Stories & Updates

Why the Philippine Government Should Consider Streamlining Tax-Deductible Donations for Nonprofits

Nonprofit organizations in the Philippines are vital in supporting marginalized communities, often stepping in where government services are limited. Despite their important contributions, these organizations face significant challenges, especially in securing tax-deductible donations. Unlike countries like the United States and Australia, where nonprofit registration automatically grants eligibility for tax-deductible donations, nonprofits in the Philippines must navigate a complex accreditation process with multiple agencies to qualify for this status. This requirement can impose a heavy burden on nonprofit organizations, potentially deterring donors and limiting support for those in greatest need.

A Comparison of Tax-Deductible Donation Processes

United States:    Nonprofits apply for 501(c)(3) status to IRS, which grants tax-exempt status and makes donations tax-deductible. Oversight is managed through annual IRS reporting.

Australia: Charities register with the Australian Charities and Not-for-Profits Commission (ACNC) and apply for Deductible Gift Recipient (DGR) status with the Australian Taxation Office (ATO). 

Philippines: Nonprofits must register with the SEC, BIR, and DSWD, and undergo the PCNC accreditation process to qualify for tax-deductible donations. The PCNC accreditation process entails fulfilling numerous requirements, including obtaining the BIR Tax Exemption Certificate, which also has its own set of requirements.

Why the Current System Presents Challenges

Complex Accreditation Process: In contrast to the relatively straightforward processes in the U.S. and Australia, nonprofits in the Philippines face multiple layers of accreditation processes. To qualify for tax-deductible donations, they must navigate several agencies, which can be time-consuming and resource-intensive. These resources could instead be used to further their community-serving missions.

High Costs and Administrative Burden: The accreditation process involves both significant financial costs and administrative efforts, making it especially difficult for smaller or grassroots organizations to comply. As a result, these organizations may be excluded from accessing tax-deductible donations, despite their valuable work.

Regulations Rooted in Past Scandals: The current stringent requirements are largely a response to past incidents involving fraudulent organizations. While oversight is necessary to prevent abuse and misuse, the existing system creates a lot of challenges for legitimate, transparent organizations that are dedicated to their causes.

Impact on Philanthropy: Without the necessary accreditation certificates, donors may be uncertain about the tax benefits of their contributions. This reduces the financial resources available to nonprofits, affecting their ability to fulfill their missions.

Proposals for Reform

To help nonprofits better fulfill their vital roles in society, the Philippine government could consider the following steps:

a.Streamline the Process: Grant automatic donation tax-deductible status to nonprofit organizations upon registration with the SEC and BIR, eliminating the need for additional accreditation with multiple agencies. This would reduce unnecessary delays and administrative costs, allowing small and grassroots organizations to more easily obtain certifications for tax-exempt donations.

b. Streamline Annual Reporting/Compliance: Instead of requiring nonprofits to submit separate annual reports to multiple agencies, a single annual report could be submitted to the SEC, which would then share it with other relevant agencies like the BIR and DSWD. Given that the DSWD already conducts thorough compliance monitoring for non-profit organizations every three (3) years, this approach would reduce the administrative burden on organizations while maintaining adequate oversight.

c. Provide More Incentives for Nonprofits: In addition to simplifying the tax-deductible donation process, the government could consider offering further tax exemptions on nonprofit operations, salaries, and direct donations. There could also be funding programs specifically targeting nonprofits that provide essential social services.

4. Encourage Public-Private Partnerships: The government could further strengthen its collaboration with nonprofits by supporting public-private partnerships similar to those in countries like the U.S. and Australia. This would allow for more effective resource mobilization and increased support for social services.

A Personal Perspective

As a grant writer with experience in nonprofit organizations across the U.S., Australia, and the Philippines and a nonprofit leader committed to empowering people with disabilities, I have seen and experienced firsthand the challenges nonprofits—particularly in the Philippines—face in securing tax-exempt donations. Despite their best efforts, these organizations often encounter hurdles that make it difficult to operate efficiently. This is not merely a matter of convenience—streamlining these processes would allow nonprofits to focus their resources on serving communities rather than being weighed down by excessive administrative burdens.

While the past abuses that led to current regulations cannot be overlooked, it's crucial to acknowledge that legitimate nonprofits should not be burdened by so many accreditation processes. The existing system, though designed to prevent fraud, creates significant hurdles for organizations genuinely working to make a difference. Strengthening transparency through existing frameworks, such as annual SEC reporting, can already ensure accountability. Furthermore, periodic compliance monitoring by the DSWD every three years also offers additional safeguards to prevent fraud and uphold transparency.

Conclusion

The role of nonprofits in the Philippines is crucial to bridging gaps in public services, particularly in marginalized communities. By simplifying the process for tax-deductible donations, reducing accreditation processes, and offering additional government incentives, the Philippine government can create a more supportive environment for nonprofits to thrive. Adopting these changes would not only enhance the impact of nonprofits but would also encourage greater philanthropy and community support.

The Philippine government can unlock the full potential of nonprofit organizations to drive meaningful social change by fostering greater trust and collaboration. It is essential to recognize the value they bring and work alongside them as partners in building a more inclusive and resilient society. Nonprofit organizations need a more effective and supportive environment to continue making a positive impact on communities across the country.

The Government Plays a Pivotal Role in Enforcing Accessibility Laws in the Built Environment.

Although various countries have implemented programs to support the inclusion of people with disabilities, challenges persist due to inaccessible environments. With the adoption of the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD) and corresponding domestic laws, countries have begun enforcing accessibility laws at different levels. The built environment refers to human-made infrastructure, including buildings, public spaces, and other physical structures designed for living, working, and recreation. Accessibility law, on the other hand, is a legal policy that mandates both public and private built environments to be accessible to persons with disabilities.

