Inyathelo hails South Africa’s grey list removal, paving the way for robust NPO fundraising and global re-engagement

By Meropa Communications

Inyathelo, The South African Institute for Advancement, wholeheartedly welcomes the decision by the Financial Action Task Force (FATF) to remove South Africa from its list of Jurisdictions under Increased Monitoring, commonly known as the grey list.

Acting Executive Director for Inyathelo, Feryal Domingo, explained that the institute views this successful delisting, following the swift and comprehensive addressing of all 22 identified deficiencies, as a significant achievement and a positive vote of confidence in the integrity of the country’s financial systems.

“This significant milestone is particularly crucial for the Non-Profit Organisation (NPO) sector, which relies heavily on trust, reputation, and unfettered access to both local and international funding channels,” she said.

The grey listing introduced immediate, severe challenges for South Africa’s NPOs and Civil Society Organisations (CSOs). Inyathelo, which exists to strengthen the capacity of civil society and grow local philanthropy, played a key role in engaging with the sector during this period.

“We had noted several concerning and even disturbing effects of the increased regulatory scrutiny. These included a reduced ability to fundraise for legitimate causes, significant reputational damage to the sector as a whole and financial institutions imposing burdensome due diligence requirements or, in some cases, closing NPO bank accounts,” said Domingo.

The removal from the grey list is expected to reverse these negative trends immediately, significantly reducing administrative costs and restoring the sector’s standing among international donors and financial partners.

While on the grey list, many international pension and investment funds were prohibited from investing in South Africa, restricting a vital flow of capital that supports both NPOs and Higher Education institutions.

The delisting is expected to contribute to collective efforts to attract investment and stimulate economic growth. This renewed investor confidence will directly translate into a more favourable funding environment for the non-profit sector.

Inyathelo remains committed to ensuring that NPOs understand and implement the necessary measures for strong governance and compliance, protecting the integrity of the sector and preserving the enabling environment for giving.

“We must however not lose momentum and continue our efforts to stay off the grey list. Now more than ever, South Africa should focus on addressing Recommendation 8, which is concerned with protecting NPOs from being misused for terrorist financing, requiring countries to review their NPO laws and implement risk-based, proportionate measures to protect vulnerable organisations without disrupting legitimate activities.

"This is a victory for the thousands of NPOs whose work is vital to our democracy and social justice. The global community can now confidently re-engage with our non-profit sector, knowing that we have robust systems in place to promote transparency and accountability,” said Domingo.

The true work of Advancement, and securing resources for social change, can now proceed with renewed vigour, unburdened by the stigma of increased financial risk.