Tag: money

Edcon Holdings is making progress toward securing R3-billion in funding need to keep the South African clothing retailer afloat for another three years, according to Business Day.

The Public Investment Corporation (PIC), Africa’s biggest money manager, may provide R1.8-billion to assist the company. In addition,  landlords may contribute another R700-million in reduced rent, and Edcon’s banks about R500m, they said.

Meanwhile, according to an article by MoneyWeb, Edcon aims to take the following steps in a bid to downsize:

  • Reduce the size of its Edgars store in the Johannesburg CBD by a third
  • Close down its big Melrose Arch store
  • Reduce its footprint at shopping centres across the country
  • Reduce regional footprints in centres such as Mall of Africa, Eastgate and Gateway
  • Continue with closing smaller stores across the country (115 have been closed to date)
  • Downsizing several stores
  • Continue to reduce retail space – in 18 months, Edcon has already downsized by 7%
  • Reduce space nationally by 5% – 7% per year over the next few years

Edcon is one of the country’s biggest employers. It has 1 200 stores which employ approximately 30 000 permanent and casual workers.
Over 100 000 jobs are supported by the company when clothing suppliers and other service providers are included.

 

By Paige dos Santos, digital lead at SAP Africa

What would you do if you didn’t need the money? It’s not a question we often give much serious thought to, but it may very well be one that we need to answer in the next few decades. The advent of the internet was expected to result in widespread economic democratisation; instead, it has resulted in increased polarisation of wealth – creating a small number of uber rich. According to the World Economic Forum’s Global Risks Report for 2017, between 2009 and 2012 the income of the top 1% in the US grew by 31% , compared with less than 0.5% for the remaining 99%.

This trend is likely to become exacerbated as digital concentration continues unchecked. This level of polarisation cannot sustain itself in the long term and could result in social upheaval. The shifting role of organisations in this new paradigm requires many traditional organisations to fundamentally rethink their reason for being and their approach to their employee value propositions, both now and into the future.

Seismic societal shifts

Murmurings of public policy response can already be seen internationally. Over the last few weeks, the United Kingdom announced the introduction of Digital Services Tax, a 2% revenue charge on “specific digital business models,” predominantly targeting tech giants such as Google, Amazon and Facebook. However, the situation we find ourselves in might well require action that is a little more radical. Yanis Varoufakis, Greek economist, academic and politician, posits that a new approach is in fact imperative to the stability of civilisation. Enter the Universal Basic Income. Call it an obligation-free dividend if you will. Universal Basic Income is a fixed income bestowed upon each citizen of a country every month – regardless of income, resources or employment status. The World Economic Forum 2018 featured several discussions exploring the concept.

Would such an approach result in sloth-like existences for us all? Will we become the embodiment of the “idle-hands” saying? Perhaps not. Several studies are currently investigating the impact of universal basic income, two of which are underway on the African continent. Studies in Uganda showed that recipients of a basic income worked an average of 17% more hours per day, increased business assets by 57% and reported a reduction in spending on vices such as alcohol and cigarettes. The reason? For the first time, people had hope.

Concurrently to digital economic concentration, our global population is burgeoning rapidly, heading towards what Charles C. Mann points out is biological ‘outbreak’ status. Our beautiful planet has finite resources. If we continue to take these for granted by pursuing linear, consumption-driven economic development approaches, we will only see an acceleration of the difficulties we are starting to face globally: choking pollution, food shortages, extreme weather and more. We urgently need to find ways to preserve our world for years to come by redesigning our processes and economies to conserve and optimise, rather than consume and monopolise.

The UN Sustainable Development Goals provide highly visible targets around this. These problems are too big for governments alone to solve. Public private partnerships, and responsible corporate citizens, are essential to making this a reality. This is something that SAP is taking very seriously, contributing to the adoption of technology to help the world run better and improve people’s lives. Purpose needs to be something indistinguishable from our core business. It should define what we do and why we do it, contributing to a beautiful world for generations to come.

