Editorial | Engage on non-profit law

If the whispers are correct, in the coming month, the government will bring to Parliament new legislation covering non-profit organisations (NPOs), or an overhaul of the Charities Act, under which these entities are regulated.

The planned update to the regulatory environment is in response to an insistence by the Financial Action Task Force (FATF) to plug loopholes to prevent NPOs from using their charity status as cover for channelling money to terrorist organisations. That is an objective with which most people agree.

But, as FATF, the body that establishes the global framework for combating money laundering and terrorism financing, acknowledged in an update to its Recommendation 8, which deals with the regulation of NPOs, there can’t be a single model for the entire sector. By implication, there have to be carve-outs for organisations that bear neither the resemblance nor the DNA of terrorism financiers and on whom a heavy regulatory burden would be detrimental to society. In countries like Jamaica, it is mainly the poor, who rely on their services and advocacy, who suffer.

It is in that context that, four months ago, this newspaper joined leaders of non-governmental organisations (NGOs) in calling on the Holness administration to engage in a full and transparent dialogue with the sector before tabling reform legislation in Parliament. Certainly, there must be no Nicodemus-style passage of the law.

The Gleaner’s Editorial Board reaffirms that position. Indeed, the board insists that the government first issue a white paper, inclusive of historic data on the operation of charities, setting out the mischief it intends to cure or prevent, and the principles upon which its regulatory framework will sit.

FRANK CONVERSATIONS

The white paper would form the basis for frank conversations with the NPO sector and other stakeholders to gather their input prior to the drafting of the legislation. The resulting bill would then be sent to a joint select committee of both Houses of Parliament for review. That committee should invite submissions and hold hearings on the proposed law.

For the avoidance of doubt, no one, and certainly not this newspaper, is against NPOs, NGOs or charitable organisations being held accountable. Indeed, from the limited data available, Jamaican charities annually receive over J$40 billion a year. That’s a tidy sum.

That money is spread widely across institutions, which mostly work directly in communities on health, education and programmes to alleviate poverty. Some NPOs and NGOs are also engaged in human rights and environmental advocacy. The government, from a social well-being and good-governance perspective, has a recognisable interest in the continued operation of NPOs.

At the same time, individuals, firms and organisations that give to these institutions have a right to know how their contributions are spent and that the money goes to its intended purpose. The government, too, has an interest in ensuring that charities don’t abuse their privileges.

However, there can be a thin line, especially when dealing with resource-strapped institutions, between being held accountable and being overly burdened by time-consuming and expensive regulatory red tape, as to render the mission of the organisation redundant. Put another way, the mutuality of interests requires a regulatory system that allows civil society organisations to be effective even as they are transparent.

CONTEXT

The context in which a regulatory system is framed is therefore important. A one-size-fits-all arrangement copied from a high-risk jurisdiction, designed primarily on the assumption that there are terrorist financiers to be caught, thus placing onerous reporting requirements on the funder of community basic schools, will soon render that organisation irrelevant to its purpose. Even larger, relatively sophisticated bodies could find themselves crippled by an overly complex and costly regulatory regime. In other words, risk assessments and regulatory arrangements applicable to the risk profile of an entity would be a sensible approach.

But these frameworks can’t, or shouldn’t, be developed in a silo, only by the government. The administration has to first recognise the mutuality of interest, and therefore the requirement for a partnership with the NPO, NGO and civil society sector.

It is in that context that it should frame a national policy that finds its way, firstly, into the white paper, then a final draft that ultimately informs any legislation that is taken to Parliament. This starts from a place of willingness, on both sides, to have difficult conversations.

It is that process, though, that is likely to yield the best results.