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The International Journal
of Not-for-Profit Law

Volume 3, Issue 2, December 2000

A publication of the International Center for Not-for-Profit Law

Table of Contents

Letter from the Editor

Articles

Church and State Relationships in German "Public Benefit" Law
By Dr. Christine R. Barker

Evaluating Tax Incentives for Donations to Public Benefit Organizations
By Paul Bater

Freedom of Association: Recent Developments Regarding the "Neglected Right"
By Leon E. Irish and Karla Simon

The Government of Israel's Control of NGOs: Legal Dilemmas and Structural Constraints
By Nitza Nachmias and Amiram Bogot

Reviews

Introduction to the Non-Profit Sector in the Balkans
By Jenny Hyatt
Reviewed by Douglas Rutzen

The Third Force
By Ann M. Florini
Reviewed by Karla Simon

Weak Democracy and Civil Society
By Imco Brouwer
Reviewed by Sam Charron

Case Notes

Central and Eastern Europe:
Poland

Latin America and the Caribbean:
Venezuela

Middle East and North Africa:
Egypt | Tunisia

North America:
the United States

Newly Independent States:
Moldova
| Russia

Country Reports

Asia Pacific:
Regional
| Australia | the Philippines

Central and Eastern Europe:
Hungary

Latin America and the Caribbean:
Regional | Dominican Republic | Guatemala | Peru

Middle East and North Africa:
Bahrain | Israel | Palestine | Yemen

Newly Independent States:
Kazakhstan | Ukraine

North America:
the United States

South Asia:
India | Pakistan

Sub-Saharan Africa:
Ghana | South Africa

Western Europe:
Belgium | France | Germany | Ireland

International Grantmaking

Conducting Overseas Site Visits
By Victoria B. Bjorklund and Jennifer I. Goldberg  

- - - - - - - - - -

Editorial Board

Country Reports: Latin America and the Caribbean

Regional

I) CERFE Regional Cconference

By Fernando Latorre

“Increase in Citizen Participation in Latin America through the Generation of Favorable Legal Frameworks” is a research project sponsored by the Inter-American Development Bank and organized by CERFE Institute from Italy.

The project is being developed in five different Latin American Countries: Dominican Republic, Colombia, Costa Rica, Brazil, and Venezuela, and involves the identification, analysis and presentation of possible solutions to obstacles that might hinder or block the development of civil society in those countries.

A workshop to discuss a first theoretical map of obstacles to the development of the third sector legal framework in Latin America, prepared by CERFE’s researchers took place in San Jose, Costa Rica, on December 15th to 17th. During the event research teams[1] from Colombia, Costa Rica, Brazil, Venezuela and the CERFE Institute had the opportunity to examine, discuss, and exchange experiences about the theoretical map and the problems of the third sector legal framework of each country.

As a result of the workshop, the national teams prepared an analysis of the theoretical map completed by CERFE’s experts in order to tailor it to the reality of each country. Questionnaires are being prepared to interview the third sector’s leaders and representatives from each participant country. The information gathered from these questionnaires will be used to form the analysis of the obstacles to the third sector legal framework that are blocking the development civil society in those countries. 

[1] CERFE: Marina Cacace, Fabio Feudo , Giancarlo Quaranta , Gabriele Quinti cerfe@tiscalinet.it; BRASIL: Fernando Latorre, Mattos Filho flatorre@mattosfilho.com.br, Silvio Caccia Bava, Polis scbava@uol.com.br; COLOMBIA: José Rafael Mateus Hoyos, abogado Jrmateus@hotmail.com, Consuelo Mariño Samper, Fundación Iatrike consuelo.m@unete.com; COSTA RICA: Camilo Acosta, Fundación para la Cooperación camilo@fcrusa.or.cr, Ana Maria Balbontin B., profesor de sociología abalbont@samara.una.ac.cr, Xinia Maria, Chaves Quiros, abogada y notaria xchaves@racsa.co.cr; REPUBLICA DOMINICANA: Ana Selman, INTEC aselman@mail.intec.edu.do José Angel Aquino, coordinador proyecto PNUD de apoyo a la reforma del Estado jos.aquino@codetel.net.do, Tirsis Quezada castellquez@codetel.net.do; VENEZUELA: Antonio L.Itriago Machado, abogado, Miguel Angel Itriago Machado, abogado alnilak@cantv.net.

