The Shifting of Foundation Law Principle from Non-Profit to Profit

Abstract

The shifting of Foundation law principle from non-profit to profit is representing a fundamental issue relating with the essence of social goal of Foundation. The issue needs to be explained to obtain proper understanding about Foundation in pursuance of the goal of establishing Foundation stated in Foundation Act. The effect of Law No.28/2004 about Amendment to Law No.16/2001 about Foundation (hereafter called as UUY) has changed the characteristic of Foundation, for example, concerning with its law base, its status as law body, and business activity. This change signifies the shifting. Foundation is initially emphasizing on habit and jurisdiction without law certainty about the status as law body. Foundation is also a merely social organization. The shifting may force Foundation to develop into a law body with law base, usually laws and regulations, with law certainty through the conferral of law body status, and more importantly, with the ability to conduct business activity. The shifting of Foundation from social activity – non-business – to business activity is reflecting the conversion of Foundation law principle from non-profit to profit.

UUY does not explain the social character, or the sociality interest, of Foundation and not differentiate strictly the presence of these two activities (social and business) in terms of meaning and character. Social activity is aimed for social, religion and humanity goals, while business activity is to achieve profit goals. In Section 14 Verse 2b UUY about Foundation Activity, it is shown that Foundation Statutes does not accommodate business activity. Therefore, it leads to the presence of the problematic of philosophy, jurisdiction, theory and sociology. Philosophical problematic is concerning with the essence of goal, participation, and autonomy of Foundation to produce social welfare that is previously remaining under the responsibility of the State. Juridical problematic is related with normative fuzziness about social and business activities which put Foundation into confusion between achieving non-profit and profit goals. Theoretical problematic is talked about different interpretation of Foundation activities and the reason behind this is usually related to the confusion between two goals of Foundation. Section 14 Verse 2b only explains the activity to achieve Foundation’s purpose and objective. Sociology problematic indicates that UUY does not secure the people from obtaining benefit from Foundation because Foundation begins to be individually oriented and therefore, it is hardly potential to grow kinship principle as the means to achieve social welfare. Taking these matters above into account, problems of research are then formulated such as: (1) What is the manifestation of law principle shifting from non-profit to profit in the law politic arrangement for Foundation?; (2) How is the law consequence on Foundation as law body with the shifting from non-profit to profit?; and (3) Can the shifting from non-profit to profit encourage Foundation to be autonomous as the means to develop kinship/mutual help principle in achieving social welfare.

Keywords: Social Character, Sociality Interest and Foundation Law Principle