Saturday, April 3, 2021

Zolt: Cross-Border Philanthropy: A U.S. Perspective

DownloadEric M. Zolt (UCLA) has posted Cross-Border Philanthropy: A U.S. Perspective. Here is the abstract:

Americans lead the world in supporting charitable activities (both in the U.S. and abroad). For foreign charitable activities, two key questions arise:

1. Should tax benefits support charitable activities outside the U.S.?
2. Should the U.S. tax system treat contributions to foreign charities differently from contributions to domestic charities?

U.S. tax law imposes remarkably low barriers to cross-border philanthropy. Contributions to U.S. charities are deductible even if all charitable activity takes place outside the U.S. Nominally, direct contributions to foreign charities are generally not deductible for income tax purposes. Practically, donors can easily work around this restriction (at relatively low costs and complexity) by transmuting non-deductible contributions to foreign charities into deductible contributions to domestic charities.

The hard question is normative: what should the law be? This chapter provides a framework for examining the desirability of the current regime and the different factors policy-makers may find useful in considering options to either reduce or increase barriers to cross-border philanthropy.

Lloyd Mayer

April 3, 2021 in International, Publications – Articles | Permalink | Comments (0)

FATF Announces New Project to Mitigate Unintended Consequences of Its Standards, Especially on Nonprofits

Fatf-logo-enThe Financial Action Task Force (FATF) has announced that in February of this year it launched "a new project to study and mitigate the unintended consequences resulting from the incorrect implementation of the FATF Standards." Those standards guide countries in implementing legal rules and processes to combat money laundering, terrorist financing, and other illegal, international financial activity. Nonprofits have long complained that countries have used the standards as cover for improperly cracking down on cross-border philanthropy, particularly philanthropy supporting disfavored nonprofits.

Here is the full announcement:

In February 2021, the Financial Action Task Force (FATF) launched a new project to study and mitigate the unintended consequences resulting from the incorrect implementation of the FATF Standards.

The project will focus on four main areas:

  • De-risking, or the loss or limitation of access to financial services. This practice has affected non-profit organisations (NPOs), money value transfer service providers, and correspondent banking relationships, in particular;
  • Financial exclusion, a phenomenon whereby individuals are excluded from the formal financial system and denied access to basic financial services;
  • Suppression of NPOs or the NPO sector as a whole through non-implementation of the FATF’s risk-based approach;
  • Threats to fundamental human rights stemming from the misuse of the FATF Standards or AML/CFT assessment processes to enact, justify, or implement laws, which may violate rights such as due process or the right to a fair trial.

The FATF will conduct the project in two phases:

Phase One: research and engagement. The project team will analyse these unintended consequences resulting from the misuse of the FATF’s Standards on preventing and combating money laundering and the financing of terrorism. This work will draw on the knowledge and experiences of members of the FATF’s Global Network of 205 jurisdictions, its observers, and outside stakeholders.

Phase Two: solutions. The second phase will develop options the FATF could consider to prevent and mitigate these unintended consequences.

The FATF welcomes input to inform this project, including, for example: scholarly research; industry and civil society perspectives; and documented instances of unintended consequences. Information may be sent to pscf@fatf-gafi.org. While contributions are welcome for the duration of the project, they would be most relevant for Phase One if submitted on or before 20 April 2021.

This is not an investigative endeavour, but an opportunity to study trends and propose solutions. Any information provided to the FATF Secretariat will be shared with the project team and the source will be identified. Depending on the volume of input, we may not be able to follow up on each suggestion for engagement, nor are we able to provide feedback about how, or if, information received is used. 

Lloyd Mayer

April 3, 2021 in In the News, International | Permalink | Comments (0)

Tuesday, March 16, 2021

Educational Philanthropy Gets Ethical Update

Today's NonProfitTimes is reporting that the standards, guidelines and definitions for reporting the results of educational philanthropy have been updated with new guidance on gift counting, a new definition of educational philanthropy and for the first time, a statement on ethics.

According to the Times, the Council for Advancement and Support of Education (CASE) recently released the CASE Global Reporting Standards. For the first time since its initial publication in 1982, the standards offer a digital subscription and six-country supplement.

Previously referred to as the CASE Reporting Standards and Management Guidelines, the CASE Global Reporting Standards is a common set of standards, guidelines and definitions for reporting the results of educational philanthropy activities at schools, colleges and universities across the globe.

The guidelines underpin CASE’s ongoing work to guide the profession, ensure integrity and consistency in educational advancement work, and to support CASE’s own work in data collection and reporting with its AMAtlas suite of tools such as the recently released Voluntary Support of Education (VSE) survey results.

