Burial societies are not often setup as businesses, they are rather setup as a group project where members contribute a fixed amount each month. Members can register themselves and other family members, usually up to 10 people.
The society pays out when any registered member dies, the pay out is usually quicker than one from insurance companies. This is because you don’t need to produce any documentation or follow a lengthy process.
Burial societies elect people who will act as government over the money. It’s usually three or more people who are in different positions like treasury, chairperson and secretary. This is to minimize fraud and corruption. Challenges arise when members fall behind on their monthly contributions to the society.
How to get started
Running a burial society as a business means that you will be acting more like an insurance company, this can be very risky. You will be expected to offer cover, unlike in a normal burial society where the money comes the members. If it happens that money runs out for some reason and people keep passing on; you will still be expected to pay out.
A good way to go around this would be to modernize the burial society and charge members for your services. That way they won’t look to you to cover them, you will just help them to manage their finances and grow the society.
This includes offering formal accounting and investment services, you can take the money that is contribute by members and invest it in low-risk assets. However, you should be able to have money that is just in a normal account that can be withdrawn at any time.
Withdrawing money from an investment account can take a very long time, especially if it’s in a fixed deposit or bonds.
How to get members
Getting members for a burial society is easy, most people will know about it, you just have to invest in word of mouth. Be transparent, make sure that everyone knows that they’re signing up for a burial society. But you are just charging them for accounting and investment services.
Another great way would be not to charge them at all, take the monthly contributions and invest them and take the returns from investments. This is a win for everyone.
This was a guide on how to start a burial society in South Africa. Do you have any thoughts or questions? Comment below.