Perspectives on Charity Accountability

An ICFO Journey Through Asia Continued

2012-01-06T03:48:00.092-05:00

Well, here we are in Phnom Penh, Cambodia

The Cooperation Committee for Cambodia (CCC) sponsored a regional forum on 13-14 December 2011 in Phnom Penh, Cambodia. The purpose of this forum was to consider the implications of Post High Level Forum 4 in Busan, Korea (29 November to 1 December 2011) on civil society organizations in Southeast Asia. The basic rationale for the forum was based on the premise that civil society organizations (CSOs) are an essential component of a healthy, progressive society. According to the concept statement, weak accountability is one of the biggest political challenges facing CSOs, thus collective and serious ownership of accountability principles, and self-regulation are critical tools to augment its legitimacy and effective role as third development actors within their own rights.

The focus of this forum was on Article 22 of the Busan Partnership for Effective Development Co-operation, which provided:

Civil society organizations (CSOs) play a vital role in enabling people to claim their rights, in promoting rights-based approaches, in shaping development policies and partnerships, and in overseeing their implementation. They also provide services in areas that are complementary to those provided by the states. Recognizing this, we will:

a) Implement fully our respective commitments to enable CSOs to exercise their roles as independent development actors, with a particular focus on an enabling environment, consistent with agreed international rights, that maximises the contributions of CSOs to development.

b) Encourage CSOs to implement practices that strengthen their accountability and their contribution to development effectiveness, guided by the Istanbul Principles and the International Framework for CSO Development Effectiveness.

First, a little history and context. The process that lead to the Fourth High Level Forum on Aid Effectiveness, or Busan HLF-4, began, at least theoretically, with the Rome Declaration on Harmonisation HLF-1 in 2003. This First High Level Forum in Rome, "marked the first occasion at which principles for aid effectiveness were outlined in a concrete declaration" according to the history reported by the UN Organization for Economic Co-operation and Development (OECD).

International development cooperation surged in the early 1960s in the midst of post-war optimism and enthusiasm. However, success was lacking in aid effectiveness. A formulation of principles for effective aid was developed and grew out of the need to understand why aid was not producing the development results everyone expected and wanted to see. The Rome Declaration produced by this High Level Forum 1 in Rome set forth a series of concrete priority action items:

That development assistance be delivered based on priorities and timing of the countries receiving it.
That donor efforts concentrate on delegating cooperation and increasing flexibility of staff on country programs and projects.
That good practices be encouraged and monitored, backed by analytic work to help strengthen the leadership that recipient countries can take in determining their development path.

Ministers, heads of aid agencies, and other senior officials representing 28 aid recipient countries and more than 40 multilateral and bilateral development institutions endorsed the Rome Declaration on Hamonisation. There was little or no evidence in the document describing this First High Level Forum, or in the Declaration itself, that civil society organizations were involved, or stakeholders in advancing the goals declared in the Rome Declaration.

According to the history of The High Level Fora on Aid Effectiveness published by OECD, The Second High Level Forum in Paris in 2005 marked the first time that donors and recipients both agreed to commitments to hold each other accountable for achieving the goals and priorities announced in the Rome Declaration on Harmonisation. Therefore, these commitments were laid out in the Paris Declaration on Aid Effectiveness.

Article I, Statement of Resolve, Paris Declaration on Air Effectiveness, provided in pertinent part, as follows:

We, Ministers of developed and developing countries, responsible for promoting development and Heads of multilateral and bilateral development institutions, meeting in Paris on 2 March 2005, resolve to take far-reaching and monitorable actions to reform the ways we deliver and manage aid as we look ahead to the UN five-year review of the Millennium Declaration and the Millennium Development Goals (MDG) later this year. As in Monterrey, we recognise that while the volumes of aid and other development resources must increase to achieve these goals, and aid effectiveness must increase significantly as well to support partner country efforts to strengthen governance and improve development performance. This will be all the more important if existing and new bilateral and multilateral initiatives lead to significant further increases in aid.

The Statement of Resolve further stated that the participants to this Declaration accepted the reforms suggested in the Declaration would require continued high-level political support, peer pressure, and coordinated actions at the global, regional, and country levels. The "ownership" of this effort was largely limited to partnership countries, although "Ownership" article did identify "donors" as stakeholders without defining who or what these donors were.

Appendix B, of the Paris Declaration on Aid Effectiveness, listed 91 countries and participating countries, 26 development banks from different countries and international organizations and funds, and 14 civil society organizations. Again, there is little in the text of the document which would specifically address the role of civil society organizations, and what was expected of them.

Nevertheless, the Paris Declaration outlined five fundamental principles for making aid more effective:

Ownership: Developing countries set their own strategies for poverty reduction, improve their institutions and tackle corruption.
Alignment: Donor Countries align behind these objectives and use local systems.
Harmonisation: Donor countries coordinate, simplify procedures and share information to avoid duplication.
Results: Developing countries and donors shift focus to development results and results get measured.
Mutual accountability: Donors and partners are accountable for development results.

In September 2008, a Third High Level Forum on Aid Effectiveness, was held in Accra, Ghana, resulting in the Accra Agenda for Action (AAA). Here, developed and developing countries agreed to take bold steps to reform the way aid is given and spent. Developing countries committed to take control of their own futures, donors to better coordinate amongst themselves, and both parties to the Agenda pledged to to account to each other and their citizens. According to the report from OECD on Accra High Level Forum 3, and the AAA, developing and donor countries, emerging economies, UN and multilateral institutions, global funds, and civil society organizations participated in the discussions leading to the Third High Level Forum for Aid Effectiveness in Accra. The forum participants used as a baseline, the development goals set out in the Paris Declaration on Aid Effectiveness. What is interesting is that the list of donors were almost all donor countries, with only a few development banks and major funds.

Prior to the Third High Level Forum on Aid Effectiveness in Accra, a coalition of more than 380 CSOs from 80 countries submitted to the Third High Level Forum in Accra, a CSO critique and list of concerns about the Paris Declaration, and put foward 16 recommendations. One of the criticisms of the Paris Declaration was that it was limited largely to aid delivery and was created without the involvement of CSOs. Therefore, Better Aid, a civil society advocacy platform convened more than 800 CSOs in Accra who called on attending governments for an equal development partnership and substantive changes to the Paris Declaration. The conclusion was that the AAA captured some of the promises made by governments to make official development assistance more effective. But, that while it reflected some progress towards meeting the goals advocated by the CSOs and addressed some of the limitations of the Paris Declaration, it faced its own obstacles to success, primarily due to the lack of time-bound commitments and indicators to monitor progress. Nevertheless, there was some recognition at the High Level Forum 3 in Accra that CSOs were "independent development actors in their own right."

Two groups running parallel to the High Level Forum process are Open Forum for CSO Development Effectiveness and BetterAid, both active in mobilizing CSOs in Accra and Busan. Open Forum is an initiative which was conceived and is led by a diverse coalition of CSOs around the world. Its process is unique in its effort to create a global consensus on principles to which it holds itself accountable. In order to accomplish its mandate, Open Forum conducts consultations with a wide range of CSO representatives around the world, as well as with non-CSO stakeholders, in over 70 countries. Its initiative takes place amidst the on-going international aid effectiveness processes, but it is not a parallel process.

BetterAid is an open platform which unites over 700 development organizations from civil society and leads many of the civil society activities, including many in-country consultations, studies and monitoring leading up to the Fourth High Level Forum 4 in Busan Korea. It does this by drafting position papers and monitoring effectiveness agreements, such as the Paris Declaration and the Accra Agenda for Action. BetterAid's critique of the Accra Agenda for Action was in part instrumental in increasing the role of CSOs in the in Aid Effectiveness consultations and I believe led to some of the changes that occurred in High Level Forum 4 in Busan.

Open Forum has also been instrumental in advancing the agenda of civil society, both by its participation in the Accra and Busan fora, but also by its own initiatives in convening the First Global Assembly in Istanbul, Turkey, in September 2010, and the Second Global Assembly in Siem Reap, Cambodia in June 2011 hosted and facilitated by the Cooperation Committee for Cambodia (CCC). More than 170 CSO representatives from 82 countries gathered in Istanbul to consider and unanimously agree to adopt the Istanbul Principles for CSO Development Effectiveness. The preamble to the Istanbul CSO Development Principles stated:

Civil society organizations are a vibrant and essential feature in the democratic life of countries across the globe. CSOs collaborate with the full diversity of people and promote their rights. The essential characteristics of CSO as distinct development actors -- that they are voluntary, diverse, non-partisan, autonomous, non-violent, working and collaborating for change -- are the foundation for the Istanbul principles for CSO development effectiveness. These principles guide the work and practices of civil society organizations in both peaceful and conflict situation, in different areas of work from grassroots to policy advocacy, and in a continuum from humanitarian emergencies to long-term development.

The first four principles address largely political and democratic oriented matters, such as promoting human rights and justice, gender equality and equity, people empowerment, democratic ownership and participation, and promoting environmental sustainability. It is not until the last four principles that the Istanbul Principles address how CSOs are to conduct themselves, that is, with demonstrated commitment to transparency, multiple accountability, and integrity in their internal operations, commitment to transparent relationships with CSOs and other development actors thereby promoting partnerships and solidarity, and creating and sharing knowledge in which mutual learning can occur and in which vision for innovation and the future can be strengthened.

The Second Global Assembly in Siem Reap resulted in the Siem Reap CSO Consensus on the International Framework for CSO Development Effectiveness. It expressed in its Introduction, "a commitment to strengthen civil society development effectiveness" while recognizing that:

Millions of civil society organizations (CSOs) worldwide contribute in unique and essential ways to development as innovative agents of change and social transformation. These contributions are long-standing: CSOs support grassroots experiences of people engaged in their own development efforts; are both donors and practitioners of development; promote development knowledge and innovations; work to deepen global awareness and solidarity among people across national boundaries; and they advocate and seek out inclusive policy dialogue with governments and donors to work together for development progress.

The Siem Reap Consensus, fleshed out some of the implications of the Istanbul Principles and provided specific guidance on how those principles were to be satisfied. Of particular interest to me were the discussions and guidance provided with respect to three of the Istanbul Principles relating to transparency and accountability, the pursuit of partnerships and solidarity, and the creation and sharing of knowledge for capacity building of CSOs. Section III of the Siem Reap Consensus addressed in rather specific terms how the mechanisms for CSO accountability were to be strengthened. Specifically, since CSO mandates are the basis for their responsibility to be fully accountable,

All development actors share a responsibility to demonstrate the results of their interventions and actions, in particular with their primary and most-affected constituencies. CSOs acknowledge and take seriously this obligation, which is set out in the fifth Istanbul Principle -- to be fully accountable and transparent for their development actions and results. As civil society organizations, accountability is shaped by various distinctive organizational mandates, embedded in their work as agents of change for the public good, with people in their communities, and with the public constituencies that support their work. This responsibility is put into practice through the implementation of various CSO accountability mechanisms, responding to different organizational and country contexts.

The guidance set forth in the Siem Reap Consensus with respect to Istanbul Principle No. 5, provided:

Transparency, mutual and multiple accountabilities and internal democratic practices reinforce CSO values of social justice and equality. Transparency and accountability create public trust, while enhancing CSO credibility and legitimacy. Democratizing information, increasing and improving its flow among all stakeholders, including political actors, strengthens both civil society and democratic culture. Transparency is an essential precondition for CSO accountability.

Accountability is not limited to financial reporting, but should strengthen both institutional integrity and mutual public reckoning among development actors, particularly focusing on accountability with affected populations. Community-based CSOs often have particular advantages in implementing local grassroots-accountability processes. Progress in transparency and accountability, however, may sometimes be affected and limited by challenges CSOs face living under highly repressive regimes and laws in armed conflict situations.

So, now three years after Accra, with this background of the work of BetterAid and Open Forum, the High Level Forum 4 convened in Busan, Korea. For the first time in the history of OECD High Level Forum events, the Fourth High Level Forum on Aid Effectiveness in Busan included CSOs as official participants, recognizing them as equal and important development actors in their own right.

There were four civil society visions for Busan:

The first was that there should be a full evaluation of the Paris and Accra commitments. This meant taking stock of the existing commitments by governments and donors that had not been respected and why. Mainly, the Busan commitments should promote meaningful democratic ownership of development policies, planning and actions through full engagement with, and accountability to, all development stakeholders.
Secondly, development effectiveness must be strengthened through practices based on human rights, especially with respect to "gender equality, human rights and decent work standards."
Third, CSOs asked that the Busan Compact recognize CSOs as independent development actors in their own right, and that it commit donors and recipient governments to facilitate an enabling environment for CSOs work in all countries. This meant committing to standards for government and donor policies, laws, regulations, and practices that create and sustain an enabling environment for CSOs
And fourth, that beyond HLF-4, civil society called for future aid effectiveness commitments to promote an equitable and just development cooperation architecture. These civil society visions were fleshed out in more detail in the Civil Society Statement to the Fourth High Level Forum on Aid Effectiveness in Busan, Korea.

This leads us to the Busan Compact, or The Busan Partnership for Effective Development Cooperation, approved on 1 December 2011. While the focus was on Article 22 during the CCC Regional Forum "Revisiting CSO Governance and Accountability in South East Asia in the Context of Post High Level Forum 4 in Busan," I think it is reasonable to ask if the Busan Compact as a whole met any of the vision statement of civil society, and CSOs.

Article 1 of the Busan Partnership for Effective Development Cooperation, expressly identified civil society as one of the participants meeting in Busan, and recognized that all participants were united by a new partnership that was more inclusive than before, founded on shared principles, common goals, and differential commitments for effective international development. Article 6 recognizes that HLF-4 in Busan builds on previous High Level Fora, with the commitment in Article 7 to improve, modernize, deepen, and broaden the cooperation between state and non-state actors. Articles 8 and 9 recognize the goals set forth in the principles of the earlier High Level Fora, and the roles of civil society in achieving those goals. Articles 14 and 16, recognize the inclusion of new actors, specifically, civil society, on the basis of shared principles and differentiated commitments. Article 22 quoted above specifically detailed the role of CSOs as "independent development actors" and with the commitment which encourages CSOs to implement practices that strengthen their accountability and their contributions to development effectiveness. While these are just a few examples, implicit in the entire document is the vital role of CSOs in progress toward the MDGs and beyond.

While perhaps I have belabored this history and context a bit, the debates in Cambodia over the draft Law on Associations and Non-Government Organizations, and the basis for the CCC Regional Forum "Revisiting CSO Governance and Accountability in South East Asia in the Context of Post High Level Forum 4 in Busan" takes on a more understandable light. See my blog posts for 17 October 2011 and 20 November 2011; http://www.rvanbroekhoven.blogspot.com/2011/10/power-to-tax-and-power-to-regulate-is.html

http://www.rvanbroekhoven.blogspot.com/2011/11/power-to-regulate-is-power-to-destroy.html

Since those two blog posts have been published, the Royal Government of Cambodia have released the fourth draft of its proposed law. As I have read these various drafts of the law, it has appeared to me that much of the debates from the High Level Fora, and the meetings of Open Society and BetterAid have driven most of the opposition to what has been proposed in these drafts.

Morever, in his presentation in the CCC Regional Forum, Lun Borithy, identified several perceived losses and continuing concerns from the High Level Forum 4 in Busan. For example, it was unclear how to contextualize the rights based approach to which the participants agreed in the Paris Declaration and in Accra Agenda for Action, whether the new actors and private sector joining in the partnership would be voluntary and without social indicators, and the vague and unenforceable minimum standards on CSO enabling environment. Some of the continuing concerns included the lack of explicit commitment to adopt human rights based approaches, the inadequate attention to women's rights, the right to development and environmental justice, and the lack of clear indicators to validate commitment progress.

As noted by CCC in its announcement and concept paper for this Regional Forum,

In Asia, various accountability schemes are being adopted and currently being actively practiced particularly in Cambodia, Pakistan, India and the Philippines but opportunities for cross learning and building strategic partnerships have yet to materialize under a south-south cooperation modality. CSO networking and solidarity movement has proven to be an effective modality to bring together like-minded organizations to collectively reflect and define common framework for effective and result based partnership. In light of this, this regional forum seeks to strengthen partnership in NGO accountability practices and accreditation, and to increase credibility and legitimacy in Civil Society in South East Asia and beyond.

Thus, the overall objective of the Forum was to raise awareness and promote greater participation in regional dialogue, to exchange practical experience on governance and accountability, and to strengthen the regional CSO movement toward good governance and professional practices. In Asia, there are various schemes which have been adopted and practiced which provide some form a CSO monitoring and certification which offer opportunities for cross learning and building strategic partnerships. Those particularly in Cambodia, India, Pakistan, and the Philippines are most closely patterned after the models followed among those member organizations of ICFO. However, these opportunities for cross learning and forming strategic partnerships have not yet materialized under a south-south cooperation modality.

Thus, CCC, in hosting this Forum, brought together strategic partners within the Asia region for collective learning and promotion of strategies for the implementation of the Busan Compact, and specifically Article 22. The objectives of this regional forum were:

To share practical experiences and best practices in promoting and enhancing CSO transparency, accountability, and legitimacy in the Asia region.
To dialogue and establish a regional learning platform on CSO accountability and good governance for the Asia region. And,
To situate CSO accountability and governance within the context of Post Busan Outcomes and future development trends.

The opening session of the Regional Forum began with welcoming remarks from Lun Borithy, the Executive Director of CCC providing a brief context for Forum post Busan and explaining the objectives. He was followed by opening remarks by Mr. Ros Salin, the Director of Policy Department of the Council for the Development of Cambodia, affirming the government's recognition of CSOs as development actors and valued partners, and recognizing the importance and complimentary role they play in relation to the government in achieving development objectives.

This was followed by a three-speaker panel that described CSO accountability from the perspective of the High Level Fora on Aid/Development Effectiveness, emphasizing its relevance to current times when CSOs have become more influential development actors in their own right, and from the perspective in charity accountability in the context of challenges to charity accountability and models for promoting charity accountability. There was also a more extended presentation of a model, described as CSO self-regulation, as practiced by CCC and as a CSO response to increasing demand for more accountability and good practices. In this regard, there was an identification of 343 initiatives around the world that presented various models of self-regulation.

The real work and benefits derived from the Forum occurred in mini-workshops. Here participants were divided into a number of workshops that addressed the challenges and benefits of the self-regulation process from the experiences in Cambodia (Cooperation Committee for Cambodia, CCC), the Philippines (Philippine Council for NGO Certification, PCNC)), and Pakistan (Pakistan Centre for Philanthropy), as well as Australia (Australia CSO Code of Conduct managed by Australia Council for International Development, ACFID), and India (Voluntary Action Network India, VANI). All of these groups defined the advantages of having a regional CSO accountability platform and the common principles that should guide the platform.

While the participants in these mini workshops recognized that CSO within the region were at different stages of growth and maturity, and had in most of these instances, affirmed that an NGO Code and self-regulation system was challenging, they were considered valuable to the credibility and sustainability of individual CSOs and networks. Nevertheless, there was lack of clarity on the idea of a regional accreditation platform. Further, there was a recognition that all countries in the region to not yet have an acceptable NGO code of Conduct.

Since this regional forum was convened to consider CSO governance and accountability in Southeast Asia in the context of Post-High Level Forum 4 in Busan, the second day of the Forum focused on the key outcomes, challenges, and impact of HLF4 in Busan on CSO roles and work.

In the plenary session, the panelists presented the history of HLF3 in Busan, beginning with the Monterrey Consensus of 2002 and The Doha follow-up Conference of 2008 which affirmed the Monterrey Consensus, as well as the High Level Fora in Rome, Paris, and Accra. This was followed by another series of mini workshops which addressed CSO accountability and governance, legitimacy and inclusion of CSOs, with particular focus on Cambodia, and the preservation of democratic space for NGOs. Included here was specific discussion about the draft Law on Associations and Non-Government Organizations proposed by the Royal Government of Cambodia. Here, the arguments were made that the draft law was not in line with Cambodia's international treaty obligations, that there had not been meaningful consultation with NGOs, informal associations, and other civil society groups, particularly at the grassroots and community level, and that it limited fundamental freedoms and human rights as a result of mandatory and onerous registration requirements and unfettered power and authority vested in the government through its administrative provisions.

Whether or not the proposed Law on Associations and Non-Government Organizations is ever enacted and signed into law (and the RGC has just released its fourth draft of the proposed law), there are a number of other laws, which according to presenters, hinder transparency and democratic space. Examples include penal code provisions that criminalize defamation and certain types of disinformation, anti-corruption laws that fail to provide independent and transparent mechanisms to combat corruption, draft trade union law, village community safety policy, and the lack of a freedom of information act.

In the final plenary session of the forum, a panel of three resource persons were asked to give their reactions and feedback to the workshop outputs. The key messages focused on ensuring CSO financial accountability, the taking of more responsibility of the overall context within the partnership with government, the private sector, and donor public, and to look for entry points to support the accountability movement. One of the conclusions was that a regional approach could provide a dimension of solidarity, higher visibility, and greater impact so CSOs could be more steadfast, learning from each other, and acting in more harmony as one body.

From the outset, this Regional Forum was not intended to be simply a conference in which attendees from a dozen or so countries gathered to exchange information on their experiences. Rather, there was a rather specific agenda to include an outcome report that commits the participants to continue to process toward a south-south regional platform. What was so interesting was how this Phnom Penh Partnership Pact for Accountability and Governance was hammered out at the close of the sessions. Essentially, it forced the participants to to discuss strategies for implementing and monitoring commitments made in Busan, and more specifically, Article 22 of the Busan Compact.

The Phnom Penh Partnership Pact, as approved, after reciting Article 22 of the Busan Compact, stated:

Within this framework and in the spirit of living up to our commitment, we representatives of CSOs participating in this regional forum on Revisiting CSO Governance and Accountability in South East Asia in the context of Post High Level Forum 4 in Busan on December 13-14, 2011 in Phnom Penh, Cambodia, commit to continue learning from each other's experiences and work toward strengthening our national coordination mechanisms and in establishing The Asia Pacific Accountability Partnership.

* * *

We therefore resolve to:

reaffirm our commitment to the Istanbul Principles for CSO Development Effectiveness adopted in September 2010 by more than 170 CSO representatives from 82 countries; reaffirm our commitment to the International Framework for CSO Development Effectiveness as the basis for CSO engagement and collaboration with all development actors to achieve the goals of Busan 4th High Level Forum on Aid Effectiveness (HLF-4)

believe that coming together as a regional group will provide us continuing opportunities to learn from each other's experiences and build on our successes with the end in view of maintaining and raising our visibility and improving our practice of good governance to enable us to make more effective and relevant contribution to a truly equitable and sustainable people's development;

commit to work towards strengthening our coordination mechanisms at the national level with the end in view of contributing more effectively to a regional CSO network (build on strategies described by attached outputs of conference workshop group on strengthening national coordination);

commit to work toward establishing a regional partnership for accountability and governance through a process that will include:

consultation with members of relevant national networks

finalizing a concept paper building on the outputs of this conference workshop group on moving regionally

mobilizing resources required

formalizing the partnership

agree to set up a working group to initiate the process described above which will be hosted/led by CCC and includes: (names of members)

An ICFO Journey Through Asia

2011-12-30T11:55:00.018-05:00

With ICFO's essentially Eurocentric history, and monitoring models for and by civil society based largely on Western history and context, my recent trip to China and Cambodia provided a learning experience unequal to anything I had previously experienced. With a world and culture so far away, we in the West tend to ignore what is happening in the Southern hemisphere and in the East. The dam that separated the East from the West was broken in ICFO when Taiwan's NPO Self-Regulation Alliance joined ICFO as members in 2008. It was during the Annual General Membership Meeting of 2008 in which ICFO celebrated its 50th anniversary, that two organizations from the People's Republic of China joined the meeting: The China Charity and Donation Information Centre (now China Charity Information Centre), and China Association for NGO Cooperation (CANGO).

Since 2008, the leadership of ICFO has visited Taiwan and Cambodia, as well as Australia, in which Adri Kemps and I participated in a conference on charity monitoring models at the Centre for Social Impact, University of New South Wales. See my posts of 9 December 2009, 10 January 2010, and 22 August 2011. However, ICFO has received regular Annual Country Reports from CCIC, and has maintained good contact with Peng Jianmei, the Director of CCIC.

It was, therefore, with real pleasure that I was able to travel to Beijing for meetings with the Ministry of Civil Affairs, with CCIC, and to participate in a training session for foundations and civil society groups. I also had the privilege of direct participation with several civil society organizations, including several local churches.

Following a meeting with the leadership of CCIC, we were able to meet with Mr. Xu Jianzhong, the Deputy General Director of the Department of Social Welfare and Promotion of Charities, Ministry of Civil Affairs, and his Division Director of Charity Promotion, Mr. Meng Zhigiang. This meeting addressed some of the issues involved in the charity sector in China, Europe, and the U.S., and the absence of serious, extensive, detailed legislation providing for the regulation of the sector. The goals of the Department of Social Welfare and Promotion of Charity are to empower the sector and improve the transparency and accountability. We discussed some of the differences between China and the U.S. and Europe with respect to the development of the sector, and the factors that promote giving and charity.

Two items received more extensive discussion both in the meeting in the Ministry of Civil Affairs and in a separate meeting the following week with the leadership of CCIC. The first was the process of articulating Standards of Responsible Stewardship, and the second was how compliance with those standards was enforced. Mr. Xu Jianzhong was particularly interested in how the Standards promulgated by the various monitoring organizations within ICFO were developed and by whom they were developed. There was also the question of whether they were country specific and unique. In other words, did they have application outside the European and North American context. I expressed the opinion that most of these Standards were universal and largely immutable, and that it was for the different countries to articulate the context and factual situations in which they would be interpreted and applied. Thus, although they might be worded slightly differently, they dealt with the same substantive matter.

The second matter was the various monitoring models followed in Europe and North America, and how these models might be applied in China. This raised the question about the relationship between the Ministry of Civil Affairs and CCIC, and the level of independence CCIC might have with respect to both the articulation of Standards, but more particularly with respect to monitoring compliance. While it was recognized that some authority was vested in the Vice Minister of Civil Affairs, it was generally vested in and exercised by the Department of Social Welfare and Promotion of Charities.

The law in China requires all charities to be registered, and indeed, they must be registered to get any favorable tax treatment. However, many are not registered and operate in a kind of grey area where they are not legally recognized and are unable to receive any tax advantage. The Ministry does seek to help unregistered groups to register.

The meeting with the Deputy General Director of the Department of Social Welfare and Promotion of Charity, and with the Division Director of Promotion of Charity was most productive, and the hospitality and interest accorded to me and to what ICFO promotes was well-received. As I understood the conclusion of the meeting, there was interest in an association between CCIC and ICFO, with what CCIC, and the Ministry of Civil Affairs, could learn from other members of ICFO and contribute back to ICFO and its members, the expertise and experiences with the sector in China.

The meetings the following week with the leadership of CCIC under the direction of its Director, Peng Jianmei, followed many of the same themes, however with special application to CCIC.

CCIC is a leading monitoring and appraisal organization governed by the Social Welfare and Charity Promotion Department of the Ministry of Civil Affairs of China. In the last five years, CCIC has emerged as the leader with an expanded database, infrastructure, and experienced services to meet the growing needs of the nonprofit sector in China. Its vision is the enhance and empower a transparent and effective third sector in China with the capability of responding to the increasing social needs. Its mission is to promote the development of philanthropy and charity together with the government, corporate, adn NGOs establishing the national platform, providing professional consulting, and enhancing accountability of charitable organizations. Its positions include leading national information platform, professional service provider, independent policy advisor, competent and reliable partner of NGOs, and providing a vehicle for social change and innovations. Its core values include total accountability and transparency, high efficiency, compassion and enjoyment, and independence and individuality.

CCIC has a board of 28 members, including the Director, and includes representatives from government, corporations, and public welfare. While the Board supports CCIC and what it does, and is involved in projects and strategic and project planning, it does not actually exercise any governance responsibilities. The Board meets in annual meetings, with the executive committee meeting weekly. However, it does approve strategy, that could include a relationship with ICFO.

The Director and Vice Director of CCIC had a number of ideas for engagement with ICFO and its members that sounded quite intriguing. They identified two problems in the monitoring process in which their reports address. The first is informing the public about the best charitable organizations in terms of transparency and accountability. The second is informing the public about which charitable organizations are most effective in their programs and charitable work. Both of these issues are being addressed in various fora by the members of ICFO.

In order to advance this engagement with ICFO, CCIC proposed consideration of a tour of ICFO member organizations to see how they are addressing these issues and to exchange ideas; to engage in discussions about what CCIC is doing to public associations; and to learn from ICFO and its members information about monitoring models that might be applicable to the China context.