II) Fortalecimiento Institucional de ONGs Latinoamericanas fue el tema debatido en Rio de Janeiro

Entre los días 20 y 22 de noviembre se realizo en Río de Janeiro la Conferencia Latinoamericana de Fortalecimiento Institucional de ONGs, que contó con la participación de representantes de asociaciones nacionales de ONGs de Perú, Chile, México, Uruguay, Nicaragua, Bolivia, Venezuela, Colombia, Argentina, Costa Rica, Guatemala, además de la Asociación Brasilera de Organizaciones No Gubernamentales (ABONG). También participaron del encuentro redes de articulación de ONGs, como la Asociación Latinoamericana de Organizaciones de Promoción (ALOP) y el Consejo de Educación de Adultos de América Latina, (CEAAL) las agencias de cooperación OXFAM, ICCO, EZE, NOVIB, IAF y representantes de la Unión Europea, de UNICEF y del Banco Mundial.

Promovido por el International Forum On Capacity Building (IFCB) y organizado por la ABONG y la ALOP, el evento posibilitó el debate para la construcción de una agenda común con el objetivo de fortalecer institucionalmente las ONGs da América Latina. Las discusiones fueron organizadas a partir de los resultados obtenidos en los Diálogos Nacionales, sobre el mismo tema, realizados en América Central, en el Caribe, en Perú, Brasil y Argentina.

Con la perspectiva del fortalecimiento institucional en mente, los grupos de trabajo pusieron énfasis en cuatro temas:

  1. La necesidad de mayor visibilización, de mayor esfuerzo de comunicación de las ONGs hacia la sociedad. Esto no solamente por un tema de marketing, sino básicamente en razón de la importancia de esa visibilización para influir en la opinión pública.
  2. Una segunda cuestión subrayada durante el encuentro fue la necesidad de fortalecer las capacidades analíticas de las ONGs. Las ONGs no se ven a sí mismas como meras instrumentadoras y ejecutores de proyectos, de grupos asistenciales o portadores de buenas intenciones; las ONGs se ven a si mismas como promotoras del cambio social, de los derechos ciudadanos, de los derechos económicos, sociales y culturales. Por lo tanto el conocimiento que se busca es uno que les permite jugar este rol de agentes de cambio social. La sistematización, generación de conocimiento, generación de propuestas y la intervención tienen esa intencionalidad.
  3. El tercer tema que fue relevado es la cuestión de las alianzas y coaliciones —locales, nacionales, regionales, globales —, generar actores y generar alianzas con capacidad de establecer su legitimidad en los espacios públicos. La construcción de alianzas se visualiza con relación a la necesidad de reapropiarse de lo público.
  4. El cuarto tema destacado fue el desarrollo organizacional, que tiene que ver con los temas de gestión, de generación de recursos, con las formas de medición de impacto, de monitoreo, de evaluación — con todo el proceso de PME.

Estos temas relevados como importantes deben analizarse respecto a esta visión y perspectiva de fortalecimiento institucional. No se quieren solamente buenos gerentes de ONGs, recursos humanos calificados, buenos mecanismos de gestión, buenos mecanismos de toma de decisión dentro de nuestras instituciones. Se busca aquello para mejorar la capacidad de producir cambios, de generar alianzas, de generar conocimientos colectivos, de volvernos más visibles y de afectar los procesos de decisión.

Los interesados en obtener más informaciones sobre el International Forum On Capacity Building pueden consultar el site www.ifcb_ngo.org o entrar en contacto por el e-mail abongifcb@uol.com.br

Dominican Republic

Proposed Amendment to the Not–for-Profit Associations Law
in the Dominican Republic

By Rhina E. Quiñones Rosado

The Constitution of the Dominican Republic, dated August 14, 1994, does not refer expressly to the existence of Not–For-Profit Associations. However, article 8, number 7 acknowledges the freedom of association for social, cultural purposes or of any other kind, provided that the public order, national security and good customs are not threatened.

