HOW TO START A FOUNDATION/NGO IN NIGERIA
A foundation can be referred to as a Non-governmental organization (NGO) or a body of persons that donates or generates funds, gives support to other organization for their own charitable activities and purposes. They do not distribute its income to the shareholders, leaders, or members of the organisation. They do not pay income tax on the money they receive for the organisation. Foundations may be focused on various interests such as health care, defence of children, civil rights, educational funding, religion, building orphanages, provision of menstrual pad etc.
A Non-Governmental Organization (NGO) is a body or association of persons registered as Incorporated Trustees under Section 590 of the Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria 2010 for the advancement of any religious, educational, literary, scientific, social/cultural development, sporting and charitable causes.
Notable foundations in Nigeria that be functional over the years includes the following:
- Medical bridges Nigeria
- Odion Ighalo Orphanage Home
- Dangote Foundation
- Family Care Association (FCA)
- Kokun Foundation
- Ndubizu Charitable Foundation
- Tony Elumelu Foundation
- New Creation Education Foundation (NCEF)
- Kanu Heart Foundation
- Airtel Touching Lives
- UBA Foundation
- Wellbeing Foundation Africa (WBFA)
- Fistula Foundation
- Tamar Rescue Foundation
- MTN Nigeria Foundation
- African Artists’ Foundation (A\AF)
ADVANTAGES OF REGISTERING A FOUNDATION/NON GOVERNMENTAL ORGANIZATION
The following are the advantages of having or registering a foundation in Nigeria:
- Protection from Personal Liability
Registering a foundation will give you the access to acquire and register stakes or assets in the name of your foundation. This enables you to protect yourself from debts and unlimited liability which will in turn lead to bankruptcy or foreclosure or judgement debt. Assets registered in the name of your charitable foundation is protected and can never be used to settle debts.
- Right to Acquire Assets
Registering an NGO will also give you access to acquire assets such as land after your organization must have been formally registered with the Corporate Affairs Commission in Nigeria (CAC).
- Corporate Entity
It will also enable your foundation to exercise its legal rights by suing or being sued through its legal trustees. This will bring about an improvement with your organization’s relationship with the public
It will also bring about stability for your foundation. Your registration will suggest that there is an effective leader in place and that the foundation is legal. Political parties, government, donor agencies, individuals, financial institutions, charity organizations and other NGOs will want to partner with a registered body in order to achieve their common objectives
Registering your foundation will also bring about an access to financing from banks and lenders because it has been formally registered with the Corporate Affairs Commission (CAC). Access to these various loan facilities will enable you to acquire assets, promote the activities and goals of your foundation
- Perpetual succession
Registering your foundation will make is sustainable for many years and your foundation will continue to exist even if the trustees or the founders die. The foundation will only cease when it is formally wound up by the order of the court.
When you are opening a bank account in the name of your foundation or NGO, it will allow individuals, government, donor agencies and other NGOs to comfortably give you funds to achieve the foundation’s cause. Before opening a bank account for your NGO, you will need the certificate of incorporation from your organization
- Structured financial plan
Registering your NGO will also bring a well-structured financial plan since most of the activities carried out in the foundation won’t be taxed. This is because foundations are deemed as not-for-profit organizations. This will allow you avoid tax liabilities and will also reduce your tax obligations
- Name preservation
After your organization have been registered with the Corporate Affairs Commission (CAC) in Nigeria, no one can use a similar name to that of your foundation in Nigeria. This will protect your foundation’s name from unauthorized use
PROCEDURES AND GUIDELINES TO TAKE BEFORE STARTING A FOUNDATION IN NIGERIA
There are certain procedures and guidelines one needs to take before opening a foundation in Nigeria. These procedures and guidelines includes:
- Make research and acquire knowledge
Before starting a foundation, you will need to make thorough research and acquire different knowledge based on the laws and regulations guiding a foundation. Starting a foundation requires passion, documentations and lots of money.
- Make a plan
Before starting a foundation, make a plan regarding the kind of services that your foundation wants to offer. Is it going to be an orphanage or provision of healthcare services, education, and scientific development. A proper and comprehensive plan will consist of your foundation
- Core beliefs
- Activities that your foundation will overtake
- Number of personnel or volunteers needed
- Funds needed
- Select a name
Choosing a name for your foundation is very important. Depending on the core beliefs and the mission of your foundation, you can devise a name that must best describe what you do. An appealing name also attracts donors to the foundation
- Register your company name
The Corporate Affairs Commission (CAC) are the ones vested with the power to register organizations in Nigeria. In Nigeria, charitable foundations may be registered as an association with incorporated trustees or a company limited by guarantee.
- Company limited by guarantee:
Under section 26(1) of CAMA ( Companies and Allied Matters Act), a company formed for the promotion of interests such as commerce, art, science, religion, sports, culture, education, research, charity, or other similar objects where the income and property of the company is applied solely towards the promotion of its objects and no portion of the company’s income or property may be paid or transferred directly or indirectly to the members of the company except as permitted by the this Act is referred to as a company limited by guarantee.
Requirements for companies limited by guarantee
- Check for Name Availability
- Reserve a Name
- Fill CAC1.1 Form . You can do this first three steps through the Corporate Affairs Commission website.