As part of its capacity building for the sector and for foundations and charitable organizations, CCIC conducts regular training sessions with different constituencies, as well as provide consulting services. One such session was conducted during my time in Beijing, and I was given the privilege of participating in that training. The focus of this training was on public credibility of charitable organizations. More than 30 foundations, grassroots organizations participated in the Salon.

This training Salon addressed the models of government monitoring, and third-party, or independent monitoring of civil society organizations with various accreditation and certification models through self-regulation schemes. Attention was given to standards of responsible stewardship, governance, and transparency, and fundraising, the ICFO International Standards, and challenges facing any type of standard setting and monitoring regime. Representatives of BSR (Business for Social Responsibility) Beijing office addressed disclosure of information and practical tools for insuring adequate and proper disclosure.

The CCIC website newsletter reported on the training session that:

China charity organizations, faced with the emergence of another problem, the public face of the many questions, how to improve public charitable organizations' integrity, accountability, self-discipline, transparent mechanisms to rebuild the credibility of public charitable organizations, to improve constantly eroded credibility of charitable organization was placed in front of a problem. The charitable contributions in the public information center invited International Committee on Fundraising Organizations President Rollin van Broekhoven who introduced some foreign advanced experience and practice, for solving the local Chinese charity challenges facing the development sector, which would be useful.

http://www.charity.gov.cn/fsm/sites/newmain/preview1.jsp?ColumnID=290&TID=20111208132304593701005

As Mr. Dou Yupei, China's Vice Minister of Ministry of Civil Affairs, said:

China Charity Information Centre (CCIC) has achieved tremendous success in giving data analysis and promoting information disclosure that contributed greatly to the cross-sector working platform for donors, charitable organizations, and beneficiary.

In 2010, CCIC assisted policy makers and various charitable organizations in organizing diversified events to promote the philanthropy and charity, conducted scientific researches on China's philanthropy and released research reports and publications concerning philanthropy development and social changes. For all these years, CCIC played a key and important role as policy advisor and has been a part of China's philanthropy.

Pei Bin, Director of Partnership Development, BSR, said:

CCIC has emerged as a leader with an expanded database, infrastructure, and extended services to address the growing needs of the nonprofit sector, driving transparency and information disclosure by releasing the "China Charity Transparency Annual Report."

While much of what I observed and experienced supported these statement, there is still a large portion of the sector that is not registered and as I wrote above, that operates in a gray area of legality. The reasons are complex and not easily reportable in this post, but are part of the present reality in China. What I found interesting is that many of these organizations are not ignored or left out of the work of CCIC.

I had a number of meetings with civil society organizations and associations connected with several churches in Beijing. These allowed me to connect leaders of these organizations, and with the people and culture of China. One of these groups supported the Living Tree Orphanage

just outside Beijing.

I had learned of this orphanage from a friend before traveling to China, and had it on my agenda to visit. However, because of my schedule in Beijing, I was unable to visit Living Tree and volunteer there for a day. The orphanage is in an apartment complex with a number of suites used to shelter and care for special needs children. Ms. Tina is the founder and head of the orphanage. The majority of the 35-40 children in the orphanage suffer from cerebral palsy. This is a remarkable work in the Beijing area and one which is highly regarded by a number of groups and churches, as well as by the staff of CCIC.

Following two weeks in Beijing, I continued on to Phnom Penh, Cambodia where I participated in the Regional Forum, "Revisiting CSO Governance and Accountability in South East Asia in the context of Post-High Level Forum 4 in Busan." There were approximately 100 delegates representing 13 countries, extending from Pakistan and India, to Korea, Vietnam, Laos, Cambodia, and the Philippines, to Australia. But, more about this Forum in the next post.

Merry Christmas and Happy New Year From ICFO

2011-12-26T07:47:00.004-05:00

Power to Regulate is the Power to Destroy

2011-11-20T01:05:00.128-05:00

Since I will be heading to Cambodia in the near future for "A Regional Forum, 'Revisiting CSO Governance and Accountability in South East Asia in the Context of Post High Level Forum 4 in Busan,'" my attention here tends to be more focused on Cambodia, its NGO work, and the draft Law on Associations and Non-Government Organization, which I introduced last post.

Reading just weeks ago about the flooding in Cambodia, and the report of Journeys Within Our Community about the work they are doing in Cambodia, I was struck by one more disaster that causes so much pain and suffering to so many. The account of the day was most interesting, and I present much of it here.

The day was Tuesday, 18 October 2011.

The day started early with the first children arriving at 7 am. While Somath, our Librarian, provided fun and engaging activities in and outside the library. Vantha, our Office Manager and I (Nicola, Managing Director) headed into the squatters' villages to advertise and importantly to check if there had been a change in the conditions. Our main concern was to check whether people had a dry place to sleep. Fortunately although levels had risen a little, the raised beds provided a refuge from the wet.

Vantha distributed information about the children's dry haven. Interest was high and we expect numbers coming to the school to increase tomorrow. We found so many children playing in the water -- water always seems fun. Unfortunately this water is not the place to be playing as it currently doubles as a latrine.

These children have found a mostly dry place to perch, but they were excited to hear they could come to JWOC all day and on Wednesday.

We headed back to JWOC slowly, trying to not fall over on the slippery mud or fall down any holes obscured by the water which we nearly managed. By the time we were back at the library, the numbers of children had increased and it was getting close to lunchtime. The children had all showered and scrubbed with antibacterial soap and cuts and other sores had all be treated. Southeast Asia is experiencing worse than normal flooding.

The Philippines, Thailand, and Cambodia are suffering particularly badly. Siem Reap Province, where the majority of JWOC's work takes place, has been hit with a wave of flooding -- damaging homes, ruining crops and destroying roads and other infrastructure. In town, many businesses are closed along with one of the major universities. For those living off the main roads, just getting out of the house means wading through dirty water that in places is above knee height. In the rural parts of the province villages are becoming cut off as road are washed away.

People in the communities JWOC works with are so far surviving but it's an anxious time -- water levels are expected to rise again, the risk of water and mosquito borne disease is high, and then there's the clean up and repair to consider once the water does eventually go down.

Or as reported in the Sunday Mirror of 20 June 2010, they are known as the rubbish dump kids . . . starving children who scavenge for scraps of food on a toxic mountain of waste.

He is a former hair dresser who runs a "charity" in Cambodia inviting you to send him money to save them.

David Fletcher, 65, appears to be the Good Samaritan, feeding hundreds of children who affectionately know him as "Papa." But, Fletcher hides a dark secret -- he was jailed in Britain for statutory rape of a 15-year-old girl and videotaping the horrific crime.

He know uses the guise of his unregistered charity in Cambodia -- where he fled to six years ago -- to spend every day with little girls, some as young as eight. The pervert raises money from tourists who believe they are providing food and shelter for hundreds of poor and hungry children.

Fletcher has even bought himself a 17-year-old Cambodian bride for £150 who he met on the dump -- sold by her own mother to pay off debts. Genuine charities are so concerned they attempted to outbid him to keep the girl out of his clutches.

Fletcher was convicted at Norwich Crown Court in July 1997 of statutory rape of a 15-year-old girl who he had plied with champagne and offered £250 for sex. When asked about his conviction he was unapologetic, saying: "Oh yes. She was just my girlfriend. They caught me. I just did it ahead of her 16th birthday. People will stoop very low to say bad things about me."

Fletcher runs the Rubbish Dump Project and has a website which tells the moving story of Phnom Penh's garbage dump kids. He invited readers to send donations to his private bank account and claims every penny is spent on the children.

The Sunday Mirror signed up for a tour of the dump and handed over US $ 50, the amount Fletcher says will feed 150 children. When we got to the garbage mountain at Stung Meanchey on the outskirts of the capital, he took a cream bun and some fruit to "my favorite little girl." With his tuk-tuk driver he dished out fruit to more than 100 desperate children amid the stench. The slum families try to survive on what they can scavenge, so flock to him when he has food.

The pervert preys on their desperation, building up the children's trust -- including his 17-year-old bride-to-be, Yang Dany, who he met at the tip.

Earlier in the day our investigators saw British-born Scott Neeson, who runs the respected charity, Cambodian Children's Fund, try to persuade Yang Dany's mother to change her mind about letting her daughter marry Fletcher. Inside the corrugated shack in Dhamnak Thom Village No. 1, Mr. Neeson, tried to negotiate with the mother.

As Mr. Neeson tells it, "The fact is that these children can be bought. It is difficult to stop it. The British Embassy have been told about Fletcher. Many organizations have files on him, but nothing has happened."
According to the Sunday Mirror, the abuse of children by foreigners in Cambodia is hampered by institutionalised corruption in a one-party state run by Hun Sen, who has locked up opposition leader Sam Rainsy.

As one former colleague who left quickly after he realized what Fletcher was up to said: "There were tens of thousands of dollars coming in. Cash was being donated by Rotary Clubs and big private donors. We also had complains of him being too familiar with young girls."

But, now this with Scott Neeson:

Or,

On 4 August 2011, the Ministry of Interior suspended the local organization of Sahmakum Tnaut (SST). SST is a Cambodian urban NGO with a mission to provide "pro-poor technical assistance for housing and infrastructure and to inform dialogue and raise awareness about urban issues." It was established in September 2005 and officially registered with the Ministry of Interior in December 2006. It addresses ongoing difficulties with land alienation and evictions. It does this through research and debate, trying to link with government policy where possible and by supporting genuine community complaints and grievances. "This includes helping communities articulate their concerns and by bringing rights issues and abuses to the attention of local and international media, donors, and other NGOs and INGOs."

As noted in a report in the Asian Times of 20 September 2011, STT was one of several NGOs involved in the monitoring of resettlement of residents displaced by the Asian Development Bank (ADB) and AusAID funded rail project.

In its initial letter of suspension, the Ministry of Interior asserted that the suspension was due to inconsistencies in the organization's paperwork. However, in a statement issued by the Ministry on 14 August, the Ministry said that:

SST operated and incited people to oppose national development by the government in order to make the development partners suspend or stop the project.

The $141 million project was to provide for the renovation of Cambodia's "decrepit" rail system which could impact approximately 4,000 poor families living along the tracks. SST opposed the settlement options the government provided to those affected by the project, and also accused the government of systematically downgrading land values along the rail line in an attempt to short-change residents' potential compensation.

The Minister of Economy and Finance, wrote Prime Minister Hun Sen on 17 June 2011 requesting punitive measures again SST and Bridges Across Borders Cambodia (BABC), another NGO that had been active on the railway project. In this letter, the Minister of Economy and Finance stated that an unnamed consultant for ADB asserted that the bank was coming under "political pressure" from these two NGOs, and asked the government to take immediate action to stem their activities. The Minister also issued instructions for the Prime Minister's approval: "Do not allow foreign NGOs to do advocacy work. Local NGOs who do advocacy work must not have foreigners involved or interfere." Referring to the draft Law on Associations and Non-Government Organizations, he requested action to nullify the eligibility of these NGOs and requested the Council of Ministers to review and approve the draft law "in a speedy manner."

On 7 September 2011, Cambodian authorities and police, armed with automatic weapons, disrupted a human-rights training event organized by two local NGOs in Kampong Thom province. According to a statement issued shortly thereafter by the Cambodian Center for Human Rights (CCHR), which participated in organizing the training event, police photographed those participating in the training, including local activists and community members protesting against the confiscation of lands. Participants were told that they did not have the necessary and required permission to hold the training workshop.

These stories are then the context for the government's attempted regulation of the sector through its draft Law on Associations and Non-Government Organizations.

In late June 2011, there was an open forum for CSO development effectiveness held in Siem Reap. From this open forum there emerged The Siem Reap CSO Consensus on International Framework for CSO Development Effectiveness. In September 2010, more than 170 CSO representatives from 82 countries around the world met in Istanbul, Turkey to consider and adopt the Istanbul Principles for CSO Development Effectiveness. There were eight principles adopted in Istanbul that were the foundation for the Siem Reap CSO Consensus on International Framework for CSO Development Effectiveness.

CIVICUS in a recent publication stated that the "growth of civil society in scale and importance over the last two decades has increased its vulnerability." As CIVICUS noted in this release and as those of us who observe the sector know, civil society is challenged from three directions. The first challenge is internally, by risking the public trust. The second is externally, by political threats to its right to exist. And thirdly, by the general threats that face humankind as a whole, such as violent conflicts, poverty, and inequality.

In "A Report of the World Movement for Democracy" entitled Defending Civil Society, co-authored by the International Center for Not-for-Profit Law (ICNL) and World Movement for Democracy Secretariat at the National Endowment for Democracy (NED), five legal barriers to civil society organizations were identified. These included barriers to entry, barriers to operational activity, barriers to speech and advocacy, barriers to contact and communication, and barriers to resources.

As a result of these threats identified by CIVICUS, CIVICUS established its strategic directions: First, protecting the rights of civil society actors. Second, strengthening good practice within civil society. This is a major purpose for the existence of ICFO and its members operating in different countries. Third, strengthening civil society's ability to influence policies and practices of governments, international institutions and the private sector.

I bring this up because the first and second challenges identified and the first and third one of these strategic directions address, it seems to me, is what at stake in the matter of the draft Cambodian Law on Associations and Non-Government Organizations. Indeed, it seems to me that all of the barriers identified in the report of the World Movement for Democracy, Defending Civil Society, are implicated by the draft Cambodian Law on Associations and Non-Government Organization. On 23 August 2011, ten International NGOs (INGOs) sent a letter to the U.S. Secretary of State requesting immediate attention to what was asserted to be a "very serious development in Cambodia," namely the release of third draft of the Law on Associations and NGOs. This letter was signed by representatives of Human Rights Watch, the International Federation for Human Rights, Civil Rights Defenders, Protection International, Freedom House, Asian Forum for Human Rights and Development, World Organization Against Torture, Global Witness among others.

According to this letter, this new law, if enacted, would allow the Royal Government of Cambodia (RGC) to intimidate and potentially shut down local, national and foreign NGOs, associations, and informal groups that criticize the government or government officials. What was requested by these INGOs was that the United States press Cambodia to end its efforts to promulgate this law and make it clear to the Royal Government of Cambodia that the United States will reassess its bilateral assistance to to Cambodia and "will also urge all agencies providing multilateral assistance, including the United Nations and international financial institutions to reassess their assistance, with particular emphasis on projects involving RGC agencies."

While these INGO signatories stated that civil society actors, both local and foreign, play a vital role in the growth in commerce and industry "through monitoring, community development, poverty alleviation, humanitarianism, research, and advocacy," the draft law would threaten "to severely restrict civil society's freedom of association and expression, thereby preventing civil society organizations and NGOs from fulfilling these roles." "Efforts to ensure transparency and accountability in project implementation will also likely be negatively affected as civil society groups monitoring government projects face tighter, and potentially hostile government scrutiny."

It seems to me that the transparency and accountability about which these INGOs were concerned is not necessarily the transparency and accountability which we in ICFO address in monitoring charities' operations and activities in accordance with certain prescribed standards. In other words, the kinds of standards and monitoring that go beyond the political issues raised by advocacy organizations and human rights watches; the standards that address the issues that lead to the loss of public trust in civil society organizations identified in the CIVICUS release mentioned above.

In their letter to the Secretary of State, the INGO signatories addressed an example of what they asserted to demonstrate how the RGC's actions reflected its intent in seeking wide-ranging powers over the Cambodian and international civil society organizations and what "may be a harbinger of the future of NGOs and associations if the current draft law was enacted. The example was the RGC's suspension of a local NGO Sahmakum Teang Tnaut's (STT) activities for five months which I discussed above. According to news reports, the letter sent by the Ministry of Interior suspending STT activities for five months accused the charity of failing to modify its leadership structure, and make revisions to its statute (charter documents) "according to the instruction of a specialized department."

Additionally, these ten major INGOs sent an almost identical letter to the UN and to 17 UN agencies, with copies to the UN agencies' offices in Cambodia, complaining about the draft law and its consequences for the sector. In these letters to the UN and its agencies, the INGOs stated that the UN agencies "Make it clear to the RGC that if the law is adopted in its current form, you agency will be compelled to reassess your programs and assistance with a particular emphasis on projects directly involving RGC agencies. According to the Deputy Director of the Asia Division of the INGO, Human Rights Watch:

It is long overdue for the UN, and in particular the UN Country Team in Cambodia, to stand up and tell the Cambodian government that this draft law violates core human rights and will severely damage participatory, grass-roots development efforts that are so critical for Cambodia's future. What is at stake in this 20th anniversary year of the Paris Peace Accords and UNTAC is nothing less that one of the core legacies of that huge international effort -- the development and flourishing of a vibrant Cambodian civil society movement. Those groups play a critical role in so many areas of daily life in Cambodia, yet now they are under threat. The UN needs to stop hiding in its offices and meeting rooms, make it voice heard, and be true to its human rights principles.

It seems to me that this might be just a little over dramatic. Indeed, I read where some commentators thought these letters were a bit self-serving for the human rights advocacy groups. However, although the focus of these letters seems to be the matter of human rights and the rights of advocacy groups to oppose anything that a state might do to limit the rights of free expression and dissent, the letters do touch on a larger danger, whether or not a vibrant civil society is at risk or not.

For purposes of this post and the consideration of the draft Law on Associations and Non-Government Organizations is the definition of civil society organizations and the recognition of the variety of such organizations.

Millions of civil society organizations (CSOs) worldwide contribute in unique and essential ways to development as innovative agents of change and social transformation. These contributions are long-standing: CSOs support grassroots experiences of people engaged in their own development efforts; are both donors and practitioners of development; promote development knowledge and innovation; work to deepen global awareness and solidarity among people across national boundaries; and they advocate and seek out inclusive policy dialogue with governments and donors to work together for development progress.

Accordingly,

"CSOs can be defined to include all non-market and non-state organisations in which people organise themselves to pursue shared interests in the public domain. They cover a broad range of organisations that include membership-based CSOs, cause-based CSOs, and service-oriented CSOs. Examples include community based organisations and village associations, environmental groups, women's rights groups, farmers' associations, faith-based organisations, labour unions, cooperatives, professional associations, chambers of commerce, independent research institutions, and the not-for-profit media.

What all this suggests in the variety of organizations involved in Cambodia, extending from relief and development to education and advocacy for democracy and human rights. The stories and video clips at the beginning of this post focus on the organizations that exist and function to serve the poor and vulnerable people in Cambodia, while it seems that much of the direct effort to address the impact of the law has been provided by those organizations and association involved in the efforts to preserve and maintain the much needed democratic space in which those elements of civil society are able to exist and function to serve the poor and vulnerable people of Cambodia.

In addition to the Istanbul Principles accepted in Siem Reap in June 2011, including those involved in strengthening the accountability of CSOs, something which was important for considering the role of CSOs in society was a particular section of the Siem Reap consensus that focused on the role of government. Specifically, that while CSOs are independent and autonomous, they are not actors working in isolation. This is one of the civil society concepts that is frequently forgotten and ignored, and is the heart of the dispute in Cambodia. Indeed, it is the heart of the lack of understanding in many countries.

The fact is, that it is not simply CSOs that we associate with traditional ideas of relief and development that are profoundly affected by the context in which they operate. This is the case with all CSOs. The policies and practices of all governments, not just those of developing countries, and of donors affect the practices and capacities of CSOs to engage in development, but not just development. Thus, as stated in the Siem Reap Consensus report,

Progress in realizing the Istanbul Principles in CSO practice, therefore, depends in large measure on enabling government policies, laws and regulations consistent with the Istanbul Principles.

However, notwithstanding the Istanbul Principles, the work of any CSO, no matter its role in society, is in large measure dependent upon the legal context and structure in which it operates. This is true not only with respect to where the NGO or charity actually performs the public benefit services, but also in the countries in which funds are raised, no matter where the actual work is performed.

It is at this point where the draft law in Cambodia becomes a matter of significant concern because it not only appears to focus on where the development work is being performed and by whom (i.e., the kind of CSO, NGO, and charity), but where the source of funding and donations is.

In my last post, I discussed the second draft, and mentioned that it had been withdrawn and a new draft Law on Associations and Non-Governmental Organizations had been issued by the government. The government issued the third draft on 29 July 2011. Although, it too was ultimately withdrawn and a fourth draft is anticipated, because of concerns about the contents of the fourth draft, it is important to briefly discuss some of the major features of the third draft and objections thereto.

The second and third drafts were basically the same, but with a few improvement in the third draft. These improvements related generally to the timing of government reviews of registration applications of domestic NGOs, and some changes with respect to requirements for foreign NGOs entering into Memorandum of Understanding with the Ministry of Foreign Affairs, with exception for foreign NGOs operating in Cambodia for less than a year, although there are notification requirements with respect to these aid projects.

However, the third draft failed to address some of the problem areas identified with respect to the second draft. Specifically, these included the failure of the draft to address the denial process in a way consistent with international law; the prohibition of any activities of unregistered NGOs and associations; the requirement that the founding members of both NGOs and associations must be Cambodian nationals; the requirement for a high minimum membership for associations thus impeding the formation of small common interest association groups; inadequate standards for government determinations to suspend or terminate an association or NGO; constraints on associations and NGOs through notification and reporting requirements which could prove burdensome; and barriers to registration and activities of foreign NGOs. In this latter instance, there appears to be no way in which a foreign NGO can operate in Cambodia independently of the government in addressing public benefit goals or community needs.

Essentially, the major issues with the third draft of the Law on Associations and Non-Government Organizations are: the mandatory and complex registration process; the lack of safeguards to insure that either the denials of registration or terminations were objectively imposed; the lack of time periods for appeals of denials of registrations; and the fact that key terms and concepts are left undefined and vague. While I am not convinced that the proposed law as drafted necessarily produces a more transparent and accountable sector or a more informed public, it has the potential to regulate the entrance of civil society organizations into a legitimate civil society presence in Cambodia. This is the very danger that CIVICUS addressed: namely, the very right to exist at all.

According to the joint statement of civil society organizations, including NGOs and associations, the preparation and issuance of the third draft departed from the practice of state-civil society cooperation and constructive dialogue which is common in democratic societies, and which as been a key factor in the development of Cambodia as a war-torn country to a vibrant developing country. Civil society organizations, including NGOs and associations, expressed their concern that this third draft granted far-reaching powers to government authorities to control citizens' rights to assemble and express themselves, in accordance with the Cambodian Constitution and international agreements to which Cambodia is a party, including the Universal Declaration of Human Rights and the International Covenant of Civil and Political Rights. Nevertheless:

We understand that a sovereign state such as Cambodia has the right to promulgate laws, regulations and practices in accordance with international democratic principles. However, the process of enacting laws must respect those democratic principles. Moreover, new laws must not infringe upon the fundamental rights of the people, including their rights to freedom of association and freedom of expression. The social and economic development of Cambodia in recent years would never have happened if the opportunities to freely organize and express opinions had been curtailed. Successful development of societies worldwide goes hand-in-hand with increased openness.

It seems to me that the context of many of the concerns expressed in these various analyses of the draft Law on Associations and Non-Governmental Organizations is directly traceable to concern about what are generally regarded as democratic rights and freedoms, particularly within the realm of human rights. What I find interesting about most of the correspondence and analysis of the draft law is that it largely focuses on freedom of assembly, freedom of speech and expression, and the right to peaceful political opposition to what the government is attempting to do across a range of activities, not simply the enactment of the proposed law.

Indeed, this is borne out by the reports of the UN Special Rapporteur on human rights in Cambodia, and the Special Rapporteur of the Human Rights Council, regarding the situation in Cambodia, in which both urged the Cambodian authorities to review the draft law on associations and NGOs, inasmuch as "it may hamper the legitimate work of NGOs in the country." For example, in a statement issued by the UN Special Rapporteur, Professor Surya P. Subedi, on 3 June 2011, he said:

While the general situation of human rights has progressed in certain areas, it has not improved much in others. Examples of the latter are land rights and evictions, and freedom of speech. Because of the fear of possible charges of defamation, disinformation and incitement against them, many people, such as journalists, human rights defenders and political activists seem to be resorting to self-censorship. I am concerned by the use of such charges against land activists and individuals making claims on disputed land. I am dismayed to hear about disproportionate use of force by law enforcement officials during peaceful protests by individuals involved in land disputes.

While this criticism focused on the larger issue of human rights and rights of dissent rather than on the proposed draft Law on Associations and Non-Government Organizations, the implication is that this is a part of the concern that is expressed in opposition to the draft law.

On 19 September 2011, the Quick Reaction Unit of the Office of the Council of Ministers issued a statement titled "NGOs Hidden Agenda." Referring to the letter written by the ten INGOs to the 17 United Nations agencies, the statement of the Quick Reaction Unit said:

This "letter" is the latest example of the relentless pressure big-name NGOs are exerting on the Royal Government of Cambodia (RGC) to fashion its draft law on NGOs in such a way that it conforms to "international standards." It is accompanied by a warning -- effectively a threat -- that Cambodia's development partners must review their involvement in the country. In truth, the year-long campaign against the RGC's duty to regulate NGOs is a well-designed scheme to let them run wild. These big organisations apparently envisage a "wild, wild West" where NGOs can ride free and shoot at will. Even worse, it's a cheap stunt designed to bring the RGC to its knees and blindly accept the rules of its international masters. But if one reads between the lines of this "letter", the flaw in its argument is revealed. It is the double standard in the application of the principle of transparency and accountability, which cannot be tolerated by UN agencies or the international community at large. . . .

The people who run NGOs benefit from them differently: the first group from effective delivery of social services to the needy, and the second group from executing the orders of international legal and human-rights organizations based in developed countries that provide funding for NGOs operating in Cambodia. For more than 20 years, NGOs in Cambodia have behaved as if the country of the Khmers is the Wild West -- good for riding and shooting, with no questions asked -- thanks to their overseas sponsors and funding partners, who are honest and compassionate by nature and who believe the funds provided to the NGOs in Cambodia will be used for the betterment of neglected Cambodians. The sponsors and funding partners of legal human-rights NGOs, however, have a hidden agenda. They seemingly aspire to become famous by bringing down an elected government that, for myriad of reasons, they don't like.

This statement on behalf of the Office of the Council of Ministers continues in much the same tenor, complaining that the letter of the ten INGOs exaggerates the potential negative impact of the registration and reporting scheme set forth in the draft law, and "would be laughable even to a second year student in basic accounting." Indeed the accusation made in this statement was that the letter of the ten NGOs was merely an attempt to shore up misplaced accusations against Cambodia's NGOs draft law and represented a concerted effort to protect the group of NGOs involved in the advocacy of the legal and human rights in Cambodia from having to adhere to principles of transparency and accountability.

I think also what comes through is a fairly profound misunderstanding on the part of the government, and perhaps major participants in the NGO community in Cambodia, about the very nature and essence of civil society. The exchange of statements and correspondence can hardly advance the cause of civil society in Cambodia. What I see as missing in much of the debate is the role of charity and public benefit organizations that are not directly involved in the political debates of the time.

While the sovereign may have authority to regulate the sector, I am not persuaded that the kind of regulation prompted by the draft Law on Associations and Non-Government organizations is necessarily the best for the country, the people, and the ability of NGOs to provide a variety of civil society services to the country and its people. Surely we can easily distinguish between the existence and operations of organizations, such as, Journeys Within Our Community and The Cambodian Children's Fund, on one hand, and the "charity organization," operated by David Fletcher on the other. Surely there must be criminal codes that address this kind of activity and conduct, and under which such individuals could be prosecuted.

If there is to be some tax exemption authorized or some subsidy to the organization permitted, a registration that simply requires the submission of charter documents, the organization's statutes, and bylaws, for example, might be proper, if the organization seeking registration can enjoy the freedoms and rights recognized in international law. The organization might be required to articulate its public benefit mission and basic government structure. Similarly, many states, and perhaps most states with an established civil society sector in which there are tax exempt provisions and tax deduction authorized to donors for donations made to a registered organization, reasonable registration requirements are generally mandatory, but are flexible with regard to information sought for the tax exempt status.

Similarly, certain basic reporting requirement often exist, such as the filing of informational tax returns. How detailed they are and at what income level they would be required versus simply permitted, could be established by democratic action within the existing political structure.

The exchange of correspondence and statements issued by government authorities raise a number of interesting questions. One is simply the question of what is a public benefit organization that may be entitled to favorable tax treatment, for example. This is the kind of question addressed by the Australian High Court in Aid/Watch Incorporated v. Commissioner of Taxation which I addressed in my last post, or even the discussion of that issue in the Statute of Elizabeth. Indeed, it may well be in the power of the sovereign to deny certain tax benefits to organizations primarily engaged in advocacy as distinguished from those involved in the delivery of social services to the poor, the disenfranchised, and to the public generally, such as medical care, education, and cultural life.

The area of interest addresses the role of government in providing welfare and social service to the public as distinguished from the role of civil society and the public benefit nonprofit, volunteer sector to provide those services. This is frequently raised where the government provides funding for specific social needs through nonprofit and other civil society organizations. What is the role of volunteer organizations in both the provision of social benefit services and in advocacy in favor of democratic ideals. It seems to me that it is widely accepted that for a society to function properly and for democratic rights and obligations to provide strength and stability to a nation, a strong and capable government, a vibrant market driven business sector, and a free and open civil society sector are all involved and active.