The Times notes three key changes within the standards this year:

  • Updated guidance around gift counting, funds received, new funds committed, and donor control and influence.
  • For the first time, the CASE Global Reporting Standards added the CASE Statement on Ethics to the front of the book and adds the CASE Principles of Practice for the advancement disciplines, all recently updated by the CASE Commissions for Philanthropy, Communications and Marketing, and Alumni Relations and approved by the CASE Board of Trustees. The CASE Principles of Practice provide global guidelines for those professions and represent the community-derived foundations on which the advancement profession stands.
  • A new definition for educational philanthropy: Voluntary act of providing private financial support to nonprofit educational institutions. To be categorized as philanthropy in keeping with CASE standards, such financial support must be provided for the sole purpose of benefiting the institution’s mission and its social impact, without the expressed or implied expectation that the donor will receive anything more than recognition and stewardship as the result of such support. 

Announcing the new guidelines via a press release, CASE President & CEO Sue Cunningham stated, “The CASE Global Reporting Standards have at their core the CASE Ethics Statement and Principles of Practice for the profession. As institutional funding has evolved and created increasing expectations for philanthropic support, the need for clear guidance is paramount.”

The standards were reviewed and updated under the leadership of the CASE Reporting Standards and Management Guidelines Working Group. The group is comprised of 19 CASE volunteers and staff, co-chaired by Matthew Eynon, Vice President for College Advancement at Franklin & Marshall College in Lancaster, Pennsylvania, and Brian Hastings, President and CEO of the University of Nebraska Foundation in Lincoln, Nebraska. Six groups of regional volunteers also provided guidance on the new regional supplements for Australia/New Zealand, Canada, Mexico, Singapore, the United Kingdom, and the United States, including text in Spanish and French.

Commenting on the project, Enyon had this to say: “In developing the first global reporting standards for the advancement profession, CASE has decided to make a statement about the power, impact and importance of philanthropy around the world. The working group members represented many of the leading advancement programs in the world, and their efforts helped to ensure we defined standards which represent excellence in our profession.” 

Hastings added: “The standards are an essential element of upholding the integrity of our profession on a global scale. By reporting and benchmarking annual and campaign results consistent with the standards, all CASE member institutions can compare results with a greater level of confidence and understanding.”

Print copies and digital subscriptions of the Global Reporting Standards are available with a CASE membership discount from the CASE bookstore.

Prof. Vaughn E. James, Texas Tech University School of Law

 

 

March 16, 2021 in Current Affairs, In the News, International, Other | Permalink | Comments (0)

Sunday, March 7, 2021

Int'l Developments: Ten Cases That Shaped Charity Law in 2020, European Legal Philanthropy Environment, Global Philanthropy, and Tax Incentives for Cross-Border Giving

DownloadThere have been several recent publications and reports of note from outside of the United States:

In this article, we examine whether and how the institutional context matters when understanding individuals’ giving to philanthropic organizations. We posit that both the individuals’ propensity to give and the amounts given are higher in countries with a stronger institutional context for philanthropy. We examine key factors of formal and informal institutional contexts for philanthropy at both the organizational and societal levels, including regulatory and legislative frameworks, professional standards, and social practices. Our results show that while aggregate levels of giving are higher in countries with stronger institutionalization, multilevel analyses of 118,788 individuals in 19 countries show limited support for the hypothesized relationships between institutional context and philanthropy. The findings suggest the need for better comparative data to understand the complex and dynamic influences of institutional contexts on charitable giving. This, in turn, would support the development of evidence-based practices and policies in the field of global philanthropy.

The 21st century has ushered in an era of philanthropic globalization marked by a significant rise in international charitable giving. At the same time, cross-border philanthropy has raised legitimate fiscal and regulatory concerns for government. To understand how donor countries have responded to this changed global philanthropic landscape, we use comparative tax methodology to develop a spectrum of approaches to the tax treatment of cross-border giving and apply tax policy criteria to critically evaluate the divergent approaches of Australia and the Netherlands, located at opposing ends of the spectrum. Findings from the comparative analysis reveal that in the current global environment for philanthropy there is a strong case to be made for allowing tax deductible donations to cross borders.

Lloyd Mayer

March 7, 2021 in International, Publications – Articles, Studies and Reports | Permalink | Comments (0)

Monday, December 7, 2020

OECD report on Taxation and Philanthropy

The OECD recently  issued a report on Taxation and Philanthropy that will likely be of interest to our readers.

