We’ve received some emails from readers lately, and this time, we’d like to thank Michelle Roddy, a missionary who regularly travels to Manila. Michelle had a query about a particular Securities and Exchange Commission (SEC)-registration requirement for foundations:
The notarized Certificate of Bank Deposit of not less than 1 million pesos.
It’s a question often asked in many NGO-related forums and blogs; a million pesos is an intimidating amount after all, especially for new groups. Is there an exception? Does an NGO really need one million pesos to be registered with SEC?
Well, not all of them.
There are various types of nonprofit, non-stock organizations: federations, trusts, etc, but to register at SEC, not all nonprofit organizations are required to have a million worth of funds. The one-million-peso rule only applies to one specific type – charitable foundations.
Foundations, according to SEC, are formed for certain purposes, like social welfare, education, culture, sports, health and environment, among others. They are expected to extend grants or raise funds to reach their goal. SEC-registered foundations also have to include the word ‘foundation’ in their corporate name.
If and when you register as a foundation, SEC requires a million-peso bank deposit – a requirement in line with the need to “ensure that donations are utilized according to the foundation’s purposes,” according to a 2004 memo. With the rising number of fake or corrupt organizations, this additional requirement is all in the name of security. So which organizations don’t need a million-peso balance then?
If you’re planning to register as a religious corporation (perhaps a church), a federation, or a condominium/homeowners’ association, SEC does not require a fixed amount of contribution, but simply a “reasonable amount as the incorporators may deem sufficient” to enable the corporation to start operating. But if you plan to become a foundation, the PHP 1 million-peso requirement strictly applies.