Dominican legislation is founded in French legislation which originated in the Napoleonic Code. After the enactment of such code and adaptations made, there remained, among other issues, a lack of Not-For-Profit Associations.

To fulfill this void, among other reasons, the North American military occupancy government (1916-1924) enacted Executive Order No. 520 contained in Official Gazette No. 3139 (July 26, 1920). This is the reason why the present law is referred to as Ordinance 520 or Law 520. The Order was subsequently formally integrated in the Dominican legal system through the execution of the Evacuation Treaty, between the Dominican and American governments.

Through the years, some amendments were introduced: the first one by means of Law No. 1143 dated March 27, 1946, Official Gazette No.6420 dated April 1st. 1946; and the second amendment was by means of Law No. 666 dated July 19, 1982, Official Gazette No. 9590 dated July 20, 1982.

For many years, it has been the wish of many Dominican Not-For-Profit Associations to modernize the legislation governing them, due to the fact that, as we have indicated, Law 520 is 80 years old and does not reflect the need and diversity of these organizations at present. Nor does Law 520 establish a mechanism for the promotion and support to Not-for-Profit Associations’ activities.

There is also a political concern that the Dominican Not-for-Profit Associations do not have proper state regulation- parts of the political sectors understand that since Not-for-Profit Associations attract donations of international funds, may be used politically with purposes contrary to national sovereignty, hence contrary to the Dominican State.

These different positions have motivated the elaboration of several Bills intended to amend the current Law No. 520. The proposals are the following: 1. Bill of Law of Not-For-Profit Associations, prepared by Alianza ONG; 2.- Bill on Not-For-Profit Associations presented to the House of Representatives by Pelegrín Castillo, Esq.; 3. Bill of Law on Non Profit Associations prepared by the PNUD; 4.- Bill of Law Frame of Encouragement to Activities of Social Development of Not-For-Profit Associations in the Dominican Republic, prepared by Tirsis Quezada, Esq.

The Bill on Not-For-Profit Associations elaborated by Deputy Pelegrín Castillo Semán, Esq. has been filed at House of Representatives of the Dominican Republic. The House of Representatives appointed a Special Commission to analyze the draft. To these ends, a public hearing was held at the House of Representatives and meeting were organized with the Deputies who were members of the Special Commission.

The undersigned, along with the Program for the Strengthening of Organizations of the Dominican Civil Society, coordinated by the Instituto Tecnológico de Santo Domingo (INTEC) under the sponsorship of the Banco Interamericano de Desarrollo (BID) (Interamerican Development Bank) and OXFAM, developed an advisory and consulting process for the Formulation of a New Legal Framework for the Regulation of Not-For-Profit Associations in the Dominican Republic.

Our main objective was to review the current legislation and the existing proposals for regulation of Not-For-Profit Associations, to update it and present a new bill elaborated in a participative manner, as well analyze current related legislation in Latin American countries.

As the analysis of the documentation was collected, various documents were prepared. The main document was a comparative/analytic Matrix of the proposals for the regulation of Not-For-Profit Associations. This matrix was created in light of areas or issues contained in the different proposals that were deemed to be of fundamental importance. The current legislation was examined in the context of this Matrix and a juridical-political hypothesis regarding the legislation’s continued feasibility was formulated.

Four Regional/Sectarian Meetings of interested social organizations and networks were held, in coordination with the Program for the Strengthening of the Civil Society Organizations and Alianza ONG. The purpose of these meetings was to generate proposals and consensus over the alternatives of regulation for the indicated Associations.

As a result of these meetings, a defined line of consensus in the different proposals, around key components of what would be a new Law on Not-For-Profit Associations.

In view of the work performed, we presented a proposal which has a normative content derived essentially from the proposals initially submitted to the consulting and analysis process. It is not an entirely new proposal, but does integrate the convergence points registered in the former formulations, legislative options deemed to be pertinent and a limited number of new provisions.

