COVID 19: Revised Budgets & Cash Flow Forecasts
COVID 19 and our response to it has brought about massive changes in so many ways. The lockdown has directly affected the way we work, and the activities we are carrying out. Some organisations have had to close down part or all of their operations, while others have ramped up or redirected their efforts. It is a good idea right now to re-look at the financial plans of your organisation. The annual budget for an organisation and/or for a particular project may have been approved by the board and by funders before COVID 19. The following may be reasons for significant variances from the original approved budget, as a direct financial impact of COVID 19: Click here for more details. 
How a Community of Long-Term Monthly Donors Make a Long-Term Difference
As a non-profiteer of many years, I have known donor giving programs to be described via a myriad of terms; sustainment, long-term, continued, recurring – all ways to describe the length of the relationship a donor establishes with a non-profit. And, while the terms may describe a donor’s giving, what can non-profits say about the results of their donors’ commitment? Is their repeated generosity creating the kind of long-term change a long-term donor expects? Water.org’s approach to empowering people with safe water and sanitation delivers on long-term impact expectations and makes it convenient for donors to create the change they wish to see in the world. Click here for more details.
How to Hang On to Fundraisers in a Hot Job Market
Employees across the country left their jobs en masse this spring. Nearly 4 million people quit work in June, according to the Department of Labor’s most recent jobs data. Many of these employees were restaurant or hospitality workers looking for safer, better paying workplaces, but executives quit, too. The Great Resignation, as some commentators are calling it, is poised to reshape the workforce, and nonprofit employees are no exception. Click here for more details.
NEW EMERGENCY RELIEF MEASURES FOR EMPLOYERS AND EMPLOYEES
NEW EMERGENCY RELIEF MEASURES FOR EMPLOYERS AND EMPLOYEES IN RESPONSE TO THE CONTINUING COVID-19 PANDEMIC AND THE RECENT UNREST IN THE COUNTRY
As the country looks to recover from the third wave of COVID-19 and from the after-effects of the violence and looting that particularly affected KZN and Gauteng, government has announced some new, and some reinstated, measures that could help organisations and employees working in the non-profit sector. Our focus here is on the reinstatement of the deferral of payment of employees’ tax to SARS for the period 1 August to 31 October 2021, the extension and expansion of the employment tax incentive (“ETI”) for the period 1 August to 30 November 2021 and some additional UIF measures. There are also proposed extensions to the UIF-COVID-19 TERS but these are directed at a specific range of employers and employees affected directly by the recent level 4 lockdown, so we will not detail these here. Please note that all measures are subject to the passing of the necessary legislation or regulations.

Deferral of PAYE liabilities

PAYE deferral relief measures are reinstated for another limited three-month period. This will enable deferral of payment of 35% of the PAYE liability without the imposition of administrative penalties and interest, provided that the deferred PAYE liability is paid to SARS in equal instalments over a four-month period commencing 1 November 2021 (meaning that the first instalment payment must be made by 7 December 2021). Employers who are still unable to meet their payment obligations after the period of relief will need to apply to SARS for deferral of those obligations or for a compromise or waiver of tax debts to avoid collection measures. The relief will be available to:
  • small or medium sized businesses conducted by a company, partnership, individual or trust with a gross income not exceeding R100 million for the year of assessment ending on or after 1 April 2021 but before 1 April 2022. That gross income should not include more than 20 per cent of income derived from interest, dividends, foreign dividends, royalties, rental from letting fixed property or annuities.
  • employers who were registered with SARS as an employer by 25 June 2021 and who are tax compliant in terms of the Tax Administration Act when making a reduced payment.
Before deferring any payments to SARS, we urge you to:
  • Check that you are fully tax compliant, as the relief will not apply to employers that have failed to submit all required returns (not only PAYE returns) or have tax debt in excess of R100 (unless an instalment agreement with SARS is in place). If you are not compliant but still delay PAYE payments, you may end up with interest and penalties due! To avoid this, SARS recommends that you check your statement of account 48 hours after submitting the relevant EMP201 to ensure that they have not revoked the concession due to non-compliance.