A third issue is what moral or ethical principles, or standards of conduct are to apply. In other words, are principles of morality and values that provide direction to society determined by governments, or are they found to exist in nature and discovered to be made applicable in different and diverse environments? Thus, in absence of any articulated rules and regulations (or legislation) promulgated by a central government authority, are associations and civil societies able to exist and enter into the public domain and operate with minimal interference by government? This also might raise the question which seems to be apparent in the correspondence from the ten INGOs; that is, are rights determined on the basis of international law, and if so, just what is international law? Or does international law, whether by treaty or custom, simply recognize rights that are inherent in human societies and have been recognized from time immemorial?

Assuming some minimal registration is required within the domain of sovereignty of a state for the overall protection of its citizens from fraud and criminal conduct and to promote well-informed and responsible citizens, what is the level of freedom that is within the natural rights of humankind that allows individuals and a society to flourish?

As I have studied the situation, I have been reminded of the Report of the World Movement for Democracy, Definding Civil Society, jointly authored by the International Center for Not-for-Profit Law (ICNL) and the World Movement for Democracy at the National Endowment for Democracy. While the attention in this report was focused, it seemed to me, and the role of civil society in protecting and advancing democracy, what struck me was the danger to a functioning civil society sector that both promotes democracy, but also addresses the needs of the poor, the sick, the downtrodden, and those who are in some way oppressed, especially where government simply are not able to address those needs, and when it does, it creates a citizenry of dependency.

In the Executive Summary of this report, the authors make the following observation, which I think is born out by the history of the drafting of the Cambodian Law on Associations and Non-Government Organizations:

Governments have tried to justify and legitimize such obstacles as necessary to enhance accountability and transparency of non-government organizations ("NGOs"); to harmonize or coordinate NGO activities: to meet national security interests by countering terrorism or extremism; and/or in defense of national sovereignty against foreign influence in domestic affairs. This report exposes such justifications as rationalizations for repression, and, furthermore, as violations of international laws and conventions to which the states concerned are signatories.

* * *

The report continues:

Many regimes are imposing controls on civil society under pretexts of ensuring security, political stability, and non-interference in the country's internal affairs. Governments place restrictions on NGO activities, constrain their work. and harass and intimidate civil society activists in violation of internationally accepted principles of freedom. NGOs that advocate for human rights and democracy, including many that work in conflict zones, are particularly targeted. Regimes justify such actions by accusing independent NGOs of treason, espionage, subversion, foreign interference, or terrorism. These are but rationalizations, however; the real motivation is almost always political. These actions are not about defending citizens from harm but rather protecting those in power from scrutiny and accountability.

When we talk about the power of the sovereign, we must also include the rights attendant to freedoms. If citizens and associations, whether informal associations of individuals of like interests, or more formal associations formed by individuals to promote public benefit through either benevolent activities or advocacy, enjoy any freedom of association, of expression, of acts of kindness and benevolence, for example, then by the force of logic, the rights and power of the sovereign are constrained. In other words, is there an inherent symbiotic relationship between the scope of government powers and individual rights?

In its grasp for extending its power, if this is the case, how will the RGC distinguish between those charitable organizations, such as Journeys Within Our Community, the Cambodian Children's Fund, and the Cambodian Children's Trust which meet severe needs of the people on the one hand and STT, Human Rights Watch, International Federation for Human Rights, Civil Rights Defenders, Freedom House, World Organization Against Torture, Global Witness, and the other INGOs that were signatories to the letters to the United States Secretary of State and the Administrator of the United Nations Development Programme?

Maybe, like the Cambodian children waiting for the arrival of humanitarian workers at the School for Vulnerable Child Garbage Workers at the Steng Meanchey Dump outside of Phnom Penh, the civil society sector will have to wait for permission from the RGC to provide the valuable services so desperately needed while the needy go unserved because the humanitarian workers never come and people wait for a promised democracy.

Well, more another time.

Power to Tax and Power to Regulate is the Power to Destroy

2011-10-17T15:49:00.017-04:00

Chief Justice John Marshall, writing for the United States Supreme Court in its 1819 decision in McCullough v. State of Maryland, et. al., quoted from Daniel Webster's argument in the case, "The power to tax is the power to destroy." Indeed, as the Chief Justice said:

The power if congress to create, and of course, to continue, the bank, was the subject of the preceding part of this opinion; and is no longer to be considered as questionable. That the power of taxing it by the states may be exercised so as to destroy it, is too obvious to be denied.

And, I suspect that the power to regulate also is the power to destroy. This is part of the theme of this post.

British author of numerous books and speaker of international fame, Os Guinness, tells the story in his book, Unriddling Our Times: Reflections on the Gathering Cultural Crisis.

Prisoner 174517 was thirsty. Seeing a fat icicle hanging just outside his hut in the Auschwitz extermination camp, he reached out the window and broke it off hoping to quench his thirst. But, before he could get it to his mouth, a guard snatched it out of his hands and dashed it to pieces on the filthy ground.

"Why?" the prisoner burst out instinctively.

"Here, there is no why," the guard answered with brutal finality.

That, for Primo Levi, the Italian Jewish scientist and writer, was the essence of the death camps -- places not only of unchallenged arbitrary authority but of absolute evil that defied all explanation. In the face of such evil, explanations born of psychology, sociology, and economics, were pathetic in their inadequacy. One could only shoulder the weight of such an experience and bear witness to the world.

Forty years later, on 11 April 1987, Primo Levi plunged to his death, joining a long and sad list of the victims of Nazi atrocities who took their own lives. Although he survived the experiences of Auschwitz, eventually got married and had children, wrote books and won literary prizes, he saw his core mission in life as bearing witness to the truth of the horrors on that period of history and guardian of the memory.

The point Os Guinness makes in presenting this story is quite different than some of the ideas that it prompts in my mind. My guess is that Os Guinness' point is much more appropriate to the overall theme of his book than to anything I might add here by the use of that story, although there are some themes that might be common to both of our purposes. But, it is important to know the times, and what we should do. That is important for all of us, but if we are going to advance the cause of civil society, it is especially important.

Nevertheless, too often when dealing with government legislation, administrative regulation, or executive fiat, there are no "whys." Theoretically, in the case of judicial review and/or litigation, the rationale for the decision of a court may be explained. Similarly, when a tax related issue, such as the tax exempt status of an organization, or the deductability of a gift, is determined, there may be some answer to the why question. But, too often, the actions of government authorities may seem arbitrary and contrary to reason or good policy.

One of our contemporary obsessions to "know in order to predict in order to control" may lead to information junkies, web-surfing, trivial pursuit players, and naval gazing trendspotters. And, isn't it true that much of what we have available through our technology, new media, and the like leads us in this direction; where we have the world at our fingertips. There never seems to be a place for a "why."

Rather than "I think, therefore I am," of René Descarte, we have "iPhone, therefore iAm," of Steve Jobs. Well, maybe not really. But, today, our electronic and digital equipment have redefined how we think and communicate with others, and how we access the world of information. Many people now locate self-discovery and human knowledge, not in their own thinking, but in the smartphone. It is at this point that the question arises as to how both the digital sector should be regulated, if at all, by government, and how the third sector should be regulated by government, if at all, in the context of the digital age with all the new media capability.

Moreover, as Steve Jobs is reported to have said, "You can't just ask customers what they want, and then give it to them. By the time you get it built, they will want something new." While people may want freedom to make their economic choices, including their giving to charity, and civil society organizations want the freedom to fulfill their purposes, whether charity, education, or advocacy, without government interference through tax policy and regulation, whenever there is a scandal, or failure on the part of a nonprofit organization, or when there is a public outcry against self-dealing within the sector, including what may be regarded as excessive executive compensation, there are calls for government intervention and regulation of the sector.

But, as I was again reminded of various legislative and government sponsored initiatives in the area of nonprofit law, and of the recent death of Steve Jobs, and his visionary leadership, I thought of this story of Primo Levi. I hope that these ideas will emerge over the next few posts, and here in particular. You see, the challenge is knowing the moment. Not only is this important in considering the role of government vis a vis civil society, but also by making sense of our situation by reading the signs of the times and assessing the significance of the moment.

One of those signs is government budget cuts due to soaring deficits. This not only affects charitable organizations which have over the years relied on government funding, and have not built of their own constituencies of private funding. Indeed, as I have written before, both the government funding of civil society organizations and their programs, and the withdrawal of that funding raise questions in my mind as to the very nature of civil society and its role in society.

But, it also affects government policy regarding taxes. Thus, in the United States, the present administration is proposing the elimination or reduction of tax deductibility for gifts to tax exempt organization based on certain income levels of the donors. To the extent that tax policy serves as a motivating factor for giving, and the amount of giving, reducing the tax consequences of donations from higher income donors could affect the ability of NPOs to carry out the purposes for which they were established, often at a time when government is cutting back on its own provision of social services and funding to independent charitable organizations that are meeting some of those needs for social services.

Changes in tax laws also affect what organizations may be entitled to tax exempt status and the effect that has on the donor public that may also seek to have its gifts treated as tax deductible. For example, a recent decision (1 December 2010) by the High Court of Australia seemed to prompt this very discussion. In Aid/Watch Incorporated v. Commissioner of Taxation, the question was whether or not Aid/Watch was a "charitable institution" for the purposes of Australian tax exemptions and concessions.

Aid/Watch had been incorporated in 1993 pursuant to the Associations Incorporation Act of 1984 and endorsed as a "charitable institution" and thus exempt from income tax liability, as well as for other purposes under other laws. Aid/Watch was an organization concerned with promoting the effectiveness of Australian and multinational aid provided in foreign countries, by means which included investment programs, projects, and policies. It researched, in partnership with people that were recipients of the aid and nongovernmental organizations, and brought to light through publicly released reports, and campaigns to change the way aid was delivered.

The Commissioner of Taxation revoked these endorsements in October 2006, and affirmed the revocations in March 2007. The Administrative Appeals Tribunal set aside the decision of the Commissioner and determined that Aid/Watch was a "charitable institution." On appeal by the Commissioner, the Full Court of the Federal Court set aside the earlier decision and affirmed the decision and objection of the Commissioner. Aid/Watch appealed to the High Court.

The definition of charity in Australia was largely derived from English common law, and specifically from the Statute of Elizabeth (1601) "An Acte to redresse the Misemployment of Landes Goodes and Stockes of Money heretofore given to Charitable Uses." But first, some context.

Medieval England, combining Christian ideals, Roman precedents, and Common Law, permitted charitable donors to entrust property -- usually to the church or other public authorities -- for charitable purposes. These endowments were part of a complex of activities involving the Crown, noble families, the church, municipal bodies, gilds, and other essentially public entities through which poverty, dependency, and other needs were attended to.

* * *

Few laws are more important -- or more misunderstood -- than Elizabeth's 1601 Statute of Charitable Uses. The preamble to the Statute sets forth the purposes for which property might be set aside for charitable purposes and, at the same time, provides a rich overview of the range of philanthropy in Elizabethan England.

Examining the Statute of Elizabeth and the precedent established over the centuries in England, US, Canada, and Australia since, the High Court of Australia noted that there were four principal divisions for charitable trusts, namely, trusts for the relief of poverty, for the advancement of education, for the advancement or religion, and for other purposes beneficial to the community (perhaps best expressed by the word, "eleemosynary").

Although the High Court noted that:

[A] a trust with a principal purpose to procure a reversal of government policy, or of particular administration decisions of government authorities, is proscribed as a trust for "political purposes"; this is so whether the government is that in England or elsewhere. Such trusts, even if otherwise within the spirit and intendment of the preamble to the Elizabethan statute, can never be regarded as being for the public benefit in the sense require for a charitable trust.

It held that the system of law that applied in Australia applied to Aid/Watch and that the activities of Aid/Watch met two characteristics indicative of charitable status. Moreover, although there was, in the law, an exclusion of "political objects" as charitable, the purposes and activities of Aid/Watch did not fall within any area of disqualification "for reasons of contrariety between the established system of government and the general public welfare." Accordingly, Aid/Watch was held to be a charitable institution within thee meaning of the relevant legislation.

As Ludwig von Mises wrote, "The funds that a government spends for whatever purposes are levied by taxation." Moreover, the very existence of the state suggests that there is also growth of the state. "As long as many people want government to use its power to tax and regulate to benefit them at the expense of others," the state "will retain its power and continue to grow."

Rulers, being human, have wants they wish to fulfill, things like doing good as they see it, power, glory, money, pride, respect, adulation, security of or in office, aiding the poor (or rich), ending capitalism, spreading democracy, and the like. Tax increases allow rulers to gain from them as long as the cost in votes is not excessive. Further, taxation provides incentivees to institute programs that ultimately distribute wealth and create dependency. These ideas cut across both the role and vitality of the civil society sector, and particularly, with regard to the purposeful choice in the realm of voluntary behavior to improve life, and similarly, with regard to the purposeful choices of individuals in both their voluntary behavior to improve life and voluntary contributions to causes they believe will improve life and the physical and spiritual welfare of people.

There are also attempts by the government to regulate the entire sector through registration and other regulatory examples. Such has been the case in Cambodia, for example. But, while we may think of this story somewhat extreme, is the position of Cambodia for its reasons much different than the position of the Australian Commissioner of Taxation for his reasons, namely the limitation of some kind of benefit conferred by government on certain types of NGOs?

Prior to its Annual General Membership Meeting in Zurich, Switzerland, The Cooperation Committee for Cambodia (CCC) asked ICFO to join in a joint statement in opposition to the Cambodian draft Law on Associations and Non-Government Organizations. The membership of ICFO agreed and joined others in the statement prepared largely by NGOs operating in Cambodia, and supported by a legal analysis prepared by International Center for Not-for-Profit Law (ICNL).

I suppose that there are any number of countries that have, or are in the process of establishing laws that, in some way, attempt to provide for a government based regulatory scheme for the third sector. Nevertheless, over the past two years, it is the Cambodian draft Law on Associations and Non-Governmental Organizations that has attracted international attention and pressure to change. First, some history and context to the debate.

ICNL, in its report on Cambodia and the third draft of the Law on Associations and Non-Governmental Organizations, noted in its Introduction that:

Cambodia is an example of a post-conflict society in which traditional forms of civil society organizations (CSOs) were devastated and then re-emerged in new forms as part of the reconstruction process. CSOs include Buddhist institutions, trade unions, media associations and non-governmental organizations (NGOs). In 1989 the first humanitarian international NGOs (INGOs) arrived and the establishment of local NGOs soon followed.

The Royal Government of Cambodia (RCG) and development partners recognize that NGOs and INGOs have made an important contribution to rehabilitation, reconstructions and development in the past 30 years. NGOs are view as important partners in the delivery of basic social services. Formally the RCG has a number of mechanisms that involve NGOs in national development strategy formulation and policy implementation and dialogue. In practice, however, NGOs have limited influence on government strategy and policy and limited space for dialogue.

Beyond the service provision sphere, the environment for NGOs is very different. NGOs involved in advocacy, legal rights and human rights are seen by the RCG as unwanted opposition and the environment for their activity is restrictive. The power of the Cambodian People's Party (CPP) is increasing and the Cambodian State is becoming increasingly authoritarian. There is widespread concern from NGOs and other stakeholders on key issues relating to the increased violation of land rights and restriction of fundamental human rights, such as the freedom of expression and freedom of assembly. Human rights defenders are continually the target of threats and attacks. The recent UN UPR's [Universal Periodic Review] submission and outcomes document this.

The legal framework in Cambodia has been governed by the Constitution. There have been no specific implementing laws, although there have been different registration requirements for INGOs and for local NGOs. In the case of the former, registration included the requirement to conclude a Memorandum of Understanding with the Ministry of Foreign Affairs. In the case of the latter, they were required to register with the Ministry of Interior. As stated by ICNR, the current legal framework was open to discretion and its implementation "saddled by a weak understanding of the concept of civil society." This latter subject has been a matter of substantial interest and concern on my part as reflected in a number of earlier posts.

In June 1995, the Council of Ministers of Cambodia initiated the idea of a law that would provide for the regulation of NGOs and local associations. The Council of Ministers assigned to the Ministry of Interior the responsibility for drafting such a law. A year later, a draft text consisting of 10 chapters and 35 articles was ready, but its examination and consideration was suspended because of disagreements as to its content.

Five years later in September 2000, the Council of Ministers asked Prime Minister Hun Sen for advice. However, he responded that he did not want to make it a priority and preferred to enforce a text that regulated the procedure for creation of NGOs and local associations, without defining their activities and role. Five years later, there were two laws, one dealing with terrorism and the other with money laundering. The Ministry of Interior, together with other Ministries, the World Bank, and representatives of Civil Society.

Sieng Lapresse, the Undersecretary of State, Ministry of Interior of the Kingdom of Cambodia reported in 2008 that:

Thirty-five NGOs agreed on the principle of a law, but asked for some time to examine the text. However, a few NGOs like ADHOC, LICADO, and the Cambodian Centre for Human Rights strongly disagreed and estimated that such a text could impose high pressure on them and hinder their freedom. Their reaction caused the suspension of the examinatrion of the text by the World Bank and the dossier is still dragging on today.

NGOs, some of which have been active in Cambodia for over 15 years, were worried that the draft law's true purpose might limit their scope of activity and independence. They also did not see why the draft law was so suddenly a priority for adoption when there were other laws, such as the anti-corruption bill, still on the waiting list for approval by the Council of Ministers.

According to a press communiqué issued on 3 December 2008 by the Cambodian Human Rights Action Committee (CHRAC), a coalition of 21 NGO members, there were enough legal frameworks controlling the work of NGOs, whether it be the Constitution of Cambodia, the UNTAC transitional law or the Prakas issued by the Minister of Interior concerning the registration of NGOs, to which the new codes of civil procedure have been added.

NGO representatives also feared that the government might control the funding they received, which would allow ministers and high ranking official to put pressure on their work.

We heard that the funding would have to come first via the Ministry of Economy. If that is the case, our work will be neither efficient, nor independent. Also, it will be difficult for us to pay our employees on time, and this is without mentioning problems of corruption within the Ministry.

Moreover, according to Ou Virak, president of the Cambodian Centre for Human Rights (CCHR),

Another sensitive topic: according to the lines of the draft law, associations and NGOs must not lead any activity serving the interests of political parties or bring in means intended to support them financially or morally. "If this point is approved, then my NGO will have to close down, because we will not be able to talk politics. The thing is, we work on the question of Human rights, and it is in direct connection with politics. This also means that we will not be able to shake the hands of politicians either.

In June 2009, the Cambodian League for the Promotion and Defense of Human Rights (LICADHO) issued a briefing paper, the subject of which was: Is an NGO Law in Cambodia Justified? Although there appeared to be some government justification for such a law on the basis of alleged crime and terrorism, LICADHO concluded that there appeared to be "no need for additional legislation in order to prosecute terrorists and other criminals, the fear here is that terrorism was merely being used to push through an unwarranted law.

To make matters worse, the Prime Minister was quoted as saying: "Every NGO wants the government to have transparency but NGOs themselves don't have transparency. Which source does the money come from" What and where do they spend the money to?"

Noting a number of other quotes from government officials that are critical of NGOs, LICADHO stated that Cambodian authorities have failed to justify the NGO law on the grounds of security or anti-corruption, and that "These quotes provide a clear indication of the government's true motivation in passing an NGO Law: nothing to do with crime, terrorism or transparency, but everything to do with political control."

In order to understand what is happening now in Cambodia, it is important to note that over the past years, several drafts of such a law have been proposed. The first draft was released on 15 December 2010. The second draft was released by the Royal Government of Cambodia on 24 March 2011. The translation of this draft was provided by the Office of High Commissioner for Human Rights (OHCHR) on which we relied in our review in ICFO and on which ICNL relied during its review. The ICNL report is available for examination at: http://www.licadho-cambodia.org/reports/files/152JointstatementCommentsOnCambodian2ndDraftLaw-Eng.pdf

As noted by ICNL, the major issues in the second draft included: a registration process that would allow for the exercise of "unbounded government discretion," a reduced by high minimum membership for associations, the limitation of eligible founding members for both associations and NGOs to Cambodian nationals, inadequate standards to guide government determination of suspension or termination of an association or NGO, barriers to the registration and activities for foreign NGOs, and constraints on associations and NGOs through notification and reporting requirements.

Inasmuch as the Royal Kingdom of Cambodia has withdrawn the second draft, and released a third draft of the proposed law, no further comment or analysis is required here. Suffice it to say, this third draft has not been received with unalloyed enthusiasm either. But, more later about it in the next post.

For now, it is sufficient to observe that the issues at stake in Cambodia are far wider than any single incident, person, proposed law, or country. Notwithstanding the protests and gatherings, such as "Occupying New York," representative democracy and market capitalism seem to be riding quite high in much of the world, an urgent question persists not only for Cambodia, but for all of us: Is the cultural order of our societies -- the world of families, churches and synagogues, or Buddhist temples, schools, colleges, the media, entertainment -- doing a good job of cultivating free, responsible citizens. Or, as Os Guinness wrote, are we seeing not only corruption at vital points, but widespread compliance with that corruption that makes all of us accomplices to our own decline?

It seems appropriate also to recognize the Cooperation Committee of Cambodia (CCC). In its partnership with national and international CSO networks, CCC brought the case of the unintended development impacts of the draft law on Associations of Non-Government Organizations for global attention and scrutiny. These efforts have made the government of Cambodia rethink and further revise the draft controversial legislation.

First, the vision of CCC is a strong and capable civil society, cooperating and responsive to Cambodia's development challenges. Its mission is to be a professional organization of non-government organizations in Cambodia providing for high quality services to civil society and influencing Cambodia's development partners with a collective voice.

Thanks to the global CSO solidarity spirit and the collective efforts to preserve and maintain much needed democratic space to function and exist to serve the poor and vulnerable people,efforts continue to encourage the government to take less restrictive measures to regulate the sector. While much attention has been give to the developments regarding the Law on Associations and Non-Government Organizations, ICFO pledged its support to the call for further review of the proposed legislation. Another common belief shared by both ICFO and CCC is our strong belief in the need for CSO good governance. ICFO highly credits the work of CCC in developing a Code of Ethical Principles and Minimum Standards of professionalism, integrity, and accountability. The Code aims to maintain and enhance standards of good organizational practice and to ensure the public trust in the integrity of individuals and organizations that make up the NGO sector.

In order to accomplish these goals, CCC provides training and Open Forums for CSO Development Effectiveness. However, its activities go beyond this. CCC is a membership organization that includes within its membership criteria, a monitoring scheme with appropriate certification which reflects the organization's successful completion of CCC's review of its documentation and compliance with the Code of Ethical Principles and Minimum Standards.

One may wonder why the Kingdom of Cambodia believes that there is a need for a law, such as the draft Law on Associations and Non-Government Organizations. Although the Prime Minister asserted that "Every NGO wants the government to have transparency but NGOs themselves don't have transparency," it appears that what is promoted by CCC is much more significant than what might result from the legislative process. Moreover, the danger appears to be stated by the National Assembly President: "Today, so many NGOs are speaking too freely and do things without a framework. When we have a law, we will direct them." This appears to be a misunderstanding of the concept of civil society.

Perhaps, the power to regulate may indeed be the power to destroy. And in Cambodia, with a growing and increasingly vibrant NGO sector, and an effective and significant self-regulatory or independent monitoring scheme, such as provided by CCC, one might wonder why a government would seek to exercise that power to regulate, and ultimately destroy. Perhaps one could explain this to the German-funded Sahmakum Teang Tnaut (STT), the NGO advocating for the urban poor, which for six years provided services and advice to urban communities.

As The Wall Street Journal reported on 20 September 2011,

The government is responding with criticisms and threats of its own, often targeted at Western aid givers.

Last year, officials in Phnom Penh threatened to expell the UN's country head and later warned all embassies and diplomatic missions not to try to "criticize or give lessons" to the Cambodian government. A visit by UN secretary general Ban Ki-moon proved disastrous, as Prime Minister Hun Sen threatened during a meeting to close the UN's local human rights office and prematurely shutter Phnom Penh's UN-backed war crimes tribunal, according to Cambodia's foreign minister.

As tension rise, both internationally and domestically, between governments, and between the CSO, NGOs, and INGOs and the Government of Cambodia, maybe the citizens and sector are discovering, like Primo Levi, that there is no "why" there.

In the meantime, as the debates concerning the Law on Associations and Non-Government Organizations continue, Cambodia worries about long-term flood fallout. Flooding has spread across 17 of Cambodia's 24 provinces, killing 247 people as of 17 October 2011, and forcing the evacuation of 34,000 households. It has destroyed more than 200,000 hectors of rice fields which is nearly 10 percent of the country's harvest. The flooding has destroyed more than 1000 schools and some 2,400 km of roads, exceeding the devastating floods of 2000.

Just Thinking

2011-10-06T20:58:00.001-04:00

Yesterday, 5 September 2011, Steve Jobs died. For many around the world, we learned of his death through many of the devices that he was credited with creating: Apple Computers, the iPod, the iPhone, and the iPad. Indeed, the day before he died, his chosen successor at Apple, Tim Cook, introduced the new iPhone 4S.

As The Wall Street Journal reported on Thursday, 6 October 2011,

He did what a CEO should. He hired and inspired great people; managed for the long term, not the quarter or the short-term stock price; made big bets and took big risks. He insisted on the highest product quality and on building things to delight and empower actual users, not intermediaries like corporate IT directors. As he liked to say, he lived at the intersection of technology and liberal arts.

This has gotten me thinking, both about his almost cult status in the technology industry, about his leadership of Apple, and about his life and design goals. But, it also reminded me of my father who also died of pancreatic cancer almost 15 years ago. So, Steve Jobs' death has been a time of reflection for me, and for thinking about some of the practices of my parents over the more than 55 years of their work in the sector.

There is much that could be said about the technology and its impact on the nonprofit sector, and particularly on how nonprofit organizations have raised funds to finance their charitable goals and activities. I have written and spoken on media ecology, and the way new media shapes the way we think and act. So, I will not repeat those thoughts here.

But, there are things about Steve Jobs' life and his philosophy that have interested me. These include his leadership of Apple and how consumers around the world use the technology in everyday life, and particular what we might learn from Steve Jobs that is important to how we might think about accountability within the third sector.

This will be my focus over the next few posts, particularly in the context of independent monitoring and self-regulation initiatives.

Congratulations Fundación Lealtad

2011-09-20T13:59:00.137-04:00

It gives us, the Board and Members of the International Committee on Fundraising Organizations (ICFO) the great pleasure to recognize our esteemed member and colleagues, Fundación Lealtad, on this, its Tenth Anniversary.

Fundación Lealtad is a non-profit pioneer in Spain, founded in 2001. It's mission is to foster confidence in the Spanish society's NGO community to achieve and increase in donor trust and donations so that this sector may achieve the potential to serve the public, whether in Spain or around the world.

Fundación Lealtad offers individuals and companies independent, objective, and consistent information on the third sector organizations, and thereby, helps potential donors to decide with whom they will collaborate and to guide them in tracking their donations. This information, based on the analysis of transparency according to established principles issued by Fundación Lealtad, is provided without charge to those NGOs who voluntarily request it.

On Monday, 19 September 2011, Their Royal Highnesses Prince and Princess of Asturias, Don Felipe and Doña Letizia received in audience representatives of Fundación Lealtad, led by its president, Salvador Garcia-Atance, and representatives of its management, led by General Director, Patricia de Roda Garcia, on the occasion of the Tenth Anniversary of Fundación Lealtad.

Audiencia al patronato y representación del equipo directivo de la Fundación Lealtad

Palacio de La Zarzuela, Madrid, 19 de septiembre de 2011

Fotografía de grupo

Fueron recibidos por Sus Altezas Reales los Príncipes de Asturias

Don Felipe y Doña Letizia recibieron en audiencia a los miembros del patronato de la Fundación Lealtad, encabezados por el presidente, Salvador García-Atance, y una representación del equipo directivo, presidida por la directora general, Patricia de Roda.

La Fundación Lealtad es una institución sin ánimo de lucro pionera en España, que fue constituida en 2001. Su misión es fomentar la confianza de la sociedad española en las ONG para lograr un incremento de las donaciones, así como de cualquier otro tipo de colaboración con las ONG.

Esta fundación ofrece a particulares y empresas información independiente, objetiva y homogénea sobre las ONG, para ayudarles a decidir con qué ONG colaborar y orientarles para hacer un seguimiento de sus donaciones. Esta información se basa en los análisis de transparencia que la Fundación realiza de forma gratuita a aquellas ONG que voluntariamente lo solicitan.

