Frequently Asked Questions: NGOs

Q: What makes an organization an NGO?

You can actually do the paperwork on your own, but it is best to have them checked by a lawyer and to seek legal advice before filing your registration.

In the Philippines, an NGO is often a non-stock, nonprofit organization and meets several criteria:

1. Its founders or decision-making body do not involve people who work for the government.

2. It has a self-regulatory mechanism/body to certify that the organization is legitimate, accountable, and transparent – especially if it receives donations or government funds.

3. Its aims are non-commercial, non-lucrative, of public interest, and for the common good.

4. It has the structure of an organization, statutes, and a legal form/registration.

Q: What is the difference between NGOs and NPOs?

Most NGOs in the Philippines are non-stock, nonprofit organizations, so most people use the two terms interchangeably. Technically, however, not all NGOs are NPOs, and not all NPOs are NGOs.

An NGO (nongovernmental organization) can actually either be nonprofit or for-profit entities.

On the other hand, an NPO (nonprofit organization) is not a profit-making entity. It can’t simply make a profit and distribute it among its members. An NPO does not necessarily mean ‘charitable’ either.

Q: What are the types of NGOs?

According to the World Bank, there are two types of NGOs/NPOs: Operational NGOs (often relief-oriented or development-related, and community-based) and Advocacy NGOs (usually directed towards raising awareness).

Q: What do NGOs do?

NGOs under Philippine Laws operate and organize for any of the following purposes:

    1. Social welfare, such as human rights, sexual abuse victims, child labor, prostitution, juvenile crimes, counseling (e.g. Red Cross, Amnesty International)
    2. Charity, such as orphanages, basic services for/distribution of food, clothing, or medicine to the poor, housing, disaster relief services (e.g. Visayan Forum Foundation)
    3. Education, such as scholarships, journalism workshops, school materials (e.g. Vibal Foundation, Tapulanga Foundation)
    4. Environment, such as the restoration or conservation of nature, animal rights (e.g. WWF, PETA)
    5. Health, such as hygiene, vaccinations, medicine, waste disposal, drug addiction recovery (e.g. Bukas Palad, KBCF Operation Paglingap Foundation)
    6. Scientific research
    7. Religion (e.g. Universal Wisdom Foundation)
    8. Culture, such as the arts, music, and sports/athletics (e.g. Bayanihan Folk Arts Foundation, Inc.)
    9. Economic, such as loans, skill training, financial consulting, job search assistance (e.g. NWTF)

Q: How do NGOs/NPOs get funding?

NGOs/NPOs get funds through different methods. They:

–       Accept voluntary private donations

–       Sell handicrafts, artwork, goods, etc.

–       Charge for services

–       Receive other grants from local agencies

–       Charge membership dues

–       Organize fundraising events, like charity sports

–       Are partially or fully funded by the government

NGOs that receive funds from the government retain their NGO status as long as no government official is a member or a director.*

Q: Are “nonprofit” and “not-for-profit” the same?

Some groups make a distinction: not-for-profit refers to an activity – a hobby, for example (i.e. fishing). Nonprofit refers to an organization established for purposes other than profit-making.

Technically, however, there is no significant difference between the two terms.

Q: Are NGOs/NPOs exempt from paying tax?

NGOs/NPOs have more tax exemption privileges than commercial businesses and for-profit corporations, but these privileges are NOT absolute.

This tax exemption refers only to real property exemption, and not to other types of tax. Income earned by a non-stock, nonprofit institution from the sale or lease of its real property is subject to tax. Interest income from bank deposits and yield from deposit substitutes are likewise subject to the final withholding taxes.

Q: What skills are necessary in running an NGO?

Working in an NGO requires basic bookkeeping, events management, great communication and leadership skills, an ability to empathize, and a genuine desire to lend a hand and/or serve the NGO’s purpose.

Q: How many NGOs/NPOs are there in the Philippines?

There is an estimated 60,000 registered NGOs in the country.