Friday, June 12, 2020
Charitable organisations occupy a central place in society across much of the world, accounting for billions of pounds in revenue. As society changes, so does the law which regulates nonprofit organisations. From independent schools to foodbanks, they occupy a broad policy space. Not immune to scandals, sometimes nonprofits are in the news for all the wrong reasons and so, when they are in the public eye, regulators must respond to high profile cases.
In this book, a team of internationally recognised charity law experts offers a modern take on a fast-changing policy field. Through the concept of policy debates it moves the field forward, providing an important reference point for developing scholarship in charity law and policy. Each chapter explores a policy debate, setting out the fault-lines in play, and often offering proposals for reform.
Two important themes are explored in this edited collection. First, there is a policy tension in charity law between its largely conservative history and the need to keep up-to-date with social change. This pressure is felt acutely along key fault-lines, such as the extent to which a body of law which developed before the advent of legislated human rights is able to adapt to a rights-based world, and the extent to which independent schools – historically so closely linked with charity – might deserve their generous tax-breaks. The second theme explores the law from the perspective of a good-faith regulator, concerned to maximise the usefulness of charities. From the need to reform old organisations, to the need to ensure that charities enjoy the right amount of regulatory freedom in a world of payment-by-result contracts, the book critically charts the policy justifications for regulatory intervention, as well as the costs that such intervention might bring.
Debates in Charity Law will be of interest to both academic researchers and students of the non-profit sector, looking to understand the links between law, social change and regulation. It will also help and guide nonprofit employees and volunteers, showing how their sector is shaped and moulded by the law.
And here is the Table of Contents:
1. Fault Lines in Charity Law
John Picton and Jennifer Sigafoos
2. Independence and Accountability in the Charity Sector
3. Debating the Extent of Party/State Control Over Overseas Nonprofit Organisations: Charity Law Debates in China
4. Regulating Egoism in Perpetuity
5. Deploying Communitarianism Bankruptcy Theory to Rescue Insolvent Charities and Maintain Charitable Purposes
6. When Should Charities be Allowed to Discriminate? The Case of Single-Sex Services and Transgender People
7. Regulating Charitable Activities through the Requirement for Charitable Purposes: Square Peg Meets Round Hole
8. Redefining the Regulatory Space? Th e First Forays of the Irish Charities Regulatory Authority
Oonagh B Breen
9. Independent Schools in Scotland: Should they be Charities?
10. Licking their Own Lollipops: What do Charities and the Public Think about the Regulation of Charitable Activities?
11. Commissioning of Services by Charities in the Third Decade of the Contract Culture: Lessons Learned (or Not Yet)
12. Regulating the Digital (Currency) Revolution: Unravelling the Technological Challenge Faced by Charities
Matthew Robert Shillito
13. Social Housing – Charities and Vulnerable Groups
14. Charity Law and Policy: Looking Forward
Jennifer Sigafoos and John Picton
Spires, Regulation as Political Control: China's First Charity Law and Its Implications for Civil Society
Anthony J. Spires (University of Melbourne) has published Regulation as Political Control: China's First Charity Law and Its Implications for Civil Society in the Nonprofit and Voluntary Sector Quarterly. I missed this article when it first came out, but given the importance of its topic it is still worth highlighting. Here is the abstract:
With the passage of a nationwide Charity Law in March 2016, Chinese nongovernmental organizations (NGOs) entered a new and unprecedented era of legal regulation, one that dramatically transformed the formal rules governing state–civil society relations. This article highlights problems experienced under earlier regulations and outlines the major features of the new law. Drawing on multiple focus groups and interviews with grassroots NGOs around China, the article highlights gaps between NGO leaders’ understandings of their work and several of the law’s key provisions, revealing civil society’s skepticism and pessimism about prospects for change. It concludes by considering the law’s likely implications for civil society development in China and lessons for other authoritarian states, suggesting that regulation in such regimes should be seen more properly as a tool of political control.
