The International Journal of Not-for-Profit
Law - Volume 2, Issue 1
A quarterly publication from The
International Center for Not-for-Profit Law
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Working Group I:
Definitions and Terminology Click on the link below or scroll down. I.
Terminology
I. TERMINOLOGY Names of the "Rose" ·
Civic Organization (CO) - socio-ideological ·
Civil Society Organization (CSO) - socio-political or
legal-political (Hungary) ·
Non-Governmental Organization (NGO) - socio-political ·
Not-for-Profit Organization (NPO) - socio-economic ·
Voluntary Organization (VO) - socio-economic ·
trust (common law) THE State-Civil
Society Dichotomy ·
State excludes Civil Society (Absolutism) ·
State includes Civil Society (Totalitarianism) ·
Civil Society includes the State (Pluralism) ·
State and Civil Society are bound together (Rule of Law
tradition) THE Public-Private
Dichotomy ·
Public interest - Private interest ·
Public policy - Corporate policy ·
Public law - Private law (Civil Law) ·
Statutory law - Common law ·
Limited and unlimited legal personality ·
Public law and private law personality ·
Double regulation by public and private law ·
Double regulation of Civil Society Organizations Categories of Civil Society Organizations ·
Mutual Benefit Organization (MBO), self-help ·
Public Benefit Organization (PBO), charity ·
Quasi-Non-Governmental Organization (QUANGO) and
Government-Organized Non-Governmental Organization (GONGO) are - per
definition - not Civil Society Organizations Categories of Special Public Law Organizations ·
religious-ethical (Churches) ·
political-administrative (Minority Self-Governments) ·
professional-administrative (Chambers of Lawyers) ·
legal-functional (Public Benefit Organizations) are - per
definition - not State Sector Organizations
II. DEFINITION THE
CONCEPT OF ”PUBLIC BENEFIT” IN CIVIL LAW ENVIRONMENT (See
Also the Definition Chart) POLITICAL CONDITIONS There is a need for informal ways
of communication and formal ways of cooperation between the State and Civil Society.
Cooperation in the field of public services includes not only human services of
the state - e.g. health-care, public education, support of minorities,
handicapped and unemployed - but also those kinds of economic policies of the
government which have an impact on social needs - e.g. increasing population,
creating new markets, reducing unemployment, heightening technological skills,
improving under-developed regions. Communication and cooperation at
this level do not differentiate between private interest organizations - i.e.
not-for-profit and for-profit organizations - but provide an overall
socio-political framework, where State and Civil Society are not antagonistic to
each other. This means that not only pluralist
democracies but sometime populist democracies or even authoritarian regimes are
able to mobilize Civil Society. But mobilization is a temporary way of
cooperation and it is rarely the best way for the long-run development of Civil
Society. ECONOMIC CONDITIONS There is a need for some sort of
direct and indirect government supports for the development of civil society
organizations. Direct support could be infrastructural, operational, normative
subsidies, or program financing on the central and/or the local level. Indirect forms of
support are numerous as well - e.g. personal and/or corporate income tax and/or
value added tax advantages, reduction of custom duties and/or administrative
duties. Economic policy at this level
divides private interest organizations. It does differentiate between
not-for-profit and for-profit organizations, because it means positive
discrimination of not-for-profit organizations against for-profit ones. Pluralist democracies are not
always supporting civil society development. It is not just a matter of human
and financial resources but also of social values and economic philosophy.
”Laissez fair” capitalism, e.g., is not the best socio-economic environment
for the prosperity of not-for-profit organizations. LEGAL CONDITIONS There is a need for an
institutional and processual setup which arrange cooperation and mediates
financial support vis-a-vis a service provision between government agencies and
civil society organizations. This institutional structure needs double or
two-folded regulation - i.e., both private law and public law regulations. Legislative pattern at this level
further differentiates private interest organizations. It differentiates between
various types of not-for-profit organizations - i.e., mutual benefit and public
benefit private organizations, and in some cases special public law
organizations - in order to regulate and/or to control government spending and
service qualities. The reconstruction of this
institutional and processual setup in the long-run has an impact on the
socio-political environment. The legislative pattern could help to create either
a more administrative - in European terms more ”corporative” - or a more
functional, more democratic society. The legal regulation is not a goal in
itself but a tool to satisfy certain social needs. THE TRANSITIONARY CONTEXT ·
In the case of strong and/or integrated civil society,
not-for-profit organizations are privately initiated but their operation and
management are supervised by some sort of independent public sector organization
- e.g., parliamentary committee or commissioner, judge, public prosecutor, tax
authority, special government agency. Such a legal environment is more and more
dominated by the idea of public benefit or charitable functions, which could be
carried out by private law organizations regulated by general laws. ·
In the case of weak and/or divided civil society, not-for-profit
organizations are primarily initiated and/or controlled by government agencies
but their operation and management are guided by private law principles. Such a
legal environment tends to be dominated by the idea of government programs and
state responsibilities, which should be administered only by specialized
organizations - e.g., chambers, unions, extra-budgetary funds - empowered by
special acts or government decrees. · In the case of the transitionary societies of Eastern Europe both
the generalized and the specialized regulations are present in the legal
environment, but democratic development and economic improvement leads to such
legislative patterns which prefer public benefit or charitable activities to
public law monopolies.