Systemic purpose

Let’s revisit the opening question. In light of our changing society, if you had enough money to cover your basic expenses, what kind of an organisation would you want to work for? One that chased profits above all else, or one that really had a higher purpose? A study undertaken by BetterUp found that workers would be willing to forego 23% of their entire future lifetime earnings in order to have a job that was always meaningful.

Engaging your total workforce around organisational purpose can be hugely beneficial, creating significant opportunity for organic and innovation driven growth. However, this is easier said than done. As organisations metamorphose to perform in the digital age, talent models are changing. The skillsets required are in a constant state of flux, and the gig-economy is booming in response to this. According to Deloitte Human Capital Trends Report 2018, more than 40% of workers in the US are now engaged in alternative work arrangements – contracting or gig working.

With such high percentages of an organisation’s human talent involved in external work arrangements, it’s essential to ensure that they are engaged and contributing to the organisations purpose too. Technology tools are available to assist customers in achieving this level of integrated engagement by approaching workforce management holistically. The SAP SuccessFactors and Fieldglass solutions integrate powerfully to ensure that both your internal and external workforce are striving towards a shared sense of purpose, and that individuals can see the impact of their efforts. At the same time, the solution suite manages the ever-present external workforce risks from a legal, security and privacy perspective.

Interlock – combining intuition and logic

When you are working for a purpose you truly believe in, you want to be able to add as much value as possible to that purpose every day. But as humans, we are fallible creatures. We often believe we are being logical and pragmatic, when the reality is that, according to research performed by Daniel Kahneman and his associates, we are primarily using our automatic intuitive responses rather than our logic-based ones. This is where intelligent systems are providing us with remarkable tools that ensure we get the right insights, at the right time, to equip us to make the best logical decisions for our organisations and minimise heuristic bias.

Consider the recruitment process. SAP SuccessFactors uses in-built machine learning analysis to ensure that job specifications created by managers are worded to equally attract male and female candidates, directly impacting gender diversity in the workplace. If the description contains too many masculine-oriented words, the system will automatically suggest replacing certain words and provide appropriate synonyms. This results in a gender-balanced job specification.

When embarking on new projects, SAP Fieldglass Live Insights enables organisations to identify the best geographic locations for the project, based on critical success factors. The solution scans SAP Fieldglass data on contract workers countrywide to recommend the best location based on resource skill level, availability and cost. Tools such as these enable our employees and organisations to perform at optimal levels, making the best possible decisions for their organisations and in turn, achieving their purpose.

The potential to thrive

If you didn’t have to work, would you choose to spend 18 hours a day at the office, sacrificing your family life and mental and physical wellness? And if by chance you did, would you be performing optimally? In the digital world, human creativity, curiosity and resilience are essential to personal and organisational performance, to achieving the purpose the organisation is driving towards. These characteristics are most evident when employees thrive, which is why special attention needs to be paid to the link between wellness and performance at work.

SAP, in collaboration with Ariana Huffington’s Thrive Global, has developed a solution that brings these together: SAP Worklife. SAP Worklife combines data on critical health indicators such as sleep, exercise, diet and mental health, with performance, development and employee satisfaction. The insight it provides enables HR professionals and managers to nurture talent to become the best they can be, in every aspect of life. Imagine the impact of unlocking curiosity and creativity across your organisation, and the energy of working with a team who are truly fulfilling their potential, not just as workers, but as human beings.

Universal basic income is just one of many possibilities that may unfold as we journey into exciting new frontiers as a human race. As our natural resources come under increased pressure and our societies start to shift, we need to pay careful attention to the change. Are we stubbornly focused on the immediate time horizon, ignoring the emerging reality of the next five years in order to fight fires for the next six to twelve months? Or are we thinking further ahead?

It’s time to be honest when you answer the question – would your employees still work for you if they didn’t need the money?

Black Friday weekend in numbers

According to an article by Business Tech, online sales for Black Friday and Cyber Monday 2018 exceeded figures for 2017.

