August 16, 2018 / 3:22 PM / a month ago

Commentary: It shouldn’t be so hard to give money to charity

Just days before leading France to the World Cup soccer quarterfinals, striker Kylian Mbappe committed to donating his entire tournament earnings to charity. Soon after Mbappe’s announcement, retired English athlete Gary Neville reminded the public that England’s players have been donating their match fees here">for years.

A volunteer carries food to tables as people wait to eat their Iftar meal to break their fast at charity tables that offer free food during the holy fasting month of Ramadan in Cairo, Egypt, June 23, 2015. REUTERS/Asmaa Waguih

Athletes have long leveraged their platforms to advance philanthropic causes, but today they’re doing so against a troubling backdrop. Nearly 30 governments have policies that restrict philanthropic activity, tipping the scales against charitable organizations and making it more difficult for them to operate.

These trends have developed amidst a growing opposition to immigration in many parts of the world, with political leaders across the ideological spectrum facing increased pressure to look inward. As a result, many countries have become more suspicious of nonprofits and NGOs working across borders to respond to the world’s most pressing challenges.

In order to ensure that philanthropic efforts can be successful – whether they are led by athletes and their fans, or foundations, corporations, NGOs and donors – policymakers must create conditions where philanthropy can thrive, while removing barriers that hold it back. This includes developing regulatory environments that encourage transparency, and allowing NGOs to receive foreign donations without unnecessary restrictions.

Drawing on the recent research findings of more than 100 country and regional-level experts in public policy and philanthropy, here are three insights policymakers, diplomats and NGO leaders should consider in order to maximize the impact of philanthropy across the globe.

Political volatility is the greatest threat to global philanthropy.

The swing toward populism in parts of Europe is an obvious example of this threat, endangering billions of dollars in private sector aid from corporations, foundations and individuals while also limiting the ability of NGOs and philanthropic organizations to operate effectively.

Consider Hungary, where a 2017 law requires all human rights groups receiving international funding to register as “foreign-supported” organizations and disclose all international funding or face closure. Many see the law as a direct attack on the Hungarian-born American billionaire George Soros, whose Open Society Foundations has for decades been funding civil society programs that promote democracy and, in many cases, support immigrants.  Since the 2015 migrant crisis, Soros has been battling with Hungary’s right-wing, populist and anti-immigrant Prime Minister Viktor Orban. In June Hungary’s parliament passed a legislative package, called “Stop Soros,” that makes NGO workers who help migrants receive asylum when they’re not entitled to it liable for prison. Additionally, legislation passed in July imposes a 25 percent tax on foreign donations to organizations whose activities support migrants – making it harder for philanthropists like Soros to provide substantive funding.

It’s not just in Hungary. Since 2010, several countries have enacted new restrictions for organizations accepting foreign charitable contributions. In 2016, for example, Israel’s Knesset passed the so-called “transparency bill,” requiring organizations that receive at least 50 percent of their donations from foreign governments  – including the European Union  – report this fact on all official publications, including on billboards and TV advertisements. The law targets mostly human rights and political organizations, and is seen by critics as being directly aimed at left-wing groups campaigning for Palestinian rights.  

Some regulation, intended to increase transparency and accountability, has the opposite effect.

Migrants try on shoes they receive from charity organizations at a train station in Hegyeshalom, Hungary , September 23, 2015. REUTERS/Leonhard Foeger

In developed countries such as the United States and the United Kingdom, policies designed to prevent funding from reaching militant organizations often hit international nonprofits with burdensome reporting requirements to prove their legitimacy.

A 2018 study from the UK-based Charity Finance Group found that legislation aimed at targeting terrorist money laundering  – such as provisions in the United States’ Patriot Act and, more recently, the United Kingdom’s anti-money laundering directives  – create unintended consequences for charitable organizations. Of the international NGOs surveyed, 79 percent reported having difficulty accessing basic financial services, while 15 percent said their bank accounts had been closed entirely.

Since 2014, the governments of countries such as Belarus, Peru, Russia, Venezuela and Nigeria have enacted (or made plans to enact) a flurry of domestic regulations on NGOs in the name of “transparency.” While these leaders also cite their goals as protecting “national security,” these regulations are often designed to obstruct most human rights and watchdog organizations from operating effectively – and making it harder for donors to donate money to NGOs.

Another case in point is  Egypt, where legislation signed into law last year outlaws the activity of many NGOs that offer services in the broadly-defined areas of social development, education and poverty alleviation, and controls their ability to receive foreign funds.

These crackdowns threaten both the existence of philanthropic organizations and the rights of the people who lead them. 

Support for philanthropy is growing in surprising corners of the world.

We’ve seen sizeable increases in philanthropy within China, even as government regulations including strict registration requirements still control the philanthropic activities of international NGOs. Indeed, from 2010 to 2016, donations from China’s top 100 philanthropists have tripled to $4.6 billion.

And in Saudi Arabia, although philanthropic organizations must navigate regulation such as obtaining a government permit for fundraising,  Riyadh is taking steps to promote the growth and professionalization of the sector. As part of the country’s Vision 2030 strategy  – a blueprint for Saudi Arabia’s economic, political and societal development  – the Saudi government aims to improve homegrown nonprofits’ performance and transparency in order to strengthen their  impact. The plan  – which hopes to increase philanthropic organizations’ contributions to GDP from less than 1 percent to 5 percent by 2030 – coincides with a rise in wealthy Saudi donors seeking to maximize their charitable impact.

What’s next?

Restrictions to philanthropy and NGO activity in some countries risk limiting the progress made to address the world’s most important causes – from migration and development, to public health, poverty, education and social equality.

If policymakers ignore the growing attacks on NGOs around the world, it will only get harder for philanthropists to address problems that neither states nor markets can tackle on their own.

About the Author

Una Osili is Assoc. Dean for Research and International Programs at the Indiana University Lilly Family School of Philanthropy at IUPUI and the principal investigator for the 2018 Global Philanthropy Environment Index.

The views expressed in this article are not those of Reuters News.

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