Private funding of political parties

The Political Party Funding Act introduces a strict regulatory framework for the private funding of political parties. This includes setting limits for the source, size and use of donated funds by political parties.

To ensure transparency and accountability, political parties are required to disclose all donations received above the disclosure threshold of R100 000 to the Electoral Commission regularly every three months (as well as ahead of general elections).

These disclosures must be reported to Parliament by the Electoral Commission.

Donors are also required to disclose all donations above the disclosure threshold to the Electoral Commission within 30 days of making a donation.


FAQs

Q: Which political parties are governed by the Political Party Funding Act?
A: The Political Party Funding Act applies to all registered political parties whether represented in the national and provincial legislatures or not.
The Act further defines “political parties” as “including any entity that accepts donations principally to support or oppose any registered political party or its candidates in an election”.

Q: When are political parties and their donors required to disclose their sources of funding?
A: The regulations require each party to disclose any funding above the annual threshold to the Electoral Commission:

  • On a quarterly basis (i.e. every three months)

Q: What are the obligations of donors?
A: Any person or organisation making a donation to a political party which individually or cumulatively exceeds R100 000 per year must report that donation to the Electoral Commission within 30 days of making the donation or within 30 days of when the cumulative donations exceeded R100 000.

Q: Which party representative will be responsible for funding disclosure?
A: The accounting officer of a political party or duly authorized office bearer of the political party is responsible for disclosing donations.

Q: How will disclosure be made?
A: The Electoral Commission is currently developing an online disclosure system which will allow both political parties and donors to made disclosures electronically.

Q: Will the Electoral Commission provide any training on the funding disclosure system?
A: As part of our preparations for the implementation of the Political Party Funding Act and its regulations, the Electoral Commission is developing training guides and material which will be made available to all stakeholders. We are also planning for special training of political party representatives.
Announcements will be made about this in due course.

Q: What restrictions are there on the moneys for the RPPF and MPDF?
A: The Electoral Commission may not accept money for the Multiparty Democracy Fund (MPDF) from:

  • Any organ of state
  • Any state owned enterprise
  • Any foreign government or foreign government agency
  • Any donor to the MPDF may request to remain anonymous 

Purposes for which money from RPPF and MPDF may not be used:

  • To pay remuneration to any person representing the party in the national, provincial or municipal legislatures
  • To pay remuneration to any person in the service of the state and who receives remuneration for that service
  • To finance or support any cause in contravention of any code of ethics binding on members of parliament or provincial legislature
  • To establish any business or acquiring or maintaining immovable property (except where that property is to be used solely by the party for party political purposes
  • To defray legal expenses relating to internal party disputes
  • Any other purpose which may be prescribed.

Q: What are the limits and thresholds to private funding of political parties?
A: Political parties and donors must disclose donations above a cumulative total of R100 000 in a financial year. This means donations of R100 000 or more must be immediately disclosed and any cumulative donations must be disclosed immediately when they exceed the cumulative total of R100 000 during a year.

Maximum donation amount for private donors (individuals or entities) is R15 million per year, per party.

Parties cannot receive donations from:

  • Foreign governments or agencies
  • Foreign persons or entities (*see below)
  • Any organ of state
  • State owned enterprises

Parties may not accept donations where it knows or ought to have known or suspected they are the proceeds of crime and must report this to the Commission

Parties may accept donations from foreign persons or entities for the purpose of:

  • Training or skills development of a member of the political party or
  • Policy development by the party
  • This is limited to R5 million per financial year in total

Q: What is a donation?
A: Donations include donations in kind but excludes membership fees or any levy imposed by the party on its elected representatives and any funds provided to political parties in terms of sections 57(2)© and 116(2)(c) of the Constitution.

Q: What is a donation in kind?
A: A donation in kind includes:

  • Any money lent to the political party other than on commercial terms
  • Any money paid on behalf of the political party for any expenses incurred directly or indirectly by the political party
  • The provision of assets, services or facilities for the use or benefit of a political party other than those provided on a commercial basis
  • A sponsorship

A donation in kind does not include services rendered personally by volunteers.

Q: What are the obligations of the Electoral Commission in terms of the Political Party Funding Act and its regulations?
A: The Electoral Commission must:

Establish a separate unit within the Electoral Commission to oversee party funding

Appoint a suitably qualified and experienced person as the Chief Executive Officer

Report annually to Parliament on:

  • The amounts received by the Funds
  • The allocations made by the Funds
  • The amounts spend by each party in connection with the purpose under each category
  • The balance in each Fund and any amounts owing
  • Make public every three months the donations reported by political parties
  • Report annually to Parliament on all donations made to political parties during the year.

Q: What are the obligations of political parties with respect to the Political Party Funding Act and its regulations?
A: Political parties must disclose all donations received above R100 000 a year (either individual donations of cumulatively)  to the Electoral Commission every three months.

Political parties must deposit all donations received into a separate bank account.

Appoint an accounting officer who must:

  • Account for all income received by the party
  • Ensure any money from the Funds is not used for a prohibited purpose
  • Ensure compliance with the Act
  • Prepare financial statements showing all money received by the party
  • Appoint an auditor to audit its financial statements annually and express an opinion on whether the party has complied with all aspects of the Ac
  • The Accounting Officer must submit the auditor’s opinion and financial statements to the Electoral Commission once a year.

Q: What about independent candidates?
A: Independent candidates are currently exempt from the Political Party Funding Act and its regulations. However, proposed amendments to the Promotion of Access to Information Act [insert link] do impose obligations for disclosure of funding on independent candidates. If approved and enacted, it will require independent candidates to keep and publish records of donations via social media.

Q: What are the consequences of non-compliance with the Political Party Funding Act and its regulations?
A: The Act provides the Electoral Commission with a range of powers to ensure compliance with the legislation and regulations including issuing:

  • Withholding distribution of funds from the RPPF and MPDF;
  • The recovery of money irregularly accepted or spent; and
  • Imposing administrative fines (via the Electoral Court)