Friday, February 7, 2020
Yu et al., Understanding the Effect of Central Government Funding on the Service and Advocacy Roles of Nonprofit Organizations in China
Jianxing Yu (Zhejiang University), Yongdong Shen (Zhejiang University), and Yong Li (Tsinghua University) have published Understanding the Effect of Central Government Funding on the Service and Advocacy Roles of Nonprofit Organizations in China: A Cross-Regional Comparison, inthe Nonprofit and Voluntary Sector Quarterly. Here is the abstract:
This research examines the effects of government funding on the service and advocacy roles of nonprofit organizations in China through a cross-regional comparison. Based on a nationwide survey of 2,058 nonprofits and in-depth interviews with 65 nonprofit executives from the same sample in 2013–2017, we find that a higher level of central government funding leads to stronger organizational capacity for service provision through leveraging matching funds and to more intensive administrative advocacy and media advocacy. Furthermore, a cross-regional comparison shows that, in contrast to those in nonwestern regions, nonprofit organizations with higher levels of central government funding in the western region engage in more administrative advocacy but less in media advocacy. Taken together, these findings highlight the importance of the government’s leverage strategy and selective empowerment in shaping nonprofits’ service and advocacy roles through government funding in China.
Wednesday, November 20, 2019
Tyler (Chief Executive Officer of Directory of Social Change) has this op-ed about the UK Charity Commission's urging charities to behave:
IT IS NOT THE JOB OF CHARITIES TO BEHAVE! (Yep, I’m a woman shouting!) Charities effect change by being disrupters, campaigners, advocates, activists. There wouldn’t be animal welfare laws without animal charities shouting; there wouldn’t be child protection laws without children’s charities getting angry; there wouldn’t be clean air legislation without health charities badgering politicians. So long as we’re not breaking any laws, it’s entirely up to us how we behave. And if we don’t get it right, we’ll be punished by our donors, supporters and beneficiaries. Their voices are way more important than those of a hectoring, ill-informed, populist, increasingly politicised commission. And we know them better than it does.
Friday, September 27, 2019
Afik, Benninga & Katz on Grantmaking Foundations' Asset Management, Payout Rates and Longevity Under Changing Market Conditions
Zvika Afik (Ben-Gurion University), Simon Benninga, and Hagai Katz (Ben-Gurion University) have published Grantmaking Foundations' Asset Management, Payout Rates, and Longevity Under Changing Market Conditions: Results From a Monte Carlo Simulation Study in the Nonprofit and Voluntary Sector Quarterly. Here is the abstract:
Today’s uncertain financial markets could affect foundations’ future grantmaking capacities. We review foundations’ financial decision-making patterns and their effect on foundations’ assets, longevity goals, and payouts. Using three fictional foundations with different longevity goals and grantmaking preferences, we demonstrate the delicate balance and tight nexus between asset management strategies, payout rates, and longevity. To do so, we perform stochastic Monte Carlo simulations of multiple foundation life cycles, conducted under diverse capital market scenarios. The findings suggest that foundations should (a) readjust their return expectations to today’s less favorable markets; (b) reduce their reliance on past portfolios’ investment returns or unique “success stories” in making decisions; (c) appreciate the strong interdependence between portfolio-mix, payout rates, and longevity; (d) consider effects of their particular mission/problem area on these parameters; and (e) use tailored projection analyses that simulate various investment strategies, payouts rates, and longevity to meet their grantmaking goals.
Carolyn Cordery (Aston University Business School) (pictured) and Dalice Sim (University of Otago) have published Regulatory Reform: Distinguishing Between Mutual-Benefit and Public-Benefit Entities in the Journal of Public Budgeting, Accounting & Financial Management. Here is the abstract:
The purpose of this paper is to analyse nonprofit regulation through comparing and contrasting mutual-benefit and public-benefit entities. It ascertains how these entities differ in size, publicness, tax benefits and whether these differences might suggest regulatory costs should be differentiated.
This mixed-methods study utilises financial data, submissions and interviews.
There are stark differences in these two types of regulated nonprofit entities. Members should be the primary monitoring agency/ies for mutual-benefit entities, but financial reports should be understandable to these members. Nevertheless, the availability of tax concessions, combined with the benefits of limited liability, suggest mutual-benefit entities should be regulated and monitored by government in a way sympathetic to their size.
As with most research, a limitation is this study’s focus on a single jurisdiction.
The differences in these entities’ characteristics are important for designing regulation.
Better regulation is likely to require a standard set of financial reporting standards. Government has the right to demand disclosures due to benefits mutual-benefit entities enjoy.
