Eleanor Roosevelt wisely said; “Learn from the mistakes of others. You can’t live long enough to make them all yourself”; and in business learning from ones’ own mistakes could amount to considerable outlay.  Expert BEE consultants, EconoBEE have used their vast experience to compile a list of the top five mistakes that businesses make when interpreting the socio-economic development element on the BEE scorecard in order to save you the time, and money, of making them yourself.

1.         The targets for Socio-Economic Development spend are 1% of Net Profit After Tax for both Generic companies and Qualifying Small Enterprises (QSEs). Companies may misinterpret the targets as a percentage of annual turnover.

2.         A common misconception among companies is generalizing all charitable donations as Socio-Economic Development spend. For a company to claim the full value of a charitable contribution as Socio-Economic Development spend, the beneficiaries must be at least 75% black.

3.         Further to the above, not all Socio-Economic Development contributions are recognized at the full value (according to the Benefit Factor Matrix). For instance, direct costs incurred in supporting Socio-Economic Development will be recognized at 100% of the contribution value, whereas overhead costs supporting Socio-Economic Development are recognized at 80% of the value.  A mistake would be considering all Socio-Economic Development contributions at their full value.

4.         Companies may still recognize a portion of Socio-Economic Development spend if beneficiaries may be less than 75% black.  For instance, 35% of the contribution value may be recognized if the beneficiaries are at least 35% black.  A common mistake is that if beneficiaries are not 75% black, no points will be earned.

5.         Cumulative Socio-Economic Development spend should be measured as a percentage of cumulative Net Profit After Tax in calculation of points earned. Companies may sum up Socio-Economic Development spend from previous years, and mistakenly calculate it as a percentage of one year’s Net Profit After Tax.

Visit the EconoBEE website at for more of the best BEE advice.  Alternatively, contact one of their professional consultants at 011 483 1190.

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