Mosaic Philanthropy
Public benefit organisations, established and administered. We incorporate the entity, secure its section 30 and section 18A approvals, and then run everything that follows — the accounting, the receipts, the returns and the governance — so the people who founded it can spend their time on the cause instead of the compliance.
Your organisation should focus on public benefit. Not administration.
Most grant-making and charitable organisations are founded by people who care deeply about a cause and not at all about the Ninth Schedule. Within a year they are running a small, unfunded finance department: a bookkeeper who does not understand exempt entities, an auditor who arrives once a year, a company secretary who files the annual return, and a founder personally chasing donor identity numbers so that receipts do not get rejected.
Nobody in that arrangement is accountable for the whole. The approval sits with SARS, the entity sits with CIPC or the Master, the money sits with the bank, and the risk sits with the fiduciaries — who are personally exposed if the organisation loses its approval.
One mandate. Every administrative function.
Mosaic takes the entire administrative burden of the organisation, from the day it is conceived to the day it is wound up. One team, one accountable mandate, one point of contact.
Structuring & establishment
- Choice of vehicle — non-profit company, trust or association
- Founding documents drafted to the section 30 requirements
- Incorporation at CIPC or registration with the Master of the High Court
- Appointment of the fiduciaries and adoption of the founding document
SARS approvals
- Income tax registration and Tax Exemption Unit application
- Section 30 approval as a public benefit organisation
- Section 18A approval where the activities fall within Part II
- Responses to Tax Exemption Unit queries and requests for amendment
Section 18A receipting
- Sequentially numbered receipts issued against the donation
- Donor data captured to the SARS mandatory field requirements
- IT3(d) third party data returns prepared and submitted
- Bulk issue and delivery to donors at year end
Financial administration
- Full general ledger, maintained continuously and not at year end
- Bank feeds and reconciliation across every account
- Fund and project level reporting for restricted donations
- Annual financial statements and audit or independent review liaison
Grant & beneficiary administration
- Beneficiary and grantee records with supporting documentation
- Disbursement processing and payment preparation
- Evidence that funds were applied to the approved activities
- Reporting back to funders against their conditions
Governance
- Meeting notices, agendas, minutes and resolutions
- Statutory registers and the beneficial ownership register
- Fiduciary appointments, resignations and succession
- Conflict of interest and related party records
Tax & statutory filing
- IT12EI annual income tax return for exempt organisations
- Payroll, PAYE, UIF and skills development levy where staff are employed
- VAT registration and returns where the organisation is liable
- CIPC annual returns or Master of the High Court filings
Section 30 is the defining status.
Approval as a public benefit organisation is not a registration you obtain and forget. It is a status granted on conditions, and it can be withdrawn. These are the constraints that govern every organisation we administer.
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The sole object must be public benefit
The organisation must carry on one or more public benefit activities listed in Part I of the Ninth Schedule, in a non-profit manner and with an altruistic or philanthropic intent. Activities that are incidental to the object are permitted; a second, commercial purpose is not.
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No single person may control it
At least three persons must accept fiduciary responsibility for the organisation, they must not be connected to one another, and no single person may directly or indirectly control the decision making powers. Founder-controlled organisations are refused on this ground more often than any other.
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Funds may not be distributed
The organisation is prohibited from distributing its funds to any person other than in the course of carrying out its public benefit activities. Reasonable remuneration for services actually rendered is permitted; excessive payment to a founder, fiduciary or connected person is not.
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Trading is permitted only within limits
Exemption applies to qualifying receipts. Business undertakings and trading activities are only exempt where they are integral to the object, occasional and substantially staffed by volunteers, or fall within the permitted parameters. Anything beyond that is taxable, and must be identified and accounted for as such.
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Section 18A is a separate approval
Approval under section 30 does not entitle the organisation to issue deductible donation receipts. That requires separate approval and activities falling within Part II of the Ninth Schedule. Where an organisation carries on both qualifying and non-qualifying activities, donations must be tracked and applied accordingly.
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Assets are locked in on dissolution
The founding document must require that assets remaining on winding up are transferred to another approved public benefit organisation, an institution of a similar nature, or a prescribed public entity or department of state. Nothing returns to the founders.
