Are recommendations to compel charities to report foreign donations an incidental misstep or a sign of things to come in the UK?
On January 25th the Public Administration and Constitutional Affairs Committee (PACAC) – a non-executive policy and scrutiny function of the UK parliamentary system – published a report of its enquiry into fundraising practices of charities in the United Kingdom. Whilst much of the report dealt with how government should respond to the aggressive tactics of some charities revealed by recent stories in the media, the final recommendation will be of concern to those of us who have been monitoring the global crackdown on the foreign funding of civil society.
Recommendation 9 of the PACAC report, The 2015 charity fundraising controversy: lessons for trustees, the Charity Commission, and regulators, which states that;
The Charity Commission and the Government should consider proposals about how donations from overseas could be made notifiable through the Charity Commission so that the authorities become aware of charities in receipt of funds from potentially harmful sources. The Government might consider employing the same definition of an overseas donation and similar reporting mechanisms as are used in the Political Parties, Elections and Referendums Act 2000 in respect of foreign political donations. (Paragraph 52)
We recognise that, like all other sectors, charities have a responsibility to be vigilant in countering the threat of corruption, money laundering, the contravening of sanctions and terrorist financing. However, a policy which singles out charities from other sectors in the economy and places all foreign donors under suspicion would be disproportionate, discriminatory and damaging to our civil society. CAF believes that when charity law, the list of purposes and activities which charities can pursue, and the regulatory apparatus is fit for purpose; there should be no need to adopt prejudicial policies which isolate charities from foreign funding sources. Indeed, this was clearly stated in the recommendations of our report, Building Trust in Charitable Giving;
Oddly, conclusions about the risks posed to the charity sector from foreign donors seem to have been drawn from the Charity Commission’s experience of attempting to restrict UK charitable grantmakers from funding an advocacy group called CAGE. The case of CAGE hardly seems an appropriate evidence base for judgements about foreign funding of charities given that a) CAGE is not a charity and b) the Charity Commissions concerns related to domestic, not foreign funding. For this to form the basis on which a recommendation is made on a matter that the committee otherwise acknowledges it has not “explored in any detail” undermines the credibility of the review. I am of the belief that if committee members understood the international context of their recommendation, they may not have made it.
A recent trend for governments to restrict the ability of charities to access foreign funds is perhaps the most consistent feature in what has come to be called the closing space for civil society. According to the International Center for Not-for-profit Law (ICNL) more than 30 nations have proposed or enacted laws restricting access to foreign funding of charities since 2012. That the PACAC would recommend the UK should join a list of nations which includes Uzbekistan, Turkmenistan, Azerbaijan, Eritrea, Russia, Sudan, Venezuela and Zimbabwe should be seen as alarming by those who value our reputation as a liberal democracy internationally.
The UK has a long history of international giving, and the desire of UK donors to engage with foreign causes remains strong. According to CAF’s UK Giving 2014 report 20% of all UK donations by value go to foreign causes. This has helped to forge positive cultural ties with nations on every continent. It is no coincidence, therefore, that many governments have developed, and continue to develop, legal frameworks for charities and charitable giving which mirror our own. The soft power that the UK wields through the charitable giving of our citizens brings benefits to the UK as well as to beneficiary nations. Any attempt to impose protectionist policies which isolate donors and charities from international funding would set a dangerous and damaging precedent … it may also mean reneging on international agreements.
Clearly, any restriction on foreign donors within the European Union would be in contravention of Article 56(1) EC which relates to the free movement of persons, services and capital. Outside Europe, Article 13 of the Declaration on Human Rights Defenders states that “everyone has the right, individually and in association with others, to solicit, receive and utilize resources for the express purpose of promoting and protecting human rights and fundamental freedoms through peaceful means, in accordance with article 3 of the present Declaration”. There is no distinction in the declaration between domestic and foreign sources. Although the Declaration is not a binding instrument, it must be recalled that it was adopted by consensus by the General Assembly and contains a series of principles and rights that are based on human rights standards enshrined in other international instruments which are legally binding. In addition, Article 22 of the International Covenant on Civil and Political Rights is generally seen as affirming the right to make and receive donations, since “the right to freedom of association with others” relates to all activities of an association including fundraising.
Fundamentally, CAF believes that when charity law, the list of purposes and activities which charities can pursue, and the regulatory apparatus is fit for purpose, there should be no need to adopt prejudicial policies which isolate charities from foreign funding sources. We hope that PACAC members come to the same conclusion in the future.