Purpose

1. This policy sets out how Sparrows accepts gifts and donations, conducts its fundraising, accounts for donor funds separately from its Department of Social Development transfer payment, and records every donation in the Donor Register (§6).

Gift Acceptance

1. Sparrows may decline any gift or donation, in whole or in part, at the Executive Director's discretion. The Executive Director reports each decision to decline to the Board, with reasons, at its next meeting.
2. A gift or donation that comes with a condition attached — whether stated expressly, or reasonably apparent from the donor's conduct or the pattern of their giving — must be declined where that condition would:
   1. give the donor influence over the care, treatment, or placement of a specific child or a group of children;
   2. require Sparrows to act inconsistently with any of its own policies, including the Conflict of Interest Policy; or
   3. create an undisclosed benefit to a Board member, the Executive Director, or a member of staff, which the Conflict of Interest Policy governs directly.
3. Where a donor proposes a condition not covered by §2.2, the Executive Director decides whether to accept it, and refers the decision to the Board where the value or nature of the gift warrants it.
4. Sparrows does not treat a child's or a group of children's participation in a donor's religious, cultural, or similar activities as a condition of that donor's continued or future support, whether or not the donor has stated it as one, and says so plainly where a donor's conduct suggests they believe otherwise. Support lost for this reason is not treated as a fundraising failure, and is reported to the Board in the same way as a gift declined under §2.1.
5. Surplus or currently unusable in-kind donations. An in-kind donation Sparrows cannot put to immediate use — for example, clothing surplus to the children's current needs under the Health, Safety and Nutrition Policy (§3) — is not left unused or discarded. At the Executive Director's discretion, it may instead be passed on to identified members of the surrounding community with a genuine need for it, consistent with Sparrows' broader community-facing purpose. This decision, and who received the item, is recorded in the Donor Register (§6).
6. Donations that do not meet a standard Sparrows must comply with. A donated item that would put Sparrows in breach of a minimum standard it is required to meet is declined outright, or — where it would still be of genuine use to someone outside Sparrows' care despite not meeting the standard — forwarded to an identified community member under §2.5, rather than brought into use at Sparrows itself. The Executive Director records the decision, and the reason for it, in the Donor Register (§6) in the same way as any other donation. This is not a judgement on the donor's generosity; it reflects a standard Sparrows itself has no discretion to waive. Examples of a standard this clause applies to:
   1. a mattress of less than the minimum 15cm thickness, or not covered in fire-proof material and made from high-density foam, as every child's bed is required to be (Health, Safety and Nutrition Policy §4.4);
   2. clothing that does not meet the itemised standard the Health, Safety and Nutrition Policy (§3.2) binds Sparrows to providing.
7. Formal Gift Agreements for major or multi-year gifts. A gift or restricted grant of R500,000.00 or more, or a gift that is a multi-year commitment, is documented in a written Gift Agreement before it is accepted, setting out the amount or commitment, the purpose it is given for, the payment schedule, the reporting Sparrows will provide, and what happens if the underlying programme or project changes. A one-off gift of less than R500,000.00, with no ongoing commitment, does not need this formality — this does not lower the conditions test at §2.2–§2.4.
8. Naming rights. Sparrows may offer naming rights over a building, room, or piece of equipment in recognition of a significant contribution, subject to Board approval and a written agreement stating the name, its duration, and Sparrows' right to withdraw it if the donor's conduct becomes seriously inconsistent with Sparrows' values or child protection principles. This does not create an ownership interest in Sparrows' property.
9. Returning a donation. Sparrows returns a donation it knows, or should know, is ineligible under the law or under the donor's or a giving platform's own guidelines, or that was given in error, because keeping it would mislead the donor and may breach the terms on which it was given. The Executive Director records the return in the Donor Register (§6) with the reason and the date.

Fundraising Priorities

1. Sparrows values every donation it receives, including a small or irregular gift, and values in particular the base of regular donors whose giving, month after month, Sparrows can rely on — this is a genuine strength, not a lesser form of support because any single gift is modest.
2. Sparrows carries a maintenance backlog on its buildings and grounds that has built up over more than a decade, and that regular giving at its current scale cannot resolve on its own. Reflecting this, Sparrows' fundraising effort is currently focused on securing the large donations — from major donors, corporates, and grant-making bodies — capable of funding that backlog, including through a formal Gift Agreement and, where appropriate, naming rights (§2.7–§2.8). This focus does not mean a smaller or more frequent gift is any less welcome, or that existing donors giving at whatever level they are able need to give differently; it describes where Sparrows is currently directing its own fundraising effort, not a change in what it will gratefully accept.