Pagina web de la Fundación Lealtad

src="file:///C:/DOCUME~1/Rollin/LOCALS~1/Temp/msohtmlclip1/01/clip_image002.gif" v:shapes="_x0000_s1026" width="102" />

On behalf of my colleagues in ICFO, I was privileged to recognize Fundación Lealtad on this occasion. Not only is Fundación Lealtad a member organization of ICFO, Patricia de Roda Garcia is an esteemed colleague on our Board. Salvador Garcia-Alance is also a friend of ICFO and a capable example of what we all strive to be.

International Committee on Fundraising Organizations
ICFO – the association of national monitoring agencies

Rollin A. Van Broekhoven, JD, LLM, DPhil

President

19 Septiembre 2011

Dr. Salavator Garcia-Atance Lafuente,

Presidente

Sra. Patricia de Roda Garcia

Directora General

Fundación Lealtad

Plaza de la Lealtad 3, 4th planta

28014 Madrid, Spain

Estimados Colegas,

Está con honor y placer que yo, representando la nuestra asociación de agencias de control nacionales y a todos nuestros miembros de ICFO, reconocemos este décimo aniversario de la creación de la Fundación Lealtad. También es un gran placer para nosotros reconocer la asociación de la Fundación Lealtad con el ICFO. Que su liderazgo en el fomento de las confianza en las NGOs de la sociedad española continúe con los altos estándares de excelencia que ha establecido en estos últimos diez años.

Así que en este día especial, nosotros le felicitamos para la diferencia es su hacer en España y hará internacionalmente por y con ICFO. Puede esto es el día que totos recordamos.

Con respecto afectuoso para su membresía en el ICFO,

RVanBroekhoven

Rollin A. Van Broekhoven, JD, LLM, DPhil, DLitt
President.

Fundación Lealtad has extended an invitation to the members and guests of ICFO to the Annual General Membership Meeting to be held in Madrid, Spain on 18-19 May 2012. The proposed theme and focus of this AGM is Global NGO evaluation and monitoring, with emphasis on emerging national initiatives, and the matter of INGO assessments. Be sure to check www.icfo.org for any announcements.

September 11

2011-09-11T15:37:00.000-04:00

HE LEADETH ME

He leadeth me.

In pastures green? No, not always

Sometimes He who knoweth best

In kindness leadeth me in weary ways

Where heavy shadows be:

Out of the sunshine warm and soft and bright,

Out of the sunshine into the darkest night.

I oft would yield to sorrow and to fright

Only for this: I know he holds my hand.

So, whether led in green, or desert land

I trust, although I cannot understand.

He leadeth me.

Besides still waters? No, not always so.

Oft times the heavy tempests round me blow,

And o'er my soul the waves and billows go.

But when the storm beats wildest, and I cry

Aloud for help, the Master standeth by

And whispers to my soul: "Lo, it is I."

Above the tempests wild I hear Him say:

"Beyond the darkness lies the perfect day;

In every path of thine I lead the way."

So whether on the hilltops, high and fair

I dwell, or in the sunless valleys, where

The shadows lie--what matter? He is there.

And more than this; where'er the pathway lead

He gives me no helpless, broken reed,

But His Own hand, sufficient to my need.

So where He leads me I can safely go.

And in the blest hereafter I shall know

Why in His wisdom He hath led me so.

-Author Unknown

Japan Disaster Revisited

2011-09-10T13:40:00.007-04:00

In my posts on the earthquake disaster in Haiti, I returned several months later to revisit the disaster aid to Haiti and to focus on several charitable organizations that are not frequently brought to public attention. This week I received the Fall 2011 issue of the Trinity International University Magazine and upon reading an article there, I was prompted to do the same thing about the disasters in Japan resulting from the 11 March 2011 earthquake, tsunami, and nuclear power plan disaster.

But, more than that; to reflect on why I am even interested in following these kinds of events, and why I have participated as both contributor and volunteer in the sector. For those of us who have lived through similar disasters, such as earthquakes, volcano eruptions, and floods, the scenes are familiar. But, it is the raw emotions that bury themselves deep in the psyche of everyone that have the capacity to touch us as humans with the realization that the length of our lives here on earth is fleeting and unpredictable, and that each of these disasters have the capacity to raise a spiritual dimension on our responses to them. That is what interested me in these stories that simply go beyond the images we see on television and the calls from large NGOs to donate money or goods to the relief efforts.

Moreover, during times of disaster such as the recent disasters in Haiti, Pakistan, Japan, and elsewhere, the focus is on the needs immediately following the earthquake, flooding, tsunami, and the like. As a result, image tends to produce the manipulative drama to encourage giving, especially to well-known and large charities and to international efforts. Moreover, there is little attention to those who labor faithfully, year after year, in the areas in which these disasters have occurred. Furthermore, as studies over the years have suggested, there is little attention and a general absence of data concerning the work of religious organizations, charities, and churches. These, then, are some of the reasons, I have decided to focus on this part of the story in this post.

In a recent (April 2010) edition of The Review of Faith & International Affairs, there was an article, "Volunteerism, Charitable Giving, and Religion: The U.S. Example," the author Brett G. Scharffs, wrote:

Since Alexis de Tocqville's prescient observations about American society in the 19th century, it has been well known that the United States has quite a high rate of volunteerism and charity. A variety of cultural and structural characteristics of the United States have played a role in fostering this high rate of voluntary contribution to the common weal. I this article, I will limit the discussion to one particularly important cultural factor (namely, the strength and diversity of religion) and one particularly important structural factor (namely, the legal framework of nonprofit organizations).

As Brett Scharffs pointed out, religious groups are the single largest recipients of both money and time. One Independent Sector survey indicated that individuals who consistently attend church are much more likely to engage in volunteer activity. Independent Sector also reported that church attendance had a pronounced effect on the rates of charitable giving.

Moreover, in the United States, many religious organizations are involved in charitable activities that do not explicitly have religious content. Examples include running soup kitchens for the homeless, operating thrift stores, sponsoring service groups, etc. In all these disasters we have observed over the last several years, such as the major Central Asia tsunami, the earthquake in Haiti, the floods in Pakistan, and now the triple disaster in Japan to name a few, religious communities, including mission organizations have been involved heavily, both in the emergency relief efforts, but more importantly, over an extended period with investment in the community and lives of those in the community.

We are all familiar with World Vision, Salvation Army, Compassion International, Food for the Poor, and Food for the Hungry, but there are many others that have been in these countries for years, who know the people and labor for both their physical and spiritual welfare. For all of my early life, this was my world. And so now, these are some of the stories describe the work of these religious organizations and missionaries, and volunteers laboring in Japan.

Trinity International University has given me permission to essentially reprint this article in this blog. And with few minor deletions, including references that are particularly relevant to alumni, the article is reprinted in its entirety here. But, first, this.

In a recent research and policy symposium in Sydney, Australia, we focused on the what regulatory models should be considered for the 21st Century for the nonprofit sector. (See, my blog post, 22 August 2011, Regulation for Not-For-Profit Sector in the 21st Century, www.RVanBroekhoven.blogspot.com) The final point in my presentation was that our giving to charity, or involvement in charity as a volunteer, should be regarded as more than simply a financial transaction. Rather, it is an expression of generosity, which marks both the individual and the character of a community or country.

The focus in this piece is how very personal these kinds of disasters can be, and the importance of personal involvement in the lives of others and of a community or nation. It is a story told from that perspective and not from the perspective of the importance of large, international non-government organizations (INGOs) raising funds and dispensing funds and services to those in need.

Where God Was During Japan's Earthquake

Providing hope -- spiritually and physically -- where it is desperately missing.

By Joseph Kim*

Sendai, Japan. March 2011. An 8.9 magnitude earthquake hit the coast of of Sendai, and a massive tsunami hit the eastern coast of Japan. As most of the world watched nearly 30 foot waves crash into the coast of Sendai, horrified by the ensuring destruction, many were wondering aloud: How would Japan cope with this?

Some economists have called this the "most expensive natural disaster ever," and the total finance cost could be in excess of $350 billion with more than 25,000 dead or missing. The earthquake left the country with a nuclear plant meltdown on the scale of Chernobyl. However for those of us who live in Japan, this disaster was much more than another crisis. It was personal.

It hit me the moment I was able to go to Sendai and Ishinomaki, two of the areas hardest hit by the tsunami. The ocean's devastation was not only on the roads, homes, and trucks that it had tossed aside like toys, but on real lives. A young man and woman were looking through a nearly destroyed car, not leaving an inch of the car untouched. The car's windows were smashed in and the hood of the car looked as if a giant hammer had smashed it several times, and then poured mud and seawater into the entire car. They had blank emotionless faces. A fellow member of our team and I approached them and asked them if this was their car? The young man responded that it was his father's car. His father had been missing for several weeks and was presumed dead. He found it by the side of the road, and was going through it to clear out his father's belongings. I realized right there and then that the tsunami was much more that the destruction of roads, homes, schools, and businesses. It was about lost family members, lost lives, and living without hope in Jesus Christ.

I had not given any thought to Japan while I was a student at Trinity. I had spent the next 10 years after graduating from Trinity finishing my PhD in philosophy and gaining experience teaching in academic settings. I had planned on teaching somewhere in Asia in a creative access nations, but the Lord had other plans. Nearly a decade after I left Trinity, the Lord reunited me with an old friend from Trinity, Michael Oh. He had recently founded a seminary and ministry in Japan, CBI Japan, and was serving with two other Trinity graduates, Craig Chapin and Tomoaki Shimatani. CBI Japan had been praying for someone to found a new international university in Japan and asked if I would consider serving alongside them for the task. After much prayer and several years of preparation and raising financial support, my family and I arrived in Japan to begin our journey.

Why Japan?

Japan is currently the third largest economy in the world, after the U.S. and China. Japan is also home to some of the world's most successful and respected companies, including Toyota, Honda, Nissan, Sony, Panasonic, Hitachi, and Nintendo. The yen is the strongest currency in Asia, and its islands are some of the most physically beautiful in the world. It is a large nation of 128 million people, and Japanese is the 12th most spoken language in the world.

However, there is a dark side. Japan is a nation where child pornography is readily available. It is a nation that has a significant percentage of young teenage girls who participate in compensated dating/teenage prostitution with men in their 40s and 50s, even though they do not need the money. It is a nation where a significant proportion of the population suffers from depression and many married couples are 'in-house divorced,' a term that refers to a couple who is living together but for all practical purposes are divorced emotionally. It is a nation where more than 1 million young men are Hikikomori (withdrawn from society and refusing to speak to others or work). It is a nation where the Protestant Christian worship attendance, including all Protestant groups, is 0.22 percent according to the most recent Church Info Service 2009 data. However, unlike most nations where the Christian percentage is so low, Japan has complete freedom of religion, equivalent to the USA.

Missionaries first established a church in Japan nearly 450 years ago, and there are many churches in Japan that are more than 100 years old. However, the church is a tiny minority. The majority of its members are graying, with an average age over 50. Nearly 80 percent of all Japanese churches are led by pastors that are in their 50s, 60s, and even 70s. This number does not include the more than 1 in 7 churches who are currently without a pastor. Several prominent missiologists have claimed that Japan is the most difficult and challenging mission field in the world.

There is hope, however, This current generation of young people have mostly rejected their parents' values. They are looking for new hope and new ideas amidst the spiritual chaos that is leaving behind its own kind of devastation. Many young Japanese who have studied abroad have become Christians overseas and have come back to serve God in their nation. Although the average church size is only around 20 or 25, there is a new movement toward church planting in urban centers. Through new media outlets, many Japanese are hearing the gospel and interacting with churches for the first time. Finally, there is a growing sensitivity among church leaders to a proclamation of the gospel which speaks directly to contemporary Japanese.

* * *

It is with this backdrop of hope in the Lord's work in Japan that our mission organization Mission to the World (MTW) has worked through its teams in Japan to send several truckloads of food and supplies. On one of the trips up north, I was able to go with several leaders from Mission to the World Japan and other partner organizations. We had learned of a key young pastor, who served as an associate pastor at his father's church in Sendai. This young pastor was leading relief efforts throughout the affected areas of Sendai and the Tohoku region. He organized several groups of people in creative ways to serve the people in the area. MTW Japan had gone to see how we could support his work, knowing how overwhelming it must have been amidst such devastation. When I met this pastor, I realized we had already met at the Trinity alumni gathering in Tokyo only a year earlier.

Yukimasa Otomo serves at his father's church, Shiogama Baptist Church, and is also Director of Hope Miyagi, in Sendai. Yukimasa is a key leaders in providing spiritual and physical relief to those who have suffered from this great tragedy. The needs are great. Along with his wife and three young children, his entire family and church have been working night and day in response to this great disaster. He and his family need much prayer and financial support. They are in the process of raising funds to renovate an old house near their church to serve as a volunteer center to help those in the area.

* * *

* Joseph Kim is the executive vice president of CBI Japan in Nagoya, Japan, serving with Mission to the World.

Mission to the World (NTW) is the foreign mission board of the Presbyterian Church in America. One of its ministry emphases is its Disaster Response Ministry. As we see from the story above, Joseph Kim is an educator and involved in ministry not directly related to the disaster in Japan. Yet, he became very much a part of the Disaster Response ministry of MTW.

MTW's Disaster Response Ministry (DRM) is a unique area of ministry that is both physically and spiritually demanding. Our volunteers respond rapidly to calls around the world to bring medical care, crisis counseling support, engineering/construction assistance after a disaster strikes. We partner with church planters already in the field to strengthen church plants and gain access to areas that may not have been previously open to the gospel.

MTW is totally engaged in Japan, not simply to address the immediate needs resulting from the earthquake, tsunamic, and nuclear accident, but as an investment in the lives of the Japanese people for eternity.

This story has led me to further reflection and the desire to present some sense of the personal and spiritual dimension of the response of religious organizations to the disaster in Japan.

As Catholic Relief Services stated shortly after the earthquake and tsunami, "long-term recovery will recovery, though, will require that Caritas Japan play a much larger role. In a recent statement, Caritas Japan says that the damage is not only physical, but also psychological: 'We will accompany people who have lost their loved ones, who lost everything and may stay in temporary shelters, and who have no one to rely on.'"

Shortly after the earthquake, Caritas Japan launched a national donation campaign and worked closely with the dioceses to support those affected by the earthquake and tsunami. This included the diocese of Sendai. Bishop Isao Kikuchi, president of Caritas Japan said:

We have received so many emails from all continents, filled with word of compassion and prayer. We are very grateful for this solidarity. We believe that aid activity is needed, but prayer is also important in such a situation.

Nevertheless, Caritas Japan did not intent to engage in large-scale response operations to the disaster, working closely instead with the dioceses and other organizations in the affected areas to support vulnerable people affected by the disaster. Indeed, the focus will be more on the rehabilitation phase with a big focus on providing moral and psychological support for those affected by the disaster.

In the US, Catholic Charities in various dioceses worked with Catholic Relief Services, the official international humanitarian agency of the U.S. Catholic Church, in responding to the disaster in Japan by supporting Caritas Japan. "Our faith calls for us to live our life in solidarity with the victims of this catastrophic disaster and Catholic Relief Services asks all to give their prayers and support to the Japanese people at this difficult time."

Shortly after the earthquake and tsunami hit the eastern shore of Japan, World Relief reached out to several long-time partners. These included: the Japanese Evangelical Alliance (JEL), Christian Relief Assistance Support and Hope (CRASH), and Food for the Hungry (FFH). These organizations had mobilized local churches and volunteers from Japan and around the world to distribute emergency food and supplies, clean up neighborhoods, and meet survivors to listen to their stories and needs.

As the need for physical and material assistance are met, the long-term mental health and emotional wellbeing of these coastal communities that lost family members and livelihoods will be the greatest concern for pastors and World Relief's local partners. JEL is bringing awareness to this need for "emotional care" to local church leader, and continues to advocate the Japanese to provide continued and expanded material assistance to the more remote and least aided towns in northern Japan.

Immediately after the earthquake and in the wake of the tsunami and subsequent nuclear threat, the Christian Reformed World Relief Committee (CRWRC), a ministry of the Christian Reformed Church, entered into a partnership with Food for the Hungry and other members of the Global Relief Alliance. Also collaborating with the Reformed Church in Japan (RCJ) Diaconal Action Committee to help engage local Christian churches as witnesses to Christ's love in the disaster response effort.

Collaborating with these groups and with CRASH, CRWRC was able to assist in providing blankets, rice, clothing, and handwarmers from its relief base set up in Sendai. It also was involved in mobilizing ground transportation and volunteers within Sendai and across Japan through local churches to help deliver donations to aid disaster-affected communities.

While removing soil contaminated by seawater in family gardens, volunteers from CRWRC's Japan partner, CRASH, learned of a grandmother named Sumita-san who "hasn't been able to sleep since the earthquake on March 11. When she closes her eyes, she has flashbacks and finds it impossible to block the sounds of people screaming as they were swept away by the tsunami."

"Some of these evacuees are from areas that were subject to high levels of radiation, and they are labeled almost untouchable. Giving massages involves a personal touch that many survivors had not experienced in months -- loosening pent-up emotions and opening conversations that change lives and provide opportunities to share the Gospel."

A retired Japanese-speaking missionary couple, Ray and Sharon Hommes, arrived from the United States and provided needed psycho-social and spiritual support even as they planned a more extensive "kokoro no kea" (heart care) training for those suffering from post-tramatic stress.

The General Assembly Mission Council of the Presbyterian Church (U.S.A.) responded to the disasters through it Presbyterian Disaster Assistance organization, and in cooperation with the Church World Service.

The Church World Service (CWS) was founded in 1946 and is a cooperative ministry of 37 Christian denominations and communions in the United States, providing in part, disaster relief. When a disaster hits, such as the earthquake, tsunami, and nuclear meltdown, CWS works with its partners on the scene to provide shelter, food and water, blankets, recovery kits, and counseling. However, in addition to its rapid emergency disaster response, CWS also helps vulnerable families and communities prepare for and recover from natural and human-caused disasters.

CWS is a founding member of ACT Alliance, a coalition of 100 churches and church-based humanitarian organizations, bringing together approximately 30,000 staff and volunteers in 125 countries. ACT-Alliance members retain their individual identities while working collaboratively.

The Presbyterian Disaster Assistance continued to respond to the needs in Japan with its mission partners, including a consortium of 32 Japanese non-profits, to provide a coordinated response to the basic needs of those living in evacuation centers. Takeshi Komino, the Response Director of CWS Asia/Pacific, reflecting on the disaster and what it meant to Japan, said:

"Is this really happening in my country of Japan?" was my initial thought. Japan is considered one of the richest nations in the world with probably the best disaster risk reduction measures in the region. And this was certainly my first time responding to an emergency in Japan as a staff member of CWS. As the extent of damage became clearer, I learned that this is actually four disasters happening at once. First, a 9.0 Richter scale earthquake, then 20m+ tsunami, then nuclear power plant reactor explosions, all happening in the harsh winter weather of Tohoku region, where temperatures nowdays go down below freezing point on a daily basis. Can my government respond adequately? The answer, unfortunately, is no.

As reported in the CWS Situation Report of 13 August 2011:

Since moving into temporary housing from evacuation centers, many survivors have become more susceptible to depression and alcoholism, since many of them now live alone. A team of mental care specialists from Kyoto prefecture treated 262 people at seven evacuation centers in the disaster-affected area until July. The team said 51 evacuees, or 19.5%, were suffering from reactive depression.

Post-traumatic stress syndrome is also a problem. In Fukushima prefecture, suicides in May and June rose 20% over the same period the previous year to 118. According to Cabinet Office, in June there were 16 suicides directly linked to the disaster across the country (mostly in Miyagi, Fukushima and Iwate prefectures). Press reports as recent as this month [August 2011] cite anxiety over joblessness and fears of being a burden as major factors for the increase in depression and suicides.

So much of this harks back to the observations of Joseph Kim in his piece, Where God Was During Japan's Earthquake, published herein. We see the images of the damage wrought by these events in news reports, but we don't often here of these personal emotional traumas, or see pictures of people standing in front of display boards searching for information about missing loved ones.

Although not uniquely the case, Samaritan's Purse, was present in Japan with hundreds of volunteers from around the world. While Samaritan's Purse was present to provide immediate humanitarian relief to those in need (and indeed, distributed 93 tons of supplies through ministry partners in the tsunami-affected areas), it was there for the long-haul. It sent out a call for skilled carpenters for rebuilding projects in Japan and around the world. Since it began this work in April, 1,647 volunteers have helped over 170 families. Moreover, Samaritan's Purse is providing housing and supplies for volunteers from all over the world, including South Korea, Brazil, and the Philippines. Such is the story presented in this short video clip from Samaritan's Purse.

What is interesting in these stories is that all of these religious organizations and churches submit themselves to various forms of accountability. Some denominationally-based churches have their own internal controls and accountability to their respective consituencies. For example, mission organizations accountable to their denominations and churches. Others, are accredited by bodies such as, ECFA and BBB Wise Giving Alliance in the U.S. or by Charity Navigator.

Perhaps what catches the spirit of much of this journey of faith for those victims of the disasters, for those volunteers, especially, those who have been in the areas directly affected by the earthquake, tsunami, and nuclear disaster, and even for those who have donated monies, goods, and services, was the prayer for the people of Japan by His Eminence, Metropolitan Gerasimos of San Francisco, International Orthodox Christian Charities:

Almighty Lord, You Who are most merciful and compassionate, we beseech You to calm the earth and waters and bring peace and healing to all those who are suffering from the devastating earthquake in Japan.

Grant them Your strength to endure the hardships they are facing and the courage to rebuild their country.

We also ask, O Lord, that you grant eternal repose to all those who have lost their lives and receive them into Your kingdom.

May You stretch forth Your mighty hand upon their families who are suffering not only at the loss of their loved ones, but for the loss of their homes and homeland.

You, O Lord, are the calm of every storm and You are the Hope for all those who call upon Your name, and to You we ascribe glory, together with Your eternal Father, and Your All-Holy, Good, and Lifecreating Spirit, now and ever, and to the ages to ages. Amen.

Regulation for Not-For-Profit Sector in the 21st Century

2011-08-22T18:07:00.001-04:00

Centre for Social Impact

Research & Policy Conference

Regulation for Not-For-Profit Sector in the 21^st Century*

21-22 July 2011

UNSW, Sydney, Australia

The Centre for Social Impact, University of New South Wales, hosted two sessions for this research and policy conference. The first was research workshop held on Thursday, 21 July 2011, with limited attendance to invited academics and several invited international guests. The emphasis here was on the presentation of research, largely from the discipline of economics, which could have some bearing on the issue of what would be an appropriate means of regulating or monitoring the not-for-profit sector in Australia. This was followed by a Research and Policy Conference held on Friday, 22 July 2011 that was more broadly attended by academics, policy makers, and leaders from the nonprofit sector.

Now some background. In January 2010, The Productivity Commission of the Australian Government published its Research Report, Contribution of the Not-For-Profit Sector. Among the key points in this report were the following: (1) current information requirements imposed on NFPs for funding and evaluation purposes are poorly designed and unduly burdensome, and reform is needed to meet best practices principles; (2) the current regulatory framework for the sector is complex, lacks coherence, sufficient transparency, and is costly to NFPs; (3) legislative proposals to reduce reporting burdens associated with companies limited by guarantee are welcome and needed if more NFPs are to adopt Commonwealth incorporation; (4) implementation of government and sector reforms will be best facilitated by a central policy and implementation unit within the Australian government, such as through the establishment of a specific
Office for NFP Sector Engagement.

Although the report noted that the sector had experienced positive developments in recent years, there were issues that restricted the sector’s ability to improve its efficiency and effectiveness and fulfill its potential. According to the report, many would argue that the current requirements regarding accountability, such as, audited financial reports, business plans, and demonstrable results, are not appropriate, impose compliance costs without commensurate benefits, and are lacking a sense of proportion in regard to the size of the organization or scale of its undertaking. Also, cross-jurisdictional differences impose unnecessary burdens.

The recommendations promoted by the Commission were: building knowledge systems which included a national data system on the NFP sector and a better evidence base for social policy; and establishing smarter regulation for NFPs, including a “one-stop-shop” for Commonwealth regulations consolidating various regulatory functions into a new national Register for Community and Charitable Purpose Organisations. This new Register would, inter alia, a register itself and would provide for the regulation of NPFs, assessing their eligibility for NFP organizations for Commonwealth tax concessions and endorsement, provide a single reporting portal for public record and financial information, provide appropriate regulatory guidance in relation to governance matters, and and provide for the investigation of compliance with regulatory requirements. There were also recommendations relating specifically to improving the effectiveness of direct government funding and removing impediments to better value government funded services.

In January 2011, the Australian Assistant Treasurer and Minister for Financial Services and Superannuation issued the consultation paper as part of the scoping study for a national not-for-profit (NFP) regulator. In its introductory statement setting out the Stakeholder Consultation, we read that: “The Government has tasked Treasury with undertaking a scoping study to determine the role, functions, feasibility and design options for a ‘one-stop shop” NFP regulator.” The Consultation Paper attempted to discuss what it called the features of a best practice regulatory framework and to seek stakeholders’ views regarding the goals of a national regulation, the scope of a national regulation, the functions of a national regulation, and the form a national regulator.

As the scoping study noted, the government provides significant support to the sector in recognition of the vital economic and social role it plays. Moreover, the scoping study also noted that:

In addition, the Australian Government and State and Territory governments provide a range of generous tax concessions to eligible NFP organizations, including: an income tax exemption; deductible gift recipient (DGR) status; refundable franking credits; and fringe benefits tax, goods and service tax (GST), land tax, payroll tax and municipal rates concessions.

According to this consultation paper, the government provides these taxation concessions because it values the contribution the sector makes to the welfare of the wider Australian community. Because these “concessions are taxpayer funded,” and as a result, “NFPs are in receipt of taxpayer monies,” there needs to be a high level accountability flowing back to the public. This means that reporting as one such accountability measure could be improved.

Noting that recent trends indicate higher levels of governance and accountability for both the for-profit and government sectors, trends to improve governance and accountability have not extended to regulation of the NFP sector according to this consultation paper. Accordingly, there are sound reasons for governance and accountability reform in the NFP sector. The scoping study then reported on international developments over the past decade. According to the study, there had been significant reform of the regulation in the NFP sector over the last decade. In countries which were federations, similar to Australia, i.e., Canada and the US, the regulations have been set up within the tax authorities. In non-federal countries, such as, the UK, Wales, Ireland, Scotland, and New Zealand, Charity Commissions (or in Scotland, where there is the Scottish Charity Regulator, and Ireland with its Charity Regulatory Authority) have been established with roles of providing guidance to registered charities, ensuring charities are accountable and meet their legal obligations, and maintain an online register.

There is much more in the scoping consultation paper that could be discussed, but will be reserved for a future post. But, what is important for my purpose here is to set out something of a context for this Research Symposium, and for the Research & Policy Conference that followed.

Research Symposium

21 July 2011

Prof. Dr. Andreas Ortmann (UNSW): Regulation, Self-Regulation, Accreditation and Certification: What We Know, What We Don’t Know, and What We Ought to Know.

The issue in this symposium and in this presentation is one of credibility. The issue, specifically, is: how to make sure that public (state funding) and private donations go to the causes for which they are intended where the goods or services are, in economic terms, credence goods? Credence goods are goods whose quality cannot be ascertained immediately, or at a reasonable cost. Third sector goods and services are rarely what economists call search goods or services whose quality can be ascertained immediately at reasonable costs.

Credence goods and services generate information asymmetries that can be exploited through fraud, mismanagement, or mission creep. So, the question is how to determine whether nonprofits spend their monies efficiently and as promised.

Addressing fraud, mismanagement, and mission drift is important because trust and reputation are what keep public funding and private donations, including gifts-in-kind, and volunteer services contributing to the purposes of the charitable organizations. A recent example is the scandal involving Central Asia Institute and the selling of the book, Three Cups of Tea: One Man's Mission to Fight Terrorism and Build Nations.

Three Cups of Tea describes the transition of Greg Mortenson from a registered nurse and mountain climber to a humanitarian committed to reducing poverty and promoting the education of girls in Afghanistan and Pakistan. Mortenson became a co-founder of the Central Asia Institute, a nonprofit organization that claimed to have built 171 schools and providing education to over 64,000 children, primarily girls, in remote regions of Afghanistan and Pakistan. In April 2011, CBS News broadcast its 60 Minutes program in which it reported alleged inaccuracies in the book, and its sequel, Stones into Schools: Promoting Peace with Books, Not Bombs, in Afghanistan and Pakistan, and financial improprieties in the funding and operation of the Central Asia Institute. It appears that many of the stories in these books were false, and that Mortenson was personally enriched by the sales of the books and monies received by the charity, notwithstanding its status as a tax exempt organization in the US and its high rating by an independent charity organization.