BankservAfrica provided Business Tech with the following figures on one of the biggest shopping days of the year:

  • A total of 581 189 online transactions were processed over the weekend
  • 404 594 online transactions were recorded on Black Friday
  • The single most expensive transaction for Black Friday was over R6-million
  • The single most expensive transaction for Cyber Monday was R5-million
  • Black Friday shopping peaked between 08h00 and 09h00
  • Cyber Monday shopping peaked between 10h00 and 11h00
  • The average number of transactions per minute peaked at 695 on Black Friday
  • Transactions averaged at 281 per minute on Black Friday
  • The average number of transactions per minute peaked at 277 on Cyber Monday
  • Transactions averaged at 1251 per minute on Cyber Monday
  • Black Friday saw 55% year-on-year growth in online transactions
  • Cyber Monday transactions were up 36% year-on-year 

The United States, where the trend originated, also saw some big numbers:

  • Cyber Monday sales surged to a record $7.9-billion spent online
  • This is a year-on-year increase of 19.3%
  • Black Friday pulled in a record $6.22-billion in e-commerce sales
  • Transactions on mobile devices were up 55.6% on Cyber Monday, generating $2.2-billion in sales
  • Cyber Monday marked the biggest shopping day in Amazon’s history
  • Amazon Black Friday and Cyber Monday combined saw the purchase 18-million toys and more than 13-million fashion items

Edcon may run out of money in 2019

According to a report by the Financial Mail, Edgars may “effectively run out capital towards the end of 2019”.

After Bain Capital paid R25-billion for the company, the retailer’s balance sheet saw debt of R17.3-billion – an amount that nearly sank the company as the 2008 financial crisis hit.

Since 2012, Edcon has lost an estimated 22% of its clothing and footwear market share where it once held more than 50% of the sector, according to Financial Mail.

Edcon still owes an estimated R7-billion to its lenders.

On a positive note, Stats SA reported that retail sales grew 2.5% for the year to August — almost twice the 1.4% annualised growth reported in July.

The problem is, says the Financial Mail, that Edcon is making a loss, and “someone has to fund the loss”. This falls to the shareholders and the problem under discussion is “how long will they fund these losses”?

Edcon’s most recent set of accounts, for the year to March 2018, saw sales down 4.8% to R24.1-billion. Trading losses ballooned to R1.36-billion from R373-million in 2017. Even though R20-billion in debt was written off in 2016, Edcon incurred R1.53-billion in “financing costs” to repay remaining debt. The three months to June were no better: sales were down 8.8%, and the quarter saw trading losses of R225-million.

The lack of customers are evident at even flagship Edgars stores. “At Melrose Arch, most of the initial space Edgars occupied is boarded up, reinforcing the impression of a gradually disintegrating department store,” reports Financial Mail.

As many as one in five South Africans used to shop at one of the 1 350 stores owned by Edcon. Despite the downward trend, Edgars has remained SA’s largest nonfood retailer, accounting for nearly a third of the clothing and footwear market.

The company employs more than 27 000 staff members, with an indirect effect on a further 100 000 people.

$17.4bn wiped off Zuckerberg’s fortune

By Melanie Kramer for Money Makers

Facebook founder and CEO Mark Zuckerberg has lost $17.4 billion, suffering from Facebook’s reputation and share price this year. He’s not the only billionaire to lose out in 2018, but he’s currently the most famous and has certainly lost more than any other.

Zuckerberg has dropped from being the third-richest person in the world to becoming the sixth richest, according to Bloomberg’s Billionaires Index. Zuckerberg now has a net worth of $55.3 billion.

The Facebook founder has faced increasing criticism over the ongoing Cambridge Analytica data scandal and Facebook’s response to the apparent social media influence exerted by Russia in US elections.

Data privacy is still an unresolved issue in the eyes of many global governments. Some seek answers over how their citizen’s personal information is handled and how Facebook will prevent illicit behavior in the future.

