How to register a charitable foundation in Ukraine? Funding issues.
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Registration of a charitable foundation is a clear-cut desire to make the world a better place and help those in need.
Unfortunately, as soon as it comes to the bureaucratic aspects of the charitable foundation registration procedure or its activity, many people encounter the following problems:
The risk of making mistakes in the Charter or other registration documents, which can then have a negative impact on the work of the foundation;
The need to independently understand the norms of the law regulating the registration procedure, or to try to get an answer from the state authorities.
Our firm helps to avoid all these problems and takes care of the registration of the charitable foundation. We have already elaborated on the registration procedure many times, for example, here.
Today we would like to share our experience and draw your attention to the financial aspects of registering and operating a charitable foundation in Ukraine. Despite the fact that a charitable foundation is a non-profit organization, finances will be received in cash or in some other form on the account, and therefore you need to develop an accounting system, so as not to lose the non-profit status.
You may also like: The Charitable Foundation Registration Procedure In 2020.
How to recognize charitable contributions on the foundation’s account?
A charitable foundation can receive several types of funding: earmarked, unearmarked and passive. We have already told in detail about the types of charity funding here.
The main rule of accounting and distribution of incoming funding is that all expenses of the foundation should be of two types:
expenses to fulfill the core mission and purposes of the foundation;
expenses for the maintenance of the fund.
Failure to follow this rule will result in the foundation having income and, consequently, losing its non-profit status.
The difficulty lies in the fact that the contributions coming into the foundation’s account can be very different, including humanitarian aid, with or without a designated purpose. This means that you need a qualified specialist, who will help you organize the whole process without drawbacks and unnecessary risks.
Does a charitable foundation need real estate? How should it be accounted for?
If you are thinking about buying or renting premises specifically for the registration of a charitable foundation - you do not have to do this. The law does not require the foundation to have its own real estate. As for the need to provide a legal address for registration - you can just buy it. Our company offers such service along with the registration.
If you are looking for premises for the work of the charitable foundation - as its office or for the activities aimed at achieving the goals and mission of the foundation, you should understand that:
the expenses for maintaining such real estate must be documented as the foundation’s expenses aimed at ensuring the operation of the fund;
when renting premises, the object shall be specified in the off-balance sheet account 01.
What if the assistance is contributed in the form of things rather than money?
Let’s imagine a situation where the assistance is contributed in the form of material things, such as computer equipment. What to do with such contributions? Can they be sold?
Yes, they can. However, it is important to properly consider both the receipt of such assistance and the process of spending the amount received from such a sale - it shall, of course, be spent solely on the objectives of the foundation. We wrote about this aspect of the charitable foundation’ in more detail here.
Our company provides services not only for registration of charitable foundations, but also services of accountants who specialize in accounting of non-profit organizations.
Do you want to register a charitable foundation easily and quickly? Don’t hesitate to contact us! We will help you understand all the aspects of registration, and establish a foundation that will work seamlessly for your goals.
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