Incorporate for Good (How to set up a foundation and get NGO certification)

By Siesta-friendly

The SEC defines a foundation as “a non-stock, nonprofit corporation established for the purpose of extending grants or endowments to support its goals or raising funds to accomplish charitable, religious, educational, athletic, cultural, literary, scientific, social welfare or other similar objectives.”[1]

Thanks to Erap and his Muslim Foundation, the SEC has taken a closer look at foundations and realized that a lot of them have merely focused on fund-raising without the consequent fund-spending.

SEC registration

Accordingly, the SEC has started to require submission of the following:

A. Upon submitting its application for SEC registration:

1. Certificate of Bank Deposit of an amount not lower than P1M, and

2. Statement of willingness to allow the SEC to conduct an audit (if the foundation was registered prior to the effectivity of the SEC Memo Circular (dated June 22, 2006), this Statement shall be submitted together with the submission of the first General Information Sheet (GIS) and audited Financial Statement (FS).
Naturally, these requirements should form part of the supporting documents to the articles and by-laws.

B. Yearly, together with the GIS and audited FS:

1. Sworn Statement indicating the following:

i. source and amount of funds,

ii. program/activity planned, ongoing and accomplished (with complete name, address and contact no of project officer-in-charge and complete address and contact no. of project office),

iii. application of funds

2. Certification, on the existence of the said program/activity in the locality, issued by the Office of the Mayor/Bgy Captain or Head of the DSWD/DOH which has jurisdiction.

NGO Certification

Assuming your foundation really aims to help in social welfare and development, your next step is registration with the Philippine Council for NGO Certification (PCNC). Certification by the PCNC will give your foundation the status of a recognized donee institution and facilitate collaboration with the government as well as possible donors, in providing service to those in need.

You will need to submit an Expression of Interest to Apply. After which you will be given a Letter of Intent and Application for Accreditation. The 2 documents then need to be returned together with am initial P1,000.00 application fee. You will then be given a Survey Form which must be returned with several attachments. Full details of all requirements and the entire process can be found at http://www.pcnc.com.ph. Once the PCNC proceeds with its evaluation, the full application fee is payable. This fee shall be based on the foundation’s total assets reflected in the FS.

As is common, when people want to make things easier they end it making it more complex. The NGO certification aims to assist NGOs to help provide better service. The process to get it may be tedious but it may prove worthwhile. The help you will provide should be enough reward, especially if funded from donations which can result in tax incentives (i.e, tax deductions and donor’s tax exemptions).[2]

Good luck!

[1] SEC Memorandum Circular No. 8. June 22, 2006.

[2] Revenue Regulations No. 13-98. December 8, 1998.

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