Just two weeks ago the UK and Canadian Parliaments summoned Zuckerberg to personally answer their questions, in an unprecedented joint move.

Facebook shares fell 3% on Friday to their lowest point since April 2017, and to a value of $139.53.

The latest fall in Facebook’s share price followed a call last week by four US Democratic senators to answer questions about Facebook’s use of contractors to spread “intentionally inflammatory information.”

According to reports, Facebook had hired a consulting firm founded by Republican strategists as part of its response to the concerns over Russian meddling. The firm’s subsequent actions are under scrutiny.

Zuckerberg’s Chan Zuckerberg Initiative is a major US political donor and Facebook co-founder Dustin Moskovitz has also donated over $35 million to Democratic and Liberal candidates and groups.

Which IT job pays best in South Africa?

Source: CareerJunction

Jobs portal CareerJunction has published it latest salary review for 2018, showing among others what the average IT employee earns per month.

CareerJunction used actual salary offerings on their jobs portal Web site (16 000+ jobs monthly) for the latest measurable period (December 2017 to May 2018).

Skill levels covered in the report include both intermediate and senior.

IT management jobs saw the biggest jump in salary, moving from R59 490 per month to R66 010 (11%). Systems analysts were the worse hit by decreases, losing 17.1% in value over the year (from R42 420 to R35 170).


Image credit: Business Tech

Regional salary differences

The Western Cape and Gauteng remain favourable locations to work for IT professionals. Salaries in these regions are very close to the national average while salaries in KwaZulu-Natal are not nearly as competitive.

The salary ranges above are based on monthly “cost to company” remuneration and only serve as an indication of the average salary offerings for each occupation.

By Scott Duke Kominers for Bloomberg 

How much is your privacy on Facebook worth?

This question has seen renewed attention following the revelation that political analysis firm Cambridge Analytica, hired by the Trump election campaign, gained access to the private information of more than 50 million users. One of the possible responses that’s generated some discussion is the creation of a paid tier that’s free of ads and data sharing. 1 Such an option would likely be socially beneficial and have considerable public appeal. But my guess is that it would be pretty expensive, too.

Let’s start with some rough calculations. Facebook’s annual ad revenue was about $40 billion in 2017, with 2.13 billion monthly active users. That means the average user is worth roughly $20 in ads to Facebook a year. That’s probably already a lot more than many users would pay for privacy on the social network.

But the price also depends on who would choose to pay for greater privacy. And it’s likely that many of the users who would opt for more protection could be worth more than $20 each to the company.

Why’s that? First, the value of keeping your data private increases with the amount of data you provide on the platform; by the same token, the more data you give Facebook, the better it can advertise to you. Similarly, you might find privacy especially valuable if there’s something unusual or unique about you that makes you especially easy to target.

The people who can afford a paid tier are on average wealthier; that too makes them more valuable to advertisers. And some of them already have browser ad blockers, so it’s hard to reach them via other channels.

To make up for those sorts of customers opting out of data sharing, Facebook would have to charge a lot more than the average of $20 just to break even. A back-of-the-envelope estimate based on the Pareto principle — 80 percent of the ad revenue coming from 20 percent of users — suggests that if mostly high-value users purchase privacy, then Facebook would need to charge closer to $80 a year.

That’s much more than even high estimates of the value most people attach to having access to Facebook. And it’s still a substantial underestimate of the likely price. According to Facebook’s annual report, the company’s 239 million North American users are responsible for a bit less than half of ad revenue; applying the Pareto principle to them would suggest annual privacy prices in the range of $325 a person.

If price alone were the question, Facebook might indeed want to charge huge amounts for enhanced privacy. The users who buy out won’t all be the most valuable users, and it would be pretty lucrative if the company could sustainably charge some customers much more for privacy than the annual ad revenue they generate. But that’s unlikely to work out in the long run.

