Wednesday, December 22, 2010

Charities Abandon Effort to Modify Treasury Department Global Grantmaking Guidelines

The Council on Foundations recently issue a press release announcing that a working group of more than 70 charities has ended its seven-year effort to convince the Treasury Department to modify its approach to global grantmaking.  Sparked by Treasury's issuance of "voluntary" anti-terrorist guidelines for charities in the wake of 9/11, the working group strove to convince Treasury to modify the guidelines to better reflect the reality of international charitable activities.  Those efforts led to a revision of the guidelines in 2006, but according to the press release those revisions were not sufficient to resolve concerns that the guidelines are "confusing and misleading."  Lack of responsiveness from Treasury led the group to determine "it can no longer support or participate in Treasury's attempts to impose current or future versions of the guidelines on the charitable sector."


December 22, 2010 in In the News, International | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 9, 2010

UK: Budget Cuts May Hinder Combatting Charity Fraud

The BBC reports that a 27 percent cut in the budget for the Charity Commission that registers and regulates charities in England and Wales has led the Commission's chief executive to state publicly that he is considering ignoring some reports of charity fraud. More specifically, the Commission might ignore reports where the amount of charitable funds at risk is relatively small, leaving such investigations to the regular police (who face budget cuts of their own).  Last year the Commission investigated 450 reports of fraud and mismanagement (as compared to 180,000 registered charities), and the articles states the Commission regards that number as significantly underestimating the fraud and mismanagement problems within the charitable sector. 


November 9, 2010 in In the News, International | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 26, 2010

Microlending in the USA

For years, social entrepreneurs in the U.S.  have applauded microlending programs as tools for wealth generation in poor countries.  The programs, generlly based on the model established by Muhammad Yunus and the Grameen Bank, provide small loans to entrepreneurs who ordinarily do not qualify for bank financing.  Until recently, microloan programs were confined primarily to the poorest nations.

Recently, the Community Development Law Clinic that I supervise in North Carolina has received requests from local groups wishing to form microloan programs in their communities.  And it appears that microloan programs' migration to the US is not confined to my home state.  The Wall Street Journalreported recently that Kiva, a nonprofit known for helping foreign entrepreneurs receive microloans, is beginning to do business along the U.S. Gulf Coast.  Kiva is the best known of the so-called "crowdfunding" organizations that act as a portal, matching donors who want to loan to microentrepreneurs with low income people who need capital to start businesses.


October 26, 2010 in Current Affairs, In the News, International | Permalink | Comments (1) | TrackBack (0)

Monday, October 25, 2010

Governing Civil Society Symposium

Several regular contributors to this blog attended a symposium last Friday at Brooklyn Law School on Governing Civil Society: NGO Accountability, Legitimacy, and Influence.  Brooklyn's International Law Journal will be collecting and publishing the papers (next spring)?  My paper, "Wait! That's Not What We Meant by Civil Society: Questioning the NGO Orthodoxy in West Africa," described how Western efforts to engender civil society in several West African nations has produced unintended consequences as Islamic religious organizations have flooded into (and as often as not taken over) civil society.  One problem with the nascent civil society organizations promoted by the West is that they tend to be run by Western-oriented elites whose interests diverge from those of grassroots citizens and groups.  This is one of the reasons that Islamic organizations have had so much success.  The paper argues that there is not much that we (i.e., the U.S.) can or should do about the situation.  All of the papers were thought provoking, but I particularly enjoyed Gary Jenkins' remarks.  He pointed out that Western insistence on NGO best administrative practices might have the effect of exacerbating the elitism of host country NGOs, rendering them illegitimate in the eyes of the ordinary citizens. (Gary, sorry if I misstated your argument.)


October 25, 2010 in Conferences, Current Affairs, International | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 20, 2010

EU Probing Property Tax Exemptions in Italy

The EU has opened a probe into property tax exemptions provided by Italy to the Catholic Church and some other nonprofit organizations.  According to another report, the issue involves an Italian law that shields these organizations from property taxes even on property used for some commercial purposes, like hostels and athletic clubs.