  • Recognise that, while this relief amounts to an interest free loan from SARS and provides cash flow relief, your projected cash flow after the end of the deferral period needs to be considered, as you will for each of the 4 months after the deferral period, have to pay over not only the normal month’s PAYE, but also 25% of the total amount deferred. Don’t let it come back to bite you!

Extension and expansion of the ETI

The ETI was introduced with the objective of generating employment opportunities for young and less experienced work-seekers reducing the costs of employing them; this is done by reducing the employer’s PAYE liability by the qualifying sum. The additional relief measures will be available from 1 August 2021 for 4 months to employers who were registered with SARS as an employer by 25 June 2021 and who are tax compliant. The key measures are:
  • The maximum allowable values will be increased (for employees eligible under the current ETI Act) by R750 (from R1,000 to R1,750 in the first qualifying twelve months and from R500 to R1,250 in the second twelve qualifying months).
  • Monthly ETI claims in the amount of R750 can be made, during this four-month period, for employees from the ages 30 to 65 who would otherwise not be eligible for the ETI due to their age.
  • Monthly ETI claims in the amount of R750 can be made during the relevant four-month period for employees from the ages of 18 to 29 who are no longer eligible for the ETI as:
  • the employer has previously claimed ETI in respect of those employees for 24 months; or
  • the employees were in the employer’s employ before 1 October 2013.
Please note that the measures will allow the ETI claim to be based on actual remuneration paid in the relevant month where the full-time employee worked less than 160 hours for the month due to social distancing requirements or disruption to the business. This means that the remuneration paid to the employee would not need to be grossed-up for the purpose of calculating the incentive claimable. Please also note the inclusion of an anti-avoidance measure aimed at limiting potential abuse where an employer claims the incentive despite having significantly reduced the employee’s wages. This anti-avoidance measure will apply to wages below R2,000.

UIF-related measures

A directive dated 15 July 2021 from the Department of Employment and Labour recognises that, where employers are severely cash-constrained, they may not be able to pay their employees. In such cases, when agreement is reached on temporary lay-offs while the business is rebuilt, during which time employees may receive no, or minimal, remuneration, employees will qualify to receive existing reduced work time (“RWT”) benefits from UIF. What is new is that the UIF recently enabled a bulk application process for COVID-19 affected employers to apply for the RWT benefits for their employees, although the RWT benefits will still be paid directly to the employees. These payments are conditional on:
  • the employees being contributors to the UIF and having sufficient UIF credits; and
  • employers being up-to-date with their UIF compliance obligations, including the submission of monthly declarations to the UIF.
The Department of Employment and Labour is also drafting a special directive dealing with workers in KZN and Gauteng whose income has been affected by the unrest and looting to provide support through the UIF; however, at the time of writing, this had not yet been issued. We hope that this newsletter will be valuable in enabling you to understand the recent measures being offered to employers and employees. With best wishes The Ziyo Team
3 Powerful Strategies to Upgrade Your Recurring Giving Program
At Classy, we have a saying: the future is recurring. Not only are recurring donors over 400% more valuable compared to one-time donors, but recurring giving also provides your organization with a revenue stream that’s consistent from month to month. In a time when the future of in-person fundraising events is still uncertain due to COVID-19, having this predictability in your fundraising is more important than ever. Click here for more details.
How a Big Nonprofit Decided to Keep Tapping Into Its Endowment in the Pandemic
A year ago Amy Bressman, president of the UJA-Federation of New York, had a lot of grim news for her fellow volunteer board members — but also a pitch. Passover was approaching, but local food banks were closing their facilities due to Covid-19, requiring a revamp of how they distributed meals. Other nonprofits supported by the federation that provide an array of critical services were in danger of closing down entirely, and some weren’t sure they’d be able to reopen, creating a permanent hole in the safety net for people in need. Click here for more details.