This essay argues that the government plays a pivotal role in enforcing accessibility laws in the built environment. Firstly, governments hold the primary responsibility for ensuring accessibility by enforcing laws and allocating necessary resources. Secondly, the successful implementation of accessibility laws depends on the government's commitment to enforcement.

Government Responsibility in Enforcing Accessibility Laws

Governments have the primary responsibility for enforcing accessibility laws and providing resources to ensure that built environments are inclusive for persons with disabilities. As duty bearers, governments are accountable for upholding international treaties such as the UNCRPD and their corresponding domestic laws (Human Rights Advocacy and the History of International Human Rights Standards, n.d.). However, despite these commitments, many persons with disabilities continue to face barriers in built environments.

For example, in several European countries that are signatories to the UNCRPD, individuals with disabilities still struggle with inaccessible infrastructure. In response, the European Accessibility Act (EAA) was adopted in 2019 as a major step by governments to fully implement accessibility laws and eliminate barriers. As a result, approximately 87 million people with disabilities have benefited from improved accessibility, enabling them to participate fully in society on an equal basis with others (Accessible EU Report, 2023, pp. 1–3).

Similarly, in the Philippines, government facilities and buildings still lack accessible features, as reported in a study by the Asia Foundation, which surveyed 100 persons with disabilities (Asia Foundation, 2021). In response, the Coalition for Change, in partnership with the Department of Education, integrated accessibility measures into the Basic Education Facilities Fund in 2023 to ensure accessibility reforms in school buildings by 2024 (Asia Foundation, 2021). These examples demonstrate that, compared to the private sector or non-government organizations, governments have both the power and obligation to implement accessibility laws and ensure that planned actions are effectively carried out.

The allocation of resources and full-scale implementation of accessibility laws directly benefit persons with disabilities by enabling their full participation in society. Improved accessibility in workplaces, for instance, allows persons with disabilities to secure jobs, meet their basic needs, and become less dependent on their families. Therefore, governments are ultimately responsible for the implementation of accessibility laws and have the greatest capacity to allocate resources effectively.

The Role of Government Commitment in Implementing Accessibility Laws

The successful implementation of accessibility laws depends on the government’s level of commitment to their enforcement. Various countries have taken steps to address accessibility challenges, but the outcomes have varied.

For instance, in Australia, an assessment on the effectiveness of transport accessibility laws—conducted with 1,000 respondents, including 600 persons with disabilities and their families—revealed that inadequate planning and insufficient resources hindered the effective implementation of the National Disability Strategy (Outpost Consulting, 2022, p. 4). To address these shortcomings, the Australian government introduced a more coordinated national data collection and reporting framework to monitor compliance with minimum accessibility standards for buildings and transport (Australian Human Rights Commission, 2019).

In France, three accessibility laws have been passed over the last 49 years, yet full implementation remains incomplete. However, in preparation for the 2024 Paris Olympics, the government demonstrated strong commitment, significantly improving built environments in just three years—progress that would have otherwise taken two decades (Condé Nast Traveler, 2024).

In contrast, in the Philippines, Erico Abordo, president of the Quezon City chapter of the United Architects of the Philippines (UAP), reported that only 20% to 60% of buildings constructed by both private and government institutions comply with accessibility standards set by Batas Pambansa No. 344 (the Accessibility Law of 1983) and Republic Act No. 7277 (Magna Carta for Disabled Persons). He attributed this non-compliance to the fact that building operators ultimately decide whether or not to integrate accessibility features, regardless of architects’ designs (Inquirer, 2025).

These examples highlight that despite the existence of the UNCRPD and domestic accessibility laws, the absence of strong government action often results in continued barriers for persons with disabilities. Without decisive enforcement, millions of persons with disabilities will continue to experience discrimination and exclusion from society. Consequently, their rights will remain unfulfilled, leading to greater isolation and adverse physical and mental health outcomes. Therefore, the full implementation of accessibility laws depends on the government’s political will and determination to enforce these laws in the built environment.

Conclusion

Governments have both the duty and the authority to implement accessibility laws in the built environment and allocate the necessary resources. However, the success of these laws ultimately depends on the government's determination to enforce them. Evidence from various countries indicates that different levels of enforcement have led to varying outcomes. Where enforcement is weak, millions of persons with disabilities continue to face discrimination and exclusion. This failure violates their fundamental rights and prevents them from fully participating in society.

To address these issues, all governments must uphold their responsibility to implement accessibility laws. Collaboration with the private sector and disability organizations is essential to ensuring that accessibility reforms are effectively designed and implemented. By demonstrating strong political will and taking decisive action, governments can create inclusive built environments that promote the full participation and well-being of persons with disabilities.

References

Accessible EU Report. (2023). Accessibility Legislation in Europe, 2, pp. 1–3.

Asia Foundation. (2021). Improving accessibility in government facilities in the Philippines.

Australian Human Rights Commission. (2019). National Disability Strategy and Accessibility Compliance Monitoring.

Condé Nast Traveler. (2024). How the Paris Olympics Accelerated Accessibility Reforms. Retrieved from www.cntraveler.com.

Human rights advocacy and the history of international human rights standards. (n.d.). Government Accountability in Implementing Disability Rights.

Inquirer. (2025). Architects call for stronger enforcement of accessibility laws in the Philippines.

Outpost Consulting. (2022). Assessment of Transport Accessibility Laws in Australia, p. 4.