In comparison to studies utilising only public-benefit data, this study uses unique data sets to compare public-benefit and mutual-benefit entities and presents nonprofit sector participant’s perceptions of these differences in context. This enables analysis of how better regulation could be achieved.
Mark Sidel (Wisconsin) has published Managing the Foreign: The Drive to Securitize Foreign Nonprofit and Foundation Management in China in the August issue of Voluntas. Here is the abstract:
In recent years, China has sought to tighten regulation of foreign nonprofit organizations and foundations operating or funding in China, including through a new Law on the Management of the Domestic Activities of Foreign Non-governmental Organizations in China, enacted in April 2016. This article analyzes the history of China’s regulation of foreign nonprofits and foundations, the effect of external and domestic events on China’s shifting policy climate, the emergence of security-based intellectuals and their role in policy on foreign nonprofits and foundations in China, the new policy framework and the new Overseas NGO Law enacted in 2016, and initial implementation of this new framework in China. These developments provide background to other aspects of nonprofit and philanthropic performance in China that are discussed in this special issue.
Tuesday, July 9, 2019
Following up on my earlier post, I was fortunate enough to be able to discuss last week the various legal barriers to cross-border philanthropy in Europe with some of the leading practitioners, academics, and organization leaders from that continent in connection with the European Research Network on Philanthropy (ERNOP) biennial conference. My detailed reflections are available on the Alliance website, so I will just say here that it is a time of both threat and promise for European philanthropy. The threat is that some countries are enacting new laws targeting cross-border philanthropy, which add to existing barriers relating to legal form and taxation. The promise is that supporters of philanthropy have two new initiatives to rally around: the European Philanthropy Manifesto issued by the Donors and Foundations Networks in Europe (DAFNE) and the European Foundation Centre (EFC) earlier this year; and the European Economic and Social Committee (EESC)'s recent opinion "European Philanthropy: an untapped potential" (the EESC is a consultative body of the European Union). Hopefully these developments, and opportunities such as the event I attended that provide an opportunity to discuss new developments, will help ensure a strong enabling environment for philanthropy in Europe for many years to come.
Monday, June 24, 2019
I am off to Basel, Switzerland next week for an event focusing on Legal Barriers to Cross-Border Philanthropy in Europe. (I know, the hard life of an academic.) I helped organize the event along with Oonagh Breen (University College Dublin) and Hanna Surmatz (European Foundation Centre (EFC)). The event will be held the afternoon before the biennial European Research Network on Philanthropy (ERNOP) conference at the University of Basel. It is particularly timely because of two significant European philanthropy developments earlier this year: the release by the European Economic and Social Committee of an opinion titled European Philanthropy: An Untapped Potential; and the publication by EFC and the Donors and Foundations Networks in Europe (DAFNE) of a European Philanthropy Manifesto. These two developments reportedly have created new momentum among policymakers to address the barriers to philanthropy in Europe, including philanthropy across borders.
Here is the current program for the event:
13:00-14:15: Session One: European Regulatory Measures
Oonagh B. Breen, UCD Sutherland School of Law (moderator)
Dominque Jakob, Universität Zürich
Wino Van Veen, Vrije Universiteit Amsterdam
14:30-15:45: Session Two: Taxation
Lloyd Hitoshi Mayer, University of Notre Dame (moderator)
Anne-Laure Paquot, Transnational Giving Europe
Giedre Lideikyte-Huber, Université de Genève
Hanna Surmatz, European Foundation Centre
16:00-17:15: Session Three: Emerging Issues
Hanna Surmatz, European Foundation Centre (moderator)
Francesca Fanucci, European Center for Not-for-Profit Law
Isabel Peñalosa-Esteban, Spanish Association of Foundations
Friday, May 17, 2019
Jianlin Chen (University of Melbourne) and Junyu Loveday Liu (London School of Economics & Political Science; K&L Gates) have published Managing Religious Competition in China: Regulating Provisions of Charitable Activities by Religious Organizations, in Regulating Religion in Asia: Norms, Modes and Challenges (Cambridge University Press 2019). Here is the abstract:
Drawing on the Law & Religious Market theory, this Chapter utilizes the case study ofChina to explain 1) how regulation of ostensibly non-economically motivated activities(i.e., religion and charity) can be properly conceived as a form of market regulation; and, 2) how such a conception can add a valuable dimension to the discourse. In particular, this Chapter situates China’s regulation of charitable activities by religious organizationsin the context of recent major legal reform on charity law and highlights the contradictory treatment where, on one hand, the law recognizes the self-interested motivation of participants and donors of charitable activities and accommodates their co-opting of charitable activities to promote or advance commercial interests but, on the other hand, specifically prohibits religious organizations from any religiouspropagation during provisions of charitable services. This Chapter argues that from the perspective of market regulation, such denial of religious “self-interest” hampers the purported policy objectives of promoting greater religious participation in charitableactivities but may be justified on the grounds that it promotes religious competition that is normatively desirable.
