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Comparing European Fundraising Regulation

Philanthropy has always been a key engine for financing civil society but little work has been done comparing the regulation of philanthropy across countries. Now, there is an opportunity to create tools and standards to guide global reform

By ESELA Posted 22/01/2018

Philanthropy has been one of the key traditional income sources for civil society organisations (CSOs) ever since their existence. It derives from the basic human urge to help other people and support the common good. The environment for private giving, however, has been dynamically changing due to various circumstances, including the growing professionalism of fundraising activities, technological developments, and the better use of social media. On the other hand, the rise of “philanthropic protectionism” has put constraints on the ability of CSOs to receive donations from abroad.

How does this manifest in legislation and self-regulation on fundraising?

Over the past two decades 13 German states have deliberately repealed their Collection Laws that imposed additional burdens on the organizers of public collections. New, more liberal legislation on public collection was introduced in Poland and Slovakia in 2014. The Finnish Interior Ministry has been working on a new fundraising act since August 2016, making fundraising activities more flexible and eliminating the prior authorisation procedure. On the other hand, however, the 2016 UK Charities (Protection and Social Investment) Act conferred additional powers on the Charity Commission to regulate fundraising and proposed a new fundraising regulator.

The spread of digital fundraising methods triggered new legislation, too. In France, a new regulatory regime for crowdfunding came into force in 2014, and a special law on SMS donations was adopted in 2016.

So far, however, there has been little comparative research on how CSO fundraising is regulated. To help fill this gap, the European Center for Not-for-Profit Law (ECNL) developed a comparative paper on the regulatory framework of fundraising in Europe, including 16 countries representing all European regions. The paper, among others, maps out the spectrum of relevant international and European standards; regional patterns; types of laws that regulate fundraising and their common elements; state incentives for fundraising and self-regulatory initiatives.

Based on the comparative analysis the paper puts forward a number of recommendations, including the following:

  • Assess: Does the current legal framework support the diversification of CSO resources and allow fundraising activities to flourish?
  • Balance regulation: Strengthen the complementary role of legislation and self-regulation to strike an effective and appropriate balance.
  • Streamline: Revisit the need for notification or permission requirements, and ensure consistent and simplified procedures that enable fundraising activities without imposing burdensome administrative requirements.
  • Foster innovation: Encourage the use of digital fundraising methods without creating additional administrative burdens for CSOs.
  • Pursue philanthropy without borders: Remove any barriers on cross-border philanthropy and guarantee the same treatment for cross-border and domestic donations.
  • Encourage giving: Support the development of philanthropy by introducing tax advantages for private giving.

What’s next?

The paper is intended as a first step towards further research and initiatives. Over the next year, ECNL, working with the International Center for Not-for-Profit Law (ICNL), continues its research to assess the impact and implementation of laws and self-regulation initiatives on fundraising, and will facilitate a multi-stakeholder dialogue on how best to regulate or self-regulate fundraising in different countries and regions. Its plans include the creation of global guidelines and toolkits on the minimum standards of fundraising regulation and self-regulation to guide reforms.

What you can do?

ECNL is inviting you to join this experiment for a better environment for philanthropy. If you are interested to receive more information feel free to contact Francesca Fanucci at francesca@ecnl.org.

Eszter Hartay

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