distinguish between public interest associations and those exclusively serving their members. Hence,
cultural and educational institutions, NGOs, grassroots community organizations, churches, and even
political parties register as associations in order to undertake fundraising and organizational activities.
Associations are subject to little public regulation of their operations or finances, and they may undertake
a wide variety of activities, including profit making enterprises to generate income. The legal governance
body of an association is its Assembly of Members. Associations are neither required nor encouraged to
have separate Boards of Directors (and this is not a common practice).
While the Peruvian state does not
in the associational life of most nonprofits, it does little to
them. Direct public sector support accounts for less 5% of the income of nonprofit
organizations for which financial data is available. There are few tax incentives for nonprofit activity or
private philanthropy. All nonprofit organizations are exempt from the payment of income tax (although
this is set to end in 2001), but they are subject to most other taxes, including valued added or sales tax
(IGV) on the sale of goods and services and regular import duties. Donations to most private, nonprofit
organizations are not tax deductible, and donors of in kind goods to private charitable organizations must
pay IGV on the value of their contribution. There are modest tax credits for donations made to certain
educational and cultural organizations, but donors and beneficiaries must register previously with
SUNAT and are subject to review of their financial reports and possible audits. For most potential
corporate donors, the tax credit is insufficient in contrast to the risk of the opening their books to the
SUNAT, in a country in which tax evasion was widespread until the 1990s.
The tendency has been to concentrate social programs and spending in the central government, and
particularly in a few key Executive agencies. This is consistent with the establishment of an overall
national plan for the struggle against poverty, which concentrates public spending on the pursuit of
specific policy objectives, such as eliminating adult illiteracy. However, such concentration of resources
is unhealthy for the development of a strong democracy and civil society. Executive branch agencies
have been increasingly tempted to skew spending priorities toward presidential reelection goals and other
forms of political clientelism, while private, nonprofit organizations have often demonstrated greater
efficiency, innovation, and political objectivity in providing services at the local level.
Meanwhile, efforts at public sector regulation of the nonprofit sector and of private philanthropy have
been weak and inconsistent. Private foundations are the only form of nonprofit organization with a
special regulatory agency, the Consejo de Supervigilancia de Fundaciones (CONSUF) within the
Ministry of Justice. By law they are required to submit annual financial reports and may be subject to
audits. Restrictions on their governance structure and financial decisionmaking make it difficult for living
donors and corporations to create foundations and be actively involved in them (though legislation is
currently before Congress to modify theses restrictions). At the same time, foundations are notably lax in
their reporting to CONSUF, and to date the agency has not succeeded in promoting the accountability or
effectiveness of this sector.
Other forms of nonprofit organization are not subject to obligatory registration or supervision by any
public sector agency. In a partial exception, NGOs are required to register with the Secretariado de
Cooperacion Tecnica Internacional (SECTI) within the Ministerio de la Presidencia if they wish to
receive international assistance that is channeled through the Peruvian government. This involves
submitting financial statements and annual reports, and has apparently led to some self censorship on the
part of smaller NGOs in the registry (interview with Sofia Macher, CNDDHH). Recently, the SECTI has
Felipe Portocarrero S., Cynthia Sanborn, Sergio Llusera and Viviana Quea, Empresas, fundaciones y medios: La
Responsabilidad Social en el Peru. Lima: Universidad del Pacifico, 2000.
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