Wednesday, January 30, 2019
Canada Revokes Organization's Charity Status for Violating Public Policy Against Providing Support for Israeli Defense Force and Permanence of Occupied Territories and Settlements
Section 149 of the Canadian Income Tax Act provides for tax exemption for charitable organizations. To be exempt, a Canadian organization may not operate contrary to Canadian Public Policy. Canada's Policy on Occupied Territories and Settlements holds that Israeli control over territories occupied in 1967 -- the Golan Heights, the West Bank, East Jerusalem and the Gaza Strip -- violates the Fourth Geneva Convention and UN Security Council Resolutions 446 and 465.
On January 12, the Canadian Revenue Agency notified the Beth Oloth Charitable Organization of the revocation of its exempt status based on a finding that the organization supports the armed forces of a foreign country -- the Israeli Defense Force -- and uses its funds to support Israel's continued occupation of the Golan Heights, the West Bank, East Jerusalem and the Gaza Strip, in violation of Canadian Public Policy. As reported in the Canadian Jewish News:
It is our position that these pre-army mechinot [a pre-military induction youth training academy] exist to provide support to the Israel Defence Forces, and that funds forwarded to these mechinot are therefore in support of foreign armed forces,” the CRA said. “While increasing the effectiveness and efficiency of Canada’s armed forces is charitable, supporting the armed forces of another country is not.” Beth Oloth had explained that it was simply funding teachers to provide religious training. It pointed out that since Israel has mandatory army service, “providing any aid to anyone under the age of 18 may be construed as providing preparation for entrance into the military.” But, it stressed, that was not its position. The audit also found about $1.2 million in donations to “projects conducted in the Occupied Territories.” However, the names of the projects are blacked out. The CRA said a charity’s work cannot contradict Canadian public policy. Canada, it stated, does not recognize Israel’s permanent control over territories seized in the 1967 Six-Day War. “Providing assistance to Israeli settlements in the Occupied Territories serves to encourage and enhance the permanency of the infrastructure and settlements, and therefore is contrary to Canada’s public policy and international law,” the CRA said.
Darryll K. Jones
Monday, January 21, 2019
Canada Revenue Agency proposes guidance "Public policy dialogue and development activities by charities"
The Canada Revenue Agency (CRA) issued draft administrative guidance "Public policy dialogue and development activities by charities," and is accepting comments on the proposed guidance until April 18. The guidance instructs charities that commentary on public policy must further its core mission, and prohibits activity that supports or opposes a political candidate.
Tuesday, December 4, 2018
Apparently in response to increasing use of "gagging clauses" in grants that forbid public commentary on public grants, the United Kingdom's Cabinet Office recently urged charities to report improper behavior and wasteful government grants "without fear of consequences." From the full story at Third Sector, "The new rules have been prompted by concerns in the media that charities working on the Department for Work and Pensions’ universal credit programme were unable to speak about their concerns with how the programme was being delivered because of clauses in government contracts."
It will be interesting to see if this move actually emboldens charity whistleblowing, or if more concrete protections are needed.
Friday, November 2, 2018
According to BBC News, early last month the Pakistani government ordered eighteen international nongovernmental organizations to end their operations and leave the country within 60 days. Among those charities are ActionAid UK, a development organization that works with women and girls living in poverty, and Plan International USA, a development organization that focuses on communities. While previous attempts to force ActionAid and other organizations to leave Pakistan failed in the face of diplomatic pressure from Western government, the most recent report indicates that this attempt is still proceeding.