Putting a high price on privacy would make it clear just how much Facebook’s user data is worth. We’d probably see increased calls to share that value by giving users a portion of revenues. The consumer-led drive for increased privacy would likely accelerate, too, prompting a growing number of users to leave the platform (assuming they can’t afford or are unwilling to pay for greater privacy).

A user exodus plus enhanced scrutiny of data practices would quickly eat away at the profits from offering the paid tier, making the whole thing a losing proposition.

Facebook must have run the numbers on this already, using much better information than we have here. The idea of a paid tier isn’t new; if Facebook hasn’t offered such an option, the company probably thinks it would be a money-loser. So if we want Facebook users to have control over how their data is shared, we may need outside pressure. The company isn’t likely to provide the option on its own.

It’s also worth noting that advertising and data sharing don’t have to be completely coupled. Facebook could enhance privacy directly by adopting data protection strategies based on privacy science, as Apple, Google, and the Census have in some of their applications.

How does government spend our taxes?

Stats SA has released a complete overview of total government spending for 2015/16, providing insight into where your tax contributions have gone.

The report found that total government spending amounted to R1.52 trillion in 2015/16 – an average of R27,600 per person if we consider South Africa’s population of 55 million people.

Compensation of employees contributed 40.6% of the R1.37 trillion, the largest expenditure item in economic terms. The second largest item was purchases of goods and services, contributing 21.9%.

According to the latest Financial statistics of consolidated general government report, general services accounted for a quarter of government spending in 2015/16. Within this, debt payments accounted for 9% (of the total) and executive, legislative and financial services accounted for 12%.

The latter includes the funding of general government services provided by institutions such as SARS, the National Treasury, the Auditor-General of South Africa (AGSA), the Financial and Fiscal Commission (FFC), parliament, and the various legislatures.

Not surprisingly, big priorities for government also include education and social protection (which includes the payment of social grants). Together these two items contributed 32% of total spending.

Government also spent more money on servicing its debt than it did on items such as housing, police, tertiary education and hospital services. Almost R129 billion was spent on public debt payments in 2015/16. In 2011/12, it was 7.2%, rising in 2012/13 (7.4%), 2013/14 (7.8%) and 2014/15 (8.4%). In 2015/16 it rose only slightly to 8.5%.

Source: Business Tech

Profitability almost rhymes with philanthropy. It’s close, but not quite.

The for-profit CEO SleepOut Initiative took the South African philanthropy industry by storm in 2015, and now appears to have raised more than R50 million over three years for various charities.

It seemed a new fund-raising model had been born.

However, over the last three years, a few cracks appeared in the CEO SleepOut’s public edifice. A significant beneficiary abandoned a potentially lucrative three-year relationship after just one year, and the initiative interdicted the beneficiary from infringing its alleged copyright in a list of donors, claiming the beneficiary was using its intellectual property to compete with the initiative to raise money for charitable causes.

Some questions also emerged regarding financial transparency and how much money reached the destined beneficiaries.

Before this story continues any further, a few points need to be made.

Firstly, it is extremely difficult to write an article about fund-raising initiatives for charities, as it may harm future potential beneficiaries of such events. Even more so when the subject matter is a seemingly successful initiative.

Secondly, we make no allegations of financial impropriety. The information in this article comes from numerous interviews with key stakeholders and former employees, most of whom were not willing to speak on record.

Thirdly, it is concerning that the CEO SleepOut Trust has not been forthcoming with information or transparent about its finances.

The first interaction was in May this year, and despite many e-mail exchanges with the founder of the initiative, Alison Gregg, a number of questions remain unanswered.

Within this context, readers should draw their own conclusions. But first, some background.

Australian concept meets American business model

The CEO SleepOut initiative started a few years ago when Gregg brought the brainchild of Australian philanthropist Bernard Fehon to South Africa. The aim was to get C-suite executives out of their warm, luxury homes to spend a cold winter night on a pavement to reflect on those less fortunate than them and to raise funds for charity.