October 20, 2010 in Church and State, Current Affairs, International | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 19, 2010

Microsoft Moves to Protect Nonprofits from Government Piracy Claims

The NY Times reports that Microsoft will provide free software licenses to more than 500,000 advocacy groups, independent media outlets and other nonprofit organizations in 12 countries with tightly controlled governments, including Russia and China, in order to prevent those governments from using software piracy claims to shut down anti-government advocacy groups. The move comes after an earlier Times story reported that Microsoft lawyers often encouraged and/or participated in crackdowns on anti-government advocacy groups in Russia, and that Russian security services confiscated computers from dozens of advocacy groups under the guise of enforcing piracy laws.


October 19, 2010 in Current Affairs, International | Permalink | Comments (0) | TrackBack (0)

Friday, September 3, 2010

What Happens When the Regulator Runs Out of £?: UK Health Care Charities Dodge Public Benefit Scrutiny

ThirdSector reports that the Charity Commission for England and Wales has canceled planned public benefit assessments of health care charities because of limited resources.  In the wake of the Charity Commission's issuance of new guidance on the "public benefit" requirement for charities (see this report), the Commission announced planned public benefit assessments of a limited sample of charities, including hospitals and other health care entities.  While the Commission has completed sixteen public benefit assessments of independent schools, religious charities, arts charities, and others, and has begun assessments of four sports and recreation charities, it has decided not to pursue assessments of health care charities, citing "limited resources."   Given the size and complexity of hospitals and other health care charities, it is understandable that such assessments would have been time consuming and costly.  Yet especially in light of their heavy level of fee dependence, it also appears unwise.  In an era of deficit-fighting, however, such decisions are perhaps to be expected, not only in the UK but in the US and other countries as well.


September 3, 2010 in In the News, International | Permalink | Comments (0) | TrackBack (0)

Thursday, September 2, 2010

New Zealand Charity Commission Denies Charity Status for "Ex-Gay" Ministry

The Charity Commission in New Zealand has refused the attempt by Exodus Ministries Trust Board, the New Zealand affiliate of Exodus International, to register as a charitable entity.  Exodus is a Christian ministry that promotes "release" from homosexuality based on its belief that homosexuals can become heterosexual and that homosexuality is morally wrong.  Consistent with these beliefs, it provides counseling and conducts seminars and study groups.  Interpreting New Zealand's statutory law, the Commission found that the organization was not charitable - citing to the Preamble to the 1601 Statute of Elizabeth from which the definition of "charitable" in most if not all common law countries, including the United States, can be traced - and also that it was unclear whether the group would provide a public benefit. The ruling appears to have been reported in the U.S. primarily if not exclusively in the gay press (see, for example, the Edge's coverage) to date.  One interesting question the decision raises is whether similar reasoning could be adopted in the U.S., the U.K., or other countries that use a similar definition of charitable, although at least in the U.S. the explicit provision of "religious" as an acceptable purpose for a charity (for federal tax purposes) may provide an alternate ground for maintaining the charity status of Exodus and similar groups.


September 2, 2010 in In the News, International | Permalink | Comments (0) | TrackBack (0)

Thursday, August 26, 2010

Pro-Israel Nonprofit Accuses IRS of Delaying Application Because Group's Activiities May Conflict with Administration's Policies

Z Street, a pro-Israel nonprofit corporation, has filed a complaint alleging that the IRS is delaying consideration of its application for recognition of section 501(c)(3) tax-exempt status because the Service is determining whether the group's activities contradict the Administration's policies.  Most specifically, the lawsuit alleges that a named IRS agent informed the group's corporate counsel that she had two concerns with respect to the application: "(1) the advocacy activities in general, and (2) the IRS's special concern about applications from organizations whose activities are related to Israel, and that are organizations whose positions contradict the US Administration's Israeli policy." 

