Editor: Stephen Bates

The International Journal of Not-for-Profit Law, ISSN 1556-5157, www.ijnl.org, is a forum for the discussion of
civil society, philanthropy, nongovernmental organizations, and the law, published by the International Center for
Not-for-Profit Law, www.icnl.org. Based in Washington, D.C., the International Center for Not-for-Profit Law
promotes an enabling environment for civil society and public participation around the world. Views expressed here
do not necessarily reflect those of the International Center for Not-for-Profit Law, its affiliates, or its funders.
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Except where otherwise noted, all contents copyright 2015 by the International Center for Not-for-Profit Law.

International Journal of Not-for-Profit Law

Volume 17, Number 1
March 2015
Letter from the Editor ………………………………….………….………………………….. 4
Cross-Border Philanthropy
Aid Barriers and the Rise of Philanthropic Protectionism
Douglas Rutzen …………………………………………………………………………………………………… 5
Allies or Adversaries?
Foundation Responses to Government Policing of Cross-Border Charity
Dr. Oonagh B. Breen ………………………………………………………………………………………….. 45
States, Public Space, and Cross-Border Philanthropy:
Observations from the Arab Transitions
Barbara Lethem Ibrahim …………………………………………………………………………………….. 72
Article
Legislation on Financing Public Benefit Activities from Tax Designation in Poland
Grazyna Piechota, Ph.D. …………………………………………………………………………………….. 86
Letter from the Editor
In this issue, the International Journal of Not-for-Profit Law focuses on challenges to
cross-border philanthropy. Douglas Rutzen, President and CEO of the International Center for
Not-for-Profit Law, analyzes the rise of “philanthropic protectionism”: restrictions on crossborder philanthropy that governments have tried to justify in the name of state sovereignty,
national security, civil society organization (CSO) accountability, and aid efficacy. Dr. Oonagh
B. Breen, Senior Lecturer in Law at the Sutherland School of Law, University College Dublin,
examines legal and policy aspects of the crackdowns on cross-border philanthropy and proposes
ways in which CSOs can respond. Another perspective comes from Barbara Lethem Ibrahim,
Senior Advisor and Founding Director of the John D. Gerhart Center for Philanthropy and Civic
Engagement, American University in Cairo. Focusing on the Arab transitions, she assesses
obstacles to cross-border philanthropy and outlines steps for ameliorating them.
This issue also features a summary of the tax provisions for supporting public benefit
activities in Poland, written by Grazyna Piechota, Ph.D., of the Faculty of Management and
Social Communication, Andrzej Frycz Modrzewski Cracow University.
We gratefully acknowledge Professor Harvey P. Dale and Professor Jill Manny of the
National Center on Philanthropy and the Law at New York University School of Law, who
convened the conference at which the papers on cross-border philanthropy were presented. For
help with manuscripts, we also thank Natalia Bourjaily, Emerson Sykes, and Ivana
Rosenzweigova. We thank our authors for sharing their expertise, too. And we invite readers to
share their own expertise: We welcome manuscripts addressing legal aspects of civil society,
philanthropy, and not-for-profit organizations.
Stephen Bates
Editor
International Journal of Not-for-Profit Law
sbates@icnl.org
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 5
Cross-Border Philanthropy
AID BARRIERS AND THE RISE
OF PHILANTHROPIC PROTECTIONISM
DOUGLAS RUTZEN1
A Russian bird group was deemed a “foreign agent.”2 Ethiopian human rights
organizations were forced to curtail their activities because of a government-imposed
cap on foreign funding.3 In India, the Sierra Club was barred from receiving funding
from abroad.4
Around the world, countries are burdening the ability of civil society
organizations to receive cross-border philanthropy. This article presents the macropolitical context underlying these restrictions. It then categorizes constraints, summarizes
governmental justifications, and analyzes restrictions under international law. The final
section summarizes conclusions and areas for further scholarship.
Background
Twenty years ago, the world was in the midst of an “associational revolution.”5
Internationally, civil society organizations (CSOs)6 had a generally positive aura, recognized for
their important contributions to health, education, culture, economic development, and a host of
1 The author is President and CEO of the International Center for Not-for-Profit Law (ICNL,
www.icnl.org). The author is grateful to Brittany Grabel, Betsy Buchalter Adler, Gabrielle Gould, Nilda Bullain,
David Moore, Margaret Scotti, Rebecca Ullman, Dima Jweihan, Katerina Hadzi-Miceva Evans, Claudia Guadamuz,
Jocelyn Nieva, and Emerson Sykes for their guidance and comments on this article.
