The Difference Between a Charitable Foundation and a Non-Governmental Organization (NGO)

It's often the case that people wish to engage in socially beneficial activities to benefit society or specific demographic groups, as well as to advance important ideas. However, when the question arises about which form of activity to choose, many are uncertain whether to operate as a charitable foundation or a public organization. This decision can be particularly challenging for foreigners who want to do something meaningful in Ukraine but are still determining where to start and which form would be most effective.

In this article, we explore the fundamental distinctions between a charitable foundation and an NGO. We also provide guidance on how foreigners can participate in charitable or socially beneficial activities in Ukraine. Drawing on our extensive experience in offering legal support to NGOs and charitable entities, we are well-versed in legal requirements and can provide practical assistance in document preparation, registration procedures, and project management. Keep reading to gain essential insights and embark on your journey toward impactful social engagement.

The Difference Between a Non-Governmental Organization (NGO) and a Charitable Foundation: Why Distinguishing Between Them Matters

When deciding between a charitable foundation and a non-governmental organization (NGO), it's crucial to grasp the advantages and limitations of each structure. This choice impacts how swiftly and effectively you can execute your social initiatives, garner support from governmental and international bodies, and forge alliances with like-minded partners. Our goal is to help you navigate this decision-making process and select the option that best aligns with your objectives and capabilities. Let's explore what distinguishes each and how they operate.

What is a Charitable Foundation?

Under the Law on Charitable Activities and Charitable Organizations, a charitable foundation is defined as an entity whose principal mission is charitable activities in one or more specified areas as stipulated in its charter. Its objectives typically involve providing aid to beneficiaries (commonly referred to as those in need) in specific sectors like education, healthcare, environmental conservation, animal welfare, social services, science, culture, and more. Essentially, it entails targeted assistance to individuals, groups, other organizations, or animals. For instance, raising funds for a child's medical treatment or equipping hospitals with necessary supplies such as medical equipment, medications, hygiene products, and the like.

Charitable foundations always possess legal entity status and are commonly established in the form of foundations (though they can also exist as charitable societies or institutions). In practical terms, it's widely accepted that in 99.999% of cases, a charitable foundation is the preferred structure, which is why these terms are often used interchangeably – charitable organization equals charitable foundation. This is generally accurate, with the understanding that a charitable foundation represents a specific type within the broader category of charitable organizations.

What is a Non-Governmental Organization (NGO)

An NGO is a type of civil society association where individuals come together to protect rights, promote freedoms, and advance various societal interests—whether economic, social, cultural, or otherwise. NGOs may or may not have legal entity status, with their rights defined under Article 21 of the Law on Public Associations. These rights include disseminating information about their activities, advocating for their goals, holding peaceful assemblies, and engaging with governmental bodies to achieve their objectives. Thus, the activities of NGOs primarily focus on societal engagement aimed at improving or defending specific societal issues overall, such as promoting certain ideas or ideals.

When choosing between a charitable foundation and an NGO, it's crucial to consider the primary goal, essence, and nature of the activities involved. Charitable foundations typically focus on providing direct aid to individuals, while NGOs often concentrate on advocating for broader societal interests or causes.

How Can Foreigners Participate in NGO or Charitable Activities in Ukraine?

If you're not a Ukrainian citizen but a national of another country, you can still engage in NGO activities in Ukraine, including charitable endeavors. According to the Law on Public Associations, foreigners who are legally present in Ukraine can establish NGOs. Moreover, founding a charitable organization requires even less—simply obtaining a Ukrainian identification number, a process our attorneys can assist with remotely without requiring your physical presence in Ukraine. Company registration can also be handled through a power of attorney.

If a foreign legal entity, such as a company or organization, wishes to engage in charitable or public activities in Ukraine, there are several options available:

• Accreditation of a Foreign Non-Governmental Organization (NGO): This is akin to registering a company's representative office. The representative office does not have legal entity status and operates under the full authority of the foreign organization.
• Establishment of a Subsidiary Charitable Organization: Here, the foreign organization or even a commercial company can establish an independent legal entity in Ukraine. The newly formed organization operates autonomously as a separate legal entity.

For more detailed information on these options, you can refer to our article: "Choosing Between Accreditation of a Representative Office or Registration of a Foundation in Ukraine."

If a foreign non-governmental organization wishes to engage in public activities in Ukraine, their only option is to accredit their organization in Ukraine, effectively opening a representative office. More details about such representation can be found in our article: "Accreditation of a Foreign Non-Governmental Organization's Representative Office."

Registration of a Charitable Foundation or Non-Governmental Organization: Legal Assistance

We trust that our article on the distinctions between a charitable foundation and a non-governmental organization has provided valuable insights. Should you require further assistance or advice, please feel free to reach out to us. Our legal team can offer consultations and detailed explanations regarding the most suitable organizational and legal structures for your needs. We can also manage the registration and official procedures required by all relevant authorities based on your chosen organizational type. We will prepare all necessary documentation and guide you through the certification and submission processes.

Additionally, our experts can provide a comprehensive range of services tailored to meet the operational requirements of your charitable foundation or non-governmental organization, including accounting, legal, and human resources support, all forms of reporting, volunteer management, and migration services. With us, there's no need for multiple contractors; we provide all services under one roof. Our dedicated English-speaking manager ensures clear communication and comprehensive information, which is especially convenient for foreigners.

Contact us now, and we will do everything possible to ensure the successful implementation of your ideas and projects in Ukraine!