Tuesday, October 23, 2018
The Nonprofit Management Program at Columbia University’s School of Professional Studies is presenting its next Master Class in the program's Professional Development Series on November 15, 2018: "Charities Regulation on the International Front: Emerging Issues in Globalization."
A description of the program:
Regulation and enforcement in the charitable sector are increasingly global in scope. Whether addressing cross-border charitable solicitation, oversight issues within religiously based organizations, terrorism concerns, money laundering, or the burgeoning technological platforms that enable new and expanded reach for these activities internationally, charities regulators are on the front lines of some of the most cutting-edge international legal issues. Join us for a deep-dive discussion with our panel of experts discussing the new globalized context of charities regulation.
James G. Sheehan, Chief, Charities Bureau, New York State Attorney General's Office
Marcus S. Owens Partner, Loeb & Loeb, Former Director, Exempt Organizations Division of the Internal Revenue Service
Moderator: Cindy M. Lott, Esq., Academic Director, Nonprofit Management Programs and Senior Lecturer'
Tuesday, May 8, 2018
New Zealand Denies Greenpeace Charitable Status because its Views on Environment Wouldn't Benefit the Public
Earlier this year, New Zealand denied charity status to Greenpeace because it found its policy positions to be contrary to the public interest. Under New Zealand law, charitable activities may involve seeking policy changes, but the purpose must be in furtherance of the public benefit. (For thorough coverage of New Zealand charity law, see this book by Poirier.) The registration board rejected Greenpeace's application on two grounds:
- Greenpeace promotes its points of view on the environment and other issues in ways that cannot be found to be for the benefit of the public.
- Greenpeace and its members’ involvement in illegal activities amounts to an illegal purpose which disqualifies it from registration.
On the first point, the Charities Registration Board reasoned:
Although the Supreme Court in Greenpeace held that advocacy can be charitable, it indicated that promoting a cause or advocating a particular viewpoint will not often be charitable. This is because it is not possible to say whether the views promoted are for the public benefit in the way the law recognises as charitable.
The Board considers that Greenpeace’s focus is on advocating its point of view on environmental issues such fossil fuel exploration and the expansion of intensive dairy farming. Most of Greenpeace’s environmental advocacy cannot be determined to be in the public benefit when all the potential consequences of adopting its views are taken into account.
The Board noted that advocacy for protection of the environment could be considered charitable, but Greenpeace's positions were simply too extreme to be considered in the public benefit. For example, the Board acknowledged that "in general" advocacy for sustainability is charitable, Greenpeace's concern about climate change and advocacy for specific policies such as the role of fossil fuels "is a complex issue that requires in-depth consideration of the potential consequences of New Zealand's international obligations and interests, environmental risks, the importance of fossil fuels in New Zealand's economy, the competing interests of industries, economic costs, and New Zealand's dealings with other nations." Finding Greenpeace's position on policy to not consider the other criteria, the Board couldn't find that "the views promoted by Greenpeace on climate change are of a benefit in the way that the law recognises as charitable."
The rejection of Greenpeace's application on the first ground may seem surprising to those in the US. Although there was once a time when governments in the US weighed whether an organization's policy viewpoints were in the public interest (and while some who dislike the NRA, the ACLU, or other advocacy grounds have urged a return to the discretionary denial of yesteryear), those days have largely passed, in no small part to Constitutional/First Amendment concerns.
Back to New Zealand, Greenpeace appealed an earlier board decision against it, so it will be interesting to see if this is heading up the courts again.
Monday, February 26, 2018
Merryn Somerset Webb penned an op-ed in The Financial Times entitled The charitable giving model is an undemocratic use of funds. Focused on the UK, the piece proposes that "99 per cent of the organisations with charitable status in the UK should have it removed." Instead, tax subsidies would apply to a limited number of official charities that would be tightly regulated. Read the entire piece at: https://www.ft.com/content/1093fcec-187a-11e8-9376-4a6390addb44
Monday, February 19, 2018
- According to NPR, the General Counsel and Chief International Officer of the American Red Cross resigned in the wake of a report from ProPublica that several years ago ARC had forced a senior official to resign amid sexual harassment and assault allegations but still provided a positive review of his performance to another nonprofit interested in hiring him.
