EO 117: Streamlining Donee Institution Accreditation
Legal question
How does a charity or NGO get 'donee institution' status so donors can claim tax deductions?
Applicable laws and rules to discuss
- Executive Order No. 117, streamlining donee institution accreditation
- Executive Order No. 720 (s. 2008), the prior accreditation framework
- National Internal Revenue Code provisions on deductible charitable contributions
Why this matters
Donors (individuals and corporations) can claim tax deductions for gifts to accredited 'donee institutions.' Before this Order, social welfare and development NGOs sometimes dealt with multiple agencies for accreditation, causing delays. Designating DSWD as sole accrediting entity for this category is meant to simplify the process.
The mechanism: one certificate, recognized by the BIR
DSWD is designated the sole accrediting entity for social welfare and development agencies (SWDAs). The operative step is that a Certificate of Registration or Certificate of Accreditation issued by DSWD is deemed sufficient and must be recognized by the BIR in granting donee-institution status for purposes of Sections 34(H) and 101(A) of the Tax Code — the provisions covering deductibility of charitable contributions and exemption from donor's tax. EO 720 (s. 2008) is repealed.
Which organizations count as SWDAs
The Order defines an SWDA as a non-stock, non-profit corporation, organization, or association engaged directly or indirectly in providing social welfare and development programs and services, which obtains its finances wholly or partly from the community through direct or indirect solicitation or other fund-generating activities. It covers public and private SWDAs, including auxiliary SWDAs.
If you already have donee status
There is a transitory rule worth knowing: SWDAs granted donee-institution status before the Order retain it until their existing Certificates of Registration or Accreditation expire. Only on expiry must they apply for accreditation with DSWD under the new system, so there is no immediate cliff for currently accredited organizations.
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