Frequently Asked Questions: Political Party Funding

A political party is entitled to an allocation from the RPPF for any 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 RPPF to political parties which are represented in municipal councils only (nor to those which have no public representatives at all).

Section 5(1)(b) of the Public Funding of Represented Political Parties Act says that the allocation may be used "for any purposes compatible with [the party's] functioning as a political party in a modern democracy", and that these include:

• the development of the political will of people (allowing voters to choose);
• bringing the party’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 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 donate 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:

• 1/3 equal (33.3%) representation.
• 2/3 proportional (66.6%) representation.

Political parties 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 for any purpose compatible with its functioning as a political party including:

• The development of the political will of the people;
• Bringing the party'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 Party Funding Act.

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

• To directly or indirectly pay any remuneration, fee, reward or other benefit to a person representing the party in any legislature (including national, provincial and municipal councils;
• To directly or indirectly pay any remuneration, fee, reward or other benefit to a person who is appointed by or in the service of the state and is paid for that service;
• To finance or contribute to (either directly or indirectly) any cause, matter, event or occasion in contravention of the code of ethics of the national assembly or provincial legislatures;
• To directly or indirectly establish a business or acquiring or maintaining any right of financial interest in any business or immovable property – except where the right or interest in the immovable property is solely for party political purposes;
• To defray legal costs relating to internal political party disputes.

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

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".

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).

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.

The accounting officer of a political party or duly authorized office bearer of the political party is responsible for disclosing donations.

The Electoral Commission is currently developing an online disclosure system which will allow both political parties and donors to made disclosures electronically.

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.

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.

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.

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 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.

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.

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.

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.