Philanthropy in Latin America and the Caribbean is at a critical juncture: while local philanthropy is consolidated as a key actor to achieve the common good in society, civic space and the enabling environment for philanthropy and the non-profit sector is being reduced. If the non-profit sector does not have an enabling environment that allows its operation, the work we do in different sectors such as philanthropy and international cooperation, among others, will not have the desired impact. And if countries do not have regulations that facilitate donations, philanthropy cannot grow.
To analyse the complex environment for philanthropy in the region, WINGS, the Centro de Filantropía e Inversiones Sociales de la Escuela de Gobierno de la Universidad Adolfo Ibáñez (CEFIS UAI), and Lilly Family School of Philanthropy of Indiana University recently launched a report titled Rules and Incentives: Mapping the Legal Framework for Non-profit Organisations and Philanthropy in Latin America and the Caribbean. The study analyses the legal frameworks of 19 countries to determine if they help or hinder philanthropy. Overall, the regulations for non-profits and civil society are too rigid and have not evolved with the maturity of the sector.
On May 3, 2022, during the online launch of the report, WINGS, CEFIS UAI and Lilly Family School of Philanthropy gathered with experts from Asociación de Fundaciones Familiares y Empresariales (AFE), Centro Mexicano para la Filantropía (CEMEFI), Grupo de Fundaciones y Empresas (GDFE) and Institute for the Development of Social Investment (IDIS) to discuss the findings and what they mean for the region.
A global perspective was provided by a keynote speaker from the Indiana University Lilly Family School of Philanthropy, who shared insights from their Global Philanthropy Environment Index (GPEI), which evaluates the enabling environment for philanthropy and showed that the overall score for Latin America was 3.17/5, one of the worst in the world after the Middle East and northern Africa, while the Caribbean scored 3.78. These scores mirror the reality of the region that was shared by speakers throughout the event.
The emphasis on what is happening in the region was presented by a speaker from CEFIS, who summarised the main obstacles for non-profit and philanthropic organisations:
- The long time to register a non-profit (this can range from 30 days to 6 months).
- Expensive costs can reach $500.
- Limitations on the purposes allowed for the legal registration of a non-profit.
- The requirement to present detailed annual reports not differentiated by size and capacity of the organisation.
- A lack of tax incentives for donations.
- The limited or non-existent regulation of electronic donations.
The study also shows that in some countries, the closure of civic space is a threat that materialises either with legal restrictions or with restrictions on the operation of non-profit organisations. In the past few years, many governments in Latin America and the Caribbean distanced themselves from civil society and are currently cracking down on their work, as can be seen in Brazil, Mexico, and Venezuela. In these situations, philanthropy needs to create alliances, work together, and act as a bridge between the polarising voices.
How can philanthropy influence changes in the regulations?
During the panel, the speakers agreed that the first step in forging a new path for philanthropy is to learn from the experiences of other countries in the region and organise the information that already exists.
The comparative data offered by the study supports the efforts that philanthropy, civil society, and the non-profit sector are making for better laws in their countries. The invitation is to use the data, to identify how non-profit organisations are navigating the obstacles of restrictive regulations, to learn from others in the philanthropic sector and to collaborate.
But learning from others implies recognising and engaging with other actors such as grassroots social movements. According to the panellists, it is philanthropy’s role to engage in conversation with these movements, understand their demands, and define with them forms of collaboration to advocate for a better enabling environment for all and to protect democracies.
Philanthropic organisations can be agents of change supporting or leading national dialogues and raising awareness at the regional and global levels. Besides including and representing the voices left out of traditional philanthropy structures, the sector should develop transparency and accountability systems, build trust between diverse actors and promote multi-sector collaboration. The invitation is to join efforts between the private sector, non-profit, philanthropy and civil society organisations and governments to work together for a better enabling environment.
Finally, the report shares recommendations to create conditions that can help philanthropy thrive:
- Advocate for more transparent and simpler registration and monitoring processes for non-profits that are not costly or time-consuming and do not impact non-profits’ autonomy.
- Advocate for the opening of cross-border giving. According to the GPEI, cross-border giving is one of the main conditions that lift up philanthropy.
- Encourage donations by providing tax incentives for all social causes, including reproductive rights, gender identity, indigenous cultures and the environment – which are often excluded.
- Develop favourable legislation for the creation of endowments.
- Promote regional knowledge exchange and learning.
Studies like the Global Philanthropy Environment Index (GPEI) and Rules and Incentives: Mapping the Legal Framework for Non-profit Organisations and Philanthropy in Latin America and the Caribbean are vital for the region. Only by working together can philanthropy strengthen its role, include new voices, and interact with governments successfully to create a better enabling environment.
Maria Eugenia Páez G. is the Project Coordinator, Latin America and the Caribbean at WINGS, and Naira Bonila is the Communication Officer at WINGS.
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