Fundraising Conduct

1. Sparrows represents its fundraising needs honestly. A fundraising appeal must not overstate a need, misdescribe how a donation will be used, or use a photograph or account of a child inconsistently with the Media and Photography Consent Policy.
2. Where a donor gives for a stated purpose, Sparrows uses that donation for that purpose, or returns it, or agrees a change of purpose with the donor directly.
3. An electronic newsletter, appeal, or update sent to a donor or supporter follows the direct-marketing consent rule at the POPIA Data Protection Policy §14, including the Direct-Marketing Register kept under it.
4. Sparrows may not run a raffle, sweepstake, or similar chance-based fundraiser open to the public until it is registered with the National Lotteries Commission as a society. Sparrows is not currently registered as a society for this purpose and has no application in progress. It does not run a raffle or similar lottery-type fundraiser until that registration is in place. The following apply:
   1. Under the Lotteries Act 57 of 1997, a person who conducts, promotes, or benefits from a lottery commits an offence unless the Act authorises it (section 57(1));
   2. A raffle open to the public is authorised only as a society lottery. The society must be registered with the Commission (section 41), and the lottery must run under a scheme that the society and the Commission have approved (section 38);
   3. The Act has two narrow exemptions. One is a private lottery for the members of a society, advertised only on its own premises (section 37). The other is a lottery at an exempt entertainment such as a dinner or fête, with no money prizes and a limit on ticket sales (section 36). This policy does not rely on either for a raffle open to the public; and
   4. This clause is separate from, and does not affect, the fundraiser cost cap fixed by Sparrows' own Constitution (clause 9.1.4.5.1; Delegation of Authority Policy §8.3).
5. No fundraising role is paid on commission. A staff member, contractor, volunteer, or agent raising funds on Sparrows' behalf is paid only a salary, hourly rate, or fixed fee — never a percentage of, or a bonus tied to, the amount raised. This protects against the aggressive or misleading solicitation practices a commission incentive could otherwise encourage.
6. Profiles and declarations on outside platforms. The Executive Director keeps every profile, listing and declaration Sparrows holds on a giving, funding, verification or nonprofit-benefit platform accurate and up to date, and renews each declaration the platform requires at least once a year. The Executive Director tells the platform at once when a statement Sparrows made in a declaration stops being true. The platform relies on these statements to decide whether Sparrows is eligible and may withdraw Sparrows' access if one is wrong.
7. Online sales to raise funds. Before a buyer pays for goods or services that Sparrows sells online to raise funds, the Executive Director makes sure, as the Electronic Communications and Transactions Act 25 of 2002 requires, that:
   1. the website shows Sparrows' full name and legal status, its registration number, the names of its office-bearers, its physical address and telephone number, its website and email address, and the address where it receives legal service of documents (section 43(1));
   2. the website describes the goods or services offered, and gives the full price including transport costs, taxes and any other fees, the manner of payment, the time for delivery, the terms of the agreement, Sparrows' return, exchange and refund policy, and any other information section 43(1) requires;
   3. the website sets out the security procedures and privacy policy that apply to payment and personal information, and Sparrows takes payment only through a system that is sufficiently secure (section 43(1) and (5); Financial Policy §12);
   4. the buyer can review the whole order, correct mistakes and withdraw from it before placing it (section 43(2));
   5. the buyer is told that they may cancel without giving a reason and without penalty within seven days of receiving goods, or of concluding an agreement for services, and Sparrows refunds the buyer in full within 30 days of a cancellation, unless section 42(2) excludes that right (section 44); and
   6. the sale also complies with the Consumer Protection Act 68 of 2008 where that Act applies. It applies to a supplier whether or not the supplier operates for profit (section 5(8)(b)).

Accounting for Donor Funds

1. Donor funds are recorded and accounted for separately from Sparrows' Department of Social Development transfer payment, which is itself restricted funding subject to its own reporting conditions (Financial Policy §18.3).
2. Where a donation is given for a stated purpose, Sparrows' records show that donation and its use as a distinct line, so that a donor, an auditor, or the Board can trace it independently of Sparrows' general or restricted funds.
3. The Board may direct the proceeds of a fundraising effort to the operating reserve (Financial Policy §5.2.4). A donation given for a stated purpose is never directed to the reserve (§4.2).

