What is Socio Economic Development
Statement 500 contained in the Codes of Good Practice, which is identified as Socio-Economic Development (SED), is the process of social and economic advancement in a society towards black people.
To recognise points on this element, an entity needs to ensure that they have all the necessary documentation or evidence as required by their verification agency.
A measured entity is required to contribute a portion of their Net Profit After Tax (NPAT). For the Revised Codes of Good Practice Generic charter, 1% is required as a basis for contribution. This may vary with sector charters.
SED contributions may be monetary or non-monetary and at least 75% of the black beneficiaries must receive benefits directly for the full contribution to be recognised. Alternatively, this will be recognised pro-rata i.e. only the value of the contribution made multiply by the percentage of black people in the organisation will be recognised.
Key to note when providing support towards SED, any initiatives done should culminate in income generating activities for the purpose of recognising SED. A list of these are listed below, although not limited.
(a) Sustainable livelihood initiatives limited to economic activities.
(b) Building of vocational, literacy and work related (including self-employment) skills.
(c) Providing opportunities for adult education.
(d) Income generating skills and knowledge.
(e) Improvement of capacity to work, including self-employment.
(f) Generation of income from productive activities.
(g) Increased employability and earning power.
A comprehensive list can be found on the BBBEE Commission guideline as per attachment.
What is required to claim Socio Economic Development contributions?
- Your Company's Audited Financial Statements and/or Management Accounts to confirm NPAT / Leviable Amount (Construction BEP Charter) / Turnover.
- This is to confirm Net Profit After Tax figure used to calculate the target.
- Confirmation black beneficiaries by an independent person’s report.
- This could be in the form of a BBBEE certificate/Affidavit stating the black percentage of beneficiaries or a letter from the SED organisation confirming this percentage.
- A thank you letter from the SED beneficiary acknowledging the receipt and they type of contribution done stating the exact amount.
- Proof of contribution via a bank deposit slop/bank statement/independent valuation letter of items granted or donated/proof of cost incurred assisting the SED beneficiary.
- Tourism Charter only:
- Status of TOMSA levy collector
- Proof of number of new recruits - possibly through employment contracts
- Proof of number of black new recruits with no prior work experience - possibly through employment contracts and ID documents.
Find attached SED acknowledgment letter template and BBBEE Commission guideline.
Please note that this template acts a guideline. Certain Verification agencies may require more or less information.
- Beneficiary Name* - The name of the receiving Organisation
- Description of Spend* - Describes the type of spend that the measured entity is contributing, whether in a form of a grant or donation.
- Date of Transaction – The date in which the contribution was made. This should always be within the measurement period under review. i.e. if your measurement date covers the Financial year Feb 2020, all contributions should have been done between 01 March 2019 – 29 Feb 2020.
- Contribution Type* Allows you an option of choosing the type of contribution done, in line with initiatives that culminate in income generating activities as stated above.
- % of Spend Benefiting Black Individuals * the percentage make-up of the black make-up of the beneficiaries.
- Location – Describes the location of the beneficiary
- Business Unit – Describes the business Unit that is responsible for the allocation of funds
- Amount * - states the amount that is spent or quantifies the contribution type if non-monetary.