The Productivity Commission (2010) in Australia found that there was a lack of evaluation criteria for the sector in Australia with which there was any agreement, and further, that the regulatory framework was complex, lacked coherence and sufficient transparency, and was costly to NPOs. Although the Productivity Commission called for a registration system for NPOs, its proposal lacked detail on what a measurement and evaluation framework should look like and the Commission appeared ignorant of what was going on elsewhere in the certification movement for NPOs.

As a result of the Scoping Study, or consultation paper in January 2011, the Government in May 2011 proposed a Not-For-Profit Sector Reform Council to establish a new regulatory system. Essentially, Australia seems to be heading toward a regulatory system that is primarily responsible for registration of charities eligible for tax exempt status and other conditions. The question is whether such a system is sufficient, or good enough, or whether there are alternatives, such as reputation, self-regulation, accreditation, certification, that should be considered.

A system based on reputation is inadequate because it invites strategizing with self-reporting, bias, and politicking. Thus, evaluation and reputation in areas such as popularity of lectures or professors in the university, or hospital, or university based on certain ranking criteria, reflect certain biases, frequently presented in the self-reporting model. However, were the reputation is based on systematically provided data, it may be preferable to that which is based on self-reporting. Nevertheless, the more idiosyncratic the service, the more unreliable reputational enforcement becomes.

Regulation which is largely based upon and limited to registration is widely required by law around the world, whether or not there are tax considerations applied to the NFP organization or donor. The focus is primarily on compliance with the tax laws with respect to public benefit and compliance with certain minimal requirements. Such a regulatory system is foundational, but not sufficient, quoting van Broekhoven and Kemps, 2011. OSCE Electronic Journal,

We have seen no evidence that a regulatory system imposed by the government instead of regulatory schemes imposed by independent watchdogs increased transparency and accountability of the NGO, and if it did, that it increased the level of trust between donor and NGO thereby increasing the level of giving.

Furthermore, the Australian registration system tends to be too complex and lack coherence. Compliance and reporting requirements impose significant costs; the trend has been for a growing compliance burden; the compliance burden is disproportionate to the risks involved and funds received; reporting requirements often appear to serve no worthwhile purpose; and lack of consistency and duplication add to the compliance burden. The US Internal Revenue Service system is based on self-reporting with insufficiently based verification. For example, just this year, the IRS revoked the tax exempt status of 20 percent of registered tax exempt organizations. For the most part, these revocations were the result of charity organizations failing to file their informational tax return for three consecutive years.

Will a "national one-stop-shop regulator" or registrar take care of the problem of bureaucratic red tape? Probably not because it will be based on self-reported, insufficiently verified data. See presentation of Dr. Lana Friesen.

To solve the credibility problem, a sufficient condition must include an assessment of membership and responsibility of governing board, fulfillment of public benefit goals, fiscal control and management, fundraising practices, and provision to public of information, such as disclosure of audited financial statements. A form of self-regulation by observation, and perhaps by third party, is rarely truly independent. Again, quoting from van Broekhoven and Kemp, Ortmann pointed out that:

Important to the satisfaction of these standards is the goal of ensuring that the public, donors and recipients of public benefits, have ready access to sufficient and adequate information to enable them to make informed decisions about the organization, their relationship to the organization, and the accountability of funds raised by the organization. Standards, without monitoring, provide little assurance to the donor regarding the transparency, integrity, and governance of charities and other public benefit non-governmental entities.

There is a debate in Australia regarding accreditation models, except with respect to the health service providers. In the US, according to Ortmann, the accreditation model for colleges and universities has been discredited, particularly when based on numbers of graduates, and performance or success rates of graduates.

Certification schemes did not exist in the US until quite recently, except in the case of ECFA. Now, BBB Wise Giving Alliance, and Maryland Association of Nonprofits, which is replicated in a number of states, are models of certification. The ICFO members, including CBF, DZI, ZEWO, ECFA, CCCC, and Taiwan NPO Self-Regulation Alliance are examples of how certification models can be effective. It is interesting that the ICFO members display: widely divergent organizational solutions; widely divergent investigative practices; widely divergent pricing strategies; widely divergent methods of financing; and widely divergent successes.

What we ought or need to know is the extent to which fraud and mismanagement exist in the third sector. According to the NCVO "Managing Risk" report of 2011,

There is a perception that the charitable sector's altruistic nature makes it a "soft target" for fraudsters. In reality most of what is known comes from anecdotal evidence. ... Over the past couple of years a number of surveys have tried to fill in this knowledge gap ... .

[T]he most recent assessment of fraud loss in the charitable sector, which is provided by, the National Fraud Authority's "Annual Fraud Indicator" estimates that total lost turnover for the sector is around ₤ 1.3 billion a year. ... an average of 2.4% of charities annual turnover. ... The estimated ₤ 1.3 billion figure captures fraud against charities (for example fraud perpetrated by employees and/or volunteers, or fraudulent applications for grants and/or financial support) as well as some of the financial impact that fake or sham charities have on legitimate charities.

Other statistics seem to suggest that there is less fraud in recent times than previously. However, the problem with these kinds of survey-based statistics is that it is quite likely that there is a high incidence of unreported cases, and it is difficult to figure out what is fraud vs. mismanagement vs. mission drift.

According to Ortmann, there is a lot of interesting work to be done by researchers, including theoretically, empirically, and experientially. For both policy makers and advocates for the third sector, insights can be gained by looking at what is being done elsewhere, and through the cross fertilization of ideas, practices, and successes and failures. This is one of the strengths of ICFO and its national member organizations.

Prof. Dr. Uwe Dulleck (QUT): The Economics of Credence Goods and the Role of Certification.

The need for certification implies asymmetric information. That is, some stakeholders (donors) cannot observe whether or not the organization is performing as promised. Therefore, there is the need for experts to observe and verify performance.

“Standard” goods, are good with a well-known or standardized quality or characteristics. One knows what they are and where to get them, and there are no transaction costs. Examples from the market include petrol, milk, or bricks, for example. “Search” goods, are those which can be observed, but one must observe the goods before buying. “Experience” goods have unknown qualities that are determined only after buying and using them. Examples would include electrical appliances, tools, or wine, for example. Standard, search, and experience goods do not require an expert to advise the buyer or stakeholder since the buyer or stakeholder knows what he or she is getting without such advice.

“Credence” goods, on the other hand, are those which the buyer does not know either before or after purchase. As a result, an expert knows what is needed before the purchase, and whether it will satisfy the needs of the purchaser or stakeholder. Examples include medical doctors who perform the diagnosis, prescribe the treatment, and perform the services; or mechanics who tell the automobile owner what is needed for the repair of the automobile and provides the service.

There can be problems with these experts as a result of their misdiagnosis, the treatments they prescribe, and the fact that the buyer or client or stakeholder does not have the required expertise to determine the need or quality of the treatment of performance.

There are four basic assumptions that one can make about credence goods. The first is homogeneity, or the idea that all consumers have the same probability have having the same major problem, and the same valuation. The second is the assumption of commitment where once the recommendation is made the customer is committed to proceed with the treatment. The third is the assumption of liability where the expert cannot provide the cheap treatment if the expensive treatment is what is really required. The fourth assumption is the assumption of verifiability where the expert cannot charge for expensive treatment if he or she provided cheap treatment.

In the case of credence goods, and assumptions regarding commitment, homogeneity, and liability or verifiability or both, market institutions solve the fraudulent expert problem without cost. Different results are obtained with variables in each of these assumptions.

Certification and credence goods lead to some problem areas and questions that need to be addressed. For example, what are the incentives for profit oriented certifiers? Profits, or enhanced reputation, may lead to biased reporting. Easy passes or easy and clean reports may lead to increased business or enlarged membership roles. When there is a certification process that may be dependent on outside experts, such as auditors or consultants, these experts will provide the service for a profit. Good or truthful reporting may lead to “abuse by rating agencies” later on. This may occur when the certifier has a good reputation for high standards, but then accepts or certifies an organization on the basis of lower standards, especially when the quality of service is not observable. Inflation of ratings may occur if consumers or followers of reporting act strongly against honest ratings or if the cost to reputation of inflation of ratings is low.

Based on the forgoing research and experimentation, according to Dulleck, there are conclusions that might be expected in the case of certification of nonprofit organizations. Incentives of any expert certifier need to be considered. Given that the true quality of an organization is likely to be always revealed, the strategic or profit maximizing motive and behavior of the certifier will play an important part in the certifying role. This implies that the strategic behavior of certifiers may be a barrier to entry on the part of nonprofits into the market, or segment of the market, since some certifiers may tend to be negative in reporting outcomes to avoid being regarded as incompetent.

Prof. Dr. Lana Friesen (UQ): Dishonesty in the Laboratory (and its Policy Implications): Economic & Intrinsic Motivation for Dishonesty.

The purpose of the study on which she reported was to measure the incidence of dishonesty in different settings and to explore the different incentives for honesty/dishonesty. Honesty is essential for many financial transactions. Yet there is evidence of the high cost to society of dishonesty. Studies have demonstrated that dishonesty is rife in American Society, and that fraud is the most expensive crime in Australia.

Dishonesty is defined as the disposition to deceive, defraud, or steal. It encompasses a broad range of acts from providing false information to more direct forms such as stealing or theft of property or equipment. The economic experiment here involved the study of two broad categories of dishonesty in individual decisionmaking. The first was direct theft task with more direct forms of dishonesty. The second was reporting task where the dishonesty occurred in the reporting activity.

Self-reporting is a tool commonly used in regulatory enforcement. Self-reporting maybe either compulsory (periodic mandatory reports) or voluntary (where there is an incentive for self-reporting). In the experiment, there was a 100 percent incidence of accidents. More reporting of violations was likely to occur where there was mandatory reporting than when there was voluntary reporting because of the aversion to telling outright lies.

The experiment involved all participants performing two tasks: theft task, and reporting task. In the theft task, they paid themselves real money for performance of certain tasks. In the reporting task, they were paid according to the decisions they made in their self-reporting of accidents which occurred. In the theft experiment, 33 percent of the participants were dishonest, with 26 percent of those taking the maximum amount of money that they could have taken, and 42 percent taking a significant amount of money. In the experiment measuring dishonesty in the reporting task, only 15 percent of the accidents that occurred were reported, and 47 percent of the participants never reported any accident. Only four percent reported all the accidents that occurred. There was a significant difference in the reporting between those who reported voluntarily as distinguished from those that reported because of compulsory reporting requirements.

What the experiment demonstrated was that there was substantial dishonesty in both tasks although the incidence of dishonest varied substantially across both tasks. Whereas, a third of the participants in the theft task were dishonest, virtually all the participants in the reporting task were dishonest, with a higher rate of dishonesty in the case of those that reported voluntarily.

The implications for nonprofit sector of this study are: (1) A significant minority of people are willing to be overtly dishonest, and some, to maximum extent. (2) Almost everyone may be prone to be dishonest in certain situations, especially in the case of organizational narcissism when outcome reporting and where findings are involved. (3) We should be cautious about using self-reporting when enforcement is weak.

Prof. Dr. David Greenfield: Health Service Accreditation as a Predictor of Clinical and Organizational Performance; Accreditation Issues for Consideration.

The prevalence of accreditation since the 1970s is due to a shift in philosophies of governments that provide for a framework for services, abatement or control of risks, and is part of a broader regulatory strategy. It is part of a strategy to produce quality, i.e. civic minded with the intent or desire to do the right thing, education, competition/consumer behavior, aspirational codes, enforced codes, mandatory general laws, and specific laws.

In Australia, accreditation in the healthcare is “responsive regulation” where the regulators are responsive to context, culture, and conduction of those being regulated. Accreditation involves the application of national and internationally agreed to standards for assessing and benchmarking performance. It is a peer led focus. Performance and environment are continually changing, shaped by development of organizations, updating of practices, and expectations of professionals and community. As a result, there is a continual need for evolving and updating accreditation standards and practices.

An examination of eight inquiries into patient safety identified a number of common themes. First, some health care was far below quality. Second, quality monitoring processes were deficient. Third, individual health care providers and patients raised concerns. Fourth, critics were often ignored or abused. Fifth, teamwork was deficient. Sixth, patients and families were not informed members of the team. All of this pointed to risks in accepting individual self-assessments.

The key question is: What is the aim of an accreditation program in health care? It is to improve the quality and safety in health care.

So, what are the potential benefits/costs for a peer review accreditation program? First, it promotes quality. Secondly, it promotes professional standards and norms. Thirdly, it promotes professional development standards. Fourthly, it provides for enhancement of networks within the profession and sector. Fifthly, it provides for the spread of information and evidence. Sixthly, it promotes the enhancement of a community of practice. However, it also takes time and involves the cost of self-study and for covering the accreditation process, and in can be a threat to professional autonomy.

In the University of New South Wales study of accreditation, there were 14 standards applicable to organizational functions, which included continuum of care, leadership and management, human resource management, information management, safe practice and environment, and improving performance. Accreditation standards covered 43 criteria, 19 which were mandatory, and 24 non-mandatory.

The accreditation process involved a self-assessment against the 43 criteria, a survey-assessment by peer reviewers, and a survey report. For the qualitative methods utilized, the assessment findings appropriately strove credible and verifiable. Although the results were not precisely repeatable, the aim was to be rigorous as possible, transparent, and defensible.

One research aim of the research project here was to explore the relationships between accreditation, clinical performance, organizational culture, and consumer participation. One of the questions here is why accreditation been effective in health care? If healthcare facilities are not completing accreditation programs, how can they demonstrate efforts to improve safety and quality?

The second aim of this research project was to examine the influence of surveyors on both the accreditation process and outcome, and on their own healthcare organizations. Here the critical issue was reliability. Reliability of assessments is a challenge to many industries, including academia, management, agriculture, and healthcare. The studies here caused the team to rethink its assumption that reliability of outcome was the right notion to be investigated. Instead, the team concluded that the reliability of process and consistency in the application of standards were, more accurately, the outcomes to be pursued.

The ability to make judgments in an accreditation process is almost impossible because there are always differences of opinion by the members of the survey team. It is important to be realistic about the ability to make judgments against criteria when judgments have subjective elements. Thus, factors that promote reliability include: peer-based review, a defined assessment program, collective training, appropriate management and leadership, and ongoing assessment of the surveyors.

In the healthcare sector, insurance companies want a proximate measure of quality. Municipalities and political entities want assurance of quality. And media is driven by its investigation and reports on the quality of healthcare service.

Context is important. There are different ways of addressing accreditation. But, a key question should be: what is the aim of a particular accreditation program?

Les Hems: Centralised Versus Distributed Systems of Regulation and Certification.

The issues here related to the building of a regulatory system. Is there a need for regulation, and if so, why? Two reasons might be to protect the interests of citizens, and to assist the functioning of the markets. What might be missing here in the discussion was what interests required protection and how the markets functioned better as a result of some kind of regulatory system.

Within the civil society sector, the charities, the not-for-profits, associations, clubs/societies, and community organizations, as well as social enterprises were among those entities that would be regulated. But, then there is the issue as to what societal roles and functions were to be regulated? These might include service providing organizations, campaigning/advocacy groups, and grantmaking organizations.

In building a regulatory system, who are the stakeholders and what are their expectations? And, do we really know what the stakeholders’ expectations are in relation to the role and operation of not-for-profit organizations and charities. Stakeholders include the general public, donors and funders, beneficiaries, clients, members, and managers and directors (as well as employees) of the NFP organizations. Assuming that there are different expectations for different categories of stakeholder, can these expectations be aligned or are the competing? Then there is the question of how to measure expectations (performance) and what metrics should be applied. How can performance be communicated, an especially important question when there is emphasis on impact measurement, and what signals prompt stakeholders’ response.

In building a regulatory system, the nature of annual reporting would include Financial Reporting Standards, Audit and Assurance Standards, such as those of Centraal Bureau Fondsenwerving (CBF), the UK Charity Statement of Recommended Practices (SORP), Social Return on Investment/Impact Statements, and International Integrated Reporting. Moreover, the nature of regulation should include the roles of self-reporting and self-regulation, the roles of accreditation and certification, and the role for formal government regulation.

Research & Policy Conference

22 July 2011

The studies presented by Drs. Andreas Ortmann, Uwe Dulleck, Lana Friesen, and David Greenfield, as well as the Centre for Social Research, UNSW, Director of Research, Les Hems, were presented again in the policy forum on 22 July 2011 as a prelude and to provide the background for the case studies and policy considerations for a regulatory regime for not-for-profit sector in the 21^st century. The presentation by Dr. David Greenfield was the Case Study 3.

Trevor Garrett: Case Study 1: New Zealand Charities Commission.

The Charities Commission was established in 2005 to register and monitor charitable organizations in New Zealand. As such, it is an autonomous Crown entity.

Many charities are an invisible part of the economy. The Charities Commission in New Zealand servers three major functions: education, registration, and monitoring compliance and investigating claims of noncompliance. To be more specific, its functions include: promoting public trust and confidence in the charity sector, encouraging and promoting the effective use of charitable resources, educating and assisting charities in relation to matters of good governance and management, considering and deciding on applications for registration as a charitable entity, compiling and maintaining a registry of charitable entities, monitoring charities to ensure that they remain qualified for registration, and inquiring into charities that may be involved in serious wrongdoing.

The registration requirements include the submission of the application for registration, together with the rules and the identification of officers. Annual registration renewals are required with the annual financial statements. Charities are also required to notify the Charities Commission of any changes in the organization.

The open data – transparency project provides for charity register and access to charity data through the Internet. There is also an advanced search option which is designed to help charities and individuals query the Register’s data in a more complete and complex way than a simple Registry search.

The main stakeholders are the public, the charities, and the government. Commission outputs include monitoring compliance, advising, educating, and providing information to charities, and advising and providing information for government reflect a higher degree of direct influence by the Charities Commission. Charitable outcomes are that the public is better informed about registered charities, charities are compliant and have the required knowledge and incentive to meet the requirements of the Charities Act, and the government is better informed about the charitable sector and the needs of the public in supporting charities. A stronger, more effective charitable sector involves responsive government policy to the needs of charities and the needs of the public in supporting charities, effective governance and management of charities with proper use of charitable resources which are used effectively and efficiently for the intended purpose, and informed decisions on the part of the public where the public has trust and confidence in the charitable sector.

Although not directly addressed in the research presentations and conference reports, the use of the word, “charity,” has not been free of ambiguity. This was addressed here where there was a recognition of a disconnect between the legal and colloquial meaning of the word, “charity.” Thus:

The terms of s. 5 make it clear that the term “charitable” is used not in its ordinary dictionary meaning but in the particular technical meaning that the law has ascribed to the word. The usual starting point for a consideration of that technical meaning is the preamble to the Charitable Uses Act 1601, often referred to as the Statute of Elizabeth 1. The preamble, with its list of charitable purposes, came to form the basis for decisions of the Courts as to what was or was not charitable, so that a technical meaning, wider than the ordinary usage of the word, has evolved.

Under existing case law, if the Charities Commission declines the registration of an organization, it must state the reasons for doing so. The challenge is publishing the decisions in understandable language so all can read and understand the basis for the decision.

The Charities Commission’s monitoring and investigative activity results from the complaints filed with the Commission, or from external sources, in which anyone has been alleged to have been engaged in conduct in breach of the Charities Act or serious wrongdoing in connection with a registered charity. Thus, complaints may relate to internal conflicts, the quality of financial statements, non-compliance with the rules, sub-optimal decisionmaking, fraud and criminal content by officers, hostile takeover bids, vote buying, private pecuniary gain, and non-charitable activity. Since June 2009, there have been 835 investigations, of which 20 percent were as a result of complaints submitted from the public, 5 percent as a result of monitoring of media, 25 percent as a result of referrals from within the Commission, 5 percent from government agencies and funders, and 10 percent resulting from the review of annual returns.

The Charities Commission is making a difference through its registration of charities (more than 25,000 charities registered), its provision of information regarding charities which has promoted transparency, its activity in monitoring and investigating complaints of noncompliance with the law and other serious wrongdoing, and its educational programs and forums.

Daniel Zuccarini: Case Study 2: State Government Regulation of Fundraising.

The New South Wales Government Office of Liquor, Gaming and Racing provided the case study for state regulation of charity. The objectives of the fundraising legislation were to promoted proper and efficient management and administration of fundraising appeals for charitable purposes, to ensure proper record keeping and auditing of records and accounts in connection with fundraising appeals, and to prevent deception of members of the public who desire to support worthy causes.

The role of the New South Wales Office of Liquor, Gaming and Racing is to ensure that persons conducting fundraising activities are operating in accordance with the law. It does so by granting authority to individuals and organization to raise funds, by providing educational programs, and by undertaking compliance programs. According to my understanding, the emphasis appears to be primarily on the actual fundraising activity or solicitation of funds, rather than the broader area of the governance, management, and accountability of the organization raising funds, which were the areas that seem to be addressed in the Productivity Commission Research Report or in the Scoping Study or Consultation Paper.

An authority to raise funds must be issued before an organization or entity is able to lawfully conduct fundraising from the public in New South Wales unless the organization is exempt. Exemptions include religious or government controlled organizations. Moreover, although the conditions for fundraising are flexible and may be modified, organizations holding authority to conduct fundraising must comply with the Authority Conditions. The Office of Liquor, Gaming and Racing specifies the rate of return on fundraising appeals, such as a minimum of 50 percent for cash or donation appeals, 40 percent from raffles, 30 percent from art unions, 12.5 percent from House, and fair and reasonable proportion of gross proceeds from other appeals.

The principle is that charities are supported by donations and the public should have confidence that its donations are applied to the purposes for which they were solicited and intended. Therefore, the Office of Liquor, Gaming and Racing have the powers of inquiry where there is misconduct and wrongful use of funds and assets, mismanagement is suspected, and noncompliance with the law is suspected.

Sanctions for mismanagement or misconduct include prohibition of further fundraising, the imposition of special conditions, the appointment of an administrator, and prosecution.

In addition to the principles and rules regarding the actual practice of raising funds, the Office of Liquor, Gaming and Racing, applies standards of accountability and record keeping. These include the requirement that accounting records must be kept for seven years, that all money received in the course of a fundraising appeal must be banked immediately, without deduction, and that all expenditures be supported by documentary evidence, including evidence that they were properly incurred and authorized by the committee. Similarly, all assets must be recorded. Annual audited financial statements are required except with respect to organizations that raise less than $100,000 p.a. unless they are submitting renewal applications or when requested.

Additionally, there are requirements or standards with respect to the responsibilities of the governing body, and access to information, such as audited financial statements, extracts from objects and constitution, and names and occupations of members of the governing body.

Adri Kemps: Case Study 4: Certification of Fundraising in the Netherlands.

In this Case Study 4, The Netherlands is presented as a model, from a European perspective of independent oversight on fundraising. The Centraal Bureau Fondsenwerving (CBF) was established as an independent foundation in 1925 to gather and publish information on fundraising organizations in order to protect the interests of donors and charities.

In 1958, CBF became one of the founding national members of the International Committee on Fundraising Organizations (ICFO). ICFO is an international umbrella organization or association comprised of 13 national monitoring organizations which are members of ICFO and four other organizations associated with some level of monitoring and interest in advancing independent monitoring of public benefit organizations which are supporting members. Additionally, there are emerging and functioning monitoring organizations in Cambodia, China, India, Indonesia, Mexico, and the Philippines with which ICFO is working. We believe that NPOs, fundraising and charity work are important elements to strengthen civil society and accountability.

Since 1965, when the income raised by CBF registered charities was the equivalent of less than €100 million, in 2009, the income raised by charities was approximately €1.3 billion. Of that amount, approximately 38 percent was dedicated to international development, 13 percent to health, 34 percent to culture and social welfare, and the remaining 15 percent to nature. There is increasing emphasis in the Netherlands by the Dutch government to increase the level of charity giving to social welfare.

As in many parts of the world, the issue is one of independent monitoring, which is regarded as the third way. State regulation is largely characterized by registration and some level of fiscal oversight. In some countries, such as Italy and the Netherlands, the Chamber of Commerce maintains the records with basic information in a registry which is open to the public. In the United Kingdom, the Charity Commission keeps the registry, whereas in Belgium, France, and Germany, registration is maintained by the district courts. These registration authorities vary in their registration requirements and what information must be available to the public.

There is also self-regulation which is done by the sector or some portions of the sector. Here there are codes of conduct issued by umbrella bodies, capacity building, and some form of requiring and promoting transparency.

Independent monitoring is the third way for promoting accountability. Here, independent monitoring is often characterized by the granting of a seal of approval (or recognition of accreditation) by an independent agency, and what is known as donor advisory by some independent watchdog group or organization.

In the Netherlands, CBF registered approximately 1,350 NGOs and maintains the website in which data on the NGOs is maintained, which serves as a knowledge centre with a data base, report on fundraising, and digital newsletter. CBF grants seals of approval to 272 charities, of which 77 are certified small charities, and provides statements of no objection for start-up charities. Additionally, CBF performs annual monitoring and conducts on-site visits, and audit reports which are used by the government and media.

As in the case for most of the ICFO member national organizations, CBF follows a practice of monitoring NPOs against certain standards. These standards cover fundraising practices (based on principles of truthfulness, accuracy and currency of information, and avoidance of manipulative pressure on donors), finances (with requirements for audited financial statements, limits on fundraising and administrative ratios, control systems on expenditures, and disclosures of financial reports), and governance (where the focus is on the functioning of planning and supervision of the organization, on effectiveness of its programs, and transparency of its operations as well as salary structures).

There are trends in the sector that are interesting to watch and consider how they will affect the monitoring of the sector and accountability. The first is trend toward quality measurement, or impact or effectiveness of the charitable activity. For reasons beyond the discussion here, this does not seem to have really caught on except perhaps in the case of major donors and philanthropists. CBF does not require reporting of effectiveness or impact measurement. The second trend is to establish limits on administrative and fundraising costs. What we are seeing is that both state regulation and the articulation of standards are trending toward specified ratios, such as fundraising costs cannot exceed 25 percent of the donated income. The third trend is greater use of professional employee within the monitoring organizations and less reliance on volunteers.

There are certain strengths and weaknesses associated with state regulation. First, it is important to understand that charitable activities and civil engagement are voluntary and private acts of people. Therefore, state involvement in regulating these activities should be restricted less this voluntary engagement, motivation, and private activity is diminished.

Second, the state can protect and support civil engagement through prosecuting criminal conduct and criminal abuse of charitable organizations. However, further “regulation” and monitoring should be left to independent monitoring organizations and self-regulation initiatives, an idea in the best sense of the concept or doctrine of subsidiarity.

Third, state authorities are generally not competent or accustomed to the nature and role and character of public benefit activities, their dynamic development, and the motivations and mentality of their leaders. Therefore, a great deal of state regulation carries the risk of being inadequate, or worse, disproportionate, to the problem the state seeks to address, or conform to its own value set.

On the other hand, the strengths and weaknesses of self-regulation and independent monitoring are found in the nature of the third sector. A strength of self-regulation is the voluntary acceptance of a code of conduct by those who are part of the group submitting to the reputation of the group through the acceptance of such a code of conduct and compliance with that code through accountable practice. The weakness is that the monitoring of compliance is dependent to a large extent of self-reporting. However, self-regulation can lead to a culture of transparency and accountability in the third sector as well as improvement of the sector’s processes and practices through capacity building. Nevertheless, in order to build on, and enhance donors’ trust, as well as the trust of the general public, self-regulation needs to be complete and complimented by independent monitoring.

Hon. Rollin Van Broekhoven: Review of Fundraising Certification Initiatives Across the Globe; Challenges to Accountability.

Several years ago there was a survey of the number of articles published in the news media about the nonprofit sector, and specifically, the kind of attention charities were getting in the public arena. The key subjects of alleged problems with NPOs covered in these articles were: board governance (129 articles), legal investigations (70 articles), conflicts of interest (61 articles), executive compensation (60 articles), extravagant spending (60 articles), and fundraising practices (45 articles). There were an additional 43 articles in which the subjects were an unwillingness on the part of a particular NPO to be open and transparent in responding to requests, poor quality of audited financial statements, the failure to stay current with changes in the law, failure to follow the organization’s own bylaws and policies, improper allocation of fundraising and overhead expenses, and the use of restricted funds for operational purposes. Most of these could be attributed to some failure with respect to board governance, although there was a separate category for that.

Almost immediately when there is a reported “scandal” in the news media, or what we might call “an odor piscatorial,” in the third sector, there are immediate calls for legislation, or some form of state regulation of the sector.

The statutory scheme and regulatory regime are almost always the same: periodic and regular reviews of tax exempt status of the NPO; revocation of tax exempt status for accommodation to tax shelters; increased sanctions for self-dealing of alleged improper investments; establishing standards for government review of alleged conversion of tax-exempt organizations to for-profit organizations; delegated authority to states to pursue federal actions against NPOs for violating federal tax laws; improving the quality of informational tax returns and financial statements, often with requirements that have little to do with the alleged shortcomings in the reporting; penalties for failure to timely file informational tax returns, required disclosures on tax returns and websites of the application for tax exempt status and determination letter from the tax authorities; detailed specifications on governance policies, including board make-up and board member duties; etc. All because someone thought that there was something wrong that needed to be corrected by the heavy hand of government.

