pcnc by luis morales
TRANSCRIPT
PHILIPPINE COUNCIL FOR
NGO CERTIFICATION
NON-STOCK, NON-PROFIT CORPORATIONS/ORGANIZATIONS
• A type of corporation formed for social welfare and/or development, educational, scientific research, religious, socio-cultural, fraternal, trade/professional leagues and others
• All revenues shall be used in pursuit of purpose/s for which the non-stock, non-profit has been organized
• No part of its revenues and assets is used for the benefit of its Board, management, staff and other persons
SEC REGISTRATION• Verify and reserve the proposed corporate
name• Prepare the Articles of Incorporation and By-
laws.• For non-stock/non-profit corporation, amount of
capital or money contributed or donated and by whom must be specified (for foundations, a minimum cash of P1 million must be deposited in the bank in the name of the org.)
BIR REGISTRATION• SEC will assign a tax identification number
(TIN) upon release of the certificate of incorporation
• TIN shall be formally registered with BIR• Registration of books of account, official
receipts/invoices• Application for tax exemption• Application for “donee institution status“
through PCNC
BUSINESS PERMITS & LICENCES
• From the LGU (town or city) where you will operate:– Community tax certificate– Barangay clearance– Fire permit– Occupancy permit– Others
TAX EXEMPTION – Sec. 30 - NIRCIt is said that:• Tax exemption is applicable to revenues
derived from donations, contributions, grants and similarly natured income are tax exempt
• Subject to tax are revenues derived from any of its properties, real or personal, or from any other activities conducted for profit, even if used for the pursuit of the purpose of the non-stock, non-profit organization
Tax Exempt Organizations
Per Section 30 of the National Internal Revenue Code of 1997, among the organizations that can avail of tax exemption are:• Non-stock corporation or association organized
and operated exclusively for religious, charitable, scientific, athletic, or cultural purposes, or for the rehabilitation of veterans
Tax Exempt Organizations• Civic league or organization not organized for
profit but operated exclusively for the promotion of social welfare;
• A non-stock and non-profit educational institution;
These organizations must ensure that no part of its net income or asset shall belong to or inure to the benefit of any member, organizer, officer or any specific person
SEC & BIR REGISTRATION
• It is best to seek the help of a lawyer/accountant who is/are experienced in the:– Registration of non-stock, non-profit
corporations/organizations– Preparation and submission of required reports
to SEC and BIR
DONEE INSTITUTION STATUS
• Corporate and businessmen donors of non-stock, non-profit organizations with Donee Institution Status are entitled to:–donor’s tax exemption (30% of donation plus
12% value added tax)–100% deductibility of donation from gross
income
DONOR’S TAX
ELIGIBLE NGOs• Non-stock, Non-profit Domestic Corporations
organized under Philippine Laws and operated exclusively for any or a combination of the following purposes:
Type of Main ProgramCharitable ReligiousCultural Scientific ResearchEducational Social WelfareHealth Youth DevelopmentRehabilitation of Veterans Sports Development
ELIGIBLE NGOs
• Civic league or organization not organized for profit but operated exclusively for the promotion of social welfare;
• Non-stock, non-profit educational institution.
THE BEGINNINGS OF PCNC
• 1997 – PCNC was organized by six of the largest networks of NGOs in the country
• 1998 – PCNC was authorized by the Department of Finance to certify NGOs for “Donee Institution Status”, subject to the final approval of the Bureau of Internal Revenue
• 1999 – PCNC was publicly launched
PART II
PCNC CERTIFICATION
BEYOND DONEE STATUS CERTIFICATION
VISION OF PCNC – as of 2009:A Filipino nation blessed with a culture of
giving:• Matched by responsible stewardship within
the NGO community:• Sought by donors• Recognized by government;• Treasured by its members
RESPONSIBLE STEWARDSHIP
The exercise of due diligence by NGOs in the management of entrusted:• Resources by donors, contributors
grantors, and other partners aimed at• Contributing to the well-being of the
target disadvantagedgroups/sectors
BEYOND DONEE STATUS CERTIFICATION
MISSION OF PCNC – as of 2009:Improve the effectiveness of Philippine NGOs
so that they become increasingly:• Accountable, credible and capable in providing
services to those in need• Instrumental in creating a culture of giving
SEAL OF
GOOD GOVERNANCE AND MANAGEMENT AND TRANSPARENCY AND ACCOUNTABILITY
FOR NGOs and FOUNDATIONS
Setting PCNC Standards
To measure NGO Legitimacy and Efficiency and Effectiveness:• Review of standards used by NGO donors and
accrediting institutions in other countries• Guidance from experts• Consultations with local networks of NGOs
and more than 300 NGOs
SIX AREAS OF ORGANIZATIONAL FUNCTIONING
• Vision, Mission, Goals• Governance• Internal Management• Program Operations• Financial Management• Collaborative Linkages
VISION, MISSION AND GOALS (VMG)
• Clarity of purpose, sector served and functions in its pursuit of a public good
• Common understanding of the VMG by Board Members, Management, Staff, Beneficiaries and Partners