For the underlying rules, SARS publishes the Tax Exemption Guide for Public Benefit Organisations in South Africa (IT26) and the Basic Guide to Section 18A Approval (IT17). We work to those guides, the Income Tax Act and the current Tax Exemption Unit practice.
What an approved organisation actually owes, and when.
This is the part founders rarely see before they commit. Every obligation below applies for as long as the organisation exists, whether or not it received a single donation that year.
Annually
- IT12EI income tax return for exempt organisations
- Annual financial statements, and audit or independent review
- CIPC annual return for a non-profit company
- Beneficial ownership filing — CIPC, or the Master for a trust
- EMP501 employer reconciliation where staff are employed
Twice a year
- IT3(d) third party data return of every section 18A receipt issued
- EMP501 interim employer reconciliation
- Provisional tax where any taxable trading income arises
Monthly
- EMP201 for PAYE, UIF and the skills development levy
- VAT201 where the organisation is registered for VAT
- Bank reconciliation and management reporting
Continuously
- Section 18A receipts issued as donations are received
- Statutory registers and minute book kept current
- Changes to fiduciaries, address or founding document reported
- Records retained for the prescribed period
From the first conversation to the final distribution.
We are engaged at every stage, and we are equally comfortable taking over an organisation that already exists as establishing one from nothing.
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Establish
We determine what the organisation is actually for, who will control it and how it will be funded — and only then choose the vehicle. The founding document is drafted to satisfy section 30 from the outset, rather than being amended later under pressure from the Tax Exemption Unit.
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Register
Incorporation at CIPC or registration with the Master of the High Court, income tax registration, the section 30 application and, where the activities qualify, the section 18A application. We handle the Tax Exemption Unit correspondence through to the approval letter.
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Operate
The ongoing mandate: accounting, receipting, payroll, returns, governance and reporting. The organisation gets management accounts it can actually govern from, and the fiduciaries get evidence that their duties are being discharged.
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Restructure
Objects change, funders change, and organisations outgrow their founding document. We handle amendments, changes of fiduciary, the addition of new public benefit activities and the reporting of those changes to SARS and the relevant registry.
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Wind up
When an organisation has done what it was formed to do, it should be closed properly: final financial statements, final returns, transfer of remaining assets to a qualifying recipient in terms of the founding document, and deregistration.
Advice is not administration.
There is no shortage of people who will advise a philanthropist on strategy, or manage a grant-making fund on their behalf. There are very few who will take responsibility for the statutory machinery underneath it.
The usual arrangement
- A consultant advises on strategy, then hands back a report
- A bookkeeper who has never administered an exempt entity
- An auditor who discovers the problems eleven months late
- Receipts issued from a spreadsheet, numbered by hand
- Donor details chased by the founder in February
- Four service providers, none of them accountable for the outcome
- The fiduciaries carry the risk of an approval being withdrawn
Mosaic Philanthropy
- Strategy, structure and the execution of both
- Accountants who administer exempt entities as their day job
- A live general ledger, reconciled monthly, not annually
- Sequentially numbered receipts issued from the ledger itself
- Donor data validated against the SARS requirements on capture
- One mandate, one team, one point of accountability
- Evidence the fiduciaries can rely on, produced continuously
Administered end-to-end on the Mosaic Hub.
Most administrators run charities out of an off-the-shelf accounting package and a spreadsheet of donors. We built our own. Every organisation we administer is run on the Mosaic Hub, which includes a dedicated public benefit organisation module — and the section 18A receipt is issued from the accounting system itself, not typed up separately.
Receipts that reconcile to the ledger
Every section 18A receipt is raised as a controlled, sequentially numbered transaction in the general ledger. The receipt, the donation and the bank deposit are the same record — so the total value of receipts issued always agrees to the income recognised.
IT3(d) readiness, checked on capture
The system evaluates every donor against the mandatory SARS fields before a receipt can be issued, and refuses to issue where identifying details, the income tax reference number, contact details or the physical address are missing. Nothing is discovered at submission time.
Nature of person, mapped correctly
Donors are classified into the SARS nature of person categories automatically, and date of birth is derived from the South African identity number, so the third party data return reflects what SARS expects rather than what a bookkeeper guessed.
Bulk issue and delivery
Year-end receipts are generated as PDFs and emailed to donors in bulk, with a per-send log recording what was sent, to whom and when. Reissues and corrections are tracked against the original receipt number.
