Many of our prominent and successful business entities in the country have already established foundations as intensification to their corporate social responsibility. Ayala Corporation has Ayala Foundation; Metropolitan Bank and Trust Company (Metrobank) has Metrobank Foundation; and Philippine Long Distance Telephone Company (PLDT) and Smart Communications, Inc. (Smart) have PLDT Smart Foundation Inc. Those non-profit corporations were formed to help and improve the lives of Filipinos. However, incorporators and entities don’t need to be famous and multi-million dollar companies to start a foundation. The initial fund contribution to start a foundation is P1,000,000 (Section 2, SEC Memorandum Circular No. 8-2006). The following are guidelines on how to register a foundation in the Philippines.
What is a foundation?
A foundation is a non-stock, non-profit 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 (Sec. 1 of SEC Memorandum Circular No. 8 Series of 2006). Read the entire SEC Memorandum Circular No. 8-2006 here.
How to register foundations with the SEC?
The following are guidelines and requirements on the registration of foundations with the Philippine Securities and Exchange Commission (SEC).
Basic Requirements
1. Name verification slip (procedures to get name verification slip is the same with stock corporations – please visit our post about registering a corporation)
2. Articles of Incorporation and By-laws (It states that no part of the income which the association may obtain as an incident to its operation shall be distributed as dividends to its members, trustees or officers subject to the provisions of the Corporation Code on the dissolution.)
3. Affidavit of an incorporator or director undertaking to change corporate name
4. List of members, certified by the Corporate Secretary
5. List of contributors and amount contributed certified by the treasurer
Note: Items 3, 4, and 5 need not be submitted if already stated in the Articles of Incorporation. You can download a sample / blank form of Articles of Incorporation and By-laws here.
You may read our article titled “How to register a non-stock corporation in the Philippines“.
Additional Requirements
The following are additional requirements for applying for registration as stated in Section 2 of the SEC Memorandum Circular No. 8-2006.
6. Notarized Certification of Bank Deposit of the amount of not less than One Million Pesos (P1,000,000.00); and
7. Statement of willingness to allow the Commission to conduct and audit.
Name Requirement
The applicant’s corporate name shall contain the word “Foundation” (Section 3, SEC Memorandum Circular No. 8-2006.
Endorsement Requirements
Foundations shall obtain endorsement from the following government agencies and form part of the registration papers, if applicable.
1. Charitable Institutions – Department of Social Welfare and Development (DSWD)
2. Education Institutions
a) Elementary to High school – Department of Education (DepEd)
b) College, Tertiary Course – Commission on Higher Education (CHED)
c) Technical Vocational Course – Technical Education Skills and Development Authority (TESDA)
3. Hospitals/ Health Maintenance Organizations – Department of Health (DOH)
To view the complete list of government agencies that may require endorsements, please read the entire list here.
Things to remember
1. The funds generated by your foundation must be utilized in accordance with the purposes stated in your Articles of Incorporation. Section 4 of SEC Memorandum Circular No.8-2006 requires all registered foundations to submit, in addition to General Information Sheet, its Audited Financial Statements which shall include a sworn Statement of its President and Treasurer on the following information that relates to the preceding fiscal year;
a. Source and Amount of Funds;
b. Program/Activity planned, ongoing and accomplished;
-Complete name, address and contact number of project officer-in-charge;
-Complete address and contact number of project office; and
c. Application of Funds
2. All funds of the Foundation shall be deposited in a banking institution regulated by the Bangko Sentral ng Pilipinas (BSP).
3. Foundations are exempt from income tax pursuant to Section 30 of the Tax Reform Act of 1997 (R.A. 8424). However, income derived from its properties, real or personal, or from any of its activities conducted for profit regardless of the disvposition made of such income, is subject to tax. The BIR shall issue a Certificate of Registration to the foundation as Qualified Donee Institution.
4. Philippine Council for NGO Certification (PCNC) is the government’s partner in the system of accrediting donee institutions. However, no foundations or NGOs shall be processed for accreditation by the PCNC unless it has secured a valid registration with the government agency (e.g. DSWD, DepEd, DOH, etc.,) that exercises regulatory function over such corporation, association or NGO (Executive Order 720). View a copy of EO 720 here.
For guidelines on registering with the Bureau of Internal Revenue (BIR) please read our article titled “How to register with the BIR”.
You may visit the websites or the offices of the following government institutions / accrediting entity for more information:
Securities and Exchange Commission (SEC)
Bureau of Internal Revenue (BIR)
Philippine Council for NGO Certification (PCNC)
Victorino Q. Abrugar is a marketing strategist and business consultant from Tacloban City, Philippines. Vic has been in the online marketing industry for more than 7 years, practicing problogging, web development, content marketing, SEO, social media marketing, and consulting.