This proposal is currently being displayed among a group of organizations and State Agencies for the purposes of observations and recommendations. Likewise, it was delivered to the Special Commission appointed by the House of Representatives to review the Bill presented by the Deputy Pelegrín Castillo.

The next session of National Congress will begin on February 27 of this year. At that time, the Special Commission will present its recommendations on each one of the drafts to the House of Representatives.

The legislation introduced by the Not-for-Profit sector is intended to impulse the repeal process of Executive Order No. 520 through the creation of a juridical system regulating Not-For-Profit Associations. The proposed legislation has been elaborated with the participation of organizations from several sectors of the country. Our proposal sets forth novel themes, among which are: the decentralization of the incorporation process; enlargement of the founding members to five physical or moral persons; encouragement of participation to strengthen a plurality of ideas, proposals and solutions; classification of Not-For-Profit Associations; the promotion of democratic mechanisms and transparency in the internal governance of the organizations; the promotion of participation of these Not-for-Profit Associations in the development programs of the Central Governments, etc.

Guatemala

INSTITUCIONALIZACION DEL SECTOR ONG EN GUATEMALA : Estrategia de Gestión del Desarrollo Sectorial

Prepared by GSD Consultores Associados

Peru

Note About the Recent Modification of the Income Tax Law: Exemption in Favor of Non-Profit-Organizations: Law No. 27356 (published in the official newspaper “El Peruano”: 18-10-2000)

bY Beatriz Parodi

Law No. 27356 has made some modifications in the income tax law of Perú (Legislative Decree No. 774) in order to extend the tax basis and collect more resources from taxation. Among these modifications, we find an important and serious modification about the exemption in favor of non-profit organizations (specifically, foundations and associations).

The recent modification has limited this exemption as follows:

  1. The social objective of foundations and associations must be exclusively for culture, investigation, social assistance, health and charity. Previously, in order to enjoy this tax exemption, these non-profit organizations could have several social objectives, such as: science, professional, work related to unions or guilds, housing and other similar objectives.
  2. Law No. 27356 allows the Executive Power, through the Ministry of Economy and Financing to establish other requisites or limitations to enjoy this exemption.
  3. The establishment of limitations related to retributions and salaries that these organizations pay, in general, directly and indirectly. But Law No. 27356 does not precise if this limitation is related to associates that work in the organization or people contracted in general.

SPANISH VERSION (TEXTUAL)

MODIFICACION LEY DEL IMPUESTO A LA RENTA EN EL PERU: LEY NRO. 27356 (publicada en el Diario Oficial El Peruano el 18 de octubre del 2000)

“Art. 19: Están exonerados del Impuesto hasta el 31 de diciembre del 2000:

inciso b) Las rentas de las fundaciones afectas y asociaciones sin fines de lucro, cuyo instrumento de constitución comprenda exclusivamente alguno o varios de los siguientes fines: cultura, investigación , beneficencia, asistencia social y hospitalaria, y que cumplan con los requisitos que se establezca mediante Decreto Supremo refrendado por el Ministro de Economía y Finanzas, el cual contendrá, entre otros, que las rentas no se distribuyan directa o indirectamente entre los asociados, así como límites en relación con las remuneraciones u otras retribuciones que dichas instituciones abonen directa o indirectamente.

TEXTO ANTERIOR:

“Art. 19: Están exonerados del Impuesto hasta el 31 de diciembre del 2000:

inciso b) Las rentas destinadas a sus fines específicos en el país, de fundaciones afectas y de asociaciones legalmente autorizadas de beneficencia, asistencia social, educación, culturales, científicas, artísticas, literarias, deportivas, políticas, profesionales, gremiales, de vivienda y otras de fines semejantes; siempre que no se distribuyan directa o indirectamente entre los asociados y que en sus estatutos esté previsto que su patrimonio se destinará, en caso de disolución, a cualquiera de los fines contemplados en este inciso.”

 

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ISSN: 1556-5157