Gregg married this noble concept with the for-profit business model mooted by the international philanthropist Dan Pallotta who is seen as a pioneer of the for-profit philanthropy industry in the US.

Pallotta’s theory is that a business run on sound business principles with well-paid executives would do a better job at raising money than NPOs could do themselves, and his achievements are impressive.

His venture, Pallotta TeamWorks (PTW), raised a staggering $556 million in donor contributions between 1994 and 2002 through various multi-day, mass-participation events. After all expenses, a total of 55% or $305 million was paid to selected charities.

PTW, as a for-profit entity, charged 4.01% or approximately $22.8 million for its professional services. (PTW also publishes detailed information about every event showing significant transparency into how donor funds were used.)

Inaugural event a spectacular success

The first rendition of Gregg’s CEO SleepOut was in 2015, where the 58-year-old charity, Girls and Boys Town (GBT), was the sole beneficiary. It was a spectacular success.

A total of 246 CEOs of some of South Africa’s top companies camped out on the pavement next to the JSE in Sandton and raised a whopping R26 million for GBT – the single largest fund-raising event ever for a charity in South Africa.

The 2016 event was also successful. A total of 167 CEOs faced the cold tarmac of the Nelson Mandela Bridge and raised R20 million for the ASHA Trust, Columba Leadership and the Steve Biko Foundation.

The 2017 event, the SheEO SleepOut, was hosted in August at Constitution Hill where about 57 female CEOs spent a night in the cold, raising roughly R4.8 million between them for the Door of Hope. (These numbers have not been audited and confirmed.)

Overall, the three events are said to have raised more than R50 million for various charities, suggesting that a new era of charitable fund-raising has arrived.

Hairline cracks

But shortly after the 2015 event a few hairline cracks appeared.

GBT, the sole beneficiary of the 2015 event, severed ties with the initiative, despite an initial three-year understanding being in place. The break-up was less than amicable, with Gregg later taking GBT to court in 2017 for copyright infringement.

(The gist of the case was that GBT contacted several donors of the 2015 event from contact details captured during their financial administration process. The court found that this was in breach of copyright and ordered GBT to stop using the list and to delete it, and slapped the charity with a cost order. GBT strongly deny they did anything wrong, but have put an application for leave to appeal on hold due to concerns of mounting legal fees).

The relationship with media partner Primedia, which was seen as a pivotal contributor and name sponsor of the 2015 event’s success, also came to an end after the first event.

Sun International terminated its sponsorship following the 2016 event, despite previously committing to a three-year involvement, citing a strategic direction change as reason for the termination.

Several former employees of Gregg’s businesses Moneyweb spoke to, also expressed their discontent with their working environment.

One staffer, who was dismissed earlier this year, said staff turnover was close to 100% a year, and that virtually all the staff employed in 2016 had since left. Several of their replacement appointees have also been terminated or resigned.

It is important to note that there were significant structural and operational differences between the 2015 and 2016 events. The CEO SleepOut Trust could not acquire NPO certification prior to the 2015 event and could therefore not issue 18A tax certificates to donors, enabling donations to be claimed for tax.

GBT had such certification, and in 2015 GBT was in total control of the financial administration, from receiving donations to issuing 18 A certificates.

In 2016 this structure changed.

The CEO SleepOut Trust had by then received NPO certification and the financial administration moved to the Trust. The Trust took over full control of the event, including the responsibility to determine the quantum of funds to be paid out to beneficiaries after the event, and to actually pay these amounts.

The Trust was to be administered by trustees who would consult a Working Group consisting of various other stakeholders of the initiative. The 2016 event also saw Gregg’s new business The Philanthropic Collection Proprietary Limited (TPC) becoming involved. This business came about after Gregg converted her previous business Alison Gregg PR from a CC to a company. TPC was a for-profit enterprise and owned and managed all the CEO SleepOut events and trademarks. It would charge the CEO Sleepout Trust for the professional services it rendered, as Gregg’s PR business had done the previous year.