The first point appears to reflect a common and legitimate concern raised by the IRS with respect to public policy groups seeking section 501(c)(3) status, as the complaint goes on to assert that the agent raised the question of lobbying and whether the group might be an "action organization," which under the applicable regulations would disqualify it from section 501(c)(3) status.  The second point is the more troubling one, although the complaint's conclusion that these "IRS's admissions" "make clear that the IRS maintains an Israel Special Policy governing the processing of applications for tax exemption by organizations which are believed to be operated by persons holding political views inconsistent with those espoused by the Obama administration" appears to read a lot into the agent's alleged comments.  Nevertheless, the possibility that even a single agent, much less perhaps the agent's supervisor or others within the IRS as well, would consider denying an exemption application because an organization takes positions contradictory to that of the current administration is extremely troubling.  The second concern appears to be a far cry from the contrary to established public policy concern that ultimately led to the revocation of tax-exempt status for Bob Jones University for engaging in racial discrimination in education.

Another interesting aspect of this lawsuit is its timing.  Code section 7428 only permits a suit for declaratory judgment that an organization qualifies for section 501(c)(3) status if either the IRS has denied the application or the application has been pending for more than 270 days.  Here neither event has occurred because Z Street only filed the application on December 29, 2009, according to the complaint, or less than eight months ago (thanks to Ellen Aprill for noting this point).  Perhaps for this reason Z street does not ask for such a declaratory judgment, but instead for a declaration that the asserted 'Israel Special Policy" is a violation of the First Amendment and for other relief that would prevent the application of this policy to Z street.

As early coverage of this story, linked to below, already has revealed, the IRS' ability to respond to these accusations is limited by its inability to comment publicly on any specific pending application.  Given this limitation, general statements about how all applications are considered fairly under the applicable law will almost certainly be forthcoming shortly, however.

For further coverage: The Jewish Daily Forward; Politico (Ben Smith); TaxProf Blog; Wall Street Journal Law Blog; Weekly Standard Blog.


August 26, 2010 in Federal – Executive, International | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 24, 2010

Third Sector Daily: "Charity Commission Refuses to Change Catholic Care Gay Adoption Decision"

The Third Sector Daily reports that the Charity Commission of England and Wales has refused to allow Catholic Care to change its charitable objects to restrict is adoption services to heterosexual individuals and couples, thereby preventing Catholic Care from taking advantage of an exemption to otherwise applicable equality legislation.  Catholic Care issued a press statement in response to the decision.


August 24, 2010 in In the News, International | Permalink | Comments (0) | TrackBack (0)

Canada to Match Private Donations to Help Pakistani Flood Victims

The Toronto Globe and Mail reports that the Canadian federal government will match private donations for Pakistan flood relief dollar for dollar if those donations are made between August 2nd and September 12th.  There is no maximum to the matching.  The article notes that the government instituted similar matching programs in the wake of the Haitian earthquake and the 2004 tsunami.


August 24, 2010 in In the News, International | Permalink | Comments (0) | TrackBack (0)

Thursday, July 15, 2010

International Year in Review for NPO-NGO Committee Posted to SSRN

Karla Simon has posted her article in the International Lawyer to her SSRN webpage.  The article is a “year-in-review” summary of developments during the year 2009 regarding civil society organizations around the world.  The article is accessible both in hard copy and on the internet.  Those wishing a hard copy reprint should contact Karla directly at [email protected].


July 15, 2010 in International | Permalink | Comments (0) | TrackBack (0)

China -- Foundation Center Established

The Wall Street Journal’s Realtime China Blogreported that some of China’s most recognized philanthropic leaders have gathered in Beijing for the launch of the China Foundation Center, a new organization that aims to help increase the transparency of Chinese charitable groups, which have sometimes struggled with public suspicion of mismanagement and even corruption.  The organization looks to bolster trust in Chinese foundations by making information about their activities available to the public—thus hopefully encouraging more participation in charitable work.  The center’s websitewill initially archive data on more than 1,800 foundations across China.  Chinese and international philanthropic leaders gathered for the launch ceremony, including Peter Geithner, father of the U.S. Treasury secretary and a former longtime leader in the Ford Foundation, and Xu Yongguang, founder of Project Hope, China’s largest non-governmental social welfare group.  Many of them described the new organization’s launch as mirroring crucial steps taken to improve the transparency of the charitable sector in the U.S. in the 1950’s. 

