PCNC certification is a seal of good housekeeping for NGOs, attesting to their practice of good governance, management and accountability. Said characteristics are attributes that grant makers, funders and program partners look for when associating with NGOs.
As per mandate from the Department of Finance in 1998, PCNC certification also serves as a basis of the Bureau of Internal Revenue (BIR) in approving applications for donee status of an NGO. Donors of NGOs with the certificate of donee status from BIR are exempted from paying donors’ tax and said donations are deductible from the taxable income of the donor.
PCNC is not a government agency. It was organized in 1997 by six (6) of the largest NGO networks in the country. It is an answer to the challenge in 1995 from the Department of Finance to the NGO community to set up a self-regulatory body that will complement the effort of BIR in ensuring that only legitimate NGOs that are practitioners of good housekeeping receive donee status.
PCNC has evolved to be more than a self-regulating body. It helps NGOs improve their reach, capability and effectiveness.
Most of the documents prescribed by PCNC from applicants are regulatory and reportorial requirements of the Bureau of Internal Revenue (BIR) and the Securities and Exchange Commission (SEC) which NGOs must religiously comply with.
A requirement also is the certification from the government agency that has purview over the type of programs implemented (by the NGO). Among these government agencies are DSWD, DepEd, CHED, DOST, etc.
Other documents asked for when applying for PCNC certification, are to establish the profile of the applicant and programs implemented which NGOs do not have difficulty producing.
If there are no deficiencies in the documents submitted to PCNC and in the findings of the evaluation team that conducted the evaluation visit, it takes three (3) months from the time the application of an NGO is acknowledged by PCNC up to the approval of the application for certification. The PCNC certification is then endorsed to the BIR for the donee institution certification. BIR approval of donee institution status usually takes two (2) to three (3) months.
PCNC organizes the evaluation team that will visit the NGO. The evaluation team is composed of the following: a senior management staff of a PCNC certified organization; a certified public accountant and a member of the Philippine Institute of Certified Public Accountants and; a PCNC certification associate.
The team conducts: interview/focus group discussion with members of the NGO Board of Trustees, management and rank and file personnel, beneficiaries and partners; review of documents that include minutes of Board meetings, original copies of documents submitted to PCNC, program monitoring and evaluation reports, accounting books and supporting documents, etc. and; field/project visits. All these evaluation activities are important in determining the degree to which an NGO complies with the standards of good governance, management and accountability.