LEGAL FRAMEWORK

OF NON
GOVERNMENTAL
ORGANIZATIONS
(NGOs)
IN NIGERIA
 INTRODUCTION
 NGO is not a legal term, but it is
used widely as such because it is the
term almost universally used by the
World Bank, the United Nations, and
other national or multinational bodies
when referring to non-governmental,
not- for-profit entities that are
engaged in development or advocacy
activities.
 DEFINITION
 NGO can be defined as:
 “Non governmental organizations” (NGO)
refers to an association, society,
foundation, charitable trust, non-profit
corporation, or other juridical person that
is not regarded under the particular legal
system as part of the governmental sector
and that is not operated for profit – viz., if
any profits are earned, they are not and
cannot be distributed as such.
 It does not include trade unions, political
parties, profit-distributing cooperatives, or
churches.
 TYPES OF NGOs
 Operational NGOs encourages
directly large scale change by
influencing political system indirectly.
 Advocacy NGOs operates on a
smaller scale
 REASONS FOR NGO LAWS
 There are at least six reasons why any society should
consider adopting laws that support a vigorous and
independent NGO sector:
 (a) implementing the freedoms of association and speech,
 (b) encouraging pluralism and tolerance,
 (c) promoting social stability and the rule of law,
 (d) efficiency,
 (e) “public sector market failure, “ and
 (f) providing support for a market economy
 The first three are social or political, while the latter three
are economic.
 Freedom of Association
 Laws permitting NGOs to be established
as legal persons play a crucially
important role in making the freedom of
association, protected by international
and constitutional law, real and
meaningful.
 Freedom of association is one of the least
developed of the fundamental principles
of international human rights laws
 Pluralism and Tolerance
 There are many differences among the
members of any society, and
individuals and groups have diverse
interests and needs.
 Laws permitting NGOs allow individuals
and groups to pursue their individual
interests (e.g., sport, folk music,
preservation of a particular language or
culture) and thus support the
development of pluralism and tolerance
within society.
 Social Stability and the Rule of Law
 A principal and appropriate role for
laws for the NGO sector is to permit
and encourage the existence of such
organizations and to afford them legal
protection while at the same time
providing the public with protection
against misconduct and abuse by
requiring appropriate transparency and
accountability, especially regarding the
use of public funds or funds donated by
the general public, and by encouraging
self-regulation within the NGO sector.
 Efficiency
 Private, voluntary organizations can often
be efficient partners for governments in
the provision of public goods and services.
 In other words, in many cases they can
provide such services with higher quality
and lower cost than can the government.
 Accordingly, the traditional tendency to
see NGOs and governments as occupying
separate “sectors” and being natural
antagonists does not reflect reality
 Public Sector Market Failure
 Laws that permit individuals and
groups to come together to meet the
gaps created by market failure in the
public sector play a vital role in
enriching society and assuring that
those public goods and services to
which individuals are willing to
devote their own resources will be
provided.
 Support for a Market
Economy
 The third economic justification for
NGO laws is that they provide indirect
support for the success and growth of
market economies. There is some
evidence that market economies
flourish best where social stability,
public trust of institutions, and
respect for the rule of law exist.
 These societal values are fostered by
laws for the NGO sector.
 LEGAL EXISTENCE OF NGOS

 Given the benefits of the not-for-profit

sector, the question arises on how best
to support its growth.
 Establishing a sensible legal framework
for the foundation and function of these
organizations is a necessary first step.
 The manner a country will use to
regulate the non-profit sector will
depend to a great extent upon the legal
structure already in place.
 LEGAL EXISTENCE OF NGOS
CONT…
 Legal frameworks for non-profit
organizations generally address
several particular issues.
 These include the way an
organization comes into existence,
the regulations of their existence,
taxation, and the particular activities
of these organizations.
CONSTITUTING AN NGO BOARD
 Boards should be strengthened and
broadened with between ten to
fifteen members
 Board members should have shared
interest.
 Ensure that target is familiar with the
activities of the NGO
 There should be a specified tenure
for members
 BOARD FUNCTIONS
 Sets policies and strategies for the NGO.
 Sets operational guidelines, work plans
and budget.
 Make funding decisions.
 Sets criteria for membership.
 It represents the views of the NGO.
 It mobilizes resources and coordinates
with other agencies
 Establishment (Registration or
Incorporation)
 To be recognized in law, that is, to enjoy
juridical personality with its accompanying
rights and obligations, non-profit organizations
must first of all be “organizations.”
 In other words, some act must be undertaken
that transforms the group of individuals into a
formally constituted, legal or juridical person,
distinct from those individuals.
 However, the exact type of entity and the
means of formally creating it can vary widely.
 Responsible Governmental
Agency
 There is a considerable variety among
legal systems in the kind of agency that is
empowered to establish NGOs.
 In some countries NGOs cannot be
established until they receive the approval
of the ministry with jurisdiction over the
subject matter of their proposed activity.
 For example, health NGOs must be pre-
approved by the Ministry of Health;
cultural NGOs by the ministry of culture
and so on.
 Amendments to Established
Status
 Under the laws of some countries it is
necessary to completely re-establish an
organization if any amendment is made in its
name, its purposes, the location of its home
office, and so forth.
 It should be possible for an NGO to amend its
governing documents to change its activities
or purposes, and the same approval processes
that apply to the initial establishment should
be required to be followed.
 Amendments to Established Status
Cont…
 Finally, to assure that assets that have
been derived as a result of tax privileges
or donations by the public are not
converted to private use, an NGO should
generally not be allowed to convert to for-
profit status.
 The NGO should be required to terminate,
with its assets distributed according to law
 The individuals can then establish a new
for-profit entity.
 Termination, Liquidation, and
Dissolution
 Although an NGO should be allowed to decide
whether to continue in existence or not, in some
countries an NGO cannot terminate without the
permission of the government (e.g., Bangladesh,
Ecuador, Pakistan, Sri Lanka) (Salamon, 1997).
 In the case of NGOs that have received
government funds, public donations, or significant
tax preferences, it is appropriate for the law to
provide that upon termination and dissolution.
The remaining assets of the organization must go
to another NGO with a similar purpose or to the
government, and that those assets may not
revert to the founders, officers or directors.
 Termination, Liquidation, and
Dissolution Cont…
 If one or more ministries or agencies of the
government is given discretion to terminate an
NGO, seize its assets, or take over its operations,
the possibility of that happening has a chilling
effect on the independence of the NGOs.
 In order to assure a vigorous and independent
NGO sector, the law should provide for warnings
before sanctions are imposed and for
intermediate sanctions (e.g., fines, suspension of
government grants or contracts) for various
types of violations, as well as the ultimate
sanction of termination
 Activities and Operations of
NGOs
(a) Economic Activities.
 In addition to their non-profit
activities, non-profit organizations
also often engage in a variety of
“business” activities in order to
generate income.
 Activities and Operations of NGOs
Cont..
(b) Political Activities.
 Political activity can be defined as supporting
or opposing candidates for office, supporting
particular political parties, lobbying for or
against specific laws, engaging in public
advocacy or pursuing issue oriented litigation.
 The primary basis for divergent treatment of
political activities of NGOs appear to be
classification in common law countries on the
basis of charitable or public benefit purposes,
in contrast with the civil law classification
focusing on the nature of the legal
personality.
 Taxation
 Most tax laws focus on the functions or
purposes of an organization in determining
whether it is entitled to tax preferences.
 For example, the tax laws of a particular
country might extend the privilege of receiving
tax-deductible contributions or property tax
exemptions only to organizations formed for
the primary purpose of advancing education,
health, science, culture, or the relief of
poverty.
 Tax preferences are one of the principal
benefits extended to NGOs, and in most legal
systems they are extended preferentially or
even exclusively to public benefit
organizations
 Structure and Governance