The Donor Register

1. Sparrows keeps a Donor Register, recording every donation received — cash and in-kind alike — together with any donation declined under §2.1 or §2.6, forwarded to a community member under §2.5 or §2.6, or returned under §2.9. The Register is the single record a donor, an auditor, or the Board can consult to trace what Sparrows received, from whom, for what purpose, and how it was used or, where relevant, why it was not accepted.
2. The Register is maintained by the Executive Director, and is updated at the time each donation is received, declined, forwarded, or returned — not reconstructed after the fact. It records, at minimum:

   Field	What is recorded
   Date	Date the donation was received, declined, forwarded, or returned
   Donor	Donor's name, or "Anonymous" where the donor has asked not to be identified (§7.1)
   Type	Cash, in-kind, pledge, or bequest
   Description	What was given — an amount, or a description of the goods
   Estimated value	For an in-kind donation, a reasonable estimate of its value
   Purpose or restriction	Any stated purpose or condition the donor attached (§2.2, §2.3, §4.2)
   Status	Accepted / Declined (§2.1, §2.6) / Forwarded to a community member (§2.5, §2.6) / Returned (§2.9)
   Reason	For a donation declined, forwarded, or returned: the reason recorded under §2.1, §2.5, §2.6, or §2.9, and, if forwarded, to whom
   Use or allocation	For an accepted donation, the programme or purpose it was applied to, or a cross-reference to the accounting record required by §5.2
   Acknowledgement given	Whether and how the donor was thanked (§7.1), and the date
   Tax or B-BBEE treatment	Whether the donor took a section 18A receipt, took SED documentation, or neither (§9.5)

3. The Register is a standing item at each Board meeting where a donation of significant value has been received, declined, or forwarded since the last meeting, and is otherwise available to the Board and to Sparrows' auditors on request.

Acknowledging Donors

1. Sparrows acknowledges a donation appropriately, using its Donor Thank-You Letter or another manner agreed with the donor. A donor's name is included in Sparrows' annual report and other standard donor-recognition materials unless the donor asks to remain anonymous. Sparrows does not publicise the value of a specific donation, or use a donor's name, image, or story beyond that standard listing, without the donor's consent.
2. A donor that gives through a workplace-giving, matching or similar platform is not named as a donor, and its logo or brand is not used, without its prior written consent, because the platform's terms require that consent. The standard listing in §7.1 applies to such a donor only once the consent is on file.

Board Stability and Fundraising

1. The Board acknowledges that instability in its own membership makes fundraising harder, not easier. A change in who sits on the Board is not only an internal governance matter — it is an administrative trigger elsewhere: every appointment or election of office-bearers must be reported to the Department of Social Development's NPO Directorate within one month, even where nothing changes (Nonprofit Organisations Act 71 of 1997, s18(1)(b)) — the Membership Policy states this reporting duty, and the office-bearer standing it depends on, as its own standing rule — and the office-bearer details on that NPO record must in turn align with whatever Sparrows submits in any application to the National Lotteries Commission, including the society registration §4.4 describes. A Board that changes membership frequently multiplies these updates, creates a real risk that the two records fall out of step with each other, and unsettles the continuity of relationship a major donor or grant-maker looks for before committing significant, long-term support.
2. The Board commits to providing stability in its own membership, so far as it is able, as a direct contribution to Sparrows' fundraising effort — not only for its own governance benefit. This does not override the Board's own composition, vacancy, or succession provisions elsewhere; it states why the Board treats its own continuity as a fundraising matter as well as a governance one.
3. Board Giving. Every Board member makes a personal financial contribution to Sparrows each year, of an amount they consider meaningful to them, alongside — not instead of — their own advocacy and fundraising effort on Sparrows' behalf. This is not a membership fee and does not affect a Board member's standing; it is a standard of full participation the Board holds itself to, on the reasoning that a funder or grant-maker who asks whether a board gives before it asks anyone else to gets "yes" as the answer.