- Doctors Without Borders (Medecins Sans Frontieres) announced that in 2017 it had dealt with 24 cases of alleged sexual harassment, resulting in the dismissal of 19 people, in an attempt to distinguish itself from the Oxfam and the scandal enveloping that organization (see below), according to Reuters.
- The CEO of the Humane Society of the United States resigned in the wake of sexual harassment allegations, after fighting the allegations for weeks and even though a majority of the organization's board voted to immediately end an investigation into his behavior, according to the N.Y. Times. Additional coverage: NPR.
- The Times of London reported that in 2011 Oxfam International covered up the use of prostitutes by senior aid workers in Haiti. Trying to get ahead of the growing scandal, Oxfam has promised to appoint an independent commission to investigate claims of sexual exploitation, according to The Guardian.
- The Presidents Club, a prominent United Kingdom charity that raised money from the British elite to fund grants to other charitable organizations, closed after The Guardian conducted an undercover investigation that revealed alleged groping and sexual harassment at the charity's most recent men-only fundraising dinner. Additional coverage: CNN.
In a Monkey Cage column in today's Washington Post, Nives Dolsak, Sirindah (Christianna) Parr, and Aseem Prakash, all at the University of Washington at Seattle, argue the presumption of virtue for nonprofits often leads to regulators and stakeholders neglecting issues of accountability and governance. (UPDATE: For a contrary perspective, see this Nonprofit Quarterly column by Ruth McCambridge and Steve Dubb.) At the same time, even the above examples illustrate everything from an apparently robust response to allegations of sexual harassment in the case of Doctors Without Borders to the alleged creation of an environment that encouraged such harassment in the case of the Presidents Club. What appears inescapable, however, is that nonprofits, like for-profits, have to invest in developing procedures to properly handle such complaints and deal with alleged harassers.
Sunday, November 19, 2017
Marina Nehme (UNSW Australia) has written Australian Charities and Not-for-Profit Commission: Enforcement Tools and Regulatory Approaches, 45 Australian Business Law Review 79 (2017). Here is the abstract:
The Australian Charities and Not-for-profits Commission (ACNC) commenced operation on 3 December 2012 after a decade of inquiries and recommendations about the establishment of an independent “one-stop-shop” regulator for the charity sector. The introduction of this regulator is a move that recognises the unique and distinctive role that charities play in Australia. This article reviews the sanctions available to the ACNC. It considers some key aspects of the ACNC’s regulatory approach to date and discusses the benefits arising from this approach. The article then assesses whether the current enforcement regime available to the regulator supports the continued implementation of such a regulatory approach and empowers the ACNC to enforce the provisions in the legislation or whether some changes may be needed.
Thursday, August 17, 2017
The N.Y. Times reports that the Cambodian Prime Minister has ordered U.S.-based Agape International Missions to end its operations in that country after it was featured in a CNN report on the sex trade there. As detailed in the story, the Prime Minister accused the NGO of possibly misleading CNN regarding the extent of the sex trade in Cambodia and thereby violating the terms of its operating agreement with the government. At this time it is not clear how Agape will respond or whether the Prime Minister's statements have in fact led to the expulsion of the group from that country.
Regardless of the details of this particular situation, there is a growing trend of foreign NGOs, domestic NGOs with foreign support, and sometimes domestic NGOs more generally being targeted for burdensome regulation or worse by the governments of many countries, as I have detailed in this space previously. These concerns have led Helmut K. Anheier (President of the Hertie School of Governance in Germany) to call on the G20 to address this issue in a recent G20 Policy Paper. Here is the abstract:
The roles of non-governmental or civil society organizations have become more complex, especially in the context of changing relationships with nation states and the international community. In many instances, state–civil society relations have worsened, leading experts to speak of a “shrinking space” for civil society nationally as well as internationally. The author proposes to initiate a process for the establishment of an independent high-level commission of eminent persons (i) to examine the changing policy environment for civil society organizations in many countries as well as internationally, (ii) to review the reasons behind the shrinking space civil society encounters in some parts of the world and its steady development in others, and (iii) to make concrete proposals for how the state and the international system on the one hand and civil society on the other hand can relate in productive ways in national and multilateral contexts.