Section 18A certificates and donor receipts
Whether the Non-profit pack issues Section 18A certificates, what a South African donor receives until then, and what to agree with your accountant.
By Achekam · · 4 min read · For Non-profit businesses in South Africa
Launching soon. The Industry CRM add-on described in this article is launching soon. This article describes it as it will work at launch.
Every February, the e-mails start. A South African tax year runs from 1 March to the last day of February, and as it closes, donors who gave during the year ask for their Section 18A certificates. Companies ask for them, individuals ask for them, and a late or wrong certificate is a poor way to thank someone for their support.
If your organisation uses, or plans to use, the Non-profit & fundraising pack in Achekam's Industry CRM, you will want to know a plain thing: does it issue those certificates? The short answer is not yet. This article explains what the pack sends instead, what is planned, and how to keep your certificate process sound in the meantime.
Why donors ask for a Section 18A certificate
Donors usually ask for a Section 18A certificate because they want to claim the gift in their own tax affairs. Which organisations may issue one, what it must show, and what a donor may claim are set by SARS, and they change from time to time.
That is exactly why the certificate needs care. A certificate issued by an organisation that does not hold the right approval, or one that leaves out required details, can cause problems for the donor and for you. The rules belong with SARS and your accountant, and this article does not try to restate them. SARS's page on public benefit organisations explains what a public benefit organisation is, how approved ones are exempt from income tax, and how they may get section 18A approval to issue tax-deductible donation receipts.
What the pack sends today
The pack issues no Section 18A certificates yet. Until it does, a donor receives a receipt or an acknowledgement.
That receipt or acknowledgement is part of the pack's donor welcome workflow. The workflow calls and thanks the donor, records their preferences, confirms the gift reached the bank, sends the receipt or acknowledgement, and later sends an update on what the gift made possible. The confirmation step matters here: in the pack, a gift is marked received by a person who has seen it in the bank, and no bank, debit-order or payment feed is read. Nothing is acknowledged until someone has checked the money arrived.
A receipt or acknowledgement is a courtesy and a record of the gift. Do not present it to donors as a Section 18A certificate, and do not let staff assume that sending it satisfies a donor who asked for one.
Certificates only where the 18A approval number is recorded
When Section 18A certificates come to the pack, they are planned only for organisations that record their 18A approval number in it. An organisation that has not recorded the number will continue to send receipts or acknowledgements.
That is a sensible safeguard: a tax certificate should only ever come from an organisation that holds the approval to issue it. If you hold the approval, keep your approval letter safe and make sure the number you record is exactly as it appears on it.
Donation receipts and the third wave
The Industry CRM is being released in waves. Donation receipts are part of the add-on's third wave, along with bookings, subscriptions and renewals, milestones and retentions, and deferred revenue. The pack keeps Donors and Donations and pledges by fund and campaign, so when receipts and certificates are produced from it, the information they draw on is already being recorded gift by gift.
That gives you a reason to start recording donations in the pack carefully now, even while certificates are still produced elsewhere: the record you build is the record future documents will rely on.
Running your certificate process in the meantime
Until certificates come from the pack, keep your existing process and tighten it:
- Keep one register of qualifying donations, gift by gift, with the donor's details as they should appear on the certificate.
- Reconcile the register to the bank before any certificate is issued, so you never certify money that did not arrive.
- Number certificates in sequence and never reuse a number.
- File a copy of every certificate issued. Achekam's Document Centre is a folder-based store where you can upload files, tag and search them, and keep earlier versions when one is replaced; a folder per tax year keeps the copies in order.
- Have a second person check each batch before it goes out, especially names, amounts and dates.
What to tell a donor who asks
Be direct. If a donor asks whether the acknowledgement they received is their tax certificate, say that it is not, tell them when their certificate will follow and who will send it, and keep a list of every donor who has asked so nobody is missed when certificates go out. A clear answer early in the year is worth far more than an apology in February.
Questions to settle with your accountant
Before February, sit down with your accountant and agree:
- Does our organisation hold a Section 18A approval, and does it cover the activities donors are funding?
- Which gifts qualify for a certificate, and which do not, such as gifts in return for a benefit?
- What must each certificate contain, and who checks it?
- How will we reconcile certificates issued to our books and bank?
- What records must we keep, and for how long?
The rest of the donor journey is described in welcoming and thanking a new donor. For reminders before a pledge falls due, see reminders for pledges and volunteer shifts, and for the people who give time rather than money, onboarding volunteers with screening and agreement.
Book that meeting with your accountant now, well before the tax year ends, so that this year's certificates go out correct and on time.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