The adequacy of the model frequently followed is subject to question. The model is this: Some authoritative body, such as the state, establishes rules regarding the type of information to be disclosed, based on the state’s value set, and not on some universally binding moral principles. Secondly, accountability requires disclosure of specific information to designated individuals or entities, such as the state. Third, accountability is generally confined to information regarding the process of accounting for funds and whether or not the NPO complied with certain processes or procedures in accumulating and reporting fund received and expended.

Except with respect to certain tax related information, there is little accountability, if any, required of the organization not submitting itself to accountability and monitoring, which represents the vast majority of NPOs.

There are a number of challenges to thinking about accountability that effect whether there is a centralized state imposed regulation, self-regulation, or independent monitoring. One of the challenges is simply the matter of language and definition. Jargon and cliché, euphemism, question-begging, and cloudy vagueness are deadly enemies of healthy political life and civil society. So, for example, “transparency” and “accountability” are examples of such words that have, or are becoming devoid of any meaning.

A second challenge is that of postmodernity and postmodernism, where doubt is a pervasive feature of modern critical reason, and where there is insistence that all knowledge takes the form of hypotheses. Relationships exist solely for whatever rewards the relationship can deliver. Systems of accumulated expertise represent multiple sources of authority, frequently internally inconsistent and divergent in their implications. Instant availability of data and the explosion of knowledge lead to a belief that harnessing the knowledge explosion offers the key to total and instant information and the power to control everything.

A third challenge is to accountability and monitoring NPOs is the challenge of the appearance of impropriety. Although rules and codes of conduct and ethics have been around for a long time, what is new and unique over the past few decades has been the fact that these rules tend to express appearances and procedures rather than matters of substantive morality and ethics. How does accountability thrive in the context where true facts relating to ethical conduct can be manipulated by good public relations experts?

A fourth challenge is the assumption that accountability represents some moral virtue. Contrary to popular understanding within the third sector, accountability is not a moral virtue. Rather, it is simply the language used by certain “experts” to describe and evaluate the process of whether money is treated in accordance with certain specified rules.

A fifth challenge is the challenge of understanding the nature and role of government with regard to civil society and accountability, and threats to freedom and accountability.

The sixth challenge is what might be called the challenge of media ecology. Today, electronic and digital equipment have redefined how we think, communicate with others, and how we have access to the world of information. Where persona are created digitally through MySpace, Facebook, Twitter, blogs, text messages, where we live in a world of virtual reality rather than actual reality, where definitions and concepts of transparency and accountability become confusing, where branding becomes what marketers and public relations make it out to be, and where giving is impulse and manipulated giving prompted by television and Internet images, donor loyalty, and principles of accountability become things of the past. There are real consequences to this, including desensitized passivity, absence even though physically present, inability to make moral judgments and antisocial behavior, isolation and absence, narcissism, instant gratification vs. deferred gratification, and goallessness.

Models for addressing NPO accountability in the face of these challenges include: accountability structures imposed by government; simple disclosure of financial information, such as what is provided by portals like GuideStar, independent rating regimes based primarily on financial data and ratios, and the ICFO model of independent monitoring or self-regulation with independent monitoring.

In most countries, the government model is characterized in its most basic form as requiring registration and providing tax exempt status for NPOs. Little is required other than filing an application and some rather routine decision as to whether the organization satisfies the requirements of law. The danger here is that the government, with its coercive power, can deny status based on its perceived political values and goals. The weakness is that standards without monitoring offer little assurance to the donor public regarding governance, integrity, transparency, and accountability, or that with heavy handed government monitoring with potential denial of status or criminal sanctions tends to increase administrative costs and even prevent the organization from performing its public benefit services.

A model which depends on little more than the disclosure of financial information is largely dependent on self-disclosure, such as in the case of informational tax returns. The weakness with this model is that the disclosures contain rather technical accounting information that often is not particularly accessible to the donor public. Moreover, without diminishing the importance of financial information, this type of reporting says little about the organization, its governing structures and quality, its fundraising operations, potential conflicts of interest, and its compliance with law and other standards.

Models which are based on independent monitoring organizations evaluating financial information and providing rating systems for comparative evaluation of NPOs, have the strength of providing totally independent monitoring schemes. The disadvantage is that this totally independent monitoring scheme is usually funded by some wealthy, self-appointed individual with the goal of cleaning up the sector, but often without any appreciation or understanding of the nature of charity, and dependent upon the work of financial analysts who have some requisite expertise in analyzing financial reports.

The models reflected by the members of ICFO combine an element of self-regulation and independent monitoring through analysis of the NPO against established standards and an accreditation or certification system based on compliance with those standards. The strength of this kind of model is that requires compliance on the part of the NPO with certain standards of conduct that encompass responsible governance of the operations and directions of the NPO, the adequacy of financial information established by external audit processes, the required disclosure of audited financial information, the integrity in the fundraising practices, and the avoidance of conflicts of interest or disclosure of related party transactions.

However, more than simply applying standards of ethical conduct, this model is strengthened by compliance monitoring through evaluation of self-reported information and on-site reviews and investigation, all enforced by appropriate sanctions for noncompliance with the specified standards. Moreover, the strength also lies in part by commitment by those seeing seeking accreditation to a set of standards and to the enforcement procedures that promote integrity, transparency, and accountability within the sector.

Theologically, the interesting point of all of these presentations and of the whole idea of charity monitoring is the vindication of the theological doctrine of original sin. Otherwise, why should anyone be concerned with transparency and accountability in the sector, be interested in what kind of monitoring would be done, whether by government or by some form of self-regulation or independent monitoring through an accreditation process?

It seems that the purpose of all of the discussion in these past two days, and indeed for the concept of transparency and accountability are: to promote moral virtue and competent leadership within the sector and from the sector, to increase and engage public trust, and to engage and promote donor trust. The sector should want to promote loyalty between donor and charitable organizations. After all, keeping donors is less expensive than acquiring donors. Moreover, the sector builds donor trust when it assists charities to gain public confidence in their operations, transparency, and how they solicit funds for the charitable purposes.

Ultimately, the purpose in any regime for promoting transparency and accountability, and model for how this is done, is to promote generosity. After all, this is what should mark both the sector and the donor public, and through it, the character and reputation of a country.

My interest over the past 45 years in the sector is not simply viewing my involvement as a donor, or the contributions of other donors as a financial transaction. I do that when I pay my taxes. Rather, it is my embrace of the needs of the human community and how those needs are met through the organizations I support. My motivations in giving to charity are quite different than my motivations in paying my taxes so that some far-away government authority can address those needs that touch my heart.

Epilogue

As I now reflect on this conference, and the Research Symposium which preceded it, and now write these last lines from my presentation, I thought of a quote from Alexis de Tocqueville I read during my presentation in the Research & Policy Conference, and specifically how different the perspective presented by that extended quote was from a hymn sung in my church recently.

In his Democracy in America, Volume IV, Part IV, Chapter 6, What Kind of Despotism Democratic Nations Have to Fear, Tocqueville wrote that he had noticed that during his stay in the United States that a democratic social state so similar to America could offer singular opportunities for the establishment of despotism. He noted that on his return to Europe, he saw that most of the rulers of Europe had already made use of the ideas, sentiments, and needs that arose from a social state in order to expand their powers.

As Michael Novak observed during his opening remarks at the opening dinner of the Summer University of Aix en Provence, in August 2005,

We can be pretty confident that Tocqueville would have been quite worried, however, about a new method employed by the state (or if not the state, at least the elites who make it their chief interest to enlarge the state) to turn civic associations into instruments of the State. These new organs are typically called Non-governmental Organizations, NGOs, and many of them are genuine associations, which allow citizens to govern aspects of their own lives cooperatively without turning to the state. But many of them are no more than lobbying organizations, founded and financed to build constituencies for enlarging government activities and government bureaucracies.

And so, quoting from Democracy in America, as I did during my presentation, it seems that these thoughts of Alexis de Tocqueville, sum up pretty well what the conference was all about.

When I think about the petty passions of the men of our times, about the softness of their mores, about the extent of their enlightenment, about the purity of their religion, about the mildness of their morality, about their painstaking and steady habits, about the restraint that they nearly all maintain in vice and virtue, I am not afraid that they will find in their leaders tyrants, but rather tutors.

. . . .

I would like to imagine with what new traits despotism could be produced in the world. I see an innumerable multitude of men, alike and equal, who turn about without repose in order to procure for themselves petty and vulgar pleasures with which they fill their souls. Each of them, withdrawn apart, is a virtual stranger, unaware of the fate of the others: his children and his particular friends form for him the entirety of the human race; as for his fellow citizens, he is beside them but he sees them not; he touches them and senses them not; he exists only in himself and for himself alone, and, if he still has a family, one could say at least that he no longer has a fatherland.

Over these is elevated an immense, tutelary power, which takes sole charge of assuring their enjoyment and of watching over their fate. It is absolute, attentive to detail, regular, provident, and gentle. It would resemble the paternal power if, like that power, it had as its object to prepare men for manhood, but it seeks, to the contrary, to keep them irrevocably fixed in childhood; it loves the fact that the citizens enjoy themselves provided that they dream solely of their own enjoyment. It works willingly for their happiness, but it wishes to be the only agent and the sole arbiter of that happiness. It provides for their security, foresees and supplies their needs, guides them in the principal affairs, directs their industry, regulates their testaments, divides their inheritances. Can it not relieve them entirely of the trouble of thinking and of the effort associated with living?

In this fashion, every day, it renders the employment of free will less useful and more rare; it confines the action of the will within a smaller space, and bit by bit it steals from each citizen the use of that which is his own. Equality has prepared men for all of these things: it has disposed them to put up with them and often even to regard them as a benefit.

After having taken each individual in this fashion by turns into its powerful hands, and after having kneaded him in accord with its desires, the sovereign extends its arms about the society as a whole; it covers its surface with a network of petty regulations—complicated, minute, and uniform—through which even the most original minds and the most vigorous souls know not how to make their way past the crowd and emerge into the light of day. It does not break wills; it softens them, bends them, and directs them; rarely does it force one to act, but it constantly opposes itself to one’s acting on one’s own; it does not destroy; it prevents things from being born; it does not tyrannize, it gets in the way, it curtails, it enervates, it extinguishes, it stupefies, and finally it reduces each nation to nothing more than a herd of timid and industrious animals, of which the government is the shepherd.

The hymn is: All Things Are Yours: We Make That True. The second and third verse read:

"Give out of love" your Word commands;
We are your head, your heart, your hands.
Your Word you underscore with needs
By using us to answer needs.

Oh what a joy to give, and then out of compassion give again.You have no needs -- though that is trueThe gifts we share are given to you.

For many, this represents the difference between stewardship and philanthropy.

* This blog post represents my interpretation of the presentations made in Sydney, Australia at the Research & Policy Conference, Regulation for Not-For-Profit Sector in the 21st Century, sponsored by the University of New South Wales, Centre for Social Impact. The views are mine and mine alone, and are not intended to convey any positions, intended or not intended, by the University, the Centre, the hosts convening the Research Symposium and Research & Policy Conference, or the presenters. Nevertheless, it was an honor to be invited and to represent the International Committee on Fundraising Organizations (ICFO).

Transparency and Accountability of Civil Society in the Context of Terrorism

2011-06-28T15:45:00.001-04:00

Transparency and Accountability of Civil Society in the Context of Terrorism

Hon. Rollin van Broekhoven

President, International Committee on Fundraising Organizations (ICFO)

Adri Kemps

Secretary General, International Committee on Fundraising Organizations

Executive Director, Centraal Bureau Fondsenwerving (CBF)

Background

As stated in the September 2002 issue of International Journal of Not-For-Profit Law, in an article titled, Charities and Terrorism: The Charity Commission Response: “It is difficult to imagine an issue that could undermine public faith in charity more than the suspicion of terrorist links.”

The issue was brought to our attention in ICFO in December 2001, following the Al-Qaeda attacks on the World Trade Center in New York and the Pentagon in Washington. The Bush Administration, as part of its War on Terrorism, declared legal and financial war on groups believed to have aided and supported sponsors of terrorism. These initially included Islamic groups that reportedly raised funds that helped militants in the Palestinian territories, Iraq, Afghanistan, and other conflict areas in the Middle East.

Then, the European Commission held a conference in mid-February 2009 addressing the European Center for Not-For Profit Law (ECNL) study on ‘Recent Public and Self-Regulatory Initiatives Improving Transparency and Accountability of Non-Profit Organizations in the European Union’. The focus of this meeting at the EU headquarters in Brussels was to encourage discussions on the outcome of this study, its recommendations, and possible follow-up.

Much of the agenda discussion during this conference arose out of the recommendations of the Financial Action Task Force on Money Laundering (FATF-GAFI), and specifically, out of Special Recommendation VIII (SR8). Broadly stated, the FATF in SR8 recognized that non-profit organizations are particularly vulnerable to being abused for the financing of terrorism. Whether or not this is true in much of the developed world may be subject to debate. Nevertheless, countries were encouraged to review the adequacy of their laws and regulations to ensure that the sector was not misused by terrorist organizations posing as; (1) legitimate non-profit organizations; (2) by legitimate organizations that were exploited as conduits for terrorist financing; or (3) were used for concealing and obscuring the clandestine diversion of funds that were donated for legitimate purposes to terrorist activities. A document, dated 11 October 2002, entitled ‘Combating the Abuse of Non-Profit Organisations’, provided detailed recommendations or best practices for addressing SR8.

In January 2009, the European Court of Justice issued its decision in Hein Persche v. Finanzampt Lüdenscheid, addressing the tax deductibility of a gift-in-kind given by a taxpayer in one country to a charity located in another country. Briefly, the Court ruled that legislation of a Member State which precluded the deduction for tax purposes of gifts to bodies established and recognized as charitable in another Member State violated Article 56 EC. This limited the free movement of capital, which Articles 56 to 60 EC addressed. This rule applied to claimed donations without regard to whether they were financial transactions or gifts-in-kind. Although this decision was unrelated to any potential financing of terrorism, we believe that achieving the objectives of SR8 becomes more complicated when countries are not in a position to evaluate the legitimacy of charitable organizations in other Member States or determine whether the funds contributed for legitimate purposes are diverted to terrorist activities.

Know Your Donor; Know Your Beneficiary

A number of examples have been provided to illustrate the reason for SR8 and the problem. The 11 October 2002 document detailing best practices stated the problem as follows:

Unfortunately, numerous instances have come to light in which the mechanism of charitable fundraising – i.e., the collection of resources from donors and its redistribution for charitable purposes – has been used to provide a cover for the financing of terror. In certain cases, the organisation itself was a mere sham that existed simply to funnel money to terrorists. However, often the abuse of nonprofit organisations occurred without the knowledge of donors, or even of members of the management and staff of the organisation itself, due to malfeasance by employees and/or managers diverting funding on their own. Besides financial support, some non-profit organisations have also provided cover and logistical support for the movement of terrorists and illicit arms. Some examples of these kinds of activities were presented in the 2001-2002 FATF Report on Money Laundering Typologies; others are presented in the annex to this paper.

Here is the situation: There is a relief and development charity based in Europe or North America. The charity is recognized as a tax exempt organization under the laws of the relevant country in which it is located, and may or may not be monitored by an independent, or self-regulatory, non-governmental monitoring or accrediting body, such as those which are members of ICFO. Through its child sponsorship funding and other fundraising efforts, it supports a group of orphanage homes in the Gaza Strip. These homes may be owned and operated by that charity, or a consortium of similar cooperating charities licensed in Palestine.

While the United States, Canada, the European Union, and other countries characterize Hamas as a terrorist organization, the United Nations, Russia, and other countries do not. Nevertheless, Hamas, in addition to governing the Gaza Strip, may be responsible for operating these orphanages and may even take over ownership of the properties. Much of the funding as a result of individual donations is directed to the humanitarian causes for which it is raised in North America and Europe. However, as money is fungible, some of it may end up in the hands of Hamas and be used for the purchase of weapons and munitions, communications equipment, medicine, visas and so on. These appropriations could subsequently be utilized when fighting UN police forces, Israeli forces, and other allied groups.

Or, for another example, during the 2010 summer floods in Pakistan, relief aid flowed to NGOs involved in alleviating the devastation of the flooding. Demands for food, water purification tablets, shelter, medicine, hygiene kits, and medical teams to help save the lives of flood victims poured into government offices and NGOs. Requests for aid also addressed the added need for transportation of these supplies and medical teams by raft, boat, or donkey. While militant groups in Pakistan previously had limited success in providing aid to refugees, the flood disaster, as well as anger and mistrust of the Pakistani government, had certainly given militant groups offering services and disaster relief some credibility. Jamaat-ud-Dawa (JuD), under the name of Falah-e-Insaniyat Foundation Pakistan, had set up approximately 29 relief camps in a number of flooded areas. According to one report by the Times of India, JuD had set up camps in its own name until police started demanding extortion money. JuD claimed to have provided food to 50,000 flood survivors in all four provinces every day and was in the process of reaching out to 100,000 survivors. Additionally, it claimed to be distributing packets of food, hygiene items, and other items to 8,000 families.

There are a number of issues in these examples with respect to transparency and accountability in the charity sector in connection with SR8. One is simply the question of whether the charities in question are in compliance with national laws. In the case of the European and US charities providing aid to the Gaza Strip, most of them were completely legitimate and operating in full compliance and respect to their fundraising and humanitarian activities. Moreover, many were accountable to the public regarding their operations, to ensure they function in accordance with the laws of the US or of a European country in which they were located. Many countries require that domestic charities legally control and operate the foreign entity to which it channels funds. In the United States, the tax authorities will disallow a tax deduction for contributions to domestic charities if the domestic charities are mere conduits for funds to foreign organizations. In Europe, a different result would probably be obtained as a result of the European Court of Justice Decision in Hein Persche v. Finanzampt Lüdenscheid.

The situation with respect to the disaster aid in Pakistan might be different, although there was no indication that JuD was operating outside the limits of Pakistani law. However, there were reports in the international press that JuD was involved in the attacks in Mumbai, India, and was a front for a terrorist organization, Lashkar-e-Taiba. As a result, there may have been questions about the ultimate use of funds donated.

Secondly, there is simply the question of standards and monitoring to be performed on charities, and whether such monitoring is to be done by government agencies or some form of independent or self-regulation monitoring regime. In the case of government monitoring, what sort of sanctions should be applied; criminal, civil, or some other form of sanction? Prosecution is challenging in these cases because even if intelligence shows signs of terrorism support, it is difficult, if not impossible in many cases, to obtain the unambiguous evidence that is admissible in court proceedings to prove that the money ended up in the hands of terrorists overseas and that the charity knew that to be the case, or understood its probability. This is often further complicated by the security classification of the intelligence gathering methods.

So, what is the solution? We are not persuaded that reliance on governmental regulation and charity monitoring are always the answer. Indeed, it is in the context of increased cross-border fundraising that independent self-regulation and charity monitoring mechanisms may actually foster, from a national perspective, an international response to money laundering and terrorist financing and the misuse of funds donated by individuals to charities that is better than a response by individual states through active regulation and monitoring of the sector.

ICFO, as an international umbrella body of national monitoring organizations, has led coordinated efforts to contribute to the cause of transparency and accountability on billions of funds raised from private donors and spent for the public benefit. It is, we believe, noteworthy that the FATF in its Special Recommendation VIII specifically recommended that the third sector, or NGO sector, take action on Anti-Money Laundering/Counter-Terrorism Financing (AML/CTF). ICFO is building a network on the concept of donor’s trust instead of promoting specific measures on AML/CFT. The question naturally arises as to what ICFO and its members are doing in this regard, and how they are doing it.

Most members of the ICFO use the model of awarding seals to trusted charities as a component of accreditation schemes. This can be referred to as innovative oversight in addition to legislation or obligatory measures on AML/CFT. ICFO takes an alternative way of oversight based on independently articulated standards and assessments to protect donors trust. The effectiveness of this model is that it relies, in part, on existing structures. These include existing laws and regulations, auditing services, and the availability of news media. The authors argue that the concept of “know your donors and know your beneficiaries” can be of added value to good governance by charities and will help NGOs strengthen trust in public fundraising as long as the concept is not used by authorities to take control over the NGOs and their policies to pursue their objectives.

Civil Society and AML/CFT

Historically, the concept of civil society can pose a bit of a problem with respect to addressing AML/CFT and government or state regulation and monitoring. Civil society has been generally understood as being historically one of the three legs of a democratic and open society. As such, civil society is understood to refer to the un-coerced collective action around shared interests, purposes, and values. Its institutional forms are distinct from the state, family, and market. Therefore, the sector is set apart from government and the market, and does not distribute profits. It is self-governing, and is a mediating organization, or group of organizations, voluntary in nature, between the state and individuals.

The problem occurs when much of the activity of the civil society organization (CSO), such as a charitable organization, is funded by government largesse, meeting a need which the government deems to be important, and perhaps even part of the government’s own sense of governmental responsibility. The work of the charitable organization is accordingly regulated by the government because of the nexus between government funding and the activities of the charity. It is clear, it seems to us, that if funds from the state treasury are to be used to accomplish some public or humanitarian purpose, which the government asserts to be part of its responsibility to be a good steward of the money entrusted to it through taxes, the government acts appropriately in requiring the CSO to account for the expenditure and use of that money. Such accounting would naturally cover some form of regulation and reporting, through audits and the submission of information concerning the work of that charity.

However, it would seem that some form of legislative or regulatory regime would also be proper in the case of the government’s obligations with respect to the flow of funds through NGOs on the same basis as its obligations to protect its citizens and satisfy its obligations under the FATF-GAFI Special Recommendations on Terrorist Financing. For example, Special Recommendation No. I provided that countries were responsible for implementing UN resolutions regarding the prevention and suppression of financing of terrorist acts, including UN Security Council Resolution 1373. Similarly, Recommendations II, III, IV addressed the criminalization of terrorist financing and associated money laundering, freezing of terrorists’ assets, and the reporting of suspicious transactions relating to the financing of terrorism. Recommendations V, VI, and VII addressed the requirement for international cooperation between nations, and the regulation of the transfer of funds, including wire transfers. All of these seem appropriate functions of government, both with respect to AML/CFT, as well as to the prevention of fraud on the private donor sector. While none of these recommendations specifically addressed the regulation of non-profit organizations, the actual handling of monies was implicated, and to that extent, had relevance to the activities of non-profit organizations.

We have seen no evidence that a regulatory scheme imposed by the government, instead of regulation schemes of independent watchdogs, increased the level of transparency and accountability of NGOs. and that to the extent it did, that it increased the level of trust between donor and NGO, thereby increasing the level of giving. The charitable impulses of the giving public are based on more than simply whether the civil society sector is regulated by the government, and whether the monitoring by the government both ensured compliance with the regulations, and was consistent with the freedom and effectiveness of organizations to fully serve their role in civil society. We sometimes forget that giving to charity is more than simply a financial transaction.

Informed Trust as Basis for Credibility of Charitable Work

A national registration system for non-governmental charitable organizations is widely required by law in countries around the world, particularly where there is some tax exemption to the organization or tax consequences applicable to the donor. In most countries, this registration requirement insures that the non-governmental charitable entity is established for a public benefit purpose and is in compliance with minimal legal requirements for registration. True standards of accountability and ethics and monitoring standards are seldom associated with the requirement.

The issue of establishing standards promoting transparency and integrity and monitoring non-governmental charitable organizations through an accreditation process is a different matter. For example, the ICFO standards cover five key areas of the activities of international NGOs, or not-for-profit, public benefit, private organizations. These include membership and responsibility of the governing body, fulfilment of public benefit goals, fiscal control and management, fundraising practices, and provision of public information, such as disclosure of audited financial statements. Important to the satisfaction of these standards is the goal of ensuring that the public, donors and recipients of the public benefits, have ready access to sufficient and adequate information to enable them to make informed decisions about the organization, their relationship to the organization, and the accountability of funds raised by the organization. Standards, without monitoring, provide little assurance to the donor regarding the transparency, integrity, and governance of charities and other public benefit non-governmental entities.

However, it is equally important that the monitoring body, responsible for setting standards and monitoring charities to insure their compliance with those standards, have insight into the charity sector and the trust of the organizations which are to be subject to the standards and monitoring. Implicit in this model is the idea of a relationship between the NPO and the monitoring organization based on the establishment of standards of accountability and monitoring to ensure compliance with those standards. This requires maintaining currency with fundraising techniques and activities, particularly in a fast moving technological age, worldwide monitoring practices, and the free exchange of information with other monitoring or accrediting bodies external to a particular country.

Governmental versus non-governmental monitoring is a matter of considerable interest to the ICFO, and has been the subject of frequent debate in many countries, particularly those with an active charity sector. Much of the public benefit work around the world is done by charities, the Church, or religious communities. As the readers may well appreciate, non-governmental organizations have become an important social counterpart of the economic and political forces in society. Private donations are widely regarded as an important factor for the independence of the charity sector.

One concern is that this independence could be compromised when there is substantial funding by the government, particularly when those funds are targeted to government objectives. While it is important to protect the rights of donors, donors are also generally assumed to be aware that they are not always adequately protected by the state from fraudulent fundraising appeals, and indeed, that they are ultimately responsible for their contributions to the charitable causes. This is why private and semi-private monitoring and advisory boards, such as various forms of self-regulation and accreditation bodies, have been established in many countries, including those countries represented by the ICFO. These monitoring and accrediting non-governmental bodies are building bridges of trust between reliable NGOs and the donor public.

One of our concerns is that a statutory regulatory scheme, with governmental monitoring, together with the potential reporting of suspected fraud or similar irregularities to police, and the denial of registrations or criminal prosecution, tend to increase the administrative costs. Specifically, such schemes generally require accounting and legal services beyond those normally required for the responsible administration of the charity. The experience in the United States, and no doubt in many countries, suggests that, as a result of governmental regulatory requirements and governmental monitoring, there is an increased requirement for additional accounting and legal services beyond that normally required to meet the general transparency, integrity, and other operational interests of the charity, to insure that all the requirements of such laws are met. There is also experience and some data that tend to support the conclusion that such requirements do little to assure the public that the finances and operations of the charity are in accordance with the requirements of such laws. This is particularly true since many donors do not understand the requirements of the law, and give to those charities with which they are familiar and which perform public benefit services they support and for which they have personal commitment. While many large charities can bear these added costs with little effect to their administrative cost ratios to total donated funds, most smaller charities cannot continue to operate and perform the public benefit functions for which they were established, with the added burden of governmental regulation and monitoring, plus the costs of the accounting and legal services that would not otherwise be warranted.

Conclusion

Traditional independent monitoring by an independent organization or self-regulation scheme to promote trust of donors has been focused on good governance of NPOs and their policies on fundraising and the transparent reporting of the income and spending of the funds. The question is how we in the general public and donor pool are to have some sense that particular NPOs are well-governed and whether their policies and practices on the raising of funds and the use and disbursement of funds are disclosed to the public and to donors on request. In other words, is it possible to improve trust between donors and the NPO sector, and is it possible to formulate clearly understood standards applicable to good governance, transparency and accountability, and to specific techniques of fundraising? And if so, is it possible to monitor the activities of NPOs against such standards to enhance the level of trust between donor and NPO? We think so.

Standards promoted by the ICFO and its members can help charities protect themselves from becoming involved in fraud, money laundering or the financing of illegal activities. The bridges of trust will be stronger if the charities are willing to submit to accreditation schemes and be monitored by independent or self-regulatory monitoring bodies, such as the members of the ICFO.

In these days of globalization, extended social media, and increased cross-border fundraising within the European Union, bridges of trust can be eroded by permitting “open areas” without national monitoring systems in the European Union. Independent monitoring should honour the national laws, history, values, traditions, and circumstances, but will be more effective when charities based in one of the countries of the European Union, will be in all cases subject to standards of substantial monitoring procedures.

Civil engagement, supported by donations for public benefit purposes, can flourish and strengthen open societies as long as trust between charity and donor, and the donor public, is maintained. In the new era of upcoming social media, personal connections and relationships are often replaced by Internet connections. It will be a challenge for charities to make use, for example, of new platforms of social networks to keep donors and beneficiaries recognised as persons with real identities and not with faked identities. Charities who know their donors and beneficiaries will be able to build and strengthen relationships in a changing world.

The authors recommend that countries that do not have self-initiated models that include standards and methods of monitoring for promoting transparency and accountability, consider adopting such models, such as those employed by the members of the ICFO, to strengthen donor trust in civil society and reduce the probability of the misuse of funds.

