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Foundations have varied reasons for being registered but
more usually for fund- raising activities or projects.
In this regard, the Securities and Exchange Commission
(SEC) maintains it to be essential that all the funds
generated by these foundations be used in accordance
with the purposes or objectives mentioned in their
articles of incorporation. Today, this is more strictly
monitored to prevent using these incorporated entities
to hide nefarious activities that can seriously injure
the public at large.
A
foundation connotes the legal concept of a nonstock,
nonprofit and in some cases, a tax-exempt corporation
established or incorporated for the purpose of extending
grants or endowments to support or carry out its goals
or raising funds to accomplish charitable, religious,
educational, athletic, cultural, literary, scientific,
social welfare, or other similar objectives or purposes
(SEC Memorandum Circular No. 8, Series of 2006).
In SEC
Memorandum Circular No. 8, Series of 2006 it provides
that a foundation applying for registration with the SEC
shall submit a notarized certification of bank deposit
of the amount of not less than One Million Pesos
(P1,000,000.00). Such an amount is to be used for
extending grants or endowments for prospective
beneficiaries or recipients of the foundation.
Noteworthy is that the presumed activity is to disburse
rather than receive. In addition to this certification,
the applicant foundation must also submit a Statement of
Willingness to allow the SEC to conduct an audit of the
foundation once it has already been registered.
Prior to
Memorandum Circular No. 8, the SEC required the
applicant foundation to submit a Modus Operandi or a
Plan of Operation setting forth therein the modes of its
operation, the source of its funds and the application
thereof. The applicant was also required to submit a
list of its prospective beneficiaries of grants or
endowments. These requirements were excluded in the
latest SEC Memorandum Circular No. 8 for the reason that
the SEC’s policy is to expedite registration of
companies applying for primary franchises and such
information, can eventually be extracted from subsequent
filings.
However,
to implement the SEC’s power to monitor corporations,
once a foundation is duly registered with the SEC, it is
required, in addition to the filing General Information
Sheet (GIS) and Audited Financial Statements (AFS), to
submit a sworn Statement by its president and treasurer
on information that is relative to the preceding fiscal
year, such as but not limited to, the source and amount
of the funds of the foundation and its program or
activity that is ongoing as well as those that have been
accomplished in the period referred to. Other documents
such as a Certification from the Office of the Mayor or
the Office of the Barangay Captain, or the Head of
either the Department of Social Welfare and Development
or Department of Health, on the existence of the
foundation’s programs or activities in the place or
locality in which it exercises jurisdiction shall
likewise be attached.
A
foundation, which is registered and in good standing
with the Commission even prior to 2006, when Memorandum
Circular No. 8 was passed, is also required to attach to
the aforementioned documents for filing, the Statement
of Willingness to allow the conduct of an audit on its
operations and funds.
The
implication of these changes in the regulatory
requirements of the SEC is that these are not
stand-alone rules. A coordinated effort to implement
statutes like the antimoney-laundering law (Republic Act
9160, as amended by RA 9194) has put a critical eye upon
entities such as foundations. In fact, it brought about
the realization that the SEC had, on file, over 16,000
foundations prior to its cleanup of nonreporting
entities and the revocation of a sizable number of them. |