July 15, 2010 in International | Permalink | Comments (0) | TrackBack (0)

Vietnam -- New Association Regulations Promulgated

The revised Decree 45 (2010) on the Organization, Activities, and Management of Associations, was promulgated on April 21, 2010, and took effect on July 1, 2010.  The new Decree governs the registration, operations, and activities of associations at national, provincial, municipal, and sub-provincial levels.  As explained by Mark Sidel in a recent article on the subject in the International Journal of Not-for-Profit Law, by issuing the regulation the Ministry of Home Affairs responded to calls from government regulators and the associations themselves for a more detailed regulatory document.  The World Bank and other donors also requested that the associations serving as their grantees have access to better and clearer regulations.  Some procedures have been changed from Decree 88 (2003), but procedures remain extremely complicated and make it difficult for the associations to actually become registered.  Such requirements include a pre-registration process involving the creation of a board to apply for registration.




July 15, 2010 in International | Permalink | Comments (0) | TrackBack (0)

Monday, June 28, 2010

Vietnam -- Article Published by Mark Sidel

Mark Sidel has published an interesting articleon the development of the laws and regulations affecting civil society organizations in Vietnam, a country that ICCSL has been following for several years.  One worthwhile aspect of the paper is that it provides a means of comparing Vietnam and China as they continue on their quest to find ways to regulate civil society that are consistent with their political systems.



June 28, 2010 in International | Permalink | Comments (0) | TrackBack (0)

China Philanthropy Update

·      New philanthropy research institute created.  Wang Zhenyao, the head of China’s first philanthropic research institute, is calling on all Chinese billionaires to donate a million yuan a year to charity.  Wang says multimillionaires should give a hundred thousand yuan annually.  For the past two decades, Wang worked in the Ministry of Civil Affairs.  He is famous in China for his efforts to help victims during the 2008 Sichuan Earthquake.  He has also promoted care for orphans and asked the government for more money for the elderly.  But Wang wants more than government support for China’s poor.  He wants professional, sustainable, private philanthropy to grow.  Now he has left the ministry to head the new Beijing Normal University One Foundation Philanthropy Research Institute full-time.  While Wang has long been a firm believer in the importance of charity, one of his subordinates says that makes him “a rather lonely person” in official circles, according to a 21st Century Business Herald article.  Charity is an emerging field in China, a sign of economic growth and a response to rising inequality.  Traditionally, financial assistance came either from the state or from extended family networks.  The Chinese government has long spoken of “serving the people” and “serving society.” However, China lags behind Western countries in private donations.  The Chinese Civil Affairs Development Report shows that the Ministry received 6.86 billion yuan (just above $1 billion) in donations in 2009, reports a recent China News article.


· The China Charity Donation Information Center in partnership with Shanghai NPO Development Center completed its report on Diaspora Giving to China 2008-2009 as part of APPC’s Diaspora Philanthropy Grants.  The grants provided seed money for specific research activities that lead to making operational databases that will map out the dynamic relationships being cultivated from the giving end to the receiving end.  These grants were awarded to organizations in China, Pakistan, the Philippines and Bangladesh in July 2009 to conduct various database studies on Diaspora giving to home communities, as follow up work to APPC’s 2008 regional conference “Diaspora Giving: An Agent of Change in Asia Pacific Communities?”

Highlights of China Report on Diaspora Giving

· Between 1 January 2008 and 30 June 2009, 24 provinces and municipalities in Mainland China received Diaspora giving valued at RMB 6.7 million from Hong Kong, Macao, Taiwan and overseas Chinese around the world.

· Sichuan province received the most donations due to the Earthquake and snow disaster in early 2008, receiving 37% of the total Diaspora giving to China.

· Second biggest receiver was Beijing, receiving 19.6% of diaspora monies. The city of Beijing houses majority of national charity organization headquarters, such as the China Red Cross Society and China Charity Federation.

· Individuals compose the largest composition of givers followed by overseas Chinese groups and organizations and overseas Chinese enterprises.

· Diaspora funds received in this period were allocated to disaster relief, education, science and sports, poverty alleviation and development.

· Seeing the response of overseas Chinese, provincial and municipal governments passed related overseas donation regulations, which provide policy support and guarantees to further enhance the overseas Chinese donations’ impact.