This post was submitted by the authors to, and published by the Office of the Secretary General, Organization for Security and Cooperation in Europe (OSCE) in the CTN Electronic Journal, June 2011, on Preventing the Abuse of Non-Profit Organizations for Terrorist Financing. This edition of the Electronic Journal, in its entirety, may be found at http://www.osce.org/atu/78912. All CTN Electronic Journals may be found at http://www.osce.org/atu/76931. The authors and the Board of the International Committee on Fundraising Organizations (ICFO) express here our thanks to Mehdi Knani, Editor or the Journal and an officer in the Action against Terrorism Unit (ATU) of the the OSCE for his kind assistance, not only with the editing of this paper, but also for addressing this important topic in this issue.

Global Charity Trends: Challenges for National Monitoring Organizations

2011-06-25T20:29:00.005-04:00

Shiftung ZEWO, the national monitoring organization of Switzerland, co-hosted with the International Committee on Fundraising Organizations, ICFO, its annual event with the public portion of the Annual General Membership Meeting of ICFO. The focus this past May, was on globabl trends in the charity sector and the challenges involved for national monitoring organizations.

While new fundraising techniques, such as those based on Internet technologies, mobile phones (and especially the newer types of smartphones with many "apps,") and those equipped with SMS capabilities, and instant, on-site high-definition satellite broadcasting, and all the techniques used to manipulate psychological and charitable impulses, international NGO developed fundraising activities in different local markets around the world, the challenge is how to promote charity transparency and accountability.

What do donors, development agencies, and NGOs in this context expect from national monitoring organizations? Or, maybe to put the matter more bluntly, what to these donors, development agencies, and NGOs expect from government authorities in the context of regulating their activities and promoting transparency and accountability?

Engaging An Evolving Civil Society

This presentation presented the question as to how civil society develops around the world? What do research and studies say about global charity trends? How can ICFO help national monitoring organizations be prepared to address these trends?

Funding the Future

Internet, mobile phones and new apps open up new possibilities to make payments. How could charities use these new options to raise funds? What are the upcoming trends in fundraising?

What About Donors

How do donor's feel about new fundraising trends? What can be recommended to them? Where are potential risks of misuse? How should monitoring agencies deal with the new developments?

International Fundraising

International NGOs (INGOs) raise funds in various local markets. What are their most common business models? What are the challenges for a monitoring agency operating in the European market? What does DZI (Deutsches Zentralinstitut fur soziale Fragen, Germany) request from international NGOs and their local subsidiaries to deserve domestic donors' trust?

How Does an International Development Agency Enforce Accountability

Questions presented in this session included: How do international development agencies measure the effectiveness of their activities to reduce poverty in developing countries?

Requirements of Swiss Development Agencies Toward NGO

Questions presented in this session included: What are the requirements of the Swiss Agency for Development (SDC) towards international NGOs? What role does a national monitoring organization, like ZEWO, play in this context? Presentations of the new admission process of SDC and some of the main challenges will be discussed.

What Role Can a National Monitoring Agency Plan in Institutional Fundraising?

More and more companies are willing to act with social responsibility. At the same time, charities look more and more for institutional donations and cooperation with companies. What is needed for a good cooperation? What do institutional donors expect from national monitoring agencies? What role can a national monitoring agency play in this context?

Some tentative thoughts about some of the themes and some conclusions

There are differences between people in affirming comfort in giving through these new technologies.
There are differences between countries as to the triggering mechanisms for giving -- printed material, email, and new media.
Social networking may be good for branding and connecting with charities, but is not particularly effective in raising funds.

There is increased attention to, and calls for measuring effectiveness impact of the work of the charity or NGO.

Over the years there has been an increased depends on government or public funding, and with the economic crisis around the world, there are diminishing funds available from government sources thereby jeopardizing the work and identity of civil society organizations.

People generally, and donors more specifically, tend to be confused or misled by the nature of certification or seals granted by national monitoring organization, thinking that such certifications suggest effectiveness of the work of the charity.

As a result of postmodernity, the nature of dissemination of news, and an increasingly prevailing sense of skepticism in society, there is a declining trust in institutions at all levels of society, including civil society raising the challenge of how trust is to be restored to the sector.

There is an increasingly important role in civil society played by institutional donors, such as for profit companies, either operating as limited partnerships with public benefit purposes while minimizing the objective of profits, or in partnership with charitable organizations as key players and donors.

Problems with charity monitoring are complicated further with internationally operating charities.

Money flow is difficult to follow.

Responsibilities and accountability are not so clear.

Truthful information on international structures is not always forthcoming or clear to understand.

Outsourcing costs are difficult to track.

Monitoring online platforms is complicated by lack of standard practices, languages, and methodologies of presenting information.

The purpose of ICFO is to ensure that fundraising for charitable purposes is being organized and performed in a satisfactory manner and that the administration of the collected funds is adequate. ICFO and its Members look after the interests of donors. This Annual General Membership meeting was directed like all of the Annual General Membership meetings, to that end. But, beyond that, it gave each member organization the opportunity to hear what challenges we face in this era of new media, to network within our association, and to hear the views of those leaders in the nonprofit sector that came to participate in this important meeting.

Monitoring Agencies Evaluate Global Trends

2011-05-30T13:38:00.001-04:00

International Committee on Fundraising Organizations

ICFO – the association of national monitoring agencies

Press Release Amsterdam, 25th May 2011

Monitoring agencies evaluate global charity trends

New fundraising methods create chances and challenges

New fundraising techniques provide promising potentials for charitable organisations worldwide, but also significant risks for donors and serious charities. This twofold message was presented at the annual conference of ICFO, the worldwide association of national agencies monitoring charitable organizations. ICFO members and guests met in Zurich/Switzerland on 20th and 21st May 2011 to discuss “Global Charity Trends” and their relevance for “watchdog” organizations which provide independent donor advice.

“With stagnant levels of giving, the charity sector needs to find ways to engage with younger audiences and technology could be key”, postulated John Low, Chief Executive of Charities Aid Foundation (CAF, London) at the conference. CAF research found that 43% of British people feel “comfortable” with donating online but in fact only 2% of the money donated to charity in 2010 was donated online. Art Taylor, President and CEO of the BBB Wise Giving Alliance (Arlington/VA, USA), stated that new fundraising techniques like SMS donations or online giving platforms are less supervised by government and therefore create an increased need of independent review for accuracy and transparency to be done by independent “watchdog” and accreditation agencies. He encouraged independent monitoring agencies to find new ways and more effective ways to provide donors with their valuable information, because “85% of U.S. donors say they care about nonprofit performance but only 35% do any research on any gift they make.”

The public part of the conference was joined by 120 charity experts. Konrad Specker, Head of Department Institutional Partnerships of The Swiss Agency for Development and Cooperation (SDC) presented the selection process for Swiss charities to be financially supported by SDC. Ruerd Ruben, Director Policy and Operations Evaluation Department, IOB, Ministry of Foreign Affairs of The Netherlands explained how development agencies could measure the effectiveness of their activities to reduce poverty and be accountable. ICFO members and guests from Swiss non-profit organizations also discussed new models to evaluate and to report on charity effectiveness, such as the reporting framework “Charting Impact” which has recently been established in the U.S. by the ICFO member BBB Wise Giving Alliance and two partner organizations.

As a new supporting member ICFO welcomed the One World Trust from London, United Kingdom. “OWT brings into the network of ICFO 60 years of experience in researching and promoting accountability from an independent status. Its worldwide map on CSO self-regulatory schemes is a unique and most valuable information source in the field of nonprofit accountability”, said Rollin van Broekhoven, President of ICFO in Zurich.

At the Annual Meeting 2011 ICFO also decided to sign a joint statement of international NGOs and association on the second draft of the Cambodian Law on Associations and Non-Governmental Organizations. The proposed NGO legislation would give far-reaching power to the Cambodian authorities to control the rights of citizens to organize and express themselves.

ICFO was established in 1958. Its members have sophisticated national and common international standards for good governance and management of charities.

For more information, please contact: Adri Kemps, Secretary General ICFO a.kemps@cbf.nl (tel.+31 (20) 417 00 03)

Disaster Again! This Time, Japan

2011-03-24T05:45:00.219-04:00

There is something about being focused on the third sector that seems to awake our sense to what is going on in the world. True, the news media, both print and electronic, are covering the disaster in Japan, just as it did when just over a year ago, a tremendous earthquake struck Haiti on 12 January 2010. But, this time, we are faced with a triple disaster, in a country prone to experience earthquakes and tsunamis, from which we got the word.

Perhaps Japan is best prepared for these types of natural disasters, and yet, no country can really be prepared. And as if that was not enough, Japan's Shinmoedake volcano on the other side of Japan from the epicenter of the earthquake erupts Sunday, 13 March 2011, just two days after the earthquake, spewing ash and rocks after weeks of inactivity. Has anyone heard of this? Yet, as reflected below, what has happened in Japan these past few days is not just a disaster; it is a calamity.

As if an earthquake and tsunami are not enough! Here we combine the 9.0 earthquake with a tsunami, all to be complicated by a potential nuclear disaster as four nuclear power plants are damaged and in melt-down. This in a country that experienced the death and destructive force of atomic bombs dropped on the cities of Hiroshima and Nagasaki.

And yet, no sooner had the earthquake hit, with all the aftershocks, and another separate earthquake not far from Tokyo, than we were riveted with the pictures and video clips of the tsunami.

We have seen the effects of earthquakes before. After all, in America, not far from our shores, a devastating earthquake hit Haiti in January 2010. In fact, this was followed by several earthquakes around the world, but none of them seemed to attract the attention of the earthquake in Haiti. Beside, Japan is located on fault lines and is located on the Pacific Rim where the geology is such that earthquakes always present a potential danger. And yet, as this chart shows, the catastrophic earthquake in Japan just a week ago in early March seemed to dwarf, in intensity, that earthquake on 12 January 2010 that hit Haiti and seemed to wake the earth up from is focus on economic problems around the world.

But, attention spans are short. What we see on television hardly seems to match what we expect of reality. We have been acclimated to action, violence, panic, crisis, and often destruction by what we see on video games, at the arcade, or on television. And yet it is real, horribly real, but also so far away. But, not so far away that the tsunami did not soon reach North and South America traveling across the Pacific Ocean at the speed of jet aircraft. Only minor damage on the coast of Oregon and California.

As The Wall Street Journal reported on 14 March, just three days after the earthquake and tsunami, "Even while thousands of people are reported dead or missing, whole neighborhoods lie in ruins, and gas and oil fires rage out of control, press coverage of the Japanese earthquake has quickly settled on the troubles at two nuclear reactors as the center of the catastrophe." And with that, a U.S. Congressman, a long-time opponent of nuclear power, warmed of "another Chernobyl," and predicted that the same thing will happen here. He quickly called for immediate suspension of licensing procedures for the Westinghouse AP1000 reactor that had been laboring through the design review procedures at the Nuclear Regulatory Commission in the U.S. for seven years.

So, we soon seem to forget the earthquake and tsunami as something thought to be far more serious, and which starts the serious migration of people around Japan and ultimately off the island. Indeed, it has been the disaster at Japan's Fukushima Dai-ichi nuclear power plant south of Sendai and north of Tokyo that has caused so much attention around the world. However, this attention, it seems to me, has not been so much focused on what the Japanese people are experiencing. Rather, it is on what this means for nuclear power around the world generally, and about how far people can believe what their governments say.

While much of the attention in the United States has been focused on nuclear power plants close to fault lines that present some potential for earthquakes, it appears that the main cause of the disaster was the tsunami. When the earthquake hit at such a huge magnitude, the affected reactors immediately shut down as they were designed to do, and emergency cooling operations began. As I understand it, none of the reactors suffered damage that prevented the insertion of control rods.

When Fukushima-1 lost power, the backup diesel generators started up as they were expected to do. However, an hour later, they were knocked out as a result of the tsunami. Okay, the tsunami probably would not have hit the area had it not been for the earthquake. Even with redundant safety systems, the power plants were not able to withstand the multiple traumas of this one-two punch of earthquake and tsunami. Although there has been improvement in the actual situation in the Fukushima Daiichi nuclear plant, engineers as of 22 March 2011 have reconnected all six reactors to the electrical grid, but are not ready to turn the power on.

With radiation levels heightened, shipments of spinach and milk from the Fukushima area were halted, and with elevated levels of iodine and cesium in the sea water, there are fears concerning the contamination spreading to the country's seafood which is now being monitored. And, the U.S. Food and Drug Administration (FDA) announced Tuesday, 22 March 2011, that it was halting the import of dairy and produce products from Japan from the area in which the Fukushima Daiichi plant is located and from which there has been some leakage of radiation.

The Japanese economy, already experiencing some stress, is reeling and three of its major companies, Sony, Toyota, and Honda, have stopped production at plants in Japan because of the shortage of parts from ruined factories in the north.

The truth is that it is hard to know how bad the meltdown at these nuclear reactors will be, even if the worse case scenario would be outcome. No one predicts that it would be anything like the Chernobyl disaster, even if it were to be a little worse than Three Mile Island.

In the United States, nuclear power currently generates about 20 percent of the nation's electricity with its 102 commercial nuclear reactors, but faces an uncertain future. No nuclear plants have been ordered since 1978 and more than 100 reactor projects have been canceled. The Watts Bar 1 reactor on the Tennessee River ordered by the Tennessee Valley Authority in 1970 and licensed to operate in 1996 is the most recently completed reactor in the U.S. The main impediments to nuclear power in the U.S. are the high construction costs for nuclear power plants, public concern about nuclear safety and waste disposal, and regulatory compliance costs.

In Europe, nuclear power is much more common than it is in the United States. As of January 2011, there were a total of 195 nuclear power plants in Europe and Russia, and 19 under construction. Notwithstanding this, European public opinion is divided and a bit reticent toward nuclear energy. In order to meet the Kyoto Protocol requirements for reducing greenhouse gas emissions, countries were finding it imperative to replace fossil fuel power plants with cleaner energy sources. Nuclear power was one of the alternative possibilities. If the European demand for electricity is to be satisfied, the EU cannot eliminate nuclear power as an energy source. Moreover, developing countries, especially those with new nuclear capability, are not eager to give up the benefits of nuclear power which they believe is required for their demands for electricity to be satisfied.

But, since the crisis at Japan's Fukushima Daiichi nuclear power plant, Germany's Angela Merkel decided to close temporarily seven plants and temporarily reversed the German government's decision on its extension of the life cycles of nuclear power plants, while five states controlled by the opposition Social Democrats (SPD) will challenge in Germany's highest court the government's previous decision to extend the lifespan of nuclear power plants. France insists that it will continue to rely on nuclear energy to preserve the country's energy independence.

As one prominent American politician said several years ago, "we can't let a crisis go to waste, can we." Just when some were seeing nuclear energy as part of the solution to energy and global warming challenges, along comes Fukushima Daiichi, and what has been called the worse accident since Chernobyl. However, we are told that with many nuclear power plants located along coastlines because as we are reminded by the disaster at Fukushima Daiiche, they are highly water intensive, natural disasters like storms, hurricanes, and tsunami are becoming more common, again because of climate change and global warming. With the predicted rise in ocean levels as a result of climate change, seaside reactors become even more vulnerable to such disasters.

So with the increased costs of construction, the safety questions resulting from events like the Three Mile Island melt down, the disaster at Cherynobyl, and now the disaster at Fukushima Daiichi, the question of disposal of nuclear waste, the debate is whether nuclear power is worth all these problems. As we noted in the case of Fukushima Daiichi, the main danger seemed to be from the spent nuclear fuel rods stored in the pools of water as the water level diminished and steam evaporating was carrying the radiation out of the plant. In the United States, the fuel rods used in the 104 nuclear power plants need to be replaced every three to five years. About 80 percent of the 63,000 metric tons of used fuel in the U.S. is stored in these pools in or near nuclear plants. The water circulates to cool the rods down and it protects the environment from the radioactivity they emit. If the water evaporates or drains from the pool, the rods are exposed and this is the problem the Japanese are experiencing at Fukushima Daiichi.

As I was reading The Wall Street Journal on Tuesday 22 March 2011, I was reminded of the recent movie, Departures. When we read about these kinds of disasters, such as the earthquake in Haiti in January 2010, or the flooding in Pakistan in the late summer and fall of 2010, and now this triple disaster in Japan within the last few weeks, we are overwhelmed and overtaken, I think, by the destructive power of the earthquake or tsunami and flooding, and by the numbers; the numbers of people who died because of the disaster, the number of people injured, the number of people unaccounted for; the number of people that are homeless, and the numbers that represent the cost of rescue, of finding and gathering of those that died, and the cost of rebuilding. Oh, we see pictures of people crying, of calling out for help, of people who are desperate as a result of their situation, and who show that desperation on their faces. But as Michael Hammer wrote in his blog post, Japan: making accountability for nuclear risk work into a progressive direction, on One World Trust website, "this live screening of events which spelled death to with some likelihood more than 10,000 people, and this may be grossly underestimated, reduced the even to a dehumanised story which benefited primarily the news channels."

The article, in The Wall Street Journal, focused our attention on something quite different, with the title, After Flood, Deaths Overpower Ritual. Let me set the scene in Higashimatsushima, a coastal village near Senda in Miyagi prefecture:

Improvised morgues across tsunami-ravaged northeastern Japan are overwhelmed by the accumulation of the dead, forcing Japanese to consider a practice that hasn't been widespread for decades: burial.

Nowhere, perhaps, is Japan's vein of conformity as apparent as it is in death: 99.9% of Japanese who passed away in fiscal 2009 were cremated, according to the country's health ministry. But, the March 11 earthquake and tsunami that shook Japan's people, its industries and its environment have also eroded the certainty of how many thousands of Japanese will be laid to rest.

In the worst-hit areas, local crematoriums can't incinerate the deceased fast enough to keep up with new arrivals. There isn't enough Kerosene to burn the bodies, or dry ice to preserve them. As the government's official toll of dead and missing has exceeded 21,000 people, governments of coastal villages are running out of time.

Some local governments have started burying the dead in mass graves -- an extreme measure in Japan, where some municipalities ban even individual burials. Some families are seeking to forestall group burials. Some families are reported to have hauled away relatives to organize cremations on their own.

* * *

"The prospect of pulling the deceased from under the rubble -- only to bury them again in soil, without even a coffin -- is just not something I am prepared to do," said Futoshi Toba, major of Rikuzentakata, a fishing village in Iwate prefecture.

But, as this article says, the issue of how to deal with the dead in natural disasters has grown controversial in recent years. We all remember the 2004 Indian Ocean tsunami in which more than 225,000 people were killed, and which exposed authorities' lack of expertise and capacity to deal with that number of dead. Do we really remember that part of the 2004 Indian Ocean tsunami story?

Which brings me back to the movie, Departures, a touching movie that reminds us of the importance of ceremony and Japanese tradition when dealing with the dead.

Departures is the story of a young cello musician, Daigo, who when the orchestra in which he plays is disbanded for lack of funding, moves back to his home town in the northwestern prefecture of Yamagata, which is just west of Sendai and . Spotting a Help Wanted add in his local newspaper, he excitedly applies for a job in what he thinks is the travel industry. He arrives at the office for the interview and spots coffins lined up against the wall. During the interview he learns that what he got into was the ceremonial "encoffination" of corpses prior to cremation. At first embarrassed by this new profession and unable to tell his wife that he is not working in the travel industry, at least as we think of it, Daigo "develops a deep respect for life in all its variations, and a profound empathy for people trying to make peace with the finality of death.
In some disasters, authorities have rushed to dispose of corpses -- often in mass graves the size of football fields -- "citing fears that the corpses could spread disease or damage the psyche of the survivors if left visible." Global health officials say that there is little risk of epidemics spread by corpses after disasters, in part, because pathogens don't survive long in dead bodies.

However, the World Health Organization and others have produced "field manuals" in recent years strongly urging relief workers to avoid rapid disposal of bodies, which can create legal complications for families if they aren't able to identify the remains.

So back to Japan, and Higashimatsushima, the village on the coast in the Miyagi prefecture close to Sendai:

On Monday, Higashimatsushima was preparing for its interim solution -- a grave they said could hold as many as 1000 bodies. At the edge of town, next to a recycling center, construction-company workers dug holes with earth-moving equipment, hammering metal rods into the ground and placing plywood sheets that would serve as barriers between bodies.

Officials in Higashimatsushima said that on Tuesday, they would start burying 80 of the bodies it is storing. The burials in the grave -- two trenches nearly 300 feet long apiece -- are expected to be temporary, with plans to cremate the dead within two years. The town will need the consent of family members before proceeding.

But, these officials acknowledged that families may be unwilling to bury their dead, but that they did not have any choice in many cases.

One thing we have seen from Japan's record magnitude earthquake and devastating tsunami on 11 March, with added complication and misery caused by the country's worse nuclear accident triggered by both the earthquake and tsunami, is the high degree of earthquake preparedness by Japan and limits to what the Japanese and international search and rescue teams can achieve in these circumstances. While the figures may vary slightly as time passes, of the approximately 22,000 dead and missing, fewer than 100 died as a result of collapsing buildings. Most of the casualties were from the tsunami. As we saw in news reports in Washington, D.C. area concerning a local Virginia search and rescue team dispatched to Japan, very few people were rescued from the destroyed buildings, and the number of dead found in these destroyed buildings were few.

Moreover, with well-trained Japanese search and rescue teams as well as the rapid deployment of the Japanese military personnel, little outside help was required. Indeed, of the 128 countries and 33 international organizations offering assistance, the government of Japan only invited teams from 15 countries. Gagah Prakoso, a spokesman for the Indonesian National Search and Rescue Agency that sent a team to Japan told IRIN that "Japan relies on its own resources because they are well-prepared. Even though we have a lot of experience, Japanese rescue workers are better trained and better equipped."

Well, what does all of this have to do with charity and accountability? According to news reports, the U.S. public was more generous after the Haiti earthquake a little more than a year ago. The Chronicle of Philanthropy reported on 17 March 2011 that:

Six days after the devastating earthquake and tsunamis in Japan, American donors have contributed more than $87-million for relief efforts, according to a Chronicle tally. Nearly three-quarters of the total has been raised by one organization, the American Red Cross.

The rate of donations is slower than after last year's earthquake in Haiti and after 2005's Hurricane Katrina [in the Gulf Coast]. Six days after the disaster in Haiti, donors had contributed more than $210-million, and six days after Katrina they had given more than $457-million.

Why? In one newspaper report in the U.S., it was reported that the president of the American Institute of Philanthropy told the television network, CNN, that "Japan is not Haiti, and it's not Indonesia; it's a developed country with a GDP somewhat similar to our country. The executive director of the Center on Philanthropy at Indiana University, also told CNN that increased reliance on text and online donations could play a role. "Giving online and text is good because it is fast, but text giving tends to lower what people would donate. After giving $5 or $10 dollars [sic], you are probably less likely to go back and write a check for $50 or $100."

The Chronicle of Philanthropy article listed 24 organizations with the amount of money donated indicated, with separate identification of the amount of money donated by text message on mobile phones. While only a few of these listed donations received through text messages, the amounts were generally not insignificant. For example, the American Red Cross received approximately $64 million in the first six days, of which more than $2.8 million was contributed by text message. Similarly, in the first six days, the Salvation Army received more than $2.5 million, of which more than $125,000 came in via text message and $2.3 million online. On the other hand, Save the Children raised $5.8 million, of which $38,000 came in by text message.

The American Institute of Philanthropy, in a hot topics newsletter shortly after the earthquake and tsunami, wrote:

Many donors understandably feel an urgency to help victims of this disaster, but it may be wise to wait until charities assess what their role will be in these efforts. As a wealthy industrialized nation, Japan has disaster response measures in place and its government and military will coordinate and provide much of the necessary relief. The United Nations and the United States government are also mobilizing support for the relief effort in Japan and elsewhere in the Pacific.

According to Oxfam-Japan Executive Director Akiko Mera, "The Japanese state has the means to reach 99% of the population, but there will always be some who need more specific assistance." Since the government has the means to deal with the immediate crisis, donors may wish to wait and contribute to the groups that are able to assist with the intermediate and long-term needs of surviving victims. Many people have been displaced or have lost their livelihoods. Ongoing assistance will be required to relocate and retrain people, and also to provide psychological counseling for traumatized survivors.

On the day of the tsunami, the director of Emergency Response for the International Rescue Committee (IRC), Gillian Dunn, issued the following statement: "Once we know more, including what the Japanese government requests from the international community, we'll be able to better assess a possible response. Japan is well equipped as a responder, and this may be an instance where aid organizations are not asked to respond in large numbers. We'll also have to see what tsunami damage might occur in other countries, including small Pacific islands."

Mail which I have received, both through normal postal routes and through email, and reports I have received all suggest that unlike Haiti, this is the pattern in Japan. The Japanese Red Cross has not asked for financial assistance although other branches of the Red Cross have. Medicins sans Frontieres (MSF) (Doctors Without Borders) made the decision not to proactively solicit restricted funds for Japan although it is working in Japan. MSF has said that the need is Japan is not nearly as great as it was in the Haiti disaster. Felix Salmon of Reuters wrote that while there was a lot of stuff that needed to be done in Japan, money is not a problem. As a result, he wrote that people should donate to the general fund of an NGO, rather than to restricted accounts for Japan relief.

Perhaps a brief perspective might be helpful. It might be argued that civil society in Asia, and in Japan specifically, is weaker than those of us in the West might expect. It seems that most observers would agree that Japanese civil society has emerged from a position of relative weakness vis-a-vis the state. Japan was typically viewed as a docile society, with people subservient to their corporations and government. As Japan experienced unprecedented economic growth during the 1950s - 1970s, eventually becoming the second, or third now, largest economy, Japanese civil society remained largely quiet. It was only in the 1980s, and especially in the early 1990s that Japanese grassroots groups such as NGOs emerged to play an active and important role in the political life in Japan.

As I have written previously, the term "civil society," has been used with considerable ambiguity. See my posts, Alexis de Tocqueville and Civil Society and Government, Civil Society, Charity, and Public Benefit in November 2009. Writers who have looked at civil society in Japan have defined civil society as the realm of organized social life that is voluntary, self-generating, largely self-supporting, autonomous from the state, and bound by a legal order or set of shared rules. It is that intermediate realm between the private sphere and the state and excludes parochial society, such as family, and economic society, such as profit-making business firms.

For much of its history, and indeed modern history, "the lines between public and private, political and personal, formal and informal, official and non-official, government and market, legal and customary and between procedural and substantive are all blurred." Whereas the political tradition of Europe and the West has been informed by a largely Christian ethic of "rendering to Caesar that which is Caesar's" providing some basis for state/civil society division of labor, the ideological component in Japan is quite different having been informed by a neo-Confucianism which are taken seriously by the state and by the citizenry where there is no identified space between the family and the state.

As a result, Japan's week civil society is derived from cultural aspects in Japan. Three aspects of the Confucian tradition are important in this respect. First, there is respect for hierarchy and authority. Second, there is an emphasis on conformity to group interests rather than individual needs. And, third, there is an emphasis on order and stability. These values legitimized social hierarchy and state authority in Japan, emphasizing citizens' obligations and responsibilities rather than individual rights, and as a result, deterred challenges from citizens' organizations.

Another cultural aspect of Japanese society is Japan's lack of what we think of as the Christian tradition in the West. Unlike Western and some developing countries, Japan does not have this Christian tradition based on volunteerism and charity. Social welfare was provided by individuals and/or the state, not by churches. As a result, the Japanese people relied on the state in times of difficulty. Social welfare, although limited, was provided to the needy, albeit in a limited fashion mainly through incorporated associations under strict control of the state.

During the 1950s -1970s, civil society to the extent it existed in limited form, was governed by the Uniform Civil Code which was promulgated in 1896, and specifically Article 35 which provided for the establishment of profit-oriented organizations, but was silent with respect to non-profit bodies. Such bodies were denied legitimacy and existed as informal groups. Civil society, limited as it was, and allowed to emerge, was kept under the strict control of the bureaucracy.

The term, nongovermental organization, like the term, civil society, was conceptually vague, but as used in Japan, referred to nonprofit organizations in Japan engaged in overseas aid programs, such as development assistance and emergency relief. By standard political science definitions, these were what we would call International NGOs or INGOs. The term, nonprofit organization, or NPO, in contrast, referred only to nonprofit organizations engaged in domestic activities in Japan. This distinction is important, and for our purposes helps to explain why so few NPOs outside Japan were involved in the relief efforts in Japan as a result of the 11 March 2011 Earthquake and tsunami, as well as which ones were able to participate in the charitable work in Japan. Examples of this expansion of NGO activity in the late 1970s and early 1980s included the establishment of Save the Children Japan in 1986, followed by CARE Japan and World Vision. In 1989, Greenpeace Japan was launched and in 1992, Medicins sans Frontieres (MSF), and 1999 Oxfam Japan. These are some of the 13 outside groups that have been permitted to operate in Japan as part of the earthquake/tsunami relief, and which have raised money for that effort.