Hi.. this is such a helpful article.. My friend, who’s now based in the US, and I are really interested in putting up a foundation. May I ask if a foundation and an NGO are technically just the same?
So much I’ve learned from this. I hope to receive a response from you soon. And I hope to gather some help from you soon. THank you and God bless.
JL
Hi JL,
Just asking if you already created your foundation. I just wanna help in your endeavor through service and part of the manpower
Hello,
The information above is really helpful. Thank you…
I have a question below pls.
I went to SEC to apply for a foundation (education sector). I was told that we need a 1M capital or seed money as stated in in Section 2 of the SEC Memorandum Circular No. 8-2006. – #6. Notarized Certification of Bank Deposit of the amount of not less than One Million Pesos (P1,000,000.00);
– If i lend our foundation 1M as show money just for incorporation, can i get it back? (this is my company or personal money which i can lend for 30-45 days, but i need it back afterwards.)
– Why is there a need for 1M? The reason why we are putting up a foundation is to raise funds and use the foundation to show that we are a legit entity(foundation).
We have and are giving out support to schools in the provinces already so we decided to form a foundation so we can reach more schools and get some grants or support here esp. abroad. Before there was no 1M bond.
Thank you and more power.
Carlos
Transfer of the 1M php guarantees that you will operate and spend at least that much in the Philippines.
Greetings! If a foundation’s tax exemption is under the process of re validation, what are the taxes that applies to any donation that it receives? and for Donor’s tax, if I understand it correctly, the Donor’s tax exempt rates only applies if the foundation is a donee institute? I hope you can enlighten me regarding the matter.
Thank you very much!
I want to start a foundation where I will donate hearing aid, or grant scholarship for hearing impaired kids go to specialized school.
Do I need to register it?
I might start a website for this, and accept donation through that website
I have been sending needy children to college and in high school there for 6 years. My first 4-year grad is now helping me and it works very well. No registration, no papers, just happy kids getting a chance to study in college.
I have a foundation that i started even from almost 10 years ago. I have never stopped helping street children in my area (providing food, books, clothes, shoes etc.), and areas i have traveled here in Philippines, but I have only been spending my own money, and i’ve yet to receive any significant donations from others, or even monetary donations. I have only been spending my own money to perform my charity work with my own donations. Do I still need to register my own foundation? What are the pros and cons of not registering my foundation? Is it even necessary when I am practically the only one donating and contributing to do my charity work? Please help me understand. I would like to extend my foundation and do more. I don’t own any company I just genuinely want to help street children in the Philippines.
The only draw back to not registering is if you wish to employ some one there to help you, they will not be recognized as a real employed person by the state.
Hi, Good day. I would like to ask in this situation
My sister and her husband established foundation in foreign country(since they stay there 7 months per year) We also registered it here just this year, We already have our SEC and BIR registration, OR(states exempt). I didn’t file 1702Q since I assume that we are exempt, and required to file only 1702EX. But I just discover lately that since this corp is foreign branch, it states in Sec 30 of NIRC that it will not qualify as tax exempt.
My concerns are as follows:
1.Are we now taxable for this year? Do I need to amend our application(since our OR is EXEMPT), do i need to file 1702Q? Do we incur penalty for not filing 1702Q?
2. Are we required to be audited? what is the treshold for Non stock non profit to be subject for independent audit of CPA.
3. Is there any special law/tax treaty that we can use so that we may qualify as tax exempt.
Thank you sir,
Hi I’m Ara, and i want to register my foundation as soon as possible.
The money is not a problem because i some people can lend me, but may question is, the bank deposit should under the name of the Chairman?
Your immediate response is very much appreciated.
thank you
Hi Aragil,
Were you able to register your foundation? May I know your foundations location?
Hi. It should be a Treasurer In Trust For (TITF) bank account. You may ask your bank about it. They may require you documents such as the propose Articles of Incorporation, By laws, etc.
Hello everyone! Our association is a non-stock corporation, sec registered and accredited by DSWD. How can financial assistance for our association? Our association official name is Philippine School for the Deaf Alumni Affairs Assn. (PSDAAA), Inc.
Hi, I think you have to do some marketing campaigns to get donors here and abroad. For example, build a website, a Facebook page, and other online marketing strategies.
Hello,
My client has a foreign foundation in Bangkok & Pakistan.
Is the above same procedure we have to follow to put up
headquarters here in Manila.
Thank you.
