Question:

 

A measured entity donates R100 000 to a golf day. This goes through the wash and after expenses eg golf fees, marketing, celeb appearance fees there is only R20 000 left for distribution to SED beneficiaries. How much is recognisable as SED?
 
Answer:
The Codes for SED say:

3.2.2 The full value of Socio-Economic Development Contributions made to beneficiaries is recognisable if at least 75% of the value directly benefits black people.

3.2.3 If less than 75% of the full value of Socio-Economic Development Contributions directly benefits black people, the value of the contribution made multiplied by the percentage that benefits black people, is recognisable.

In this example an entity is donating R100 000, but only R20 000 of the value goes to directly benefit black people.
We see the recognition as being based on the benefit received, not the cost of providing the benefit. In the case above 80% of the value of the contributions is benefiting people who are not black, so the 80% spend is not defined as SED. Only 20% (R20 000) goes to directly benefit black people.