BEE Intro and BEE benefits available to NPOs

1. 1
PETER ROSS
ActivPro Business Solutions
B3 Bloubergsands,
22 Arum Road,
Bloubergrant. 7441.
Tel: 021 556 2271
Cell: 083 302 3791
Email: peter@activpro.co.za
INTRODUCTION TO THE
NEW BBBEE CODES

2. 2
New BBBEE Codes
EFFECTIVE DATES
New codes came into effect on 1st
May 2015
This implementation date relates to the financial year end of the
entity and not the date of verification
Old codes apply to all financial years on or before 30 April 2015
and the new codes apply to financial years after 1st
May 2015
Sector charters will continue to apply until they are brought into
alignment with the new codes and finally gazetted.

3. New BBBEE Codes
DEFINITION OF A BLACK PERSON
Black people – Generic term which includes Africans,
Coloureds, Indians:
Who are citizens of RSA by birth or descent
Who became RSA citizens by naturalisation:
a) Before 27 April, 1994
b) On or after 27 1994 and who would have been entitled to
acquire citizenship by naturalisation prior to that date
were it not for apartheid
3

4. New BBBEE Codes
Principle Changes
Empowering Supplier Status
Amended Scorecards
Adjusted Recognition Table
Priority Elements & Discounting
Economically Active Population (EAP) targets
Skills Development Increased target
Incentive for disability
4

5. New BBBEE Codes
Principle Changes - Continued
Training of non employees is recognised
Learnership Absorption incentives
Growth in EME/QSE Expenditure
Growth in 51%+ BO Supplier Expenditure
Supplier Development
SED – Income generating activities
5

6. New BBBEE Codes
Changes in Turnover Thresholds
Exempt Micro Enterprise (EME) Increase from R5
million pa to R10 million pa
Qualifying Small Enterprise (QSE)
Old codes: R5m - R35 pa
New codes: R10m – R50m pa
Large Enterprise:
Old codes: > R35 million pa
New codes: >R50 million pa
6

7. New BBBEE Codes
Deemed Recognition Levels
Exempt Micro Enterprises (EMEs):
< 51% Black-owned: Level 4
>= 51% Black-owned: Level 2
100% Black-owned: Level 1
Qualifying Small Enterprise (QSEs):
< 51% Black-owned: Per verification
>= 51% Black-owned: Level 2
100% Black-owned: Level 1
7

8. New BBBEE Codes
Deemed Recognition Levels
Specialised Enterprises (EMEs and QSEs):
>=75% Black beneficiaries: Level 1
>=51% Black beneficiaries: Level 2
8

9. New BBBEE Codes
Proof of Deemed Status
For EME or QSE with at least 51% Black
Ownership: Affidavit confirming turnover and
percentage Black Ownership
EME with less than 51% Black Ownership:
Affidavit confirming turnover
QSE with less than 51% Black Ownership: has
to be verified.
9

10. New BBBEE Codes
Proof of Deemed Status
For Specialised Enterprises EMEs or QSEs
with 51% or more Black beneficiaries: Affidavit
confirming:
 Annual revenue of R10m / R50m or less
 Percentage of Black beneficiaries
10

11. New BBBEE Codes
Empowering Supplier
•Entity must be a good SA citizen
•Complies with all regulatory requirements
Five Criteria:
1. At least 25% of costs of sales must be procured from local SA
suppliers
2. 50% of jobs created are for Black people
3. At least 25% transformation of raw material including
manufacturing, production, assembly or packaging
4. Spend 12 days pa minimum assisting Black EMEs and QSEs
beneficiaries
5. At least 85% of labour costs should be paid to South African
employees by service industry entities
11

12. New BBBEE Codes
Empowering Supplier:
Large Enterprises have to comply with 3
out of 5 criteria
QSEs have to comply with 1 out of 5
criteria
EMEs and Start-ups automatically qualify
12