Donor Tax and B-BBEE Benefits

1. Sparrows is registered with the South African Revenue Service (SARS) as a Public Benefit Organisation and is approved to issue section 18A receipts (registration 93000-5523). A donor may claim a tax deduction only with a receipt that Sparrows issues under section 18A(2) of the Income Tax Act, 1962, and Sparrows issues one only for a bona fide donation of cash or of property in kind. For each receipt:
   1. the Executive Director asks the donor for their name and address; whether they are an individual, a company, a trust or another kind of person; for an individual, the type of identity document and the country that issued it; their identity or registration number; their trading name, if it differs from their registered name; their income tax reference number; and their email address and contact number;
   2. for a donation of property in kind, the Executive Director also records a description of the property and the deemed amount of the deduction under section 18A(3) or (3A);
   3. the receipt states Sparrows' section 18A reference number, the date Sparrows received the donation, Sparrows' name and an address for enquiries, the donor's name and address, the amount or nature of the donation, and a certification that the receipt is issued for section 18A and that the donation has been or will be used exclusively for Sparrows' object (section 18A(2)(a)). It also carries the further information that SARS Notice 6762 prescribes, including a unique receipt number; and
   4. the Executive Director submits the information on every receipt to SARS in an electronic third-party return (the IT3(d)) under section 26 of the Tax Administration Act 28 of 2011. A return for receipts issued from 1 March to 31 August is due by 31 October. A return for receipts issued from 1 March to the end of February is due by 31 May (SARS Notice 3631).
2. Sparrows does not issue a section 18A receipt for any of the following, because SARS does not treat it as a bona fide donation:
   1. services rendered, such as a professional person giving a voluntary service or their skill free of charge;
   2. an amount paid to attend a fundraising dinner, dance or charity golf day;
   3. the amount paid for a successful bid for goods auctioned to raise funds;
   4. memorabilia, paintings and similar items donated to be auctioned to raise funds;
   5. an amount paid for a raffle or lottery ticket;
   6. an amount paid for school fees, for entrance to a school, or for a compulsory school levy;
   7. the value of free rent, water or electricity that a lessor provides to Sparrows;
   8. a payment of a debt Sparrows owes, such as the cost of repairs to a vehicle paid on Sparrows' behalf;
   9. prizes and sponsorships donated for a fundraising event such as a charity golf day;
   10. a membership fee;
   11. an amount not yet paid or transferred, such as a pledge, a promissory note or a future instalment; or
   12. a contribution that a corporate makes under the B-BBEE Codes of Good Practice to enhance its own B-BBEE credentials.
3. The deduction a donor may claim in a year of assessment is limited to 10% of the donor's taxable income, calculated as section 18A(1) provides. A donation that is disallowed only because it exceeds that limit is carried forward and treated as donated in the next year of assessment.
4. A donation to Sparrows may count toward a corporate donor's own Broad-Based Black Economic Empowerment (B-BBEE) scorecard as a Socio-Economic Development (SED) contribution under Code Series 500 of the B-BBEE Codes of Good Practice. The Codes recognise a contribution made with the objective of facilitating income-generating activities for its beneficiaries, so that they gain sustainable access to the economy. The Codes list the forms it commonly takes: development programmes for women, youth, people with disabilities and people living in rural areas; healthcare and HIV/AIDS programmes; education programmes, resources, materials, bursaries and scholarships; community training and skills development; and arts, cultural and sporting development programmes (Schedule 1). A donation spent only on food, clothing or building repairs generally does not meet that test. The Codes recognise a contribution in full when at least 75% of its value directly benefits black people (Statement 500, paragraph 3.2). Sparrows is a registered Public Benefit Organisation in a rural area. Its beneficiaries, the children in its care, are predominantly black. Whether, and how much, a donation counts is for the donor's verification agency to decide. Sparrows does not certify or guarantee it.
5. A donor takes one benefit for a donation, not both. A donation that is awarded SED points cannot also have a section 18A receipt, and a donation that has a section 18A receipt cannot also be awarded SED points. SARS does not treat a contribution made to enhance the donor's B-BBEE credentials as a donation (§9.2.12). Therefore:
   1. before Sparrows issues either, the Executive Director asks a company donor whether the donation is for SED recognition;
   2. where it is, Sparrows gives the donor the documentation in §9.6 and issues no section 18A receipt;
   3. where it is not, Sparrows issues a section 18A receipt (§9.1) and gives no documentation for SED recognition; and
   4. the Executive Director records which of the two the donor took in the Donor Register (§6.2).
6. The Executive Director gives SED documentation only for a donation that is applied to one of the purposes in §9.4. The documentation is:
   1. a letter that states the donor's name, the amount or nature of the donation, the date Sparrows received it, and the purpose it was applied to, and confirms that the beneficiaries are at least 75% black people;
   2. a copy of Sparrows' current sworn affidavit on its B-BBEE status under the Codes; and
   3. once the donation has been applied, a written confirmation that it was applied to that purpose, and what it did for the beneficiaries.
7. A funding relationship that is not an ordinary donation, such as income that Sparrows receives as the beneficiary of a trust, is recorded in the Donor Register (§6) in the same way as any other source of funding. It is reported to the Board in the same way as any other significant, ongoing funding relationship.

Review

1. This policy is reviewed annually by the Board.