Ms. Corazon T. Aragon

February 4, 1992 Ms. Corazon T. Aragon UPLB Foundation, Inc. College, Laguna 4031 M a d a m : This refers to your letter dated January 28, 1992 requesting advise whether the University of the Philippines At Los Baos Foundation, Inc. could pursue its intention to grant a donation to the low income profile employees of the University of the Philippines at Los Baos in the form of rice amounting to P297,000 for about 1,400 beneficiaries. Section 36 of the Corporation Code enumerates the powers expressly conferred on corporations. Said powers include, among others, the power to donate. The Law provides, thus: "SECTION 36. Corporate powers and capacity . Every corporation incorporated under this Code has the power and capacity: xxx xxx xxx 9. To make reasonable donations ,including those of the public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes: Provided, That no corporation, domestic or foreign, shall give donations in aid of any political party or candidate or for purposes of partisan political activity; ...(Emphasis supplied) Thus, every corporation organized under the Corporation Code has the power to grant reasonable donation, regardless of whether or not the donation has relation to the particular purposes or objects for which the donor corporation was created. However, it has to be emphasized that since the above-mentioned donation is not necessary or incidental in the furtherance of the Foundation's objective to "assist the University of the Philippines at Los Baos in expanding and optionally utilizing its human, financial and material resources towards accelerated agricultural and rural development" as provided for in its articles of incorporation, the board of directors should use good judgment in the exercise of such power and it should determine the reasonableness of the amount to be donated in the light of the Foundation's financial condition and taking into consideration the source of funds from which the donation is to be made. It should be kept in mind that when doubtful as to the amount involved, the members may review the exercise of such corporate power and may inquire into its reasonableness, and if found excessive, to afford adequate relief therefrom. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman