By Erin Colton-Enberg
Wherever you are in the world, creating a nonprofit organization (let alone in your first language) can be a big undertaking.
Colombia, like many countries in Latin America, draws the attention of those looking to work in the nonprofit sector. In Medellin alone, whether you are looking to volunteer with local organizations like Volunteers in Colombia, or work with inter-governmental organizations like the United Nations, there are many opportunities to get involved.
After landing in Colombia in 2015 with a program called Colombia Bilingue, I worked for three years in a public school teaching English to high school students. During the four years that I lived and taught at public and private schools in Colombia, I connected emotionally with local girls and realized there is little discussion, education, or resources available about leadership and empowerment for young women. Having benefited from women’s circles and being mentored by women, I started a nonprofit corporation, called Proyecto Florecer, an organization that has created a community kitchen run by single mothers and a team of local volunteers, serving up to 200 lunches a week to those in need.
Corporation or Nonprofit?
Wherever you, creating a nonprofit organization (let alone in your first language) can be a big undertaking. Under the umbrella of nonprofit organizations, Colombia has three major branches; Foundation (what we know as a 501.c3 in the United States), a Corporation, and a B-Corporation (similar to a social enterprise). In Colombia, B-Corporations are less common and are limited to larger companies like Crepes and Waffles (a restaurant that hires single mothers).
When creating Proyecto Florecer, I had to decide if I wanted to register my organization as a foundation or a corporation. While both options benefit others, foundations must designate all earnings, funds, and resources to further their goals as a foundation, rather than to distribute profits to owners and investors. Even officers of corporations with charitable goals can receive a salary as long as it is proportionate to the earnings and donations received.
Costs of Accounting
One reason I went for a corporation was the cost difference between a corporation and a foundation. In Colombia, the accountant fees are relatively high, especially for someone like me with little earnings and a low budget. But bookkeeping must be flawless for corporations and foundations. Otherwise, it may be impossible to renew the corporate license. For a corporation, accounting fees are at about 500,000 COP / month (that’s around $150 USD) while an accountant for a foundation runs at the cost of minimum wage at 800,000 COP / month (about $230 USD).
Start-Up Costs and Process
Something to keep in mind when creating a business, corporation, or foundation in another country is that it is going to take time! To create our corporation took about three months. Between the costs of the lawyer, notary fees, and constitution fees, the creation of our corporation cost about 1,500,000 COP (around $500 USD).
So, what documents do you need to create a foundation? My best advice is, find a trustworthy lawyer who understands the goals of your organization and can guide you through the bureaucracy jungle. You will need to have all your documentation, which should be straightforward; a copy of the founder’s passport, a letter stating the activities of the organization, the address, phone number, and the name and logo of the organization. Your lawyer will take it from there. Once everything is sorted, you must sign and notarize all documents and turn everything over to the Chamber of Commerce (Camara de Comercio). Once they approve your corporation, you will receive a tax ID number and documents. Now you can open your corporate bank account.
Feeling intimidated yet? Well, creating Proyecto Florecer has kept me up at night, and I felt at times pulling my hair out. I had to wait in more lines to sign documents than I would have cared to admit, but that’s the process for those looking to create their incorporate in Colombia.
For more information on our work at Proyecto Florecer, visit our website at www.proyectoflorecer.org and check out TCI for answers to questions you might have on being an entrepreneur in Colombia and beyond!
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