Foreign currency and corruption laws inadvertently impede philanthropy, report finds

 

Alliance magazine

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Foreign currency and anti-corruption regulations, which aim to increase transparency, cause delays and bottlenecks in philanthropic funding around the world, according to the Index of Philanthropic Freedom 2015.

These rules, coupled with the ‘increasingly sceptical and, at times, hostile treatment of foreign donations made to local civil society organizations’ present obstacles to foundations and the organizations they serve, according to the report by the Hudson Institute.

The report, based on surveys in 64 countries, defines philanthropy broadly as an ‘activity performed with a goal of promoting well-being’. The surveyed actions range from direct donations to corporations’ social programmes in the countries they work in, and include diaspora giving and social enterprises. While the report identifies giving trends globally, it also notes challenges.

Foreign currency and capital controls, which can enforce artificial exchange rates or cap the amount of money that enters or leaves the country, can impede foreign donations and raise the cost of philanthropy.  The rules can also limit a recipient’s access to foreign funding and raise the cost of receiving them.  In Venezuela, for example, only central bank-controlled entities can deal in dollars or euros, which makes it difficult for groups to get funding from outside the country.


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