- Pay appropriate Stamp duty fee to Federal Board of Inland Revenue Service
- Pay filing fee to the Corporate Affairs Commission
- Scan and save as PDF format the dully completed Form CAC1.1 together with Memorandum and Articles of Association (MEMART), a recognized form of identification for Director(s)/Subscriber(s) and Secretary. Upload the scanned documents for processing on the website.
- The Commission is obliged to obtain approval of the Attorney General of the Federation before registration of the Company Limited by Guarantee.
- Incorporated trustees
An association with incorporated trustees is an association of persons, which appoints one or more trustees and pursues registration under Part C of the Companies and Allied Matters Act. Once this association is registered, the trustee or trustees become a body corporate and has/have perpetual succession as well as the power to sue and be sued on behalf of the association. Under section 673 of CAMA, associations with incorporated trustees can come in two forms. The first form occurs where the trustees are appointed by any community of persons bound together by customs, religion, kinship or nationality.
The second form occurs where trustees are appointed by any person or association of persons established for any religious, educational, literary, scientific, social, development, cultural, sporting, or charitable purpose.
Requirements for registration of incorporated trustees
- Check if the proposed name for your foundation is available and reserve it. This proposed name can be reserved for just 60 days before it reverts back for use by another organisation.
- Procurement of application form the Corporate Affairs Commission (CAC) which contains a memorandum for the guidance of application.
- Publication of notices in three (3) national dailies; one being a local newspaper widely circulated in the area where the organization is based.
- A formal letter of application
- The original newspaper publications
- 2 copies of Applicant’s constitution
- Minutes of the meeting whereat the trustees were appointed, having the list of members present and absent and showing the voting pattern, signed by Chairman and Secretary of the Board
- Minutes of the meeting where the special clause rules were adopted into the constitution of the organization which must be signed by Secretary and Chairman
- Trustees (Applicants) have to attach 2 passport sized photographs of themselves
- Trustees have to sign against their names on the application form and furnish permanent residential addresses
- The impression of the common seal should be affixed on page 11 of the form
- Payment of NGN37,000 (Incorporation of Trustees 30,000, Certify True Copy of Constitution 5,000 and Certify True Copy of Incorporation Form)
- Two copies of the application form
- Application form duly signed by Secretary and Chairman of the Board
- Open a bank account for your organization
This is another important step to be carried out because opening a bank account in the NGO’s name shows the NGO is official, legal and that you are ready to receive financial support and donations from the public. To open a bank account, you will need the Certificate of Incorporation of the NGO issued by the Corporate Affairs Commission. You can now then proceed to any bank of your choice to open a bank account
- Obtain funding for your foundation
Setting up a foundation means spending money to carry out the missions of your foundation. Money will be needed to purchase all that will needed to achieve your goal. A foundation can acquire funding through the following means:
- Government grants
- Grants from other foundations
- Corporate sponsorships
- In-kind donations such as food, clothing, etc.
- Interests from endowments/ investment
- Fundraising campaigns
- Individual donations and gifts
- Purchase the necessary equipment and tools needed
Equipment needed by foundation differ on the type of charitable cause they are offering. Take for example a foundation whose mission is to ensure that adequate medical services are provided to the general public for free. Equipment and tools that will be needed for the charitable cause includes medical supplies, wheelchairs, high blood pressure detectors, bandages, drugs, blankets etc. You can also get the equipment needed from donors who may either donate the equipment or funds for the purchase of such equipment.
- Location of the foundation
You must choose a location depending on the charitable cause your foundation is offering. Some foundation will need a large space and warehouses for storage while some may just need an office. Your location must be easily accessible
- Management and staffing
Even foundations will need staffs and employees to carry out functions for the growth of the foundation. You may also have paid staff as well as volunteers who will help you push your vision
- Promote your foundation
You need to promote your foundation through various means such as the media in order to expand your outreach and to also attract donors to your foundation. You can promote your foundation through the following means
- Connecting to donors by making appeals and using storytelling, images and videos to show them the impact of their donations
- Engage in fundraising activities to attract more donors
- Make a user friendly website for your foundation
- Develop materials that are specifically designed to highlight your charity and community work
- Reach out to newspapers as well as online magazines to write about your organisation.
- Promote your organisation through social media platforms.
- Forge partnerships with other organisations for specific charitable activity.
- Launch your foundation
Starting a foundation is not an easy task in Nigeria but you must ensure that you achieve what an individual donor cannot do on his or her own. After all things have be set in place, you can now proceed to launching your foundation through creating awareness and partnering up with other organizations
If you want to start a foundation or an NGO in Nigeria, it is recommended that you are given the proper guidance in order to ensure the growth and sustainability of your foundation. At Qeeva Advisory Limited, we offer the proper guidance for all the procedures mentioned above. For more information on how to start a foundation in Nigeria, contact us on 08023200801, 08075765799, Email: email@example.com
About the author
Onamakinde Dare Daniel is a highly motivated accountant with knowledge in Accounting, Taxation, Management, Audit, Costing and Research. He is keen on tax matters due to its ever dynamic nature.[contact-form-7 404 "Not Found"]