Introduction

Establishing a charitable foundation dedicated to supporting elderly individuals is a noble endeavor that addresses critical social needs such as healthcare, financial assistance, housing, and emotional support for senior citizens. In the Philippines, where the elderly population is growing rapidly due to improved life expectancy and demographic shifts, such foundations play a vital role in supplementing government programs like those under the Department of Social Welfare and Development (DSWD) and the National Commission of Senior Citizens (NCSC). This article provides a comprehensive guide to the legal processes involved in registering and operating such a foundation, ensuring compliance with Philippine laws to achieve legitimacy, tax benefits, and operational efficiency.

The primary legal framework for non-profit organizations in the Philippines is governed by the Revised Corporation Code of the Philippines (Republic Act No. 11232), the Tax Code (as amended by the Tax Reform for Acceleration and Inclusion or TRAIN Law and the Corporate Recovery and Tax Incentives for Enterprises or CREATE Act), and regulations from agencies like the Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), and DSWD. Foundations focused on elderly support must align their objectives with national policies, such as Republic Act No. 9994 (Expanded Senior Citizens Act of 2010) and Republic Act No. 11350 (National Commission of Senior Citizens Act), to maximize impact and eligibility for incentives.

This guide covers every aspect, from conceptualization to ongoing compliance, assuming the foundation will operate as a non-stock, non-profit corporation—the most common structure for charitable entities in the country.

Step 1: Conceptualization and Pre-Registration Planning

Before formal registration, thorough planning is essential to ensure the foundation's viability and legal soundness.

Defining the Purpose and Scope

Mission Alignment: The foundation's primary purpose must be charitable, specifically aiding elderly people through programs like medical aid, livelihood training, community centers, or advocacy against elder abuse. Under Philippine law, charitable purposes include relief of poverty, advancement of education, health promotion, and social welfare, as defined in Section 30 of the National Internal Revenue Code (NIRC).
Target Beneficiaries: Focus on Filipino senior citizens (aged 60 and above), including indigents, abandoned elders, or those with disabilities. Incorporate inclusivity for indigenous elders or those in rural areas to align with government priorities.
Governance Structure: Decide on a board of trustees (at least 5 members, with no more than 15 for efficiency), officers (president, secretary, treasurer), and members. Ensure no dividends or profits are distributed to members, as required for non-profit status.
Funding Sources: Plan for donations, grants, fundraising events, and partnerships. Foundations can seek accreditation from the Philippine Council for NGO Certification (PCNC) for donor incentives.

Legal and Financial Feasibility

Conduct a name search via the SEC website to ensure availability.
Prepare initial capital (minimum P1,000,000 for foundations, as per SEC guidelines for endowments).
Engage a lawyer specializing in non-profit law to draft documents and avoid pitfalls like unintended tax liabilities.

Step 2: Registration with the Securities and Exchange Commission (SEC)

The SEC is the primary registrar for non-stock corporations, including foundations.

Required Documents

Articles of Incorporation: This outlines the foundation's name, purpose (e.g., "To provide holistic support to elderly Filipinos through health, financial, and social services"), principal office, term of existence (perpetual unless specified), trustees' names and addresses, and incorporators (at least 5 natural persons, majority Filipino residents).
By-Laws: Details internal rules, such as meeting procedures, trustee elections, and fiscal year. Include provisions for elderly-focused committees.
Treasurer's Affidavit: Certifying the initial endowment or contributions.
Endorsement from Relevant Agency: For elderly support, obtain a letter from DSWD confirming the foundation's alignment with social welfare goals.
Name Verification Slip: From SEC.
Cover Sheet and Undertaking: Standard forms.

Filing Process

Submit documents online via the SEC's eSPARC (Electronic Simplified Processing of Application for Registration of Corporation) system or in person at SEC offices.
Pay filing fees: Approximately P2,000 to P5,000, plus 1% of the endowment for legal research fees.
Processing Time: 3-7 working days for approval.
Upon approval, receive a Certificate of Incorporation, making the foundation a legal entity.

Special Considerations for Charitable Foundations

Classify as a "foundation" under SEC rules, requiring an endowment fund where only income (not principal) is used for operations.
Ensure the purpose clause explicitly states non-profit intent and prohibits political activities.

Step 3: Post-SEC Registration Requirements

After SEC registration, additional steps secure operational legitimacy.

Registration with the Bureau of Internal Revenue (BIR)

Obtain TIN and Certificate of Registration: File Form 1903 at the Revenue District Office (RDO) covering the principal office.
Apply for Tax Exemption: As a non-stock, non-profit entity under Section 30(E) or (H) of the NIRC (for charitable or social welfare institutions), submit:
- SEC documents.
- Proof of charitable activities (e.g., project proposals for elderly homes).
- Audited financial statements (initially, a projected budget).
BIR Ruling: Grants exemption from income tax on donations and grants, but VAT and other taxes may apply unless qualified.
Donor Incentives: Tax-exempt status allows donors to deduct contributions up to 10% of taxable income.

Accreditation with Other Agencies

DSWD Accreditation: Mandatory for social welfare activities. Submit application with SEC certificate, by-laws, and program plans. This enables access to government funds and partnerships.
PCNC Certification: Voluntary but recommended for credibility. Involves evaluation of governance, finances, and programs; certified NGOs enjoy enhanced donor tax benefits (150% deduction).
Local Government Unit (LGU) Permits: Register with the barangay, city/municipal hall for business permits, especially if operating facilities like senior centers.
PhilHealth and SSS Registration: If employing staff, comply with labor laws.

Step 4: Operational Compliance and Best Practices

Governance and Reporting

Annual Reports: File General Information Sheet (GIS) and Audited Financial Statements (AFS) with SEC annually. BIR requires Annual Information Return (Form 1702).
Board Responsibilities: Trustees must act in good faith, avoiding conflicts of interest. Implement policies on fund management, ensuring at least 70% of funds go to programs (per PCNC standards).
Transparency: Maintain books of accounts, subject to audit. Publicize annual reports to build trust.

Program Implementation for Elderly Support

Legal Frameworks: Adhere to RA 9994 for discounts and benefits integration; RA 7876 for senior citizens centers.
Partnerships: Collaborate with NCSC, DSWD, or NGOs like the Coalition of Services of the Elderly (COSE).
Fundraising Regulations: Comply with DSWD rules for public solicitations; secure permits for events.
Data Privacy: Follow the Data Privacy Act (RA 10173) when handling elderly beneficiaries' information.

Tax Obligations and Incentives

Exempt from income tax on charitable income, but liable for withholding taxes on payments.
Property tax exemptions possible via LGU ordinances.
Import duty exemptions for donated goods under the Customs Modernization and Tariff Act.

Step 5: Potential Challenges and Risk Management

Common Pitfalls: Misclassification leading to tax audits; inadequate endowment causing revocation.
Legal Risks: Non-compliance with anti-money laundering laws (RA 9160) or election bans on partisan activities.
Sustainability: Diversify funding; build endowments through bequests.
Dissolution: If needed, follow SEC procedures, distributing assets to similar charities.

Conclusion

Registering a charitable foundation for elderly support in the Philippines is a structured process that, when followed diligently, creates a lasting impact on vulnerable seniors. By leveraging legal incentives and aligning with national policies, such foundations can thrive, contributing to a more compassionate society. Prospective founders should consult legal experts for tailored advice, as laws evolve. With proper setup, the foundation can become a beacon of hope for the elderly, ensuring dignity in their golden years.