Hello, basically, yes. But to make sure, I recommend that you visit the office of the Security and Exchange Commission to get the exact requirements the foundation you are planning to register here in the Philippines.
Hi we are a foundation company based in the UK and want to open a base in Philippines, I have struggled for two weeks now to get first past the ‘finding an acceptable company name’ and then couldn’t get past the office address section. The website keeps saying our internet is not strong enough. I have emailed them for assistance and get no response. Any ideas/advice would be gratefully received.
KR
Hello, did you mean you’re struggling with SEC’s website’s online name reservation? I have not tried the online reservation recently, but what you are experiencing might be a glitch on their part. They are also usually difficult to reach thru email. You can try to contact them thru their telephone numbers which are found here: http://www.sec.gov.ph/contact-us/
Another option is to get some help from bookkeepers/accountants/business processing service providers here in the Philippines. They can help you do the registration process in behalf of your organization.
Hi! Good day everyone!
I have a few questions regarding starting up a foundation and I hope you will kindly answer the following questions:
1. Should we have the building first before registering to SEC, or we should register first with SEC before putting up the building?
2. is there a minimum number of children we should cater?
3. is there any facility requirement to start a children’s home? For example, playground and car?
4. is it ok to include a foreigner as an incorporator or it is not advisable?
Thank you very much!
Hello, these are just my personal opinions.
1. If the building is to be named under the corporation, then it would be good if you register the corporation first to have smooth accounting and tax records. If the corporation is already SEC registered, then you can claim all the purchase invoices relating to the construction of the building under the corporation, not under an individual.
2. I believe the number will depend on your facility. What is the foundation all about. If it’s an educational institution, you have to secure an endorsement from DepEd or CHED, or other related government agency. For children’s home, I think you should secure endorsement/permit from DSWD. Please inquire for more information.
3. Please inquire with the DSWD or other related government agency.
4. It’s okay to have a foreigner as an incorporator as long as the majority of the incorporators must be residents in the Philippines.
hello… i have read your message.. We are planning to put up a foundation here in Sarangani Province, Philippines. There are so many out of school youth here in our place. They are intelligent but poverty hinders them from going to school. Maybe you can consider us to be your partner in our plan to put up a foundation.
About your problem regarding SEC., I can help you with that. Just email me.
Thank you.
Hello po. I am an employee of an Foundation. Tanong ko lang po. Paano po ba kame ma-eexempt sa pag babayad ng city registration? every year we need to pay for our business permit. Even though we are foundation and we are generally live from the donation. which can be use for our outreach and health project. Saan po ba kame pwedeng agency ng government pwede makahingi ng opinion tungkol dito. We are not an income generated businesses. Thank you
Hello Zhane. What is your Foundation all about – it’s main operation? Your Foundation should secure an endorsement from the government it is directly related. For example, if it is about education, then you should get an endorsement from DepEd or CHED. If it is about health, then you should secure an endorsement from the Department of Health. For the exemption on Mayor’s permit, you should ask consultation from the City Licensing Office and comply with their requirements.
hello po!. Pa check lang po aq sa foundation na ito if legit ba talaga ito sila. kasi claim nila magbibigay sila ng billion2x na pera for every group project. at bibigyan ng million2 ang bawat director sa group project.
DCFI – MCFI
DEPENDANT CLAIMANTS FOUNDATION – MINDANAO CHARITY FOUNDATION, INC.
SEC REG 05-07573 ILIGAN
President ng Foundation: Erlinda M. Daag
Thank you!
they are not registerd to SEC, therefore they are not legit. all corporations, NGO’s, Foundations must be registered to SEC before starting any related businesses.
Hi
We are planning to put up a foundation catering the kids that are out of wedlock and send them to school which bottom line is providing them better future.
This will cover the whole Philippine Archipelago with our office will be in Pasig. Some of my friends who wants to join are foreigners who wants to touch the lives of Filipino children.
is there any individual/ company who are into this kind of service from SEC registration up to BIR ?
our target of registration will be 1st week August.
Thanks
Vins Valle
Hello Good Day… I’m inquiring about a Foundation which is based in Iligan.. it’s (Mindanao Charity Foundation Inc). and their president is Ms. Erlinda M. Daag. Are they legit now? They’re here in Iloilo City. My mom and dad is hooked with this foundation and I can’t put sense into them. They’re telling them that they’ll get millions of benefit… I’m really worried… pls help.
Hello. Since before I want to have a Foundation for disabled person because wanted them to give hope, love and giving importance that they are still worthy and giving inspiration both of them but I dont know how to start. I wanted this in Philippines…