13. The BBBEE Generic
Scorecard
13
Old Codes New Codes
Element
Weighting (excluding
bonus points)
Element
Actual points as per
each code (excluding
bonus points)
Ownership 20 +3
Ownership (priority
element)
25
Management 10 +1 Management control 19
Employment Equity 15+3
Skills development
(priority element)
20+5
Skills development 15
Enterprise and
Supplier Development
(priority element)
40+4
Preferential
procurement
20
Socio-economic
development
5
Enterprise
Development
15
Socio-economic
development
5
TOTAL 100 +7 109+9

14. The BBBEE Generic
Scorecard
14
REVISED BBBEE CODES GENERIC SCORECARD
HIGH LEVEL TARGETS
Indicator
weighting
Indicator
target
Ownership (Priority Element) 25,0 25% of Equity
Management Control 19,0 50% - 88%
Skills development (Priority Element) 20,0 6% of Payroll
Enterprise and Supplier Development (Priority element) 40,0
Preferential procurement: 25,0 80% of TMPS
Supplier development: 10,0 2% of NPAT
Enterprise development: 5,0 1% of NPAT
Socio-economic development 5,0 1% of NPAT
TOTAL 109,00
GENERIC SCORECARD

15. New BBBEE Codes
Priority Elements
Priority elements with sub-minimum
targets:
Ownership
Skills Development
Enterprise and Supplier Development
15

16. New BBBEE Codes
Priority Elements - Continued
Large Enterprises:
All three priority elements are
compulsory
QSEs:
Ownership compulsory
Choose between Skills Development and
Enterprise & Supplier Development
16

17. New BBBEE Codes
Priority Elements - Continued
Ownership:
At least 40% of the Net Value points (3.2 out of
8)
Skills Development:
At least 40% of the total points (8 out of 20)
Enterprise and Supplier Development:
At least 40% of the points in each of
Preferential Procurement, Supplier Development
and Enterprise Development
17

18. Procurement Recognition Levels
18
Contribution Level Old Codes New Codes Recognition level
Level One ≥ 100 points ≥ 100 points 135%
Level Two ≥ 85 points but < 100 points
≥ 95 points but < 100
points
125%
Level Three ≥ 75 points but < 85 points
≥ 90 points but < 95
points
110%
Level Four ≥ 65 points but < 75 points
≥ 80 points but < 90
points
100%
Level Five ≥ 55 points but < 65 points
≥ 75 points but < 80
points
80%
Level Six ≥ 45 points but < 55 points
≥ 70 points but < 75
points
60%
Level Seven ≥ 40 points but < 45 points
≥ 55 points but < 70
points
50%
Level Eight ≥ 30 points but < 40 points
≥ 40 points but < 55
points
10%
Non-Compliant
Contributor
< 30 points < 40 points 0%

19. 19
PETER ROSS
ActivPro Business Solutions
B3 Bloubergsands,
22 Arum Road,
Bloubergrant. 7441.
Cell: 083 302 3791
Email: peter@activpro.co.za
FROM CHARITY TO
BBBEE BENEFICIARY

20. Scorecard elements which could
benefit NPOs
SOCIO ECONOMIC DEVELOPMENT
SKILLS DEVELOPMENT
ENTERPRISE AND SUPPLIER DEVELOPMENT
PREFERENTIAL PROCUREMENT

21. Socio-Economic Development Scorecard
Criteria
Weighting
Points
Compliance
Target
Annual value of all Socio-Economic
Development Contributions by the
Measured Entity as a percentage of the
target
5 1% of NPAT

22. Socio Economic Development
 Monetary or Non-monetary Contributions
 Specific objective of facilitating income generating activities for
targeted beneficiaries
 SED contributions are measured annually
 Full value of SED contributions is recognisable if at least 75% of
the value benefits black people
 If beneficiaries are less than 75% black the actual percentage is
recognisable ie Pro rata achievement is recognised

23. Socio Economic Development
SED Contributions include:
 Development programmes for women, youth, people with
disabilities, people living in rural areas
 Healthcare and HIV/ Aids programmes
 Support for education programmes, resources and materials at
primary and secondary education level
 Arts, culture and sporting development programmes