The summary provides: "This report provides a detailed review of the tax treatment of philanthropic entities and philanthropic giving in 40 OECD member and participating countries. The report first examines the various arguments for and against the provision of preferential tax treatment for philanthropy. It then reviews the tax treatment of philanthropic entities and giving in the 40 participating countries, in both a domestic and cross-border context. Drawing on this analysis, the report then highlights a range of potential tax policy options for countries to consider."

Philip Hackney

December 7, 2020 in Books, In the News, International, Publications – Books | Permalink | Comments (0)

Saturday, November 21, 2020

C. Chapman, M. Homsey, N. Gillespie: A Longitudinal & Multinational Examination of Public Trust in Nonprofits

Download (2) Download (1) DownloadCassandra M. Chapman, Matthew J. Homsey, and Nicole Gillespie (all from the University of Queensland) have published No Global Crisis in Trust: A Longitudinal and Multinational Examination of Public Trust in Nonprofits in the Nonprofit and Voluntary Sector Quarterly. Here is the abstract:

Recent high-profile scandals suggest the potential for a crisis of trust in charities, which could have negative consequences for the nonprofit sector as a whole. Although widespread, this crisis narrative has not yet been subjected to empirical examination. To assess the extent to which public trust has changed over time, we examined trust in nongovernmental organizations within 31 countries over nine consecutive years using data from the Edelman Trust Barometer (N = 294,176). Multilevel analysis revealed that, after allowing for differences in absolute levels of trust and trends across countries, there was actually a small increase in global trust in the nonprofit sector. This increase was sharper among men, people aged below 40 years, and people with higher education, income, and media consumption. Overall, we find no evidence of a crisis of trust in nonprofits; scandals within individual organizations have not affected sectoral trust.

Lloyd Mayer

November 21, 2020 in International, Publications – Articles | Permalink | Comments (0)

Saturday, September 19, 2020

Breen: Regulatory European Philanthropy: Lessons from the Scholarly Legacy of Evelyn Brody

Photo (1)Oonagh B. Breen (University College Dublin) has published Regulating European Philanthropy: Lessons from the Scholarly Legacy of Evelyn Brody in the Nopnrofit Policy Forum. Here is the abstract:

Throughout her long and distinguished academic career, spanning more than three decades, as a Professor of Law at Chicago-Kent University, Evelyn Brody’s work has interrogated three broad themes that underpin and drive charity law – the tax treatment of charities; the governance framework applicable to charities, its application, monitoring and enforcement; and the evolution of charitable structures over time, whether from an economic convergence perspective, a constitutional right of association perspective or from a public/private benefit perspective. This article reviews Brody’s contribution in these key areas. It explores the resonance of her work outside of the United States and its relevance for EU non-profit scholars before looking to Brody’s research legacy for future nonprofit scholars on both sides of the Atlantic.

Lloyd Mayer

September 19, 2020 in International, Publications – Articles | Permalink | Comments (0)

Langford (two papers): Conflicts and Coherence in the Charities Sphere; Using the Corporate Form for Public Benefit

Langford_rosemaryRosemary Teele Langford (Melbourne) has posted two articles.  The first is Conflicts and Coherence in the Charities Sphere: Would a Conflict By Any Other Name Proscribe the Same?, 14 Journal of Equity 1 (2020). Here is the abstract:

Proscriptions on conflicts of interest have long been a core component of governance regimes. In the charities sphere such proscriptions arise from a number of sources, including general law, statute and governance standards articulated by the regulator. Unfortunately the wording of relevant conflicts duties varies extensively, giving rise to acute incoherence and uncertainty. This article undertakes detailed critical analysis of the myriad of conflicts duties in order to provide certainty and comprehensive guidance. This resolution is relevant beyond the charitable sphere given the multitude of ways in which conflicts proscriptions are expressed in other governance contexts.

The second is Use of the Corporate Form for Public Benefit - Revitalisation of Australian Corporations Law, which will be published in 43 University of New South Wales Law Journal No. 3 (2020). Here is the abstract:

This article specifically addresses the theme of revitalisation of Australian law in the facilitation of purpose-based companies. It is the second of two articles on purpose-based governance in the charitable and for-profit spheres. Building on the first article, this article critically analyses relevant features of the Australian corporations law regime. It pays close attention to challenges relating to the application of directors’ duties where companies have multiple purposes and to the drafting of appropriate constitutional provisions. In so doing it draws on insights from overseas jurisdictions that have enacted legislation to enable purpose-based companies.

