Regressive policies towards charities and an atmosphere of suspicion among governments across the world risk undermining public trust and threaten to stifle the growth of charitable giving according to a report released today.
Heavy handed government policy and regulatory mismanagement in many parts of the world have damaged the public reputation of charities, according to the report by the Charities Aid Foundation, an international charity which promotes charitable giving and provides financial services and social finance to charities and not-for-profit organisations.
The report warns that government-fuelled suspicion of not-for-profit organisations could jeopardise efforts to promote giving among new generations of middle class people emerging across the world, which could contribute up to $224 billion a year to good causes by 2030.
The report, Future World Giving: Building Trust in Charitable Giving, found that many countries such as Belarus, Uganda and Kenya are adopting increasingly bureaucratic procedures for not-for-profit organisations seeking official registration – preventing charities from obtaining the legal status they need to carry out their work.
Governments in Algeria, Egypt and Russia have singled out charities that receive foreign funds for additional scrutiny with Russia legislating to compel such not-for-profits to register as ‘foreign agents’ – potentially undermining confidence in charities and stifling international giving.
In countries such as Uzbekistan and China, governments retain control of charities by establishing ‘government organised non-governmental organisations’. These organisations are not given the space to earn the trust of the public through their actions and have been involved in various scandals in which the State has recycled unused donations to other projects, damaging the image of charities.
Even in countries with progressive legislation governing the not-for-profit sector, such as South Africa, a failure to work with and respond to the advice of not-for-profit organisations has led to regulatory mismanagement in recent years.
Whilst recognising that policies should be responsive to national context, the report is able to offer a set of universal recommendations to policy makers which if followed, will help to build public trust in charity. These recommendations for governments include:
- Ensure that everyone is legally entitled to register a charity without discrimination.
- Reduce red tape for smaller not-for-profits whilst maintaining regulatory focus on larger organisations
- Allow not-for-profits to access foreign funds and engage in international association without discrimination
John Low, Chief Executive of the Charities Aid Foundation said: “The emerging middle classes around the world have the potential to contribute on a massive scale to charitable causes and through them make an enormous difference in tackling global problems.
“To make that dream a reality, it’s vital that governments give charities the freedom they need to develop, become effective and earn the trust of the public.
“All too often independent charities face suspicion, heavy handed bureaucracy or outright hostility from governments. The international community needs to work together to guarantee charities the effective frameworks they need to harness their potential to change the world for the better.”