“Our company will no longer qualify as an automatic EME and we will have to undergo a formal BEE verification. We have always tried to help our community with donations and allowing our staff to help with charities. Will this count towards our socio-economic development points?”
A common misconception is that any charitable contribution or intitiative qualifies for Socio-Economic Development points. Although such initiatives are laudable, the BEE Codes of Good Practice have very clear requirements for contributions to qualify for recognition under the Socio-Economic Development Element of your scorecard.
Firstly, contributions can be monetary or non-monetary so both donations as well as work done for a charity or qualifying organisation can potentially qualify.
Secondly, at least 75% of the beneficiaries of your charitable contribution must be Black persons in order for the full value of a contribution to be recognised. If less than 75% of the beneficiaries are Black persons the contribution can still be recognised but only in proportion to the percentage of Black beneficiaries.
Thirdly, the objective of the contribution must be to promote sustainable access for the beneficiaries to the economy. This is a bit vague but in general most initiatives that train, clothe or feed the beneficiaries would probably meet this requirement. Charitable contributions, such as paying for a funeral, may however not be accepted by a verification agency as it does not meet this requirement.
There is also a list of contributions that are specifically included as recognised Socio-Economic Development contributions. These include contributions to development programmes for women, youth, people with disabilities and people living in rural areas; support of healthcare and HIV/AIDS programmes; support for education programmes, community training; skills development for unemployed people and adult basic education and training; or support of arts, cultural or sporting development programmes. Contributions to these initiatives will be recognised in full if the beneficiaries are composed of at least 75% Black persons.
You will have to evaluate whether the contributions, both monetary and in time and other support, made by your company and staff will meet the above requirements. If they do, then you will probably be able to recognise such for your Socio-Economic Development Element. It may be advisable to enlist the help of a BEE consultant to help with preparing for your BEE verification and also help you calculate your targets for Socio-Economic Development and to what extent your current contributions will help you meet such targets or may need to be supplemented with further Socio-Economic Development contributions.