An earlier version of this article was presented at the 2014 Annual Conference of the National Center on
Philanthropy and the Law, New York University, on “Regulation or Repression: Government Policing of CrossBorder Charity,” October 26, 2014.
2 “Russian Bird Support Group Branded ‘Foreign Agent,’” RIA Novosti, March 5, 2013, accessed
September 25, 2014, https://en.ria.ru/russia/20130503/180967677/Russian-Bird-Support-Group-Branded-ForeignAgent.html.
3 Amnesty International, “Ethiopia: The 2009 Charities and Securities Proclamation as a serious obstacle to
the promotion and protection of human rights in Ethiopia,” Amnesty International’s written statement to the 20th
Session of the UN Human Rights Council, June 11, 2012,
https://www.amnesty.org/fr/library/asset/AFR25/007/2012/en/5b3d4e94-56c5-4044-9b73-
93b55cd13e61/afr250072012en.pdf.
4 “RBI Imposes Curbs on 4 American NGOs,” India West, January 6, 2015, accessed January 12, 2015,
https://www.indiawest.com/news/india/rbi-imposes-curbs-on-american-ngos/article_520532b6-9599-11e4-84b9-
33473a4b2e33.html.
5 Lester Salamon, “The Rise of the Nonprofit Sector,” Foreign Affairs 74(109) (July – August 1994),
https://www.foreignaffairs.com/articles/50105/lester-m-salamon/the-rise-of-the-nonprofit-sector.
6 For purposes of this article, the term “civil society organization” or “CSO” encompasses not-for-profit,
nongovernmental organizations, whether or not they are eligible for tax benefits in a particular country.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 6
other publicly beneficial objectives. In addition, political theorists associated civil society with
social justice, such as the civil rights movement in the United States, the dissident movement in
Central Europe, and the anti-apartheid movement in South Africa.
As the 20th century closed, commentators noted the fall of the Berlin Wall, the rise of the
Internet, and the renaissance of civil society. Political, technological, and social developments
were weaving themselves together into an era of civic empowerment. Reflecting this era, in
September 2000, the United Nations General Assembly adopted the Millennium Declaration.
Among other provisions, the Declaration trumpeted the importance of human rights and the
value of “non-governmental organizations and civil society, in general.”7
One year later, the zeitgeist changed. After the terrorist attacks of September 11, 2001,
discourse shifted away from human rights and the positive contributions of civil society.
President Bush launched the War on Terror, and CSOs became an immediate target:
Just to show you how insidious these terrorists are, they oftentimes use nice-sounding,
non-governmental organizations as fronts for their activities…. We intend to deal with
them, just like we intend to deal with others who aid and abet terrorist organizations.8
President Bush then launched a “Freedom Agenda” to advance democratic transitions in the
Middle East.9 In many circles, the Freedom Agenda was greeted with skepticism because of the
increased militarization of U.S. foreign policy, concerns about U.S. unilateralism, and the decline
of U.S. “soft power” after the human rights abuses at Abu Ghraib.
On the one hand, the sector was targeted under the War on Terror. On the other, the Bush
Administration embedded support for civil society into the Freedom Agenda. For both reasons—
the association of civil society with terrorism and the association of civil society with Bush’s
Freedom Agenda—governments around the world became increasingly concerned about civil
society, particularly CSOs that received international support.
Concern heightened after the so-called “color revolutions” that occurred shortly after the
Freedom Agenda was announced. The 2003 Rose Revolution in Georgia roused Russia, but the
turning point was the 2004 Orange Revolution in Ukraine. President Putin viewed Ukraine as a
battleground state in the contest for geopolitical influence between Russia and the West.
President Putin also seemed to have an exaggerated sense that the Orange Revolution was the
result of Western funding of Ukrainian civil society, rather than an authentic, indigenous
response to electoral fraud.10
The Orange Revolution caught the attention of other world leaders. While protesters were
on the streets of Kiev, President Lukashenka of Belarus famously warned, “There will not be any
7 United Nations General Assembly, United Nations Millennium Declaration, para. 30, UN Doc. A/55/L.2
(September 8, 2000), https://www.un.org/millennium/declaration/ares552e.htm.
8 President Bush, “President Freezes Terrorists’ Assets,” Remarks on Executive Order, U.S. Department of
State Archive, September 24, 2001, https://2001-2009.state.gov/s/ct/rls/rm/2001/5041.htm.
9 Sarah E. Yerkes & Tamara Cofman Wittes, “What Price Freedom? Assessing the Bush Administration’s
Freedom Agenda,” Center for Middle East Policy Analysis Papers, Number 10 of 34, Brookings, September 2006,
https://www.brookings.edu/research/papers/2006/09/middleeast-wittes.