• Degree to which the VMG are achieved
GOVERNANCE• Active involvement of Board Members in:– Policy formulation and direction setting– Approval of strategic plan and budget– Evaluation of program accomplishments and
financial performance– Resource generation for sustainability
• Compliance with legal requirements of concerned government agencies
• Delineation of responsibilities of the Board and Executive Officer
GOVERNANCEDept. of Finance (DoF)/Bureau of Internal Revenue (BIR) Mandated Provisions in the Articles of Inc./ By-Laws of non-stock, non-profit corporations:• “In the event of dissolution, assets of the
accredited NGO would be distributed to another NGO of similar purpose/s or to the State for public purpose/s”
• “No part of net revenue or asset of which shall belong to or inure to the benefit of any person”
GOVERNANCEDoF Mandated Provisions in the Articles of Incorporation of non-stock, non-profit corporations:• “Members of the board do not receive any
compensation”• “Level of administrative expenses not
exceeding 30% of total donations received and total expenditures for the year”
GOVERNANCE
Per Executive Order 720• “Registration, licensing and/or accreditation
from government agency (e.g. DSWD, DOST, DepEd, etc.) that has regulatory functions over the type of programs and services implemented by the NGO/Foundation”
GOVERNANCEAdditional PCNC Polices for Foundations organized by religious congregations: At least one (1) Independent Trustee who has
no working/monetary and/or membership connection with the foundation, its affiliate organizations, and grantees
Chair/President and Treasurer must not be related by affinity or consanguinity up to the second degree
INTERNAL MANAGEMENT• Clear inter-relationships and delineation of
duties and responsibilities and authorities of staff
• Sufficiency of staff and appropriateness of knowledge, skills and attitudes
• Compliance with government labor and employment laws
• Written and practiced administrative and personnel guidelines
PROGRAM OPERATIONS• Mechanism for involvement of stakeholders• Criteria for selection of beneficiaries and
programs and services• Program guidelines are in place and practiced
accordingly:– Development & Planning– Implementation– Monitoring and Evaluation
• Tracking of program disbursements
FINANCIAL MANAGEMENT
Internal control guidelines applying checks and balances in handling and utilization of funds• Accurate and up-to-date four books of account• Check disbursements covered by pre-numbered
check vouchers and with supporting documents• Approving party, cash custodian and bookkeeper
are three (3) different persons
FINANCIAL MANAGEMENTInternal Control Guidelines
• Funds are kept in a bank account in the name of the organization, except for petty cash
• Check vouchers and all supporting documents are stamped when check is released
• Monthly preparation and review of:– Financial Statements– Bank Reconciliation Statements
FINANCIAL MANAGEMENT• Annual external audit by independent
Certified Public Accountant registered with the Professional Regulatory Board, BIR and Board of Accountancy
• Regular sources of funds• Reporting of, at least, the sources of funds
generated and corresponding utilization• Preparation of Board approved three-year and
annual budgets
COLLABORATIVE LINKAGES
• Resource generation• Criteria and system for partnering • Program partnership with other institutions
(GOs, NGOs, Funders)• Sharing of “good practices”
Major Hindrances to Full Organizational Development of NGOS
• Deficient:–Resources–Access to capability building assistance
• Handcuffed organizational culture
PART III
PCNC CERTIFICATION PROCESS
MAJOR STEPS IN THE PROCESS OF PCNC CERTIFICATION
• Conduct by applicant of organizational self-assessment (optional) using:– Tools developed by PCNC along the standards and
indicators used to measure compliance with:• Statutory requirements of the government (legitimacy)• Efficiency and effectiveness of operations
• Organization by applicant of all documentary requirements of PCNC for evaluation
MAJOR STEPS IN THE PROCESS OF PCNC CERTIFICATION
1. Submission of complete documentary requirements
2. Payment of application dues (range from P10,000 to P30,000 based on assets of the NGO/Foundation)
3. Organization of team of two (2) or three (3) trained Volunteer Peer Evaluators (management staff of PCNC certified organizations and/or PICPA member)
MAJOR STEPS IN THE PROCESS OF PCNC CERTIFICATION
4. Conduct of NGO Evaluation guided by the standards and indicators set:– Documentary Review– Interview of Board Members, Management and
Staff, Beneficiaries and Partners– Project Visits
5. Rating of results and identification of recommendations for improvements
6. Board deliberation and approval/denial
MAIN PREMISE IN THE EVALUATION OF NGOs
• More than certification, the evaluation conducted by PCNC should be seen as an opportunity for:– Identification of organizational strengths and areas
for improvements– Determination of actions that could be taken to be
compliant with standards of NGO legitimacy and efficiency and effectiveness or “good housekeeping”
PCNC
…owes much to its Volunteer Peer Evaluators, without whose help, PCNC would not be able to achieve its Vision and Mission
SALAMAT PO