates to donors?

Do you understand compliance?

The DSD has issued 41 787 notices of non-compliance to registered NPOs. Over 6 000 have already been deregistered for failing to submit their annual reports. A staggering 203 279 organisations are at risk of deregistration for the same reason.

The consequences of non-compliance are serious. Your organisation can lose tax-exempt status, the ability to issue Section 18A tax receipts to donors, and be disqualified from government and corporate funding. For an organisation serving vulnerable people, that can result in shutting down.

South Africa’s greylisting by the Financial Action Task Force (FATF) in 2023 added an additional layer of scrutiny to the sector. Regulators are no longer lenient and compliance is being enforced.

Can you afford to start?

Start up costs are high, and includes registration and legal fees, opening and maintaining a bank account, setting up payroll if you have staff, paying for accounting services and independent reviews or audits, a tech infrastructure including both computers and internet access but also your website and social media presence. This is all before you look at the actual cost of delivering your programmes.

How will you fund ongoing operations?

South Africa’s funding environment is competitive and increasingly risk-averse. Corporate CSI budgets are shrinking. Government grants are slow, bureaucratic, and tied to specific deliverables. Foreign funding has become more complex under new FATF-related exchange control requirements. How will you pay the rent, the salaries, and the phone bill in month seven when your first grant hasn’t come through?

How will you set up your board?

NPOs in South Africa are legally required to have governance structures in place. But beyond the legal minimum, your board needs to add real value — financial oversight, sector expertise, legal literacy, and strategic guidance. Do you know qualified people willing to take on this responsibility?

Who will manage your bookkeeping?

Under the NPO Act, you are required to submit annual narrative reports and financial statements, signed by an accounting officer, within nine months of your financial year-end. You need proper bookkeeping from day one using a proper system that can withstand scrutiny from the DSD, SARS, and your donors simultaneously.

What is your monitoring and evaluation framework?

Founder burnout is one of the leading causes of organisational collapse.  What happens to the people you’re serving if you walk away in two years?

Funders increasingly require evidence of impact. How will you measure whether your work is actually making a difference? Who will collect and analyse the data?

What happens when you burn out?

Founder burnout is one of the leading causes of organisational collapse. Do you have succession planning? Is the organisation built around a mission, or around you? What happens to the people you’re serving if you walk away in two years?

What is your cultural competency?

Have you consulted with the communities you intend to serve? Are their voices in your governance structure? Do you understand the historical and social context of the issues you’re addressing?

If you’ve read this far and you’re still convinced there’s a genuine gap that nobody is filling, and you have the expertise, the resources, and the tenacity to fill it responsibly, here are some recommendations based on our experiences.

• Get legal advice early. The structure you choose matters enormously. For specialist NPO legal advice, ngoLAW and Ricardo Wyngaard and Associates are two of the most respected practices in South African nonprofit law. They can help you understand your obligations before you make an expensive mistake.
• Get your accounting right from the start. Don’t wait until your first compliance crisis. Firms like Ziyo and Turning Point Chartered Accountants work specifically in the nonprofit sector and understand the particular demands of DSD and SARS compliance.
• Invest in donor management systems. Managing donor relationships without proper systems is how organisations lose funding and credibility. Look at tools designed for the South African context: Paysoft Impact, ActiveDonor, and 10BucksOnly all offer platforms built for this environment.
• Map the landscape first. Before you build anything, spend time understanding what already exists. You might find that the most effective thing you can do is support an existing organisation rather than start a new one.
• Partner before you build. Consider whether your vision can be realised through a formal partnership, a fiscal sponsorship arrangement, or a programme hosted within an existing organisation. Not everything needs to be a standalone entity.

Final Thoughts

When you are trying to serve real people with real needs, passion and good intentions are simply not enough.

Learn first, look for partnerships and understand the landscape. Know the law, the costs, and your own limitations. Understand the legal compliance framework and the consequences of non-compliance.

If there is truly a gap that you are genuinely positioned to fill, build something that is ready to carry the weight of the mission.