|NGO Guidelines for Good Policy and Practice (Commonwealth Foundation)|
|Part I: NGOs: what they are and what they do|
|7. The legal and institutional frameworks within which NGOs operate|
There is a wide variation between countries in the extent to which the general and specific issues concerning the blurring of the boundaries of NGO activity with those of other sectors of society are recognised and given attention. But on one aspect of this there is little variation:
The law lags badly behind the reality of NGO activities and structures in many countries.
The essence of the problem here is that increasing NGO diversity is generally not reflected in the laws under which they operate. In many countries laws relating specifically to NGOs were framed years ago, and thus reflect the NGO scene at the time the legislation was passed. In general this means that the laws are suited to NGO work in care and welfare activities but less so to others. The laws of many countries typically refer to NGOs as welfare organisations or as charities. In doing so they reflect the context in which 19th Century charitable law was framed. In broad terms these allow NGOs to pursue objectives which are related to the relief of poverty, the advancement of education, and other objectives which are termed "beneficial to the community" (including in some, the "advancement of religion"). In one African country, for example, the legislation concerning "welfare organisations" (1967) defines these as:
"...any body or association of persons, corporate or unincorporate, or any institutions, the objects of which include or are one or more of:
a. the provision of all or any of the material, mental, physical or social needs of persons or families;
b. the rendering of charity to persons or families in distress;
c. the prevention of social distress or destitution of persons or families;
d. the provision of funds for legal aid;
e. the prevention of cruelty to, or the promotion of the welfare of, animals;
f. such other objects as may be prescribed;
g. the collection of contributions for any of the foregoing..."
This example gives a flavour of how the language of the 19th Century lives on in legislation across the world. That is one problem: the language is outdated. It also illustrates how legal definitions, however outdated their language, do nonetheless tend to be broad enough to allow many NGO activities to be carried out, through terms such as "such other objects...".
But where the purposes of charitable or welfare organisations are thus generally defined, as they are in many countries, they tend to permit objectives, activities and organisations which some feel should not be within the realm of NGOs. In some countries these may include proselytising religious organisations and purely educational bodies, so that private schools can be registered as charities. Yet even such broadly-framed law can exclude many current NGO purposes and activities. Such terms as "other purposes beneficial to the community" or "such other purposes as may be prescribed" are open to interpretation.
They can therefore in practice be as restrictive as the statements in some laws which enable administrators to disallow (to take the words used in one country's laws) "such other bodies, associations or institutions as may be prescribed".
One example of how even the enabling catch-all of "other purposes beneficial to the community" produces restrictions is that the creation of jobs or generation of income, even when these are to be done within non-profit forms of organisation, is not allowed as a charitable purpose in part of one country, yet is allowed in another part, where charitable law is administered and interpreted differently.
The laws of some countries use more specific statements. In one country for example no fewer than 27 different specified types of permitted "charitable purpose" are set out in the relevant legislation, passed in 1985. The legislation nonetheless permits charities in such fields as the "provision of schools, colleges, universities and other like institutions" and "the maintenance of the efficiency of the armed forces and the police force and their welfare".
This is not to single out particular countries for praise or criticism, but to illustrate that the law does not reflect the current NGO reality and causes confusion. The problem is that there are no laws which are based upon the definition of NGOs set out in this report. In consequence some legitimate NGOs and activities may not be recognised, and, conversely, some illegitimate ones are permitted.
Many other problems and confusions regarding the laws under which NGOs operate have been identified. These include:
- the ambivalent or restrictive attitude the law in many countries has towards the realities of the control and management of NGOs, and especially of participatory organisations.
Charity and welfare organisation law frequently vests responsibility for the control of NGOs in a Board or committee of nominated, worthy individuals who oversee paid staff or volunteers, who in turn attend to the needs of what are often termed the beneficiaries. It thus broadly favours the private form of NGO. The reality of such practices as empowerment of those served, and of participatory forms of control and management is not reflected, or in some cases the law often does not allow for them and even forbids them. Thus it can restrain NGOs from adopting the activities, structures and systems of management and control which they feel most truly reflect their objectives.
- the ambivalent or restrictive attitude the law has towards the more political activities of NGOs. As noted previously it is possible to distinguish between that form of political activity which emerges from NGO work and that form of political activity which is usually termed "party politics". At present, however, no example was found in which the law and the manner in which it is interpreted reflects this. the changes in the ways NGOs secure their income. In the charitable past, such income came from grants and donations, including directly from the public. It was not, in other words "earned". Now many NGOs derive income from payments for services rendered under contracts and from trading. Again, the change is not adequately reflected in many laws: while they commonly do not forbid trading by NGOs, they often permit it only to a limited extent. in some countries there are no laws regarding NGOs.
In others the laws apply only to certain types of NGO, while some leave the status of NGOs unclear.
- in some countries the laws are or have at times been very restrictive. In some cases they disallow the existence of all forms of NGO. In others there are demanding legal, registration, regulatory and other institutional requirements that NGOs must satisfy. For example, some require separate registration procedures for organisational purposes, for tax purposes, and for purposes of obtaining foreign funding, currencies and imports. In some countries NGOs have to satisfy the requirements of both national and state/regional laws.
- in some other countries, at the opposite extreme, the requirements are relatively undemanding, or even non-existent. This makes it easy for unscrupulous or ambitious individuals to establish fraudulent NGOs and for organisations which are not NGOs to represent themselves to be them.