Email to [email protected] for more information or the full report.



June 28, 2010 in International, Music | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 23, 2010


The Balkan Civil Society Development Network has reported that on 15th April 2010, the Government of Montenegro adopted a decision to found the Council for Cooperation between the Government and NGOs.  The Council acts as an advisory body to the Government.  Its aim is to follow the government’s Strategy with NGOs as determined by the Action Plan for the implementation of the Strategy for the period 2009-2011.  The Council is composed of a chairperson and 24 members, i.e. 11 representatives of Ministries and the Head of the Office for Cooperation with NGOs and 12 representatives of different sectors of civil society.  The chairperson of the Council is a representative from the Government.  The chairman and the members of the Council are appointed by the Government, for a period of 3 years.  The decision also included the procedure for election of representatives of civil society by way of public announcement.



June 23, 2010 in International | Permalink | Comments (0) | TrackBack (0)


Karla Simon gave a speech on developments with regard to CSOs in China at the European China Law Studies Association meeting in Copenhagen on June 18, 2010.  She presented a paper that she and Hang Gao, a former CUA Research Fellow, are working on, entitled “Opening the Space: New Developments for China’s Civil Community Organizations,” which is available on her SSRN page(and which has made several recent SSRN top-ten download lists).  That paper and an earlier one published in the Fordham International Law Journal were featured by Stanley Lubman in his influential WSJ blog last month.  Prof. Simon has also posted an analysis of other recent developments regarding the regulation of CSOs in China to the ICCSL website. 



June 23, 2010 in International | Permalink | Comments (0) | TrackBack (0)


Under the latest proposal from the Finance Ministry, a Revised Discussion Papersuggests the following changes affecting charities and NPOs will be made in the Direct Tax Code (DTC).

·     NPOs already registered under the Income-tax Act, 1961 and holding valid registration on the date on which DTC comes into effect, would not be required to apply for fresh registration under the DTC. However, they would be required to provide additional information to facilitate the administration of the new provisions;

·     Up to 15% of the surplus or 10% of gross receipts, whichever is higher, will be allowed to be carried forward to be used within three years from the end of the relevant financial year. In other words, indefinite accumulation of up to 15% of gross receipts as is prevalent will not be allowed;

·     The term “charitable purpose” will be retained in place of “permitted welfare activity” proposed earlier;

·     Donations by an NPO out of its accumulated surplus to another NPO will not be considered as an application for “charitable purpose;”

·     A basic exemption limit will be provided and the surplus in excess of such limit will be subject to tax;

·     The cash method of accounting will be retained since it is simple to follow and easy to administer;

·     The Central Government will be empowered to notify any non-profit organization of public importance as an exempt entity;

·     Currently NPOs are allowed unlimited carry forward of unspent balance to the next financial year. It is proposed not to allow this;

·     NPOs will no longer be allowed to accumulate funds for up to 5 years;

·     Donors will not be able to enjoy 100% deduction for donations made to projects approved under section 35AC; and

·     Business activity, even if incidental, will not be allowed for NPOs established for a “charitable purpose” but falling under the category, “advancement of any other object of general public utility.”



June 23, 2010 in International | Permalink | Comments (0) | TrackBack (0)

Thursday, June 17, 2010

Hudson Institute Releases 2010 Index of Global Philanthropy and Remittances

The Hudson Institute's Center for Global Prosperity released the 2010 version of its annual Index of Global Philanthropy and Remittances (executive summary (4+ MB); full report (13+ MB)).  The report reviews financial support from the United States and other countries to developing countries in 2008, including government aid, private aid, and remittances, as well as investment.  Among its findings, the report notes that U.S. private philanthropic support held steady in 2008 at $37.3 billion, as compared to $36.9 billion in 2007, and was $10 billion more than U.S. government official development assistance.  Both figures were dwarfed by remittances from people in the U.S. to relatives and friends in the developing countries, which reached its highest level ever in 2008 at $96.8 billion.


June 17, 2010 in International, Studies and Reports | Permalink | Comments (0) | TrackBack (0)