1. DON’T PANIC The new B-BBEE guidelines and non-profits Dylan Edwards, Senior Consultant NOVEMBER 2012

3. WHY THE FUSS? “firms could lose black economic empowerment (BEE) points if they donate to charities that do not have 100 percent black beneficiaries.” - from “BEE proposal could ruin charities” (The Mercury)

5. SED CHANGES The full value of Socio-Economic Development contributions is recognisable if at least 75% 100% of the beneficiaries are black. If less than 75% of the full value... directly benefits black people, the value of the contribution... multiplied by the percentage that benefits black people, is recognised.

6. ALL OR NOTHING? “The full value of socioeconomic development contributions made to beneficiaries is recognisable if at least 100% of the value directly benefits black people.”

8. >Now: All 5 points >Future: 3.5 points? Or 0?

9. GIVEN BENEFIT OF THE DOUBT 100% black = 100% points <100% black = proportional points – 60% black beneficiaries STILL = 60% points – BUT 80% black beneficiaries = 80% pts (previously 100%) – Unintended consequence: firms might need to spend MORE on charities the fewer black beneficiaries they have. 130% required spend to get 100% available pts?

10. SPOT THE DIFFERENCE Now: Proposed:

11. BUT Look!

12. BIG CHANGES From seven – Ownership – Management – Employment equity – Skills development – Preferred procurement – Enterprise development – Socio-economic development To five – Ownership – Management control – Skills development – Enterprise and supplier development – Socio-economic development

13. SCORING Ownership25 Management control15 Skills development20 Enterprise and supplier development40 Socio-economic development5 TOTAL105

14. MORE FIRMS NEED TO COMPLY Previously companies with a turnover R5m<R35m only had to comply with 4 areas on the scorecard. Now all companies with turnover >R10m have to comply with ALL five.

15. IT’S GOING TO BE HARDER Source: Minister Rob Davies’ presentation

17. ENTERPRISE & SUPPLIER DEVELOPMENT (ESD) Combines enterprise development (15 pts) and preferred procurement (20 pts) and adds another 5 pts. Only 5pts on offer for ED projects not linked to supply chain.