If you have tried to set up a South African non-profit that can issue tax certificates, you have probably encountered all three abbreviations in the same week. NPO, NPC, and PBO describe three completely different things, governed by three different laws, administered by three different government bodies. You can hold all three — and for a Section 18A-approved fundraising organisation, you usually need to.
NPO — Non-Profit Organisation (NPO Act)
Governed by the NPO Act 71 of 1997, administered by the Department of Social Development (DSD). Registration gives you an NPO number. It is voluntary — you do not legally have to register — but it signals legitimacy to donors and grantmakers and is often required by funders.
An NPO number has nothing to do with tax status. It does not exempt your organisation from income tax, and it does not allow you to issue Section 18A certificates.
NPC — Non-Profit Company (Companies Act)
Governed by the Companies Act 71 of 2008, administered by CIPC (Companies and Intellectual Property Commission). An NPC is a legal entity — like a company, but with no shareholders and no profit distribution. The letters “NPC” must appear in your organisation's name.
Having CIPC registration as an NPC gives you legal personhood (your organisation can own property, enter contracts, sue and be sued in its own name). It says nothing about your tax status.
PBO — Public Benefit Organisation (Income Tax Act)
Governed by the Income Tax Act No. 58 of 1962, administered by SARS. A PBO is a tax status, not a legal form. SARS grants PBO approval to organisations whose activities fall within the Ninth Schedule of the Act. Approval gives you:
- Exemption from income tax on qualifying income
- A PBO number (the exemption reference number)
- Eligibility to apply for Section 18A status
PBO approval is not automatic — you apply to SARS with your constitutive documents and a description of your activities.
Section 18A — the additional layer for donation receipts
Section 18A approval is a further step beyond PBO status. It authorises your organisation to issue tax-deductible donation certificates. Without it, donors cannot claim a deduction, even if you have NPO and NPC and PBO registrations.
The SARS IT3(d) BRS confirms that the PBO number is the key identifier on every Section 18A certificate — and that without it, the entity cannot have Section 18A status.
How they fit together — a practical example
A typical Section 18A-approved NPO in South Africa might look like this:
- Registered with CIPC as an NPC (legal entity, Companies Act)
- Registered with DSD as an NPO (voluntary, NPO Act) — gives NPO number
- Approved by SARS as a PBO (income tax exemption) — gives PBO number starting 93...
- Approved by SARS for Section 18A (can issue tax-deductible certificates)
Each registration is maintained separately. Lapsing one does not automatically affect the others, but you need all four to be in order if you want to issue valid Section 18A certificates.
What does this mean for your Hopely account?
When you set up your organisation on Hopely, the PBO number field maps directly to the Section 18A certificate and the IT3(d) Exemption Reference Number. If you have not yet received Section 18A approval, certificates you generate will be incomplete and not valid for donor tax purposes. Get the approval letter from SARS first — then you are ready.