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CAF is one of Europe’s largest charitable foundations. We produce research on charities and charitable giving, develop policy ideas and work with people, companies and charities to help good causes thrive.

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Independence of not-for-profit organisations under threat globally

22 May 2014

The independence of not-for-profit organisations is at risk due to the hostile rhetoric and regressive policies of governments around the world. This is stopping these non-governmental organisations (NGOs) speaking out and is limiting their freedom to manage their own finances, claims a report released today.

These governments risk alienating donors and damaging civil society. In many countries NGOs are being prevented from performing their crucial role in holding governments to account and helping to drive improvements in society.

We, an international charity which promotes charitable giving and provides financial services and social finance to not-for-profit organisations, describes the wave of policies weakening the independence of not-for-profit organisations.

This wave is engulfing countries regardless in both the developed and developing world. Governments in emerging economies such as Azerbaijan, Ecuador, Indonesia and Algeria are joined by the likes of Canada and the UK in introducing legislation to restrict the ability of NGOs to campaign and influence government policy.

The report ‘Future World Giving: Enabling an Independent Not-for-profit Sector’ warns that poor legislation on not-for-profit campaigning and independence could jeopardise efforts to promote giving among new generations of middle class people emerging across the world, which otherwise could contribute up to $224 billion a year to good causes by 2030.

The report looks at how governments are either intentionally or indirectly, through vague legislation, stifling the voice of not-for-profit organisations.

For example, in Venezuela organisations that criticise the government have faced informal, personal threats and prosecution of their members, while in Thailand and Cambodia, it is possible to be charged with defamation against the government for criticising their policies. This is a criminal offence with the possibility of 2 years in jail, meaning that NGOs feel unable to take on the risk of speaking out against the State.

The report also looks at how government funding of not-for-profit organisations can impact their independence. Without strong rules guiding relationships, these organisations can become mere contractors to government – a problem exacerbated by the inclusion of “gagging clauses” that prohibit public criticism. To tackle this, the report lays out a number of recommendations that developing and developed nations should adopt in order to encourage a healthy civil society and build independence in the not for profit sector.

They include:

  • Governments should allow not-for-profits to criticise and influence policy in order to improve standards and promote public debate.
  • Not-for-profit organisations need freedom to manage their resources in the way which best achieves their stated mission.
  • Governments should foster a strong and independent civil society to benefit both the state and society as a whole.

Adam Pickering from the Charities Aid Foundation, said:

“It’s frightening to see how many countries have recently tightened controls on the activities of not-for-profit organisations.

While governments may want to ensure that public donations to not-for-profits are used responsibly, their methods for doing so are effectively gagging charities and holding them back from achieving their missions.

It is invaluable that not-for-profits are free to do things differently, to take risks and to speak out on behalf of the marginalised. Policy makers need to recognise this and ensure they do not create a barrier to these activities. 

“Not-for-profits don’t just provide services for society. They often represent the concerns and aspirations of communities to government and act as a pressure gauge to release social tensions in a controlled and constructive way. Not-for-profits around the world must be free to pursue causes and develop ideas that would be deemed too risky by the private sector. They must be free to drive improvements that make the world a better place for us all.“

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