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Corporate Securities Info

Besmirched NGO reputation

/ 01:10 AM October 11, 2013

Until Janet Lim-Napoles and her alleged P10-billion pork barrel scam hit the headlines, nongovernment organizations enjoyed a good reputation.

Their officers and members were looked at with admiration for devoting, without expecting remuneration, their time and effort in the service of the less fortunate members of our society.

The words “NGO” and “foundation” are like badges of honor traditionally associated with religious organizations. They were trusted to honestly handle the money and resources given them for the benefit of their constituencies.


With the reported use of bogus NGOs and foundations as instruments for siphoning the people’s money into the pockets of corrupt senators, congressmen and other government officials, these organizations, as a whole, have become objects of public scorn.

NGOs have earned the moniker “Napoles Group of Organizations.” Mention the word “foundation” and the cynical will ask if you are referring to a beauty product used to hide skin blemishes, a procedure our honorable (ugh!) lawmakers engage in when their integrity is put into question.

Thus, for the mistakes of a rotten few, the NGOs in the country that have lived up to their calling (and continue to do so) to serve the poor, needy and underprivileged are under a cloud of suspicion.


The people behind the NGOs that have besmirched the name of their organization are now facing plunder and malversation charges at the Office of the Ombudsman.

Whether or not they will be haled to court by the Ombudsman and later found guilty remains to be seen. Considering the slow pace of justice in our country, it would probably take four to ten years before these cases are finally resolved.

Meantime, despite the adverse publicity, the legitimate NGOs and similar organizations should not slow down in their missionary activities.

They have an important role to play in our society as they help fill gaps in public service. They step in when government agencies fail, for one reason or another, to perform their assigned tasks.


But if you’re one of many generous and kind-hearted people who want to help the less fortunate members of our society through NGOs, two questions must be going in your mind now:

How do we know which NGO is legitimate and which is not? What is the assurance that monetary donations will not find their way into the pockets of the copycats of Napoles, “senatongs” and “tongressmen?”

Scams have the uncanny ability to recreate or reprogram themselves to adjust to regulatory measures put in place to address their past activities. As the saying goes, there is a sucker born every minute, and that (unfortunately) sometimes includes the educated and well-meaning.


The legitimacy of NGOs or foundations is not determined solely by the certificates of registration issued them by the Securities and Exchange Commission.

Any group of persons can register a nonstock, nonprofit corporation as long as the supporting documents are in order. The SEC does not look into the true motives behind the registration.

It takes the statements in the applications at their face value because it does not have the staff and resources to go beyond the four corners of the registration papers submitted.

For foundations, the registration process is a little strict. No organization can attach the word “foundation” to its name unless it shows it has P1 million in capital deposited in a bank.

Upon the issuance of the registration papers, the corporation or foundation can declare itself an NGO for promotional or solicitation purposes. This self-serving description can be legally made by any organization that receives no funding from the government or has no links with the government.

After registration, the monitoring process for the two organizations varies. Nonstock, nonprofit corporations simply submit a General Information Sheet (GIS) every year to show, among others, their membership profile.

Foundations, on the other hand, are required to submit their GIS and a certification from the mayor, barangay captain, or head of either the Department of Social Welfare and Development or Department of Health on the projects they have accomplished within the jurisdiction of the offices mentioned.



The SEC registration of an NGO or foundation is not a “seal of good housekeeping” or guarantee that it is what it purports to be or that it will actually engage in the activities it promised to do.

The registration certificates simply mean they have acquired a juridical personality that enables them to enter into contracts, own properties and maintain bank accounts.

Anyone who wants to be sure about an NGO’s or foundation’s legitimacy should treat the registration papers as merely the starting point of the verification process.

The offices or project sites of these organizations should be visited to check their existence or veracity.

The verification process for foundations could be less tedious if the SEC is scrupulous in enforcing its requirement that foundations submit every year the certification on projects accomplished by the government offices earlier mentioned.

If the indicated offices or projects sites are nowhere to be found or are of suspicious character, chances are the NGO or foundation concerned is being used as a conduit to solicit funds that will eventually find their way to the pockets of the people behind the fake organizations.

“Trust but verify” should be the guiding principle in dealing with NGOs and foundations. This approach may look cynical but it cannot be helped because of the Napoles experience.

It will probably take some time before these organizations can recover the high esteem they once enjoyed in the public’s eye.

For comments, please send your e-mail to rpalabrica@inquirer.com.ph.

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TAGS: “Napoles Group of Organizations”, Janet Lim-Napoles, NGO, nongovernment organizations, pork barrel scam, Securities and Exchange Commission
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