Compensation

One of the first questions asked of any philanthropic venture is how much of the donated money reaches the actual beneficiaries. This is even more so in the case of a for-profit fund-raising effort.

GBT’s audited statements for 2015 confirm that the initiative raised R26 million and that this amount was received directly into its bank account. The statements also confirm that GBT paid an amount of R1.3 million (ex Vat) to Gregg after the event, via her business Alison Gregg PR, as compensation. This amount was calculated as 5% of the R26 million raised.

Unfortunately, no audited or unaudited amounts are yet available for the 2016 event, as BDO is still busy with the audit process – six-and-a-half months after the Trust’s year-end, and more than a year after the event.

But there are unaudited amounts disclosed in the public domain. From the CEO SleepOut website it is clear that R20.2 million was raised in 2016 and R46.2 million for both 2015 and 2016.

The website also states a total of 75% of the R46.2 million was paid to beneficiaries and that this distribution “exceeds international norms of events of this nature”.

Thus, around R11 million was retained from the funds raised in 2016 to cover operational expenses and to allow for a profit for TPC. It also suggests, through the manner in which the amounts are disclosed, that a portion of the funds raised from the 2016 event was used to cover expenses related to the 2015 event. This amount excludes the R1.3 million already paid to Gregg the previous year.

In response to a question, Gregg denied that this assumption is accurate, but did not provide an explanation. This is relevant as the CEO SleepOut Trust took full administrative control of the event in 2016, and could therefore decide how much of the raised funds could be used to cover expenses.

The retained amount of R11 million is significant as it represents around 55% of the R20.2 million raised in that particular year.

How does this chime with international benchmarks for charity running costs? Research by Giving Evidence and Givewell in the UK provides the first empirical data on charity admin costs. It looked at 265 charities between 2008 to 2011 and found that charities recommended by Givewell spent an average of 11.5% of their costs on administration.

However, in response to an earlier question relating to the R11 million, Gregg said: “At the time (December 2016), we budgeted roughly R9 million in costs (over the 12-month period) and held back a further R3 million for the 2017 (and where relevant 2018) working capital requirements. This was on advice from our accountants. Depending on the reconciliation and final accounts, further payouts will be considered.”

Regarding the disclosure of the R1.3 million, Gregg stated: “It was disclosed to the 2015 Working Committee, in court papers, to Sars, to you, and would likely have been disclosed in GBT financials.”

What she will not divulge, however, is how much of the retained R11 million remains in the Trust and how much was paid to TPC, either as professional fees or to cover operational expenses or as licensing fees, and what profits were made by TPC.

Gregg wasn’t prepared to disclose unaudited amounts, but these will be confirmed once the audited statements of the Trust become available.

Trustees

The decision-making authority within the Trust is also concerning. The CEO SleepOut was registered in 2015 with four trustees. They were Gregg, Patricia Stewart, Dick Sher and Darren Olivier.

Moneyweb has been able to confirm that Stewart, Sher and Olivier have subsequently resigned as trustees, leaving Gregg as the only remaining trustee. Gregg failed to respond to several questions related to these resignations and whether any new trustees have been appointed.

It is not clear who decides on the allocation of funds to charity. In a published Q&A document on the website, it is stated that once the revenue was audited, “the allocation (net of costs and working capital requirements) is presented to the Trustees and the members of its Working Group who are comprised of Founding, Title, City, Media and Stakeholder Partner representatives and the Beneficiaries. After that process, the monies are paid out to the appointed Beneficiaries, with total transparency.”

From this, it is not clear how the decision-making process works and whether it is material that only one trustee, who is seemingly conflicted as she is also the owner of TPC, remains.

Many questions regarding the initiative are yet to be answered. Hopefully, more information will become available once BDO signs off the CEO SleepOut Trust’s financial statements. The philanthropy industry is built on a trust relationship and ultimate transparency entrenches this relationship.

By Ryk van Niekerk for MoneyWeb

 

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