... As Participants gain insights on terrorism financing risks, regulatory obligations, and financial accountability
No fewer than 35 executive directors, programme managers, and finance officers from nonprofit organisations across Nigeria’s South-West region have been trained on regulatory compliance, taxation, and terrorism financing risk assessment.
The three-day NGO Regulatory Compliance and Tax Clinic (RCC), organised by Spaces for Change under the Civic Space Resource Hub initiative and supported by the Ford Foundation, focused on strengthening governance systems and improving accountability within the nonprofit sector.
Participants were drawn from civil society organisations operating across key states in the region, reflecting growing concern over compliance gaps and financial vulnerabilities within Nigeria’s expanding nonprofit landscape.
A major highlight of the training was the emphasis on proper registration and post-registration obligations with the Corporate Affairs Commission.
Facilitators noted that while many organisations are registered, a significant number fail to meet ongoing compliance requirements, including filing annual returns and maintaining proper governance structures.
“Registration with CAC is only the beginning,” a facilitator said. “Sustaining that status requires discipline, transparency, and a clear understanding of regulatory expectations.”
Participants were taken through practical steps to ensure compliance, including documentation processes, governance reporting, and statutory obligations often overlooked by nonprofit operators.
The training also spotlighted the increasing role of financial institutions in enforcing compliance standards among nonprofits.
Experts explained that banks are no longer passive custodians of funds but active gatekeepers in the fight against financial crimes, including money laundering and terrorism financing.
“Nonprofits must understand that every transaction is being scrutinised,” another resource person said. “Proper documentation and transparency are no longer optional—they are mandatory.”
Participants were advised to strengthen their internal financial controls, ensure accurate record-keeping, and maintain clear audit trails for all transactions.
One of the most engaging sessions focused on terrorism financing risk assessment and the supervision of at-risk nonprofit organisations.
Facilitators warned that nonprofits, particularly those operating in vulnerable communities, could be exposed to exploitation if adequate safeguards are not in place.
The session provided insights into identifying high-risk transactions, conducting due diligence on donors, and implementing internal systems to mitigate exposure.
“There is increasing global attention on how nonprofit funds are used,” a facilitator explained. “Organisations must adopt a risk-based approach to protect themselves from unintended consequences.”
Participants were also introduced to monitoring frameworks used by regulators to assess compliance levels within the sector.
Tax compliance emerged as another critical area, with discussions centred on what nonprofit organisations need to understand about their obligations under Nigerian law.
Contrary to popular belief, facilitators stressed that not all nonprofits are automatically exempt from taxes, noting that compliance depends on structure, activities, and regulatory classification.
The concept of Public Benefit Status (PACS) was also explored, providing clarity on eligibility for tax exemptions and the conditions attached.
“Operating as a nonprofit does not mean operating outside the tax system,” a facilitator said. “Understanding your obligations is key to avoiding penalties.”
Participants were guided on filing requirements, documentation, and best practices for maintaining tax compliance.
Some participants described the training as a turning point for their organisations.
“This training has changed how we see compliance entirely,” one attendee said. “We used to focus more on programme delivery, but now we understand that strong systems are what sustain impact.”
Another participant noted that the sessions exposed critical gaps in their organisation’s structure.
“We discovered areas where we were vulnerable without even knowing. Now we have practical steps to fix them,” she said.
Facilitators repeatedly emphasised that passion alone is not enough to sustain nonprofit organisations in today’s regulatory environment.
According to them, long-term impact depends on building resilient systems that can withstand scrutiny, adapt to policy changes, and maintain operational integrity.
“Growth is not accidental,” a facilitator said. “It is the result of deliberate systems, clear processes, and consistent compliance.”
Participants were encouraged to institutionalise governance practices, strengthen board oversight, and invest in financial management systems.
Nigeria’s nonprofit sector continues to grow rapidly, but experts say capacity gaps in compliance and governance remain a major challenge.
Initiatives like the RCC Clinic are therefore seen as critical interventions to bridge these gaps and enhance the credibility of civil society organisations.
With increasing expectations from donors, regulators, and the public, nonprofits are under pressure to demonstrate transparency and accountability.
The training, stakeholders say, is a step in the right direction.
Observers note that the nonprofit sector in Nigeria is at a critical juncture, where the demand for impact must be matched with strong governance and compliance systems.
With support from organisations such as the Ford Foundation, capacity-building initiatives are helping to prepare nonprofits for this shift.
For participants at the RCC Clinic, the message was clear: the future belongs to organisations that are not only passionate about change but also structured to sustain it.
As the three-day training concluded, many attendees left with renewed commitment to strengthening their organisations—armed with knowledge, tools, and a clearer understanding of what it takes to thrive in an increasingly regulated environment.