24. SED Benefit Factor Matrix
Grant and Related Contributions:
Grant Contributions (100%)
Direct cost incurred in supporting SED initiatives (100%)
Discounts in addition to normal business practices supporting SED
initiatives (100%)
Overhead Costs incurred in supporting SED initiatives - Monetary or Non-
monetary (80%)
Contributions made in the form of human resource capacity:
Professional services rendered at no cost supporting SED initiatives (80%)
Professional services rendered at a discount (80%)

25. What NPOs Need to do to Align
themselves with BBBEE
As a Recipient of Grants and Related Contributions:
Thank You letter in the prescribed format on your letterhead stating:
 Date and amount of donation
 The name of the donor
 The nature of the NPOs activities
 Description of the beneficiaries
 The percentage of thebeneficiaries who are black persons
Beneficiary Recognition Certificate issued by a verification agency or by an
independent competent person

26. What NPOs Need to do to Align
themselves with BBBEE - CTD
As a Recipient of Grants and Related Contributions - CTD:
Apply for registration as a Public Benefit Organisation (PBO) with
SARS
This will enable the donor to treat the donation as tax deductible

27. Other Scorecard elements which
could benefit NPOs
SKILLS DEVELOPMENT
ENTERPRISE AND SUPPLIER DEVELOPMENT
PREFERTIAL PROCUREMENT

28. New BBBEE Codes
28
Skills development (Priority Element) 20,0
Skills development spend for black people 8,0 6,00%
Skills development spend for black employees with disabilities 4,0 0,30%
Black employees participating in Learnerships, Apprenticeships
and Internships as a % of all employees 4,0 2,50%
Black unemployed people participating in training specified in
learning programme matrix as a % of all employees 4,0 2,50%
Bonus points: Black people absorbed by the measured and
industry entity at the end of the learnerships programme 5,0 100,00%

29. SKILLS DEVELOPMENT
The new Skills Development scorecard refers to training of black people as
opposed to black employees
The Skills Development target for large corporates has been increased from 3%
of annual payroll to 6% of annual payroll. For medium sized corporates the
increase is from 2% to 3% of annual payroll
New element for larger corporates – Black unemployed people participating in
training specified in learning programme matrix. Target is 2.5% of number of
employees (4 points).
Must be an alignment to demographic representation of black people and
different race and gender sub-groups
Skills development a priority element (40% of target needs to be achieved)

30. SKILLS DEVELOPMENT - CTD
An NPO can examine their activities and the skills of their Management and
Staff with a view to providing training programmes to Corporates as another
revenue stream
Programmes can be aimed at the corporates employees and / or unemployed
black people (latter applicable to large corporates only)
Reference must me be made to the Skills Development matrix – defines
Categories A to G training programmes.
Informal training (Category F and G) is capped at 15% of total expenditure

31. 31
BBBEE - SKILLS DEVELOPMENT MATRIX
Cat. Narrative description Delivery mode Learning site Learning achievement
A Instruction-based theoretical
instruction alone – formally assessed
by the institution
Institutional instruction Institutions such as
universities and
colleges, schools,
ABET providers
Recognized theoretical knowledge resulting in
the achievement of a degree, diploma or
certificate issued by an accredited or registered
formal institution of learning
B Instruction-based theoretical
instruction as well as some practical
learning with an employer or in a
simulated work environment –
formally assessed through the
institution
Mixed mode delivery with
institutional instruction as
well as supervised learning
in an appropriate workplace
or simulated work
environment
Institutions such as
universities and
colleges, schools,
ABET providers and
workplace
Theoretical knowledge and workplace
experience resulting in the achievement of a
degree, diploma or certificate issued by an
accredited or registered formal institution of
learning
C Recognized or registered structured
experiential learning in the workplace
that is required after the achievement
of a qualification – formally assessed
by a statutory occupational or
professional body
Structured learning in the
workplace with mentoring
or coaching
Workplace Occupational or professional knowledge and
experience formally recognized through
registration or licensing
D Occupationally directed instructional
and work-based Learning Programme
that requires a formal contract –
formally assessed by an accredited
body
Institutional instruction
together with structured,
supervised experiential
learning in the workplace
Institutions and
workplace
Theoretical knowledge and workplace learning,
resulting in the achievement of a South African
Qualifications Authority registered
qualification, a certificate or other similar
occupational or professional qualification
issued by an accredited or registered formal
institution of learning
E Occupationally directed instructional
and work-based Learning Programme
that does not require a formal contract
– formally assessed by an accredited
body
Structured, supervised
experiential learning in the
workplace which may
include some institutional
instruction
Workplace and some
institutional as well
as ABET providers
Credits awarded for registered unit standards
F Occupationally directed informal
instructional programmes
Structured information
sharing or direct instruction
involving workshops,
seminars and conferences
and short courses
Institutions,
conferences and
meetings
Continuing professional development,
attendance certificates and credits against
registered unit standards (in some instances)
G Work-based informal programmes Informal training Workplace Increased understanding of job or work context
or improved performance or skills

