Per the Broad Based Black Economic Empowerment Act, companies are required to contribute 3% of Net Profit After Tax (NPAT) towards enterprise development in order to qualify for the 15 points available in terms of the scorecard. Shanduka Black Umbrellas has been certified by Empowerdex as fully compliant with the requirements of the B-BBEE Codes of Good Practice and all relevant criteria therein for the recognition of Enterprise Development Contributions. Empowerdex has verified that all beneficiaries of the Shanduka Black Umbrellas initiative are Category A beneficiaries. Therefore the full value of contributions made to Shanduka Black Umbrellas by donor entities may be recognised at a factor of 1.25 when calculating the donor entities’ Enterprise Development Contributions. 

Thus a company donating money to Shanduka Black Umbrellas would be able to claim 125% of its contributions as Enterprise Development Contributions. For example, a company donating R100,00 to Shanduka Black Umbrellas would be able to claim R125,000 (R100,000 x 125%) as an Enterprise Development Contribution. In addition, Shanduka Black Umbrellas has been granted Section 18A Tax Exemption by SARS, thus donations of cash or quantifiable assets are deductible for tax purposes within the limits prescribed in terms of Section 18A of the Income Tax Act.

Donations of goods or services which will assist in the operation of the offices, development of the SMMEs and expansion of existing operations are also greatly appreciated. Overhead costs which are allocated to supporting the activities of Shanduka Black Umbrellas and not directly incurred may be recognised at a benefit factor of 80%. However, with the enhancement factor of 1.25, 100% of the allocated overhead cost may be claimed for scorecard purposes.

20 points on the B-BBEE scorecard are available for Preferential Procurement calculated as follows:

In terms of Statement 000,

• Exempted Micro Enterprises (EME) are any enterprises which have annual revenue of less than R5 million and have a deemed BEE Procurement Recognition of 100% and BEE Status of Level 4 Contributor. If the EME is more than 50% owned by black people or black women, it is promoted to a BEE Status of Level 3 Contributor and a BEE Procurement Recognition of 110%.

All SMMEs within Shanduka Black Umbrellas are 100% black owned Exempted Micro Enterprises and thus have a 110% BEE Procurement Recognition level. In addition, if the Measured Entity procures goods and services from a supplier that is a recipient of enterprise development contributions from the Measured Entity under Code series 600, the recognisable B-BBEE Procurement Spend that can be attributed to that Supplier is multiplied by 1.2.

Thus if the Measured Entity contributes to Shanduka Black Umbrellas as part of its Enterprise Development initiatives and procures from an SMME within the programme, the BEE Procurement Recognition will be enhanced by a further 20% i.e. 132%.

If the Measured Entity spends R100,000 with an SMME within the Shanduka Black Umbrellas programme and makes an enterprise development contribution to Shanduka Black Umbrellas, the BEE Procurement Recognition will be as follows:
R100,000 x 110% (EME and black ownership > 50%) x 120% (enterprise development contribution to EME via supplier development programme) = R132,000 (32% enhanced benefit).

If the Measured Entity spends 15% of its Total Measured Procurement Spend with SMMEs within Shanduka Black Umbrellas, it will be entitled to a further 6 points, 3 points because all SMMEs are EMEs and 3 points because all SMMEs are more than 50% black owned.

For those companies who wish to diversify their supply chain by including more black owned EMEs, a collaborative solution may be created with Shanduka Black Umbrellas whereby appropriate 100% black owned SMMEs which meet the companies’ supply chain needs are identified via the companies’ supplier databases, the blackpages and the existing SMMEs within the Shanduka Black Umbrellas programme and a managed supplier development solution be provided via the Shanduka Black Umbrellas incubator.

The managed supplier development solution will ensure the risk to companies in bringing new suppliers into their supply chain will be minimised via the systems and processes already operating within the Shanduka Black Umbrella’s program, namely:

• a rigorous selection program that includes credit and criminal checks to ensure the most appropriate SMMEs are selected;
• a training and personalised mentoring program that includes benchmarks on business plans which the SMMEs prepare themselves thus ensuring each SMME is properly prepared and supported to deliver the level of service, quality and pricing required;
• rigorous monthly financial accounts provided for every SMME in the program which enables the corporate suppliers to see the economic benefit provided by the procurement opportunities provided to the SMMEs;
• a monthly evaluation of the progress and sustainability of each SMME;
• supporting the SMMEs with services and infrastructure such as telecoms, use of vehicle, internet and e-mail etc.

The supplier development programme would also provide significant B-BBEE scorecard benefits to a participating company as they would be able to claim 125% of the amounts contributed to Shanduka Black Umbrellas for enterprise development purposes and would be able to claim 132% of any procurement from SMMEs within the programme.

A key part of the Shanduka Black Umbrellas Programme is the provision of mentorship support to its SMMEs. Mentors and mentees are assessed and matched to form an ongoing mentoring relationship aimed at improving the sustainability and growth of the SMME’s businesses with the objective of:

• transferring business skills and knowledge from mentors to mentees
• helping the SMMEs to grow
• help the SMMEs meet their objectives

The Shanduka Black Umbrella Mentorship Programme has a two tier structure:

1. Volunteer Mentors– There is a database of mentors in each area who are linked one to one with participating SMMEs. Minimum time commitment by volunteer mentors:
   
   
   • one day training (once off)
   • one hour a month for mentoring
   • 30 minutes quarterly for reporting
   • three hours once a year for a mentor report back meeting
2. Panel of experts – this consists of industry specialists across various sectors. They are called on when necessary by the mentor to address specific issues pertaining to an SMME. They also may be requested to run a workshop, or address the SMMEs from time to time.

Note to Donors

Donors can be advised to state the branch prefix and their contact telephone number in the reference of their deposit (eg: under Reference………”PTA – 012 326-9196”). This will go a long way in assisting us in establishing the actual donor, who their donation is intended for and of course the contact details of the donor.