John Searle, answered from the texts and cited to the page.
Institutional facts are facts that exist only because human beings collectively accept them as existing. That Barack Obama is president of the United States, that I am a licensed driver, that a chess match was won by a certain player — none of these facts would obtain without human institutions to sustain them.1 Contrast them with brute facts: the Earth is 93 million miles from the sun whether or not any human being has ever noticed, measured, or cared.1
Institutional facts are typically objective — you can be wrong about them, look them up, settle disputes about them — but their mode of existence is peculiar: they are facts only by virtue of human agreement or acceptance.1 The deep structure behind every institutional fact is a constitutive rule of the form X counts as Y in context C.1 An institution just is a system of such rules, and the system automatically creates the possibility of institutional facts.
What makes this structure interesting is that the Y term imposes a new status on whatever the X term names, and this new status carries a function that the X element cannot perform by virtue of its intrinsic physical features alone.2 A piece of paper has certain physical properties; those properties do not by themselves make it money. What makes it money is the collectively accepted status, and the status carries with it the function of serving as a medium of exchange.2
Indeed, the status description already implies the function: to call something money just is, in part, to say that it functions as a medium of exchange.2 Here is the point that I regard as one of the most important in the entire theory: in the domain of institutional reality, the normal relationship between intentionality and ontology is reversed.3
Ordinarily, what is the case is logically prior to what seems to be the case — we understand what it is for an object to be heavy, and that understanding explains why it seems heavy. But for institutional facts, the ontology derives from the intentionality. If enough people think that a certain kind of thing is money, cooperate in using it as money, and treat it as money, then it is money.3
"Seems" is prior to "is." The noises coming out of my mouth are, considered purely as physics, rather trivial acoustic blasts; but because we all think of them as sentences and speech acts, and cooperate in using and interpreting them as such, they are sentences and speech acts.3 Because the Y level of institutional reality has no existence apart from its representation, we need symbolic means — typically linguistic — to perform and sustain the shift from X to Y status.4
There is no natural, prelinguistic feature of the X element that marks the transition; the Y element simply has no natural features beyond those of X that could serve as markers.4 This is why animals running in a pack can have hierarchies, cooperative hunting, even pair bonding — but they cannot have marriages, property, or money.4 What they lack is the capacity to represent to themselves the deontic phenomena that institutional facts create: rights, obligations, duties, powers.
My dog can learn that handing over a bill gets him food, but he cannot think that now he has the right to buy things.4 Deontic powers of this kind are not reducible to dispositions to behave or fears of negative consequences; the attempts to eliminate them in favor of something more primitive have, famously, failed.4
Some facts exist independently of any human institution. I call these brute facts. But some facts require human institutions in order to exist at all. An example of a brute fact is that the Earth is 93 million miles from the sun, an example of an institutional fact is that Barack Obama is president of the United States. Institutional facts are typically objective facts, but oddly enough, they are only facts by human agreement or acceptance.Making the Social World, pp. 22–23
The Y term imposes a new status on the phenomenon named by the X term, and the new status carries with it a function that cannot be performed just by virtue of the intrinsic physical features named by the X term... the status described by 'money' already implies the function of being a medium of exchange, among others.The Construction of Social Reality, pp. 122–123
In the case of institutional reality, the ontology derives from the intentionality. In order for a type of thing to be money, people have to think that it is money. But if enough of them think it is money and have other appropriate attitudes, and act appropriately... then it is money. In this case, 'seems' is prior to 'is.'Rationality in Action, p. 219
Because the Y level of the shift from X to Y in the creation of institutional facts has no existence apart from its representation, we need some way of representing it. But there is no natural prelinguistic way to represent it, because the Y element has no natural prelinguistic features in addition to the X element that would provide the means of representation... Animals running in a pack can have all the consciousness and collective intentionality they need... But they cannot have marriages, property, or money.The Construction of Social Reality, pp. 77–79