What is an NGO?
NGO means directly, non-governmental organization. They are non-profit organizations that are mostly committed to the environment, poverty, and human rights. An NGO is therefore not a government. They are non-profit organizations that work with volunteers and receive money from donors who share common interests in their work.
NGOs can also be discussion partners for governments. For example, for advice or mediation in problems of child labor or human rights. Some NGOs focus specifically on developing countries, development cooperation or development aid.
Well-known examples of NGOs are Greenpeace, Doctors without Borders, Oxfam Novib, the Refugee Foundation, and UNICEF Netherlands.
How do you start an NGO?
Starting an NGO starts with setting up a foundation. A foundation is a legal form that you must register in the Trade Register of the Chamber of Commerce.
Recruit donors for your NGO
An NGO cannot do without donors. You can start recruiting in your own environment, for example by networking during meetings and events. But your reach will of course increase with your own website and social media. Your NGO will become even better known to a wider audience through advertising or interviews on radio and TV.
A foundation runs thanks to volunteer work. So you need volunteers. Use all media to reach them. Your website and social media, for example. But also traditional channels such as folders and advertisements or word of mouth through your board members or donors. Basically, make it known everywhere that you need people to volunteer.
Grants for development aid and development cooperation
Doing business with developing countries and emerging markets offers opportunities for Dutch companies. So also for NGOs. There are grants and schemes that can help entrepreneurs contribute to better products, employment, new technology, and general development. For example, there are special loans for NGOs with water projects in developing countries. View all grants that may be of interest to your non-profit organization.
Working with the United Nations
NGOs are often called in by the United Nations (UN) to participate in projects for, among other things, development aid or development cooperation. The UN annually purchases $14 billion through tenders. For example, to provide relief goods or services for disaster areas and developing countries. But also as a discussion partner for development cooperation in the fields of education, agriculture, the environment, and human rights. Check whether the UN is also something for your non-profit organization.
To run a successful NGO in Nigeria you need to register it with the Corporate Affairs Commission. The importance of this can’t be adequately stressed. By registering with CAC, these are some of the advantages.
- Right to Acquire Assets. When your organization is formally registered with the Corporate Affairs Commission by way of registration, it then becomes entitled to acquire land, own fixed assets and/or obligations under its common seal. It is not legal for an unregistered organization to buy, hold or sell land anywhere in Nigeria.
- Protection from Liability Insurance. You can buy, acquire and stake and register the assets in the name of your NGO. This is a very smart way to protect yourself from unlimited liability for unwanted happening like bankruptcy, foreclosure, judgment debt, or divorce etc. Assets and land registered in the name of your NGO can never be targeted or seized for the satisfaction of any outstanding debts, nor can it be used for court settlement in a divorce proceeding. Better to outsmart an ugly situation in the future than regret!
- legal person. As a legal entity, your organization’s transactions and engagements with the public will improve. The NGO can enforce its legal rights or be sued too through the registered trustees.
- Structured Financial Plan. Having an NGO can provide a tax-free mechanism for activities you carry-on under the NGO. NGOs are deemed not-for-profit and tax-exempt. You can craft a structured financial plan that permits the organization to do business free of tax liabilities. This is the so-called “tax avoidance”. Tax evasion is a legitimate way of reducing or eliminating your tax liability. Tax avoidance is not “tax evasion”, it is illegal!
- Stability. The registration of your organization suggests that there is a well meaning leadership in place. The public will perceive the same as more stable than an unregistered organization. Political parties, government, donor agencies, financial institutions, charity organizations and other NGOs will want to collaborate with a civil society body to further common goals.
- Perpetual Succession. This means that an NGO was given an unlimited lifespan and will continue to exist even if the founder or trustees die or leave the NGO. The organization’s existence will not cease until it is formally liquidated by the court’s ruling. Among other advantages, it can allow continuous succession.
- Access to credit. Registering an NGO would grant access to credit from lenders and financial institutions. You can use loans to pursue the organization’s activities, finance a mortgage, buy land or fixed assets. Banks must see the proof of registration with the CAC before they do business with your company. It is a required condition of giving a loan.
- Preservation name. Once your organization is registered, no one can use the same name or similar to it in Nigeria. This has the advantage of protecting your corporate image and name from unauthorized use.
- Corporate Banking
Opening a business account with a bank for the NGO can signal the fact that you are being transparent. Some individuals, government, donor agencies, and other NGOs will not be comfortable writing a check for your organization in your personal name. A bank account for the NGO would signal its corporate existence and its willingness to receive donations. You must prove that your organization is registered with the Corporate Affairs Commission to be able to open an account with a bank.
If you want to start an NGO, you are taking the right step in the right direction. Registering an NGO would confer numerous benefits for the growth and sustainability of whatever you do. It is recommended that you get advice from an accredited lawyer from the CAC for the pre and post-integration issues of the NGO, and pin down key issues related to the governance structure and internal affairs of the same.