Registration of GCAP Global Foundation - Frequently Asked Questions

NOTE: This document aims to respond to some key questions that have been asked during the discussion on the registration matter and formation of GCAP Global Foundation as a registered entity. The notes provided in this document will help to understand the reasons and key points that became the basis of discussion and agreements in Transition Committee and IFT. In case there are more questions or points to understand the issue please do not hesitate to write to Irfan Mufti for further clarity.

Why the registration of the GCAP Global Foundation?

The GCAP Future Structure Task Group came in 2007 to the general agreement that 1) it is useful to distinguish between the “legal” hosting and “physical” hosting; and 2) after considering different options, particularly the risks, liabilities and potential conflict the legal hosting could possibly entail, it would be unavoidable and adequate to create an independent legal organization for the global secretariat, whereas the “physical” hosting (or housing) arrangements can be constructed separately. We also came to believe that, with proper structure in place, this independent legal registration could be handled with a minimum negative impact on GCAP’s strength in its diversity, spontaneity, political strength and leadership, dynamism and flexibility.

And it resolved the following: That GCAP form GCAP Trust, independent legal not-for-profit organization registered that takes care of administrative and financial aspects of running GCAP at the global level, including staff hiring and finance. The Governing Council elects the GCAP Trust Board of the GCAP Trust to oversee the functioning of the Global Secretariat.

Why it has to be registered in The Netherlands?

After several consultations with legal experts (ICNL) and NGO leaders in different countries the GCAP search focused on 9 countries to research: Brazil, Estonia, India, Netherlands, New Zealand, Philippines, South Africa, UAE and. Uruguay.              

The Transition Committee set five key criteria – endorsed by the IFT - to get information from those focused countries:

• No political interference
• Ability to work internationally (and to have an international board)
• Short registration timeframe/ bureaucratic ease
• Tax exemption and light/no funding restrictions
• Have an international board
  

The GCAP support team used several channels to collect information from those focused countries. Contacts with NGO partners, GCAP coalition members, legal experts, international organizations and other reliable and credible sources were used to extract information. The information was tabulated, analysed under the continuous guidance of the Transition Committee who at every step scanned the information and set standards.

International organization specialized in NGO laws were also consulted to authenticate the process and information gathered from different sources.

After comparing the various options, the Transition Committee recommended to the International Facilitation (IFT) Team that GCAP register as a Foundation in the Netherlands.

Why ‘GCAP Global Foundation’? What does a Foundation entail?

The IFT agreed that ‘GCAP Global Foundation’ be used instead of GCAP Trust (the term that had been used by the GCAP Future Structure Team in 2007) as a trust is a different kind of body in the Netherlands and using the work global makes it more understandable as to what level, the body refers to within GCAP.

In the Dutch Civil Code/Burgerlijk Wetboek Article 285 Book 2, a foundation (stichting) is defined as “a legal person created by a legal act which has no members and whose purpose is to realise an objective stated in its statutes using capital allocated to such purpose”. There are no different types of foundations in the Netherlands. However, a Dutch foundation can be used for different purposes and allows international board members with minimum interference in the functioning of the foundation from the government. The registration process is also simple and also allows a temporary registration till the formal board is constituted and announced.

According to Dutch law the Foundation does not require being located in Netherlands and offers flexibility to place its secretariat and other operational structures. Under the Law the registered Foundation can operate from anywhere regardless if it is registered in The Netherlands.  Oxfam International, Action Aid International and others have secretariats all over the world and are registered legally in the Netherlands.

According to the relevant registration law, a registered foundation has to only submit an annual report to the registration authority as annual requirement.

What will be the mandate and the governance structure of the GCAP Global Foundation?

After carefully analyzing all the information gathered so far and the preliminary analysis the Transition Committee recommended that GCAP Global Foundation should be set-up as a legal entity. Such registration status will help GCAP formalize the roles of signing contracts and reporting, audits, hiring staff and other administrative and financial functions. GCAP Global Foundation will be an independent non-profit organization. GCAP Global Foundation will have the GCAP Global Foundation Governing Board and the GCAP Global Secretariat.

The governing board of the GCAP Global Foundation will perform its functions under the supervision and political guidance of the GCAP Global Council.

• The GCAP Global Foundation will hold executive, fiduciary and legal responsibilities of the GCAP Global Secretariat.
• It will be composed of eight members, of which five are elected from the GCAP Global Council and three are at large members with specific skills (e.g. human resources, legal, accounting, etc.), nominated by the GCAP Global Council.
• In its election and nomination, gender balance and regional considerations will be enforced.
• Its elected members must have the written support and recognition by their employers to dedicate an agreed amount of her/his time to GCAP.
• The GCAP Global Foundation will have a GCAP Global Secretariat with professional competence.

With registration in the Netherlands, can the secretariat be moved to other countries?

YES. This is the main reason the Transition Committee has suggested to register in Netherlands as no other country (The Transition Committee looked at registration laws in more than 9 countries) allows such flexibility of location of secretariat anywhere else in the world while registered in Netherlands.

What minimum registration requirements does GCAP Global Foundation have to fulfil in the Netherlands?

Initially, three names (as provisional Board members) and later the full board elected by GCAP Global Council will be notified to the registration authority accordingly. There are minimum requirements of documents and procedures from registration authorities in the Netherlands.

What additional tasks will the Global Secretariat have to perform while registering in the Netherlands?

Only an annual narrative and financial report, checked by a Dutch accountant, will be submitted to the registration authorities. Other than this minimum requirement, there is no other extra work or activity for the global secretariat.

Will such a registration in The Netherlands affect its ability to secure funds meant for groups in the South only?

NO. The Transition Committee believes that registration in Netherlands cannot/will not become problem in accessing funds for GCAP. It is the location of its functions and secretariat that will create its image. As the GCAP Global Secretariat will be based in the South, and generally, the restriction in question is where the activities are going to take place and the emphasis of our activities will determine the character of GCAP.  The Netherlands was particularly chosen because it allows operation out of the Global South.  A number of other NGOs have taken this registration model, and been able to access funds without many difficulties (e.g. Action Aid International).