5 Major Reasons You Need to Diversify Your Nonprofit Revenue Streams
Diversifying your fundraising portfolio with multiple nonprofit revenue streams is crucial to your organization’s sustainability. Just like a financial advisor wouldn’t recommend investing your life savings into one volatile stock, your nonprofit shouldn’t solely depend on a single revenue stream to keep it afloat. A diversified fundraising portfolio gives your organization peace of mind in knowing that you’re prepared for the things you can’t control, and that you’ll be able to bounce back when the next crisis hits. Click here for more details.
10 Ways Nonprofits Can Develop A Self-Funding Model
Nonprofits always have the problem of trying to find funding. New investors are still welcome, but the business needs to be able to operate under its own steam at some point. The process of developing a self-funding model for a nonprofit takes a concerted effort on behalf of the organization's leaders. Click here for more details.
Donor Stewardship: How to Stop Losing Your Donors
A strong individual giving program is the best way for nonprofits to ensure their financial health from year to year. And the reason why is pretty simple. An organization can lose a big grant in the blink of an eye, but it’s pretty difficult to lose all of your donors at once. Click here for more details.
35 amazing ways to engage and involve your donors and supporters
If you’re stuck wondering how to involve your supporters with your mission, look no further. Here are 35 ideas from a stream of my consciousness. Click here for more details.
How to Strengthen Donor Relationships Between Appeals
A one-time donation is always a win for nonprofits, but financial sustainability is heavily dependent on repeat donors. It is more cost-effective to retain a donor than recruit a new one, but what does “retain” really mean? Ultimately, retaining a donor means getting them to donate again. And in order to do that, you have to take a calculated and tactful approach. Click here for more details.
How to systemize your fundraising
Many nonprofits share a common problem when it comes to fundraising: they don’t have enough time, money, or people-power to do everything they want to do. They want to raise more money and do more good in the world, but simply don’t have the resources to do any more than they already are. Click here for more details.
WHAT ROLE CAN PRO BONO PLAY IN BUILDING NONPROFIT RESILIENCY?
COVID-19 has changed everything about our daily lives. People are keeping their distance. Businesses have had to completely shift their way of doing business or closed entirely. Organizations everywhere are feeling the strain of multiple crises affecting their communities. And the social sector as a whole is looking for clear action steps for bouncing back and building nonprofit resiliency. Click here for more details.
The Ten Commandments of Crisis Management
You may ask why there are so many crises that appear to have been preventable. It’s a good question. Unlike crisis management, which is mainly reactive, risk management is a proactive process with its goal of crisis anticipation and preparation. It may run counter to individual leaders’ inner nature, but the objective is not to win in a crisis. The goal is to survive, fight another day, show humility and empathy throughout, and plan for recovery and an eventual comeback. Here, then, are my Ten Commandments of Crisis Management: Click here for more details.
South Africa’s COVID relief fund dogged by delays and corruption
‘It’s employers getting these payouts and not passing them onto the employees, and using it to pay their debts.’ The South African government is investigating reports of large-scale “looting” of its $26 billion coronavirus rescue package, launched to cushion the economic impact of the pandemic on struggling households. Click here for more details.
Working from home? How to get a tax refund from Sars
Some taxpayers who are now working from home may be able to claim for expenses they incur. In the tiniest of nutshells (listen to the audio for more detail), here are some of the criteria to meet in order to claim for home office expenses: You must spend 50% or more of you time in a tax year working from home. Your home office must be exclusively used as an office. Deductible expenses include rental or home loan interest apportioned and based on the office space in relation to the rest of the house. Phone bills don’t qualify as a tax-deductible expense. Click here for more details.
Emerging Challenges in Year End Preparation & Audits
Every year around this time, CMDS is very busy assisting organisations to finalise their financial records and prepare their annual financial statements for audit as the financial year end for many organisations falls either on 31 December, 28/9 February or 31 March. The lockdown has made this process more difficult from a practical point of view this year, but many audits are approaching completion with the hard work of finance staff and the cooperation of the auditors and funders. Click here for more details.
CMDS: Financial Health Check
  • How financially fit is your non-profit organisation?
  • Are its financial resources well managed?
  • How healthy are your financial control systems?
This checklist will diagnose the health of your organisation's systems of financial management. Click here for more details.