Lloyd Mayer

September 19, 2020 in International, Publications – Articles | Permalink | Comments (0)

Li: Global Civil Society Under the New INGO Regulatory Law (China)

Shuoyan Li (Shanghai University) has published Global Civil Society Under the New INGO Regulatory Law: A Comparative Case Study of Two INGOs in China, in VOLUNTAS. Here is the abstract:

This paper tries to explain why similar International Nongovernmental Organizations (INGOs) have different scopes under the new regulatory law in China. While previous studies have often associated fragmented authoritarianism with more room for civil sectors, the unintended consequence has been largely ignored. The paper argues that while civil sectors benefit from decentralized bureaucratic politics, the conflict between bureaucracies may also become an obstacle. This argument is based on a comparative case study of two similar INGOs whose missions are to solve poverty issues. While World Vision International had difficulties becoming a national organization after establishing several provincial offices with the help of local authorities, Oxfam succeeded and received permission from CPAFFC because it terminated collaboration with other local authorities, which put CPAFFC at ease. The interviews illustrate that competition among different departments and concerns about political risk lead to different outcomes for civil society. Government agencies will doubt an INGO’s willingness to commit to a new relationship if it has too many partners. This implication reveals the complex effects of fragmented bureaucracy on INGOs. The decentralized political structure may lead to different outcomes for INGOs. It is necessary for INGOs to understand the political logic of the new INGO law so that they can choose the proper strategy to maximize their benefits.

Lloyd Mayer

September 19, 2020 in International, Publications – Articles | Permalink | Comments (0)

López-Arceiz & Bellostas: Nonprofit governance and outside corruption


811522Ana_Jose_Bellostas-PerezgruesoFrancisco-José López-Arceiz (Universidad Pública de Navarra) and Ana J. Bellostas (University of Zaragoza) have published Nonprofit governance and outside corruption: The role of accountability, stakeholder participation, and management systems in Nonprofit Management & Leadership. Here is the abstract:

Outside corruption implies that a nonprofit organizatio

n is used to commit an infraction or crime. In Spain, this type of corruption has been detected in the context of public nonprofits as a result of the legal reform that enabled the judgment of the criminal responsibility of legal entities. A large percentage of these entities were affected by the reform, but little is known about the possible practices that can altogether prevent this behavior. In particular, there are few studies that consider nonprofit governance as a possible measure to avoid corruption in this context. For this reason, our aim is to analyze the role of certain nonprofit governance practices in fighting corruption. Using structural equation modeling, our results reveal that nonprofit governance is a key tool for mitigating corruption, although the weights of the different practices are not the same.

Lloyd Mayer

September 19, 2020 in International, Publications – Articles | Permalink | Comments (0)

Mayer: Charitable Crowdfunding

Lloyd_mayerI have posted Charitable Crowdfunding. Here is the abstract:

Charitable crowdfunding is a global and rapidly growing new method for raising money to benefit charities and individuals in need. While mass fundraising has existed for more than a hundred years, crowdfunding is distinguishable from those earlier efforts because of its low cost, speed of implementation, and broad reach. Reflecting these advantages, it now accounts annually for
billions of dollars raised from tens of millions of donors through hundreds of Internet platforms such as Charidy, Facebook, GoFundMe, and GlobalGiving. Although most charitable crowdfunding campaigns raise only modest amounts, every year several efforts attract tens of millions of dollars in donations. However, charitable crowdfunding also has its downsides. Donors may misunderstand how the beneficiaries will use the funds raised or a campaign that unexpectedly goes viral may overwhelm a small charity or greatly exceed an individual’s needs. There have also been instances of outright fraud, as well as concerns raised about money laundering and terrorist financing.

Existing laws relating to charitable solicitations and charities more generally have either uncertain or limited application to charitable crowdfunding. Broader fraud and money laundering laws may apply to the worst abuses, but these usually criminal statutes are rarely invoked. The challenge faced by government regulators is therefore whether and how to modify existing laws to address the downsides of this new activity without unduly inhibiting the generosity that charitable crowdfunding encourages. This challenge is made more difficult by the lack of information regarding the positive effects as well as the downsides of crowdfunding. Finally, existing scholarship relating to charitable crowdfunding focuses on either the motivations of donors or tax implications instead of addressing this regulatory problem, even as some governments are beginning to develop proposals to address this activity.

This Article fills this gap by reviewing the existing, incomplete information regarding charitable crowdfunding and theories for regulating in the face of uncertainty to develop recommendations for addressing this new and growing phenomenon. Given we know very little about the positive and negative effects of charitable crowdfunding, and given that any harms are likely modest, purely financial, and often readily cured, I recommend that governments should at this time only take two steps. First, governments should require notification of designated beneficiaries to help ensure funds raised reach those beneficiaries. Second, governments should require notification of regulators, but only for the small subset of campaigns that cross a relatively high threshold, to both provide information about the scale and growth of charitable crowdfunding and deter problems with the largest campaigns. Additionally, I disagree with initial steps taken by some governments to impose more comprehensive consent and administration requirements on many or all charitable crowdfunding campaigns because such requirements are unnecessary hindrances on this new and innovative way of encouraging generosity, given there is little evidence of widespread problems and given that any potential harm is almost certainly relatively small and easily remedied if it occurs.

