Registering an organization is generally a vital first move, as it is almost universally required in order to receive funding, hire staff and launch operations. However, although this is often legally required, registration can present unique difficulties in every context. An alternative option is to establish a program under an existing human rights organization that is already registered. This section will present the benefits and challenges of each option, and provide guidance on how these options can be pursued.
Deciding whether to register your organization
Before deciding whether to register your organization, you will need to be aware of the legal enabling environment in your country, and of the political and other potential risks involved in setting up your organization. A number of countries have recently introduced laws restricting the percentage of foreign funding (including in-country foreign donors) an organization can receive. Some other countries have, for historical and structural reasons, never developed a protected space for civil society organizations. Given the nature of work for refugee rights is often sensitive, you would need to be prepared for a degree of official hostility towards your work.
There are usually multiple ways to register an organization, each with their comparative benefits, protections and disadvantages.The choices you make when registering your organization will affect its prospects in the long term. It could influence factors such as the dates of your fiscal year, whether your organization will have members, and what kind of board of directors or governors you choose to have.
Whether you register as a for-profit or non-profit entity often affects what taxes you will have to pay, as well as what funding you are eligible for. In some cases, you may choose to register as a company as it may be easier, cheaper, and less visible. In other cases, registering as a nonprofit may allow you to benefit from tax relief, and to obtain certain types of grants and funding.
Some points of consideration when weighing the potential benefits and risks of registering your organization are listed below.
Potential benefits of registering your organization:
- Legitimacy with funders and the authorities
- Enables subsequent financial management e.g. opening a bank account
- Enables fulfilling financial reporting requirements such as submitting audited accounts
- May provide legal protection from potential closure of operations
- Facilitates legal operations, including ability to enter into contracts (tenancy, purchase of equipment, hiring staff)
- Limits legal liabilities in the event of breaches of contract
Potential drawbacks of registering your organization:
- Attracts more attention in a politically repressive environment
- Some governments restrict the ability to receive funds from certain donors e.g. foreign donors, or impose requirements on what your organization must do to access outside funds
- Registration may constrain your permitted activities
- Registration may also require other additional bureaucratic activities, such as filing certain paperwork each year
Practical advice on registering your organization
Obtaining legal advice
One way to identify and analyze your options may be to enlist the pro-bono assistance of a locally-based law firm, ideally one that has a culture of pro-bono and is committed to providing equally high quality services to pro-bono and paying clients. Advice from someone familiar with the legal rules and regulations governing the incorporation of new entities in the country is likely to be invaluable, even if that person is not familiar with non-profit organizations. If pro-bono lawyers are unavailable, it is advisable to invest in paying a lawyer or other agent experienced at registering social benefit entities to work with you to prepare your paperwork and help you navigate the system. If there is an NGO Council in your country, they may be able to provide such assistance free of charge. However, in certain countries, such ostensibly supportive bodies may prove hostile or corrupt (see the need for risk analysis, above).
Consulting existing NGOs
It will also be helpful to talk to existing NGOs in your country about these issues. You may utilize external help to:
- Learn about how they assess the risks, how they chose to be registered, and why they made the choices they did. Note that junior staff may not be aware of these aspects of organizational history. You will probably need to speak to the director and board of governors, and to any in-house legal advisor the NGO may have.
- Guide you around seemingly innocuous words that may raise red flags to a government if included in your registration information. Trigger words are often surprising and unpredictable. It is likely that these terms, even if central to your registration, can be re-worded and related difficulties easily avoided. For example, ‘education’ or ‘lobbying’ could become ‘advice’ and ‘designing policy frameworks’.
- Identify the interests of the government, and tailor “Objects Clause” to suit them. For example, if the government prefers that all refugees are resettled out of the country and tries to prevent refugees from entering, stating that your services assist the UNHCR process refugees faster is more likely get your organization registered than mentioning about rights, empowerment or advocacy.
- Speed up the registration process. Existing NGOs are likely to have built up relationships with government officials responsible for getting registrations done. Utilizing even low-level relationships may speed up this process, which is an additional benefit to the lawyer or agent’s familiarity with the procedure.
Note that if you attempt to register and are refused permission, you will have to choose between operating in direct violation of government decisions, or not operating at all. In some contexts – where registration is particularly slow – your application may be put on hold indefinitely. This could be an advantage: you can show you have taken the correct steps, and then operate informally in the interim without actually having received a negative answer. Again, these elements are highly contextual and we recommend doing extensive research before making decisions with long-lasting consequences.
Alternative to registration: establishing a project within an existing human rights organization
Alternatively, there may be options to operate as a project within an existing human rights organization that is already registered. In some contexts, this may be advisable for practical reasons, e.g. for low-visibility protection, or as a start-up arrangement while waiting for full, independent NGO status. This may be a relatively quicker route to achieving operational status.
However, note to also identify the ‘costs’ to such an arrangement beforehand. Working with an existing human rights organization also entails the management and coordination of a further set of organizational relationships. If this path is pursued, it is vital to be clear from the beginning regarding the extent of the ‘parent’ organization’s control over your operations, and to what extent you would have to compensate them in any way for the services they provide. Defining the respective roles of each partner are best spelled out in a formal Memorandum of Understanding. This should seek to cover all eventualities, including an exit clause.