How One Social-Justice Organization Diversified Its Revenue
NEW YORK — As he leads a visitor on a tour of the busy Harlem intersection where the organization he co-founded has made a home for the past 25 years, Khary Lazarre-White explains with pride how Brotherhood/Sister Sol transformed a cluster of mostly vacant and rundown bodegas into classrooms and a temporary headquarters. A few steps later, he pauses at a community garden — an oasis of green amid rows of brownstones and gray tenements — run with help from the young people who participate in the group’s programs. Finally, he heads two lots over to an empty hole in the ground, which will soon be the site of the nonprofit’s new headquarters. Click here for more details.
New coronavirus relief changes that every South African employee should know about
Minister of Employment and Labour, Thula Nxesi, has published a new directive which aims to make it easier for South African employees to receive financial support from the Temporary Employee/Employer Relief Scheme (TERS). The TERS applies to employers who are ‘facing distress’ and are unable to pay salaries due to the lockdown. It is one of the key ways that the government is helping distressed workers during the coronavirus pandemic. Click here for more details.
New push to allow South Africans to access their retirement funds during coronavirus lockdown
Trade federation Cosatu has submitted an urgent request to Finance minister Tito Mboweni, to allow workers to access part of their retirement fund savings for coronavirus financial relief. Cosatu said that other than the ‘very meagre’ TERS benefit, many of its members are not receiving income as they are are not working during the lockdown period. “We are of the firm view that access to sufficient income during the lockdown period, coupled with the threat of a rapidly spreading Covid-19 pandemic, is critical to the well-being of workers and their families,” Cosatu said. Click here for more details.
UIF-Covid-19 TERS National Disaster Application System
The COVID-19 UIF Beneficiary Process – Temporary Employers Relief Scheme (TERS) The benefit is only available where an Employer is registered with UIF The benefit is available to Employees who are laid off as a result of COVID-19 and do not receive a salary or are receiving a reduced salary. In other words, an Employer could top-up an Employee’s salary The benefit is available where an Employer has closed the whole or part of its business for a period of three months or less as a result of COVID-19 Click here for the solution user guide. Click here for more details.
Existing UIF Benefits for Contributing Employers and Employees
The Unemployment Insurance Fund (UIF) has always provided for a level of protection to employees and the unemployed. Aside from the new COVID TERS benefit through UIF covered in our previous newsletter, there are a number of existing UIF benefits that are relevant in this time of crisis, and these have been highlighted in various media statements. This is a quick and basic summary of relevant existing UIF benefits: Click here for more details.
All taxpayers beware – 10 points from SARS
On 5 May 2020, the commissioner for the South African Revenue Service (SARS) provided a detailed account of projected revenue collection in light of the Covid-19 crisis, along with insight of what we can expect from the tax collector in coming months. Jean du Toit, head of tax technical at Tax Consulting SA, unpacked the most important aspects of Edward Kieswetter’s address below: Click here for more details. 
SARS is changing the tax filing season due to the coronavirus – here’s what you need to know
The South African Revenue Service (SARS) has outlined changes to the coming tax filing season due to the impact of the coronavirus. In a presentation on Tuesday (5 May), SARS commissioner Edward Kieswetter said that the season will be comprised of three phases with a number of key changes being made. Click here for more details.
Covid-19 | Money Hub
The Covid-19 Money Hub will help answer your business and money questions and explore the financial help available to you during the coronavirus crisis. Click here for more details.
SARS UIF Benefits apply: COVID during disaster period
The Unemployment Insurance Fund (UIF) gives short-term relief to workers when they become unemployed or are unable to work because of maternity, adoption leave, or illness. It also provides relief to the dependants of a deceased contributor. The unemployment insurance system in South Africa is governed by the following legislation: Unemployment Insurance Act, 2001 (the UI Act) Unemployment Insurance Contributions Act, 2002 (the UIC Act) These Acts provide for the benefits, to which contributors are allowed, and the imposition and collection of the contributions to the UIF, respectively, and came into operation on 1 April 2002. Click here for more details.