Public attention to civil society dramatically and abruptly surged in Japan in the wake of the Great Hanshin-Awaji Earthquake in Koby in January 1995 which took the lives of more that 6,400 people. More than 1.3 million volunteers and a large number of NGOs converged on Koby to offer relief and assistance to the victims. With so much sudden awareness on social capital and the value of volunteers and NPOs, the government and political parties sought to find ways to facilitate these volunteer activities. Thus, the so-called NPO law (officially the Law to Promote Specified Nonprofit Activities) passed the Diet in March 1998 providing new impetus for further growth of civil society in Japan.

There are currently 440,000 CSOs that have obtained corporate status or government registration. The religious corporations were the most prevalent with 183,000 followed by political, labor unions, small business cooperatives. registered NPOs, social welfare organizations, and the like. There are an additional 300,000 neighborhood associations, most of which have questionable legal status.

An article, Civil Society in Japan, published in the journal of Inter Faculty, by the Graduate School of Humanities and Social Sciences, University of Tsukuba, Tsukuba, Japan, one of the conclusions reported from the study was:

As a tradition has developed in pre-modern times, Japan has a thick layer of voluntary associational activities, with a history of human relationships with society that are based on trust. With the Meiji Restoration after the defeat of World War II, while individual structures may have become disconnected, they also passed on a well-developed sense of organization. Since he Meiji Restoration through the post-war growth era, Japan's goals have revolved around modernization stances that have focused on catching-up process. Therefore, Japanese civil society has kept a developmentalist structure.

Maybe this is why we have seen such a difference between the relief efforts in Haiti after the January 2010 earthquake, and the relief efforts in the case of the Pakistan floods of July and August of 2010.

Now, our attention is diverted from Japan to some ill-defined war in Libya. It seems that we have forgotten about earthquakes and tsunamis in the Pacific, although we continue with our periodic worries about radiation and what is going on at the Fukushima Daiiche Nuclear Power Station and how it affects public policy regarding nuclear power.

One lesson of which we might be reminded is that the decisions made on this side of the grave are the most important decisions anyone can make.

Why We Do What We Do

2011-02-22T23:23:00.316-05:00

As I finished my last post, thinking about the various models for accountability monitoring of charity sector, including some forms of government regulatory schemes, I thought that it might be important for me to reflect on my own experience and assumptions, as well as the basis for ICFO's basic philosophy regarding the monitoring of charity accountability. I was reminded of a talk that Ken Berger, the CEO of Charity Navigator, gave some time ago, and posted on his blog in August, 2010.

Do you ever reflect on what it is that drives you to be involved with the third sector? Either as a contributor or donor, volunteer or charity leader, charity monitor or evaluator?

All of which got me thinking about the importance of being up front here about my biases and motivations for doing what I am doing, as a donor to charities, as a member of a number of governing boards of charities, and as someone who has been involved in charity monitoring for over 30 years.

Ken Berger was speaking at a philanthropy camp in New York, and the substance of his speech can be found at http://vimeo.com/14123869. While much of his speech addressed the work of Charity Navigator in the US, what I found more interesting was his brief autobiographical discussion that kicked off his talk. He spoke of how he became involved in charity work. Well, here is my journey.

I was raised in the nonprofit sector. My parents were missionaries in Guatemala with what was then known as the Central American Mission, now CAM International. We traveled to Managua, Nicaragua sailing on a United Fruit Company ship from New Orleans, Louisiana, by way of Havana, Cuba, through the Panama Canal, and up the Pacific Coast to Managua. Originally based in Nicaragua, our family moved to Guatemala in 1943, where my father was a professor at a Guatemalan seminary. He later founded a cultural radio station, Radio Cultural TGN, TGNA, and was its first executive director.

The recent events in Tunisia, Egypt, Libya, Bahrain, and Yemen, and elsewhere in the Middle East have brought back memories of my childhood. Shortly after arriving in Guatemala, we were caught up in the middle of protests and a revolution in which attempts were made to overthrow the government of Generalismo Jorge Ubico.

My memory, such as it is, of that time, was of a peaceful and almost prosperous nation. Early in the 20th Century, around 1901, the U.S. United Fruit Company, became a major force in Guatemala. During the dictatorship of General Ubico in the 1930s, foreign investments flowed into Guatemala, with special favors granted to the United Fruit Company by General Ubico. As a result, the United Fruit Company poured investments into Guatemala, bought the controlling shares of the railroad, electric utility, and telegraph, while also gaining control of more than 40 percent of Guatemala's best land.

But first, a little context. It has been said that one cannot really understand the history and politics of Guatemala without knowing something of the United Fruit Company. Indeed, the history of banana growing in Central America is closely tied to the history of politics in that region from the 1880s through the 1970s.

In 1901, the Guatemalan government hired the United Fruit Company to manage the country's postal service and in 1913, the United Fruit Company created the Tropical Radio and Telegraph Company. By the 1930s, the United Fruit Company had absorbed more than 20 rival firms and became the largest employer in Guatemala. However, with its control of vast tracks of land and its domination of regional transportation networks through its railways throughout Central America and its great fleet of steamships, it was able to maintain its market dominance and control the distribution of bananas and banana producing land. In order to do this, it often required government concessions, which meant the firm had to be politically involved in the region, even though it was an American company. It was through its heavy-handed involvement with governments in Central America, which often were or became corrupt, that the term, "Banana Republic," became the term to recognize the presence of a "servile dictatorship."

One thing I remember, however, was that the road system in Guatemala was not at all well-developed. Indeed, there were vast areas of Guatemala which were not accessible by automobile or bus because of the absence of roads. Because the United Fruit Company allowed vast tracts of lands it owed to remain uncultivated, it discouraged the governments in Guatemala and elsewhere in Central America from building highways, which would lessen the profitable transportation monopoly of the railroads under the company's control.

Admittedly, my memory of that time may not be the best, especially when my interpretation of events and my understanding of what I was experiencing was through the eyes of a young boy. On reflection, I thought of General Ubico as something of a benevolent dictator, assuming of course, that I knew what that meant.

I remember a basically happy time, where the streets and parks were safe, where my mother shopped freely in the central open market, where there seemed a measure of freedom, at least in the eyes and imagination of a young boy, and where religious communities, primarily Roman Catholic and Protestant flourished. It was also a time when justice was swift. When thieves and petty criminals were caught and arrested, tried and convicted in the space of a few days, and then summarily executed by police rifle squads. This had an effect on the crime rates in Guatemala City and potential problems of recidivism. The executions were always announced in the newspapers and on the radio, and carried out at the wall surrounding the National Central Cemetery not far from where we lived. Church bells rang out as the sound of the gun fire was unmistakable in announcing to the citizens of Guatemala City just what was happening down at the National Cemetery.

But as I later learned as an adult, the record was not that clear. By way of background, in the 1890s, during the U.S. implementation of the Monroe Doctrine in Latin America, European colonial powers were expelled and U.S. hegemony over the resources and labor in Latin America was expanded. The dictators ruling Guatemala during the late 19th century and early 20th century were accommodating to the U.S. business and political interests.

It was during the 1930s, that General Ubico came to power with U.S. support, and according to some reports, instituted one of the most brutally repressive governments in the region. According to these reports, he created a network of spies and informants. Political opponents were tortured and put to death. A staunch anti-communist, he consistently sided with the wealthy landowners and urban elites in disputes with the peasantry.

Nevertheless, Ubico remained close to the United States, informing the U.S. Minister at the time of the Munich crisis in 1938, that "Guatemala will follow the policy of the United States as long as it is not Communistic." When President Franklin Roosevelt successfully ran for and was elected to a third term, contrary to the two-term tradition in the United States, General Ubico and his supporters were encouraged, seeing that the U.S. had placed "the man above tradition," and believed that this was also a good reason to keep General Ubico in office for an additional extended period.

His repressive policies and arrogant manner eventually led to a widespread popular insurrection which was led by middle class intellectuals, professionals, and young junior officers in the Guatemalan army. In 1944, a group of dissident military officers, students, and liberal professionals, the so-called "October Revolutionaries," empowered by revolutions in Venezuela, Cuba, and El Salvador, overthrew the dictatorship of General Ubico.

I remember this because much of the fighting in the streets of Guatemala City took place right outside our urban apartment building. Indeed, shots were fired that penetrated our apartment and caused some minor damage. Our building was quite close to the main army fortress, Fort Matamoros, where much of the fighting was taking place. The final action in this coup leading to the unseating of General Ubico was led by two young officers, Jacobo Arbenz and Francisco Javier Arana. Arbenz and Arana then stepped aside making way for a general election and what was called "Ten Years of Spring." Juan Jose Arevalo, a university philosophy professor and popular democratic socialist, was elected and held the presidency until 1951 when he was term limited and stepped down. He was be followed by the election of Colonel Jacobo Arbenz, one of those two young officers, in 1950 and his his inauguration in 1951.

Jacobo Arbenz was the son of a Swiss German pharmacist who immigrated to Guatemala in 1901. His family was quite wealthy and upper class. Arbenz had wanted to be an economist or engineer, but when the family business went bankrupt, he could not afford to go to the university. His father subsequently committed suicide. Nevertheless, young Arbenz won a scholarship to the Escuela Politecnica, the Guatemalan military academy, which was several blocks from our home. He entered as a cadet. After graduating, he was posted in several military assignments, ultimately returning to the Escuela Politecnica as a professor teaching military subjects, history, and physics. It was during this time that he met Maria Vilanova, the daughter of a wealthy landowner from El Salvador. They were married . It was through her that he was exposed to Marxism. She had received a copy of The Communist Manifesto, and left a copy for him to read. They discussed it as Jacobo Arbenz began to read more works by Marx, Lenin, and Stalin. By, the late 1940s, he was regularly interacting with a group of Guatemalan communist leaders and thinkers.

The election of Jacobo Arbenz as president in 1950 accelerated the process of social and economic change in Guatemala which had been started by his predecessor, Juan Jose Arevalo. The centerpiece of Jacobo Arbenz's program was a June 1952 agrarian reform law which allowed the taking or expropriation of 1.5 million acres of unused agricultural land from approximately 100 owners of large tracks of land and giving this land to rural workers. As part of this arrangement, the United Fruit Company lost approximately 250,000 manzanas (or just under 500,000 acres) out of 350,000 manzanas (or a little less than 700,000 acres) that it owned in Guatemala. Although the United Fruit Company was compensated, the compensation was regarded by the company as inadequate. According to the decree, this land had to be taken and distributed to peasant communities and the local natives for agricultural purposes. The company fought the land expropriation and the proffered compensation on the basis that the valuation of the land was estimated to be about 20 times higher than offered by the government. The United States supported the United Fruit Company in its dispute with the government of Jacobo Arbenz.

Nevertheless, Jacobo Arbenz sought to end the domination of the United Fruit Company and other U.S. companies, primarily those in the public utility and transportation sectors. He claimed that he would adopt policies for nationalistic economic development if necessary, and that all foreign investment would be subject to Guatemalan laws. He further claimed that Guatemala was not prepared to make an exception for the United States.

However, it was not just his agrarian reforms that got him in trouble with the United States. President Arbenz eventually forced moderate representatives out of the leading positions in his government and replaced them with communist party leaders. In 1952 the Guatemalan Party of Labor was legalized, and communists subsequently gained considerable minority influence over important peasant organizations and unions. There had been a radicalization in the major government parties. The Communist Party was never the center of the communist movement in Guatemala until Jacobo Arbenz came to power. However, when he came to power, he extended political freedom to the communists allowing them to participate in politics.

In 1952, U.S. President Truman authorized the first CIA effort to overthrow Arbenz, a CIA collaboration with Nicaraguan dictator Anastacio Somoza. According to CIA documents released in the late 1990s following their declassification, the CIA directed covert operations aimed at removing the government of Arbenz from power in Guatemala. The agency drew up a list of some 58 individuals for assassination, exile, imprisonment, and otherwise removal from office. In the end, the plans were abandoned and no Arbenz government officials were assassinated. The names of targeted individuals have been deleted from the released documents, and so it is unclear whether or not there were any assassinations of any of the individuals listed..

In 1953, President Eisenhower authorized the continuation of this plan against Colonel Arbenz and his government. The takeover of the United Fruit Company (subsequently renamed and known today as Chiquita) and the proliferation of labor and agricultural laws were instrumental factors in the White House decision to continue the plans to overthrow the government of Guatemala. However, the policy was also rationalized in terms of anti-communism and the need to respond to the threat that might lead to Guatemala's withdrawal from the capitalistic politico-economic orbit. While there is no evidence that America viewed what was going on in Guatemala as a specific threat against the United States, Arbenz's "drift toward Communism" had become an established fact of policy-makers. As one writer described it:

In Guatemala Communism has achieved its strongest position in Latin America, and is now well advanced on a program which threatens important American commercial enterprises in that country and may affect the stability of neighboring governments. Continuation of the present trend in Guatemala would ultimately endanger the unity of the Western Hemisphere against Soviet aggression, and the security of our strategic position in the Caribbean, including the Panama Canal.

According to some historians, Arbenz's land reform was designed by the Communist Party and was ruled unconstitutional by the Guatemalan Supreme Court, after which Arbenz purged the Court. His regime openly praised Stalin and relied on communists for key decisions. He was alleged to have killed hundreds of his opponents. Arbenz also purged the military brass of officers who were thought to support Francisco Javier Arana, President Arevalo's chief of the armed forces, and a possible opponent of Arbenz. One of those officers was Colonel Carlos Castilla Armas. Colonel Armas retired from the Army and was subsequently exiled to Honduras.

Throughout the early 1950s, primarily in 1953-1954, there was a campaign of propaganda against Jacobo Arbenz. The US Information Agency (USIA) placed unattributed articles in foreign newspapers labeling Guatemalan officials as communists. Additionally, the USIA distributed 100,000 copies of a pamphlet, "Chronology of Communism in Guatemala" throughout the Western Hemisphere. A radio station, La Voz de la Liberacion (The Voice of Liberation), was set up in Miami but claimed to be operating deep in the Guatemalan jungle, broadcasting a mixture of popular music, humor, and anti-government propaganda. Local Guatemalan newspapers also carried on a propaganda campaign against the president.

In the early 1950s, the Roman Catholic press in the United States, following the lead of secular journalists, became convinced that there was a Moscow-directed plot to take over Guatemala, and that it had succeeded and was spreading throughout Central America. Popular Catholic periodicals were turning their attention to Jacobo Arbenz and Central America generally, warning readers of the dangers of the supposed communist regime of Jacobo Arbenz. When he was subsequently overthrown, the Catholic press praised his downfall and predicted cooperation between Guatemalan authorities and the Church. with support by the U.S. government, and the onset of democracy.

Following a March 1954 meeting of Foreign Ministers in Caracas, Venezuela, the CIA received its "marching orders" to plan and train an invasion force of Guatemalan exiles to overthrow the Arbenz regime. Washington's assessment of the situation in Guatemala seemed confirmed when Guatemala received a shipment of weapons from Czechoslovakia in May 1954 at its port, Puerto Barrios, on the northeast Atlantic coast of Guatemala.

During a state visit by Nicaraguan president, Anastasio Somoza, to the U.S. in the early 1950s, he informed the U.S. of Colonel Castillo Armas and his small army of rebels. President Somoza believed that with proper financial support from the United States and from the Dominican Republic dictator, Rafael Trujillo, he and Colonel Armas could depose President Arbenz.

The decision was made to support Colonel Armas and his ragtag army of rebels. Colonel Armas's history is wrapped up in Guatemalan history of this time. He was from a poor family, abandoned by his father and raised by his mother. He attended and graduated from the Escuela Politechnica, the National Guatemalan Military Academy and participated in the coupe that resulted in the overthrow of General Ubico. He was later appointed the superintendent of Escuela Politechnica, a supporter of Colonel Juan Jose Arana. During a coupe attempt, he was wounded and arrested, and subsequently escaped to Honduras.

On 18 June 1954, Colonel Armas's forces crossed the border from Honduras into Guatemala. Before dawn, CIA P-47 fighter planes bombed the Guatemalan Pacific port city, San Jose. The invading army was 480 strong and invaded along the border of Guatemala with Honduras and El Salvador at five key points. This gave the impression of a major force and with this kind of disbursement, reduced the chance of the entire force being routed in a single engagement. During the invasion, radio broadcasts transmitted false reporting of huge forces joining the local populace in a popular revolution.

Aircraft dropped a few bombs here and there during the invasion on the 18th of June. Also during this period, aircraft were flying over the capital, Guatemala City dropping leaflets of propaganda. However, on subsequent raids on the capital, the P-47 aircraft bombed and strafed several targets effectively demoralizing government leaders.

Our home was a few blocks from the Guatemalan military headquarters, the Escuela Politechnica, the headquarters and stables of the Guatemalan Army Cavalry, and the transmitter building for the government radio station, TGW. Although much of the fighting took place in the city center around the national palace, considerable fighting took place in our neighborhood because of the location of the military installations and national radio station. Because of its location, our home suffered some minor damage due to the shooting in the neighborhood.

The CIA P-47 airplanes became known as "Sulfatos," the Guatemalan word for laxative, because of the alleged effect their appearance had upon Arbenz and his officials.

There was one mistake that was made by the CIA, however. On 24 June, a P-47 swooped down over Guatemala City strafing gasoline stations and in the process of its strafing runs, knocked out a radio station. It was not, as luck would have it, the government radio station, TGW, which was the intended target and near our house. Rather, it was TGNA, the protestant missionary radio station founded and operated by my father. Our new family car was heavily damaged by the bullets from the aircraft's 50 mm machine guns, and the studio and transmitter facilities, as well as towers, were badly damaged.

At the sound of the roar of the P-47 conducting the raid, my father and his staff of studio personnel and transmitter engineers stepped outside the respective buildings just in time to see the dive strafing runs of the aircraft. My father and his colleagues dove to the ground to avoid being targets, only to have their bodies surrounded by bullets from the plane's machine guns.

On 27 June, with most of his cabinet ministers having resigned and having fled to various embassies, consulates, and other countries, President Arbenz took to the airwaves to announce his resignation from the presidency, leaving his friend, Colonel Carlos Enrique Dias, then chief of the Guatemalan armed forces, as head of the government. Colonel Dias, whose nickname was Pollo Triste (Sad Chicken), went on the air and announced that:

The struggle against the mercenary invaders of Guatemala will not abate. Colonel Arbenz has done what he thought was his duty. I shall carry on.

Initially, Arbenz fled to the Mexican Embassy, seeking refuge there, and was subsequently given safe passage to Mexico. He stayed in Mexico for a short while, and then moved with his family to Switzerland. However, the Swiss government did not allow him to stay there, unless he gave up his Guatemalan citizenship. He refused to do so, and then moved to Paris initially, and then to Prague. The Czech officials were uncomfortable with his stay there because they were afraid that he would demand the government to repay him for the poor quality of the arms which Czechoslovakia had sold him shortly before the 1954 coupe and revolution. He then moved with his family to Moscow, and finally was allowed to move to Uruguay in 1957. In 1960, Fidel Castro invited him to come to Cuba, and he remained there until 1965, when he returned to Mexico following the suicide of his daughter. Arbenz died on 27 January 1971, and his remains were later returned to Guatemala on 19 October 1995 to a hero's welcome for burial in the National Central Cemetery following a ceremony in the National Palace.

In the meantime, On the 28th of June, Jerry DeLarm, one of the pilots with the CIA, bombed Guatemala City again. DeLarm was a native of San Francisco, California, known for his barnstorming adventurous flying around Central America. Initially flying for Colonel Arbenz, doing sky-writing and broadcasting, when he was not paid for his work as promised, and suspecting that Arbenz was a communist, he started flying for Colonel Armas. This time, he hit his target, the right one, the government radio station, TGW, knocking it off the air, and then dropped two bombs on the major army fortress, Fort Matamoros.

President Arbenz's friend and successor, Carlos Enrique Diaz, was deposed two days after he assumed the presidency as head of a military junta, by a military coup led by Colonel Elfego Monzon, who established a military junta.

Colonel Carlos Castillo Armas was invited to join the junta, which he did and on 3 July 1954, he returned to Guatemala City to a huge welcome, and succeeded Colonel Monzon as the leader of the junta on the 8th of July 1954. On 1 September, the remaining members of the junta resigned, and Armas was formally declared president. Although my family stayed in Guatemala, I left for the United States to continue my education around that time.

Throughout the latter half of the 1940s and early half of the 1950s, I attended a small boarding school in the Guatemalan highlands in the town of Huehuetenango. Initially, the only roads were small and difficult roads through Quiche or through Quetzaltenango that required 10 to 12 hours to drive to Huehuetenango through difficult and mountainous terrain and so we traveled there by airplane from Guatemala City, a 45 minute flight. After I left Guatemala in 1954, with the construction of the Pan American Highway, it was possible to make the trip in about four hours.

Situated in the center of Mayan culture, and close to the ancient Mayan pre-Columbian capital of Zaculeu, we experienced the beauty of the land, the abject poverty that was present every where in that area, and the nature of accountable charity. So little had changed in over 100 years. The languages, of that area of Guatemala, still existing from ancient Mayan times, were Mam, K'iche', and Q'anjob'al.

The boarding school was a place in which 20-30 boys and girls from missionary families throughout Central America came for their elementary schooling. The students all became part of the local Huehuetenango. We participated in the cultural, civic, commercial, and religious life of the community. However, for most of us, it meant that we were away from our homes and families, and unable to see our parents during the almost 10-month school year.

Yet, it was basically a happy and fulfilling life. We contributed to the community through our charitable services and through regular practices and disciplines taught to us by our parents and the teachers at the school. We regularly visited sites of historical and cultural significance, giving us appreciation for the ancient cultures and practices of the Indian nations that made up Guatemala, and in particular, during the pre-Columbian period.

Zaculeu, is a pre-Columbian Maya archeological site in the highlands of western Guatemala, just a little less that four kilometers outside the city of Huehuetenango. Its occupation dates back to the Early Classic period (AD 250-600) of Mesoamerican history. It was later the capital of the Postclassical Mam kingdom, and later conquered by the K'iche' Kingdom of Q'umarkaj. In AD 1525, the city was attacked by the Spanish during a siege that lasted several months.

There are a number of these ancient cities consisting of nothing more than the ruins covered with mounds of dirt. One such ancient capital, is Iximche', located near the town of Tecpan and not far from Huehuetenango. Like Zaculeu, it was built on an isolated bluff surrounded and protected by ravines. It was one of the K'iche' Mayan capitals until it was conquered by the Spanish with the help of the Kaqchikel Indians in the early 1500s.

These ancient cities of the Mayans were pretty much the same, unexcavated mounds of dirt, containing temple-pyramids and government palaces grouped around a series of plazas, and a ballcourt for the playing of the Mesoamerican ballgame. Zaculeu was no different, and abandoned in 1525, around the same time as the others were abandoned. However, in the late 1940s during my elementary school years, the United Fruit Company excavated and restored it, essentially by clearing the mounds away and covering the pyramids, ballpark, and plazas with concrete.

Now, why is any of this important? Well, maybe it isn't really important because it is so much ancient history and so personal to my history. But, it also fills in some of the cracks that have informed me in connection with what I believe and how I have become involved in the third sector.

The first is the recognition that I was raised in a Christian family that devoted itself to its religious calling and service to others. As a result, it was in that family that I learned what was important to life and the meaning of calling and stewardship. I don't mean to suggest that these are simply religious terms, which clearly they are. But rather, that there is a difference between being called to serve to poor and others in need, as opposed to being driven to be successful; that my talents, experiences, time, and material resources are held in trust to that end; that my interest is only that of being a steward. Stewardship not only involves what I do with my resources, talents, experiences and time, but how I am accountable for what I do and to whom do I owe that accountability.

Secondly, the one lesson I learned well from my parents, their colleagues, and my personal experiences and history, was that whenever I am in a country other than my own, I am a guest in that country. This has several effects, some of which may be contrary to many of the INGOs that are participating in the INGO Charter. That does not mean that I discount the importance of what organizations, like Amnesty International, Greenpeace, CIVICUS World Alliance, Earthrights International, Transparency International, and similar groups do. But, that just is not where I am right now.

I am reminded of what I wrote in one of my posts on Haiti last year, that Haiti is really not able to progress and be an effective self-governing country because of the large NGO sector there, almost acting in a parallel sort of fashion doing the things the government should be doing. My father always respected the host country government, and dealt professionally and courteously with most of the individuals identified in this post. My family was in Guatemala to serve the people of Guatemala, not to advance some political or socio-economic agenda. He did not spend a lot of time being concerned about some effectiveness or impact evaluation of his work. He was okay with letting the United Fruit Company worry about that.

A third lesson I learned was that governments deserve a certain sense of skepticism, both with respect to what they can deliver in terms of social services and good government, and in how they can regulate all sectors of national life. This is not to say that I am anti-government in any way. However, as one who has worked for the United States government for almost 50 years, but who also spent his formative years in Guatemala, I have learned that governments, no matter where they are located and at what level they operate, are not able to provide for all the needs of all of the people, and still allow a decent level of personal freedom and personal responsibility. I also understand that through legal and regulatory regimes, and the exercise of executive powers, civil society organizations may be restricted in what they can do, either through registration processes or regulatory enforcement mechanisms, and that charities will often owe their existence to governmental decisions.

A fourth thing I learned that wherever I am, any effectiveness in my service through charity takes place in the context of relationships. That involves learning about the history, culture, and traditions of the people with whom I work and to whom I offer assistance. In foreign countries to my own, that involves learning the language, meeting and knowing the people and their interests and needs. As a child, my playing with the indigenous children my age tended to inform my beliefs and motivations when dealing with people and their needs. My father brought into his circle of advisers, including as member of the boards of several organizations he led, national Guatemalan leaders, technicians, and specialists. Not because it was required by law at that time. Rather, he wanted the relationship and advice of those who knew the country, its history, its people, and wanted to be a part of the mission of his organization. My father not only loved his work, he most of all loved the Guatemalans. Proud as we were to be Americans, we understood that America did not have all the answers.

As an illustration, I joined my mother and father, and sister and brother-in-law in a trip to Guatemala many years ago for the 40th anniversary celebration of the radio station my father founded. As we were having breakfast in the guest apartment one morning, a Guatemalan Indian woman came to the door with a basket of Guatemalan tamales. She had worked with or for my parents in the late 1940s, and had left her village early that morning, long before sunrise to walk miles and then to take an early morning bus to Guatemala City on the chance she might see our family. We sat around the table eating those wonderful tamales she had made with such care catching up on 50 years of personal history.

Ten years later, or 11 years ago, my brother and I went to Guatemala to take part in the celebration of the 50th anniversary of Radio Cultural TGN, TGNA. I had been in the offices in the studio building when one of the staff members approached me to tell me of an elderly woman that was waiting for me in the crowd of several thousand. I went out to see who might be looking for me, and found a woman, then in her mid-90s, waiting patiently on a park bench for the chance to see me. She had left her home in Huehuetenango that morning around 4:00 to travel by bus to the Capital. She knew my father and mother had died, but thought I might be there to represent the family on this important anniversary event. She really had no way of knowing whether that would be the case. But, for the next two days, she did not leave my side during the programs at the radio station or in the Olympic Stadium. She was just one of the many people my parents served.

The fifth lesson I learned as a boy was the importance of accountability. In those days, and to a lesser extent today, most missionary societies in Europe and the United States required their missionary workers to raise their financial support as they went out around the world; to Africa, India, China and other parts of Asia, and Central and South America. We now call this deputized fundraising. I guess to be clear about the nature of this effort and make sure that there was no misunderstanding by the government concerning compliance with its tax laws. Funds were raised from organizations, churches, individuals, etc., by those individuals preparing to go out into missionary service, with the donations made directly to the mission society, from which salaries and expenses and project costs would be covered.

I remember evenings as my father sat down with his typewriter writing personal thank you letters and reports of his work to those who had made donations to the mission society for my parents' support. He did this for almost 60 years, right up to shortly before he died. During his return trips to the U.S., he would make every conceivable effort to visit those people, organizations, and churches that had made donations to his work. My father and mother believed that their work represented a team effort, and that they were the point of the spear, whereas those donating the funds were every bit as important to the success, however it was defined, of the work they were doing.

My parents never bought into the modern maxim that big is good, that bigger is better, and that biggest is best.

Rather than be concerned about how someone defined success, or how their successes, however defined, were adequately perceived by others, they simply sought to be faithful in all they did, whether it was in their work in Guatemala and later around the world, or in how they maintained their communication with those donors that made it all possible.

Old fashion, isn't it? But this was the environment in which I grew into adulthood, and these are some of the things that shape my thinking, even today. I suspect that there are other things that I learned in life concerning the sector, but these are a few that came to mind as I was reflecting on my life and writing down these few thoughts.

By the way, I do still love Guatemala and the Guatemalan people.