By María del Mar Zamora
The world of non-profits in Mexico is varied and can be a little daunting to wade through when we are trying to make a donation in our community. The non-profit world and terminology of the United States and Canada don’t translate directly to their Mexican counterparts. I hope this article helps you untangle some of the uncertainties if you are thinking about making a donation to a local organization.
In Mexico we talk about “Organizaciones de la Sociedad Civil.” Literally this translates Civil Society Organizations which refers to community groups which are taking collective action to have an impact on the public sphere, generally on issues that affect all citizens. Most non-profit organizations in Mexico (upwards of 80%) will constitute themselves formally under the figure of an Asociación Civil, or Civil Association. You might have noticed most philanthropic organizations in the area end their names with A.C. which identifies them as a Civil Association.
However, not all A.C.s are philanthropic. The figure may be used for any communal activities which don’t have profit as a primary aim.
Many condominiums and trade associations for example are formally organized as A.C.s.
Philanthropic organizations, such as those whose aim is cultural, ecological or social assistance focused, can achieve another status which will differentiate them from a standard A.C. This status is “donataria autorizada” or authorized donee which is akin to the English “tax-exempt” status. Organizations which have achieved this status generally have several years of work under their belt, have a letter of recognition from a renowned national organization relevant to their line of work, and follow strict accounting guidelines to maintain this status.
The work of a cultural organization for example, needs to be recognized by the National Council for Culture and the Arts (CONACULTA) or another relevant institution.
This status is difficult to obtain and organizations must work diligently for many years to achieve it, so don’t let it discourage you from contributing to their cause if they do not have it, but if they do, you can have even more confidence that your donation will be having the impact you desire.
If you are paying taxes in Mexico, the donataria status shouldn’t only give you peace of mind, it can also decrease your tax burden.
Donations you give to these organizations will get you a tax-deductible receipt which is deducted from your base income/profits before calculating your tax responsibilities.
Since our community has such a large contribution from Canadian and American citizens you will also find that many organizations have found a way to give the pertinent Canadian or U.S. tax-deductible receipts.
They will have either incorporated a sister organization in the respective country, or will work with another organization to set up a fund for their Mexico-based organization.
Whatever your philanthropic cause of choice may be, make sure to be an informed donor. Any organization will be glad to give you the information on their status, as we all strive for deeper and deeper transparency and accountability in the Mexican non-profit world.
Thank you for becoming an involved member of our community and happy donating/volunteering!