Lloyd Mayer

September 19, 2020 in International, Publications – Articles | Permalink | Comments (0)

McMillan: Noncharitable Nonprofit Organizations and Tax Policy: Working Toward a Public Benefit Theory

Mcmillan-lori200x238Lori A. McMillan (Washburn) has posted Noncharitable Nonprofit Organizations and Tax Policy: Working Toward a Public Benefit Theory, which will be published 59 Washburn Law Journal No. 2 (2020). Here is the abstract:

Noncharitable Nonprofits in Canada are exempt from federal income tax, but are subjected to little scrutiny to qualify for this exemption. The tax policy behind this exemption is explored in this paper, trying to determine what should underpin the exemption for these types of organization.

Lloyd Mayer

September 19, 2020 in International, Publications – Articles | Permalink | Comments (0)

Friday, June 12, 2020

Debates in Charity Law (Picton & Sigafoos, editors)

9781509926855Hart Publishing has released Debates in Charity Law, edited by John Picton and Jennifer Sigafoos (both Liverpool). Here is the description:

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
Matthew Harding
3. Debating the Extent of Party/State Control Over Overseas Nonprofit Organisations: Charity Law Debates in China
Mark Sidel
4. Regulating Egoism in Perpetuity
John Picton
5. Deploying Communitarianism Bankruptcy Theory to Rescue Insolvent Charities and Maintain Charitable Purposes
John Tribe
6. When Should Charities be Allowed to Discriminate? The Case of Single-Sex Services and Transgender People
Jennifer Sigafoos
7. Regulating Charitable Activities through the Requirement for Charitable Purposes: Square Peg Meets Round Hole
Adam Parachin
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?
Patrick Ford
10. Licking their Own Lollipops: What do Charities and the Public Think about the Regulation of Charitable Activities?
Eddy Hogg
11. Commissioning of Services by Charities in the Third Decade of the Contract Culture: Lessons Learned (or Not Yet)
Debra Morris
12. Regulating the Digital (Currency) Revolution: Unravelling the Technological Challenge Faced by Charities
Matthew Robert Shillito
13. Social Housing – Charities and Vulnerable Groups
Warren Barr
14. Charity Law and Policy: Looking Forward
Jennifer Sigafoos and John Picton

Lloyd Mayer

June 12, 2020 in International, Publications – Books | Permalink | Comments (0)

Spires, Regulation as Political Control: China's First Charity Law and Its Implications for Civil Society

Anthony-spires-smAnthony 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.

Lloyd Mayer

June 12, 2020 in International, Publications – Articles | Permalink | Comments (0)

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

InfoInfo (1)Liyong0Jianxing 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.

Lloyd Mayer

February 7, 2020 in International, Publications – Articles | Permalink | Comments (0)

Wednesday, November 20, 2019

Third Sector: Debra Allcock Tyler: "'Bugger off' Charity Commission"

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.

Read the whole thing at: https://www.thirdsector.co.uk/debra-allcock-tyler-bugger-off-charity-commission/governance/article/1666192

November 20, 2019 in Current Affairs, International | Permalink | Comments (0)

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.

Lloyd Mayer

September 27, 2019 in International, Publications – Articles | Permalink | Comments (0)

Cordery & Sim on Distinguishing Between Mutual-Benefit and Public-Benefit Entities

Carolyn Cordery (Aston University Business School) (pictured) Corderyand 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:

Purpose

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.

Design/methodology/approach

This mixed-methods study utilises financial data, submissions and interviews.

Findings

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.

Research limitations/implications

As with most research, a limitation is this study’s focus on a single jurisdiction.

Practical implications

The differences in these entities’ characteristics are important for designing regulation.

Social implications

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.

Originality/value

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.

Lloyd Mayer

September 27, 2019 in International, Publications – Articles | Permalink | Comments (0)

Sidel on The Drive to Securitize Foreign Nonprofit and Foundation Management in China

Sidel-110311-2-tj-09Mark 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.

Lloyd Mayer

September 27, 2019 in International, Publications – Articles | Permalink | Comments (0)

Tuesday, July 9, 2019

Reflections on Legal Barriers to Cross-Border Philanthropy in Europe

European Philanthropy ManifestoFollowing 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.

Lloyd Mayer

July 9, 2019 in Conferences, International | Permalink | Comments (0)