By using crowdfunding platform Feenix, students can fund their education without taking on debt, and funders can benefit from a tax deduction.

Many black professionals carry the costs of educating the next generation. The upside of this commitment is that the young person receiving the education will be able to qualify and get a job which helps them not only provide for themselves, but also support extended family and reduce the burden on the few who are already working. However, it does create a significant financial burden for those young professionals who are themselves starting out in life.

There is a way to make this so-called ‘black tax’ tax deductible. As long as you are not closely related to the person receiving the funds (i.e., not a parent or sibling), you can support a student through a crowdfunding platform called Feenix and receive your contribution as a tax deduction. Feenix provides a tool for students to formalise their fundraising efforts and a channel for funders to find students they wish to support.

As Feenix is a Public Benefit Organisation, all bona fide donations are deductible from a person’s income in terms of section 18A of the Income Tax Act. Anyone other than direct family can download a section 18A tax certificate if they donate to a student.

How it works

After the student has registered on the Feenix website, their profile is verified to make sure they are a bona fide student. The student creates a profile in which they tell their story – how much they need, what they are studying etc. They can reach out to their communities, friends and family, individuals and businesses, who can all contribute to that student’s funding goal.

As a contributor, you make your donation via the platform and receive your section 18A tax deduction. Keep in mind however, that 5% of your contribution goes to administration of the platform, so only 95% goes towards the education costs.

The funds are paid directly to the tertiary institution, so the student never gets to handle the money themselves. This is a great way to ensure that the funds actually  go towards the student’s education costs.

All outstanding debt is verified beforehand to make sure no overpayments are made. Students have to submit a fee statement from their institution when registering a profile, which is verified by Feenix. Only costs on this statement are covered by Feenix. These costs may include academic costs, accommodation at registered residences, and textbooks.

Leana de Beer, Feenix Chief Operations Officer, says the crowdfunding platform was started in 2017 to create debt-free education. It was co-created with students as a digital space for businesses and individuals to donate funds for tertiary education. “By connecting students with individuals and businesses, we are creating a sustainable education funding model for South Africa,” explains de Beer.

Employment opportunities

Apart from securing funds, Feenix could also create potential long-term employment opportunities for students by connecting graduates with businesses upon request.

“Through the matchmaking process, donors can identify students they want to donate to. Even though all communication between students and donors is facilitated through Feenix, donors can receive progress reports of the students they fund. After graduation, should a corporate donor wish to get in touch with the student with regards to employment opportunities, this can be arranged through Feenix,” de Beer says.

Although students are not required to repay the funds they receive, Feenix encourages beneficiaries to pay it forward by helping their peers to raise money or by becoming donors themselves once they have found jobs.

“We often see former beneficiaries returning to the platform as donors, such as Khanyisile, a psychology honours student at Wits who raised the R36 000 she needed to graduate debt-free in 2018. She has since returned to Feenix this year as a donor,” says de Beer.

This article first appeared in City Press.