III.
SUMMARY Working group 1 was composed of individuals with a wide variety of interests and backgrounds, which was evident in the numerous perspectives on how to approach the question of what is public benefit status. Public benefit status was examined through the lenses of political philosophy, sociology and the law. It was not easy to find a common approach. We
started off with a round among the members of the group in order to phrase
some key issues related to the question of defining public benefit. Petr Pajas
made a list of the questions, which are available at the end of this document. During
the discussion following this round, we touched upon various aspects of
terminology related to distinguishing between public and private law in relation
to public and private benefit. It is fair to say that we discussed the issues at a fairly abstract
level. ·
One
fundamental issue raised is why is there a need to
define public benefit. A case is to be
made that voluntary action by itself, where citizens take the initiative to
handle things that they feel are important, is vital to civil society. There were basically two approaches to this. 1.
Public benefit status might give credibility to
certain organizations, regardless of whether it comes with certain other
benefits. 2.
Public benefit status gives access to certain privileges in terms of
government support. To put it differently: if a state will not give specific benefits, it is of no use
to define what is public benefit. A point was made that specific benefits are
granted to nonprofit organizations that are not public benefit organizations,
such as sports organizations. Additionally, some benefits are given related to
certain activities or services, regardless of who or what type of organizations
provide these services, such as education and medical care. It
is fair to say that mainly we discussed the question of what public benefit
is about in light of the second vision: special, favorable fiscal treatment by
the govenrment. ·
This leads
to the issue of how broad the definition of public benefit should be. In some
instances a government may not have the financial leeway to grant too generous a
system of financial benefits, or it simply may not think such a system is
useful. It seems there are several ways to address this issue: ·
Define only
those kinds of activities or services that you want to support. This is not
necessarily related to public benefit status. ·
Make up a
list of the type of activities or purposes that you think are worthy of
government support, and qualify those for public benefit status. · Restrict public benefit status only to those activities or purposes that are outside of the political arena, e.g. what would be, in substance, the scope of charity under the UK and related systems. · Do not impose any restrictions. No consensus was reached on this point. Apart from budgetary reasons, the individual vision of the relationship between the
state and civil society plays a role. We did agree, however, that organizations
with an objective of disturbing public order or violating or restricting the
rights and fundamental freedoms of other citizens should not be able to obtain
public benefit status under any conditions. Basically,
the idea is that governments are in a position to choose what serves their
interests best, and it not necessarily so that all public benefit organizations,
however they are defined, should enjoy the same benefits. It may depend on the
type of objectives they pursue. ·
Another
issue raised regarding the relationship between public law and civil law
concerns what should happen with the remaining property of a public benefit
organization after dissolution and winding up of the organization. Because a
public benefit organization receives direct or indirect support at the expense
of the taxpayers, there should be a prohibition on dividing the remaining
property after dissolution among members or office holders. The same issue also arises when a nonprofit
organization is converted into a for profit organization, or when altering the
objectives of the organization. The members
of the group agreed that a condition placed upon access to public benefit status
and the privileges that come with it should be that after dissolution the
remaining property shall not be divided among the founders or members as could
be the case in ordinary nonprofit organizations.
Instead, the property shall be passed on to another public benefit
organization with a similar purpose. Questions raised during the first session of Group
1 on defining the public benefit 1.
To what
extent may an NGO engage in private interest activities without harming the
public benefit status of the NGO? 2.
What are the
distinct characteristics of NPOs (not-for-profit), PBOs (public benefit) and NGOs
(non-governmental)? 3.
Is the
recent development of the power structure (legislative, executive, and judicial
power) in modern
societies important for the issues of public benefit and how? 4.
How should
one treat self-help oriented organizations.
How much are these of public benefit? 5.
How should
the government handle voluntary organizations that intend to carry out public
activities contrary to the public policy of the government? 6.
Are there
any “per se” categories of public benefit organizations? 7.
Should
and/or may there be any limits to the basic or general rights of legal bodies
(such as the right to hold title to real estate, etc.) with respect to public
benefit? 8.
May the
existence of an ombudsman in a country be of any importance to the case of
public benefit organizations or to the development of the civil society? 9.
Are private
schools of the same importance and should they have the same rights as public schools? 10.
Is any voluntary action in and of itself a public benefit activity? In
other words, is the element of voIunteerism enough for obtaining the status of
public benefit? 11.
Should a registering authority have discretionary
power in making decisions regarding the need for a public benefit activity or a PBO? 12.
Should the tax authorities co-operate with
any other authority in deciding public benefit status? 13.
How should one deal with the discrepancy in the way
countries treat political parties and/or trade unions? 14.
Should we establish subcategories of PBOs that
enjoy further preferential status due to the presence of characteristics that we
feel should be rewarded? 15.
Should we take into account the national, regional
or temporal characteristics of the notion of public benefit? 16.
Should there be a list of public benefit
activities or even PBOs? 17.
Is it important to distinguish the approach to the
public benefit issue according to the common law or continental legal structure? 18.
What should be done when a decision is made to
remove public benefit status from an activity?
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