Unlimited entities, one login
Where a family runs a foundation alongside its trusts and operating companies, all of them sit on one platform with a consolidated view — with access rights controlling exactly who may see the philanthropic entity.
Live, not annual
Bank feeds, continuous reconciliation and management accounts on demand. The fiduciaries can see the position of the organisation on any day of the year, which is the standard their duties are actually measured against.
Serious philanthropy, properly administered.
Mosaic Philanthropy is built for organisations where the amounts involved make the administration consequential — and where the founders would rather not become administrators themselves.
Family foundations
Families giving structurally rather than occasionally, often alongside an existing family office relationship, who want the philanthropic entity held to the same standard as the rest of the balance sheet.
Corporate social investment
Companies funding a dedicated vehicle for their social investment, who need the spend evidenced, the receipts correct and the reporting defensible to their own auditors and stakeholders.
Testamentary charitable trusts
Charitable trusts created under a will, where the trustees inherit an obligation they did not design and need an administrator who can bring it into compliance and keep it there.
Founder-led organisations
Organisations built around one person's commitment, which need the independent fiduciary structure that section 30 demands without losing the founder's direction of the cause.
Existing organisations
Approved organisations that have outgrown their current arrangements, or that have fallen behind on returns, receipts or registers and need the position regularised before it becomes a withdrawal of approval.
Professional advisers
Attorneys, auditors and wealth managers whose clients need a philanthropic structure established and administered, without the adviser taking on the ongoing statutory burden themselves.
The questions founders ask first.
General information on the South African rules, not advice on your organisation. We will give you that once we understand what you are trying to achieve.
What is the difference between section 30 approval and section 18A approval?
Section 30 of the Income Tax Act is what makes an organisation an approved public benefit organisation, which is the basis for its income tax exemption. Section 18A is a separate, additional approval that allows the organisation to issue receipts entitling its donors to a tax deduction. Section 30 approval does not automatically carry section 18A approval — the organisation must carry on activities listed in Part II of the Ninth Schedule and apply for it specifically.
Which structures can be approved as a public benefit organisation?
A non-profit company incorporated under the Companies Act, a trust registered with the Master of the High Court, or an association of persons formed under a written constitution. The right choice depends on how the organisation will be funded, controlled and eventually wound up. It is an advice question, not a form-filling question — which is why we do not ask you to choose before we have spoken.
What is the difference between Part I and Part II of the Ninth Schedule?
Part I lists the public benefit activities that qualify an organisation for approval as a public benefit organisation under section 30. Part II lists the narrower set of activities in respect of which section 18A receipts may be issued. An organisation can therefore be a fully approved public benefit organisation and still not be entitled to issue deductible donation receipts.
How many people must accept fiduciary responsibility?
At least three persons must accept fiduciary responsibility for the organisation, and no single person may directly or indirectly control the decision making powers relating to it. Those persons must not be connected to one another. This is a statutory requirement of section 30 and a common reason applications are refused.
Does approval mean the organisation pays no tax at all?
No. Approval exempts qualifying receipts and accruals from income tax, but the organisation remains a taxpayer. Trading income outside the permitted parameters is taxable, and the organisation still has obligations as an employer for PAYE, UIF and the skills development levy, must register for VAT where it exceeds the threshold, and must submit an IT12EI income tax return every year.
What is an IT3(d) return?
IT3(d) is the third party data return through which an approved section 18A organisation reports every receipt it has issued to SARS. It is submitted twice a year. Because SARS matches the data to donors' returns, receipts with missing donor identification, income tax reference numbers or address details are rejected — which is why donor data has to be captured correctly at the time the receipt is issued, not at year end.
How much can a donor deduct?
A donor's deduction for qualifying donations is limited to 10 per cent of their taxable income for the year, calculated before the donation deduction itself. Amounts above that limit are not lost — they are carried forward and treated as a donation made in the following year of assessment.
What happens to the assets if the organisation is wound up?
The founding document must require that any assets remaining on dissolution are transferred to another approved public benefit organisation, an institution of a similar nature, or a prescribed public entity or department of state. Assets cannot be distributed to members, founders or directors. SARS reviews this clause as part of the approval process.
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