All foundations are non-profit organizations, but not all non-profit organizations are foundations.

There are two basic alternatives available to business owners and philanthropists in the Philippines when it comes to creating a non-profit organisation: foundations and non-stock, non-profit organisations (NPOs).

There are considerable distinctions between the two types of organisations, despite the fact that both types of organisations have the same objective of promoting social welfare and charity activities.

The registration criteria and structural characteristics of these organisations are unique.

Most sports organizations are non-profit in nature

Non-profit organization in the Philippines offer unique benefits, including tax exemptions and the ability to reinvest profits into the organization’s mission. These entities can be formed for a wide range of charitable, educational, and civic purposes.

The incorporation process for non-profits is similar to other corporations, but with some key differences:

• The Articles of Incorporation must clearly state the non-profit nature of the organization.
• Initial requirements include a Name Verification Slip, Articles of Incorporation, By-laws, and a list of members and contributors.
• Non-profits must have a minimum contribution of at least P1,000,000 to register as a foundation.

Beyond the SEC, non-profits must also register with other agencies:

• Educational non-profits need endorsement from the Department of Education, CHED, or TESDA.
• Organizations providing social welfare services must register with the DSWD.
• All non-profits must register with the BIR as a non-stock/non-profit or NGO.

By understanding the unique requirements for non-profit organization in the Philippines, individuals and groups can establish entities that drive positive change while benefiting from legal privileges and tax exemptions. To learn how to start a foundation Philippines, you may also contact our team of specialized lawyers today.

Some retirement homes in the Philippines operate as non-profit organizations or foundations.

A foundation is a unique type of non-stock, non-profit organization in the Philippines. The defining characteristic of a foundation is that its corporate name must contain the word “Foundation.”

To establish a foundation, the Articles of Incorporation must specify the amount of capital, the names, nationalities, and residence addresses of the contributors, as well as the amount contributed by each. Additionally, foundations are required to submit:

1. A Notarized Certification of Bank Deposit in the amount of not less than P1,000,000.
2. A statement of willingness to allow the Securities and Exchange Commission (SEC) to conduct an audit.

The minimum deposit requirement is in place to ensure that the foundation has the necessary financial capacity to carry out its intended purposes.

After incorporation with the SEC, a foundation must also register with the Department of Social Welfare and Development (DSWD), Department of Science and Technology (DOST), Department of Health (DOH), National Commission for Culture and the Arts (NCCA), and other government agencies or bodies that can certify the Foundation based on its purpose. The DSWD will assess the organization’s administrative, technical, and financial capabilities to operate its social welfare and development programs and services in the Philippines. DSWD registration is a prerequisite for accreditation with the Philippine Council for NGO Certification (PCNC). The PCNC is responsible for certifying whether a non-profit organization meets the established minimum criteria for financial management and accountability in serving underprivileged Filipinos.

The PCNC’s certification is crucial, as it allows the organization to be recognized as a “donee institution” by the Bureau of Internal Revenue (BIR). Donations made to these certified NGOs are exempted from donor’s tax and are deductible from the taxable income of the donors. We have discussed the process on how to register a foundation or non-profit organization in the Philippines in our separate article.

SEC Regulates all profit and non-profit organizations in the Philippines

To ensure compliance, it is essential to understand the requirements for SEC registration of non-profit organizations in the Philippines before proceeding with the application process. 

According to the SEC, the minimal contribution that is necessary for registration is one of the most prominent distinctions that can be made between foundations and non-profit organisations (NPOs). The minimum amount of money that must be contributed to a foundation in the Philippines is one million pesos (P1,000,000.00), which must be accompanied by a certificate of bank deposit that has been certified. NPOs, on the other hand, are non-stock organizations in the Philippines that do not have to meet any minimum contribution requirements in order to register.

Gawad Kalinga Foundation is a Non-profit organization in the Philippines focusing on helping poor, homeless families

The necessity that the word “Foundation” be included in the corporate name of a foundation is still another important distinction. This title is required for foundations, and they must incorporate it into their names in order to convey the fact that they are legally recognised. Non-profit organization in the Philippines, on the other hand, are not obligated to incorporate any particular title into their corporate name.

An Article of incorporation of a Non-profit organization must expressly state the nature of its operation as a non-profit

Articles of Incorporation, also known as the “charter,” is a document created in the process of incorporation. It contains the primary purpose of the organization, location, names of initial trustees, and any other provisions agreed upon affecting the organization. This legal document is to be submitted to the Securities and Exchange Commission (SEC) and allows the creation of the corporation.

When trying to create Articles of Incorporation for an organization, it is essential to maintain clarity and closeness to the purpose and activities of the organization. 

The intended purpose of the entity must be explained clearly and expressly before it can be validated by the SEC.

Other provisions of the document should also be clear and specific. There are also certain provisions that must be placed exactly as indicated in the corporation code. Due to the restrictions and to promote better governance and social responsibility, all provisions stated in the Articles of Incorporation and the bylaws should be disclosed to the public. Once the document has been drafted and agreed upon by the incorporators, it must be notarized before submission to the SEC.