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Donation laws: Data and tips for non-profit organizations

June 19, 2019
Communications Colunga Foundation

As a result of the last talk that Pro Bono Foundation made in the ColungaHUB building, we extracted the most important data about the different laws that regulate financing through donations to non-profit organizations.

In Chile, there are about 26 laws that regulate the different types of financing through donations. Each one establishes the characteristics of who can be subject of donations, the limits of amounts and assets, in addition to the tax royalties that can be obtained by the donor companies.

Considering that in the country there are about 654 foundations registered in the Register of Grantees, the Pro Bono Foundation, belonging to the Colunga network, elaborated a complete training on the regulations that are of main interest for the civil society. From the talk, we highlight the following:

Law of Donations for Educational Purposes

The list of entities that can benefit from this law is varied, but always within the area of education. In the case of civil society, the non-profit organizations that administer free schools and pre-school establishments, and also those institutions that collaborate with SENAME, are the ideal grantee.

The main benefit it offers to donors is that they can use credit up to 50% of the total donation, thus lowering the tax rates to pay. The rest of the amount can be paid as an administrative expense.

Law of Donations for Social and Public Purposes

This norm allows donations for nonprofit organizations and foundations that provide free services to vulnerable groups, such as people with disabilities, or educational establishments that work in the rehabilitation and prevention of addictions in their community.

To be accredited in this law, organizations must be registered in the Ministry of Social Development and have their programs approved in the Project Bank. In addition, the grantees must have at least one year of uninterrupted operation.

The main benefit it gives is that donors can use 50% of the donated amount as credit. However, unlike the law on donations for educational purposes, you can not use the rest of the amount as an expense.

Municipal Income Law

The purpose of the Municipal Revenue Law is to regulate the proper use of donations. All organizations and institutions that run programs aimed exclusively at vulnerable groups and people with limited resources can benefit from it.

Who grants the accreditation to be able to receive resources under this regulation is the Mayor of the commune that will benefit from said projects; and the donors can be those companies that are governed under the first category tax.

The main benefit for the latter is that, in accounting terms, it can yield the entire donation as an administrative expense.

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