Frequently Asked Questions: Political Funding

A political party and/or independent representative is entitled to an allocation from the PRF for each financial year that it is represented in the National Assembly and/or in any provincial legislature. In other words, no allocations are made from the PRF to political parties and independent councillors who are represented in municipal councils only (nor to those which have no public representatives at all).

Section 7(1) of the Political Funding Act provides that the allocation may be used "for any purposes compatible with [the party's] functioning as a political party or independent representative in a modern democracy", and that these include:

• the development of the political will of people (allowing voters to choose);
• bringing the political party's or independent representative's influence to bear on the shaping of public opinion (providing voters with a choice);
• inspiring and furthering political education (keeping voters up to date with what is available and who is offering what);
• promoting active participation by individual citizens in political life (getting people involved);
• exercising an influence on political trends;
• ensuring continuous, vital links between the people and organs of state (developing the interface between citizens and public administration;
• A party or independent representative must account for the money allocated to it under these classifications: personnel expenditure, accommodation, travel expenses, arrangement of meetings and rallies, administration, and promotions and publications.

Any private individual or corporate entity may contribute funds to the MPDF. Those excluded from making donations are organs of state, state owned enterprises and any foreign government or foreign government agency.

The following are not permitted to donate funds to the MPDF:

• Any organ of state;
• Any state owned enterprise; and
• Any foreign government or foreign government agency.

Funds from the MPDF are distributed according to the formula:

• 1/10 equal (10%): One tenth is allocated equitably to all parties and and independent representatives that hold seats in the National Assembly or any provincial legislature.
• 9/10 proportional (90%): Nine tenths allocated in proportion to seats held by a political party and independent representatives in the National Assembly or provincial legislatures.

Political parties and independent representatives represented in national and/or provincial legislatures are the beneficiaries of the funds raised by the MPDF.

The funds may be used by a represented political party and independent representatives for any purpose compatible with its functioning as a political party including:

• The development of the political will of the people;
• Bringing the party or independent representative’s influence to bear on the shaping of public opinion;
• Inspiring and further political education;
• Promoting active participation by individual citizens in political life;
• Exercising an influence on political trends;
• Ensuring continuous and vital links between the people and organs of state; and
• Complying with provisions of the Political Funding Act.

The Act prohibits the use of funds from the MPDF by represented political parties and independent representatives:

A political party may not:

• pay any direct or indirect remuneration or other benefit of any kind to any elected representative of the party or to any public servant at any level of government;
• finance or contribute directly or indirectly to any matter, cause, event or occasion if it contravenes any code of ethics binding on members of parliament or any provincial legislature;
• use the money directly or indirectly to start any business or acquire or maintain a right or financial interest in any business;
• use the money directly or indirectly to acquire or maintain a right or financial interest in any immovable property, unless if solely for ordinary party-political purpose;
• to defray legal costs relating to internal political party disputes;
• use the money for anything else that is incompatible with a political party’s functioning in a modern democracy.

An independent representative may not:

• pay any remuneration, fee, reward, perquisite or other benefit to any person who is appointed by or in the service of the State and receives remuneration for that appointment or service;
• finance or contribute, whether directly or indirectly, to any matter, cause, event or occasion, in contravention of any code of ethics binding on the members of Parliament or members of a provincial legislature;
• establish any business, or acquire or maintain any right of financial interest whatsoever in any business, or in any immovable property, except where the right or interest in the immovable property is to be used in the performance of the duties of an independent representative; and
• May not use money received from the Fund for personal use.

Depending on availability, funds from the MPDF are distributed quarterly to represented political parties and independent representatives.

The Political Funding Act applies to all registered political parties, independent representatives and independent candidates 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".

The regulations require each party, independent representatives and independent candidates to disclose any funding above the annual threshold to the Electoral Commission:

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

Any person or organisation making a donation to a political party, independent representatives and independent candidates 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.

The accounting officer of a political party or duly authorized office bearer of the political party, independent representatives and independent candidates are responsible for disclosing donations.

The Electoral Commission has developed an Online Political Funding System which allows political parties, independent representatives and independent candidates and donors to made disclosures online.

As part of its obligations, the Electoral Commission will continuously conduct training sessions for political parties, independent representatives and independent candidates on the Political Funding Act, Regulations and the Online Political Funding System.

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 money which the Commission has reason to believe is the proceeds of crime.

Purposes for which money from PRF 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.

Political parties, independent representatives and independent candidates 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, independent representatives and independent candidates cannot receive donations from:

• Foreign governments or agencies;
• Foreign persons or entities unless for a purpose listed below(*see below);;
• Any organ of state;
• State owned enterprises.

Parties, independent representatives and independent candidates 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, independent representatives and independent candidates 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, independent representative and independent candidate;
• This is limited to R5 million per financial year in total.

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)(c) and 116(2)(c) of the Constitution.

A donation in kind includes:

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

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

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, independent representative or independent candidate;
  • Report annually to Parliament on all donations made to political parties, , independent representative or independent candidate during the year.

Political parties, independent representatives and independent candidates must disclose all donations received above R100 000 a year (either individual donations of cumulatively) to the Electoral Commission every three months.

Political parties, independent representatives and independent candidates must deposit all donations received into a separate bank account.

Appoint an accounting officer, independent representative or independent candidate who must:

• Account for all income received by the party, independent representative or independent candidate;
• 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, independent representative or independent candidate;
• Appoint an auditor to audit its financial statements annually and express an opinion on whether the represented party or independent representative has complied with all aspects of the Ac;
• The Accounting Officer or independent representative must submit the auditor’s opinion and financial statements to the Electoral Commission once a year.

Unlike represented political parties and independent representatives, unrepresented parties and independent representatives candidates are not required to appoint an auditor and submit audited financial statements. Instead, unrepresented political parties and independent candidates are required to submit statements and the books and records of account together with a prescribed confirmation letter from its bank and affidavit confirming the correctness of their contents to the Commission in the prescribed form and within six months of the end of the financial year.