 In framing laws on the internal governance

of non-profit organizations, policy makers
must balance two competing values: first,
the value of autonomy and non-
interference by the state in the internal
affairs of the organization; and second, the
need for these organizations to have
understandable decision- making
structures and to be publicly accountable.
 Structure and Governance
Cont…
 Laws often address issues concerning
the size and terms of office of
governing board of non-profit
organizations. Further, laws may
stipulate the officers that are
required and the power of each, or
leave this to be spelled out in the
organization’s bylaws.
 Conclusion
 Legal standards are ones that are normative and can be
generalized, but law is necessarily a locally developed
framework.
 On a global level, we can say that the overriding
assumption of this presentation is that a good legal
framework is a necessary but not a sufficient condition to
enable NGOs and to further their capacity.
 Laws create only the basic minimum of conditions that
promote and further the development of a civil society.
 Civil society cannot grow and thrive without a social and
political environment that encourages it. Thus, although
laws are important they do no more than establish a fertile
soil in which the seeds of civil society can be planted.
 With that global perspective as a guide, local laws
affecting NGOs must be examined to ascertain the ways in
which they accomplish the results of enabling NGOs and
building their capacity.
SETTING UP AN NGO BY-
LAWS

BY OBANYA ANTHONY
 By-laws or Bye-laws?
 Come up with an understanding of
the above- mentioned
 NGO BY-LAWS
 By-laws are internal documents, a set of
rules that enables each organization to
conduct its affairs.They are generally the
supreme
 It is important they be written clearly and
in language that is easily understood by
all organization stakeholders. This
document is frequently necessary for the
registration of an NGO with national and
public authorities.
 NOMOMECPA
 Name
 Object
 Members
 Officers
 Meetings
 Executive boards
 Committees
 Parliamentary Authority
 ITEMS OF AN NGO BY-LAWS
Typical items addressed in the bylaws are:
 Name and purpose of the NGO - The

Purpose is usually a restatement of the NGO's

Mission Statement, but can contain additional
details
 The frequency, notice, and quorum

requirements for organizational meetings

- These can be internal or regular meeting of
the NGO, or external meetings such as those
for the general public, with other stakeholders
etc.
 ITEMS OF AN NGO BY-LAWS
CONT…
 Voting qualifications, proxies, and
procedures for approval of boards. This is
related to the governance structure of the
NGO's board.
 The number and term for members of the
board, scope of authority, method of
nomination and election to the board, and
provision for filling vacancies.
 List of board officers, method of
nomination and election, terms of office,
powers, duties, and succession.
 ITEMS OF AN NGO BY-LAWS
CONT…
Membership and authority of
committees or working groups-
Many of an NGOs' work is done
through sub-committees or groups,
and provisions need to be made for
such committees.
 Title and scope of authority for the
executive director and other staff
members who are responsible for the
day to day functioning of the NGO.
 ITEMS OF AN NGO BY-LAWS
CONT…
 Record-keeping and financial
reporting responsibilities- In
many countries this is necessary for
the maintenance of the tax-exempt
status of an NGO.
 ITEMS OF AN NGO BY-LAWS
CONT…
Amendment procedures for the bylaws
and provisions for dissolution of the
organization.
 Writing and gaining approval for a set of
bylaws takes thought, time, and the
involvement of the organization’s
constituents.
 Bylaws should be written with an emphasis
on fair Strategy and transparent
governance.
 ASSIGNMENT
 Establish a quintessential paradigm
of an NGO reflecting its type and by-
laws.
 Come up with two learning points
each from our discourse
 CONCLUSION
 Having a clear set of by-laws not
only provides clarity to an NGO’s
structure, it also provides a basis for
trustworthy relationships.
 THANK YOU!