32. New BBBEE Codes
Enterprise & Supplier Development – ED & SD
Component
Annual value of all Supplier Development
Contributions made by the measured entity as
a percentage of the target
Annual Value of Enterprise Development
Contributions and Sector Specific Programmes
made by the Measured Entity as a percentage
of the target
10
5
2% of NPAT
1% of NPAT
Total - Enterprise & Supplier Development 15
32

33. ENTERPRISE AND SUPPLIER DEVELOPMENT
What was previously just enterprise development (ED) has been split into
enterprise development (5 points) and supplier development (SD) (10 points)
Targets and points allocated for each are:
 ED – 5 points if target of 1% of NPAT achieved
 Supplier Development – 10 points if target of 2% of NPAT achieved
The aim is to encourage the development and sustainability of black-owned
small businesses and their access to market.
NPOs can’t benefit directly since they are not businesses, but they can act as a
conduit by facilitating ED and SD initiatives for a company for a fee.
NPOs can also possibly set up small black-owned business units within their
operations for companies to fund.

34. ENTERPRISE AND SUPPLIER DEVELOPMENT - CTD
There are various types of ED and SD initiatives (Refer ED and SD Benefit Factor
Matrix)
For example:
 Grant contributions (100% recognisable)
 Direct cost incurred (100%)
 Discounts in addition to normal business practices (100%)
 Overhead Costs incurred in supporting SED initiatives - Monetary or
Non-monetary (70%)
 Soft loans (70%) or standard loans (50%)
 Professional services rendered at no cost (60%)
 Professional services rendered at a discount (60%)

35. New BBBEE Codes
35
FROM BENEFICIARY TO SUPPLIER
Preferential Procurement Component
BEE Procurement Spend from all Suppliers 5 80%
BEE Procurement Spend from Qualifying Small Enterprises 3 15%
BEE Procurement Spend from Exempted Micro-Enterprises 4 15%
BEE Procurement Spend from any of the following Suppliers
:
1. Suppliers that are at least 51% black owned; or
2. Suppliers that are at least 30% black women owned.
9
4
40%
12%
Total - Preferential Procurement 25

36. PREFERENTIAL PROCUREMENT
One of the most sustainable ways an NPO can benefit from BBBEE is by
becoming a regular supplier of goods or services to corporates
There are some social enterprises who have succeeded to enter this more
lucrative space
Typically the transactions are commercially based in terms of which the NPO
supplies goods or services at a market related price
NPOs should regularly assess what role they can meaningfully play in the
supply chain of businesses
The deemed status provisions for specialised enterprises supports their
favourable recognition in the preferential procurement scorecard

37. What NPOs Need to do to Align
themselves with BBBEE
As a Service Provider or Supplier:
An affidavit in the standard format confirming:
 Statutory details of the NPO – Registered name, Registration number and
Address
 Turnover in the last financial year
 The percentage of beneficiaries who are black persons
 Their BEE status (NPOs with more than 75% black beneficiaries are deemed to
have a Level 1 status. If between 51% and 75% the deemed status will be a
Level 2.
The affidavit can be accompanied by a confirmation letter confirming the contents

38. 38
ActivPro Business Solutions
Contact Details
PETER ROSS
ActivPro Business
Solutions
B3 Bloubergsands,
22 Arum Road,
Bloubergrant. 7441.
Cell: 083 302 3791
eMail
peter@activpro.co.za