10 William Schneider, “Ukraine’s ‘Orange Revolution,’” Atlantic, December 2004, accessed September 16,
2014, https://www.theatlantic.com/magazine/archive/2004/12/ukraines-orange-revolution/305157/.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 7
rose, orange, or banana revolutions in our country.” During the same period, Zimbabwe’s
Parliament adopted a law restricting CSOs. Soon thereafter, Belarus enacted legislation
restricting the freedoms of association and assembly. If there was a global “associational
revolution” in 1994, by 2004 the global “associational counterrevolution”11 had begun.
In 2005, the counterrevolution gained prominence when Russia adopted a high-profile
law restricting civil society. The same year, Eritrea, Uzbekistan, and other countries followed
suit.
The zeitgeist also changed because there was less appetite for civil society support in
countries that had undergone political transformations after the fall of the Berlin Wall. Years had
passed, and governments no longer considered themselves to be in “transition.” Rather, they had
transitioned as far as they were inclined to go, and they were now focused on the consolidation
of governmental institutions and state power. This was particularly true in so-called “semiauthoritarian” or “hybrid” governments that held elections but had little attraction to the rule of
law, human rights, and other aspects of pluralistic democracy.12
Governments were also able to coat restrictions with a veneer of political theory.
Governments with autocratic tendencies touted variants of Vladimir Putin’s theory of “Managed
Democracy,” which seamlessly morphed into notions of “Managed Civil Society.” Essentially
two models emerged in these countries. In some countries, CSOs were given latitude to operate,
provided they stayed away from politics. In others, the government sought to co-opt CSOs and to
shut down groups that resisted, particularly those that received international funding.
Restrictions also gained momentum from efforts to promote the effectiveness of foreign
aid. In March 2005, ninety countries endorsed the Paris Declaration on Aid Effectiveness, which
incorporated the concepts of host country ownership (which was soon co-opted into “host
government ownership”) and the “alignment of aid with partner countries’ priorities.”13 Soon
thereafter, a number of governments introduced restrictive measures to regulate international
funding, covering not only bilateral aid but also cross-border philanthropy.
Buffeted by these and other factors, civic space quickly contracted. According to data
from the International Center for Not-for-Profit Law (ICNL), between 2004 and 2010, more than
fifty countries considered or enacted measures restricting civil society.14
A second wave of legislative constraints then emerged after the so-called “Arab
Awakening,” which began in late 2010. Once again, countries around the world took notice and
initiated measures to restrict civil society. Since 2012, more than ninety laws constraining the
freedoms of association or assembly have been proposed or enacted. This trend is consistent with
a continuing decline in democracy worldwide. Freedom in the World 2015 reveals that 2014 was
11 Douglas Rutzen & Cathy Shea, “The Associational Counter-Revolution,” Alliance, September 2006,
https://www.alliancemagazine.org/en/content/associational-counter-revolution.
12 Thomas Carothers & Saskia Brechenmacher, Democracy and Human Rights Support Under Fire
(Carnegie Endowment for International Peace, 2014).
13 The Organisation for Economic Co-operation and Development (OECD), “The Paris Declaration on Aid
Effectiveness and the Accra Agenda for Action,” OECD, 2005/2008, 1,
https://www.oecd.org/dac/effectiveness/34428351.pdf.
14 A trend analysis only tells part of the story, for many countries (such as Syria, Eritrea, Saudi Arabia,
Cuba, Laos, etc.) remained “stably restrictive” throughout this period.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 8
the ninth consecutive year of decline in freedom globally, with sixty-one countries showing
overall declines.15 As demonstrated in the chart below based on ICNL’s tracking data, there was
a spike in activity between 2012 and 2014, with the number of restrictive initiatives doubling
each year:
Restrictions on association and assembly are more common in certain regions, but this a global
phenomenon, as shown by the chart below also based on ICNL’s tracking data:
16
Among these restrictive initiatives, approximately half constrain the incorporation/registration,17
operation, and general lifecycle of CSOs (so-called “framework” legislation).18 Approximately
15 Please see Freedom House, Freedom in the World 2014, https://www.freedomhouse.org/report/freedomworld/freedom-world-2014#.UxEVs4Xnmf0.
16 Regions are defined based on State Department Bureau classifications. It is interesting to note how
regional trends change based on classification. For example, if the states of the former Soviet Union were to be
classified as their own regional category, they would lead all other regions with 21 restrictive initiatives.
17 In many civil law countries, “registration” is the process by which an organization incorporates and
becomes a legal entity.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 9
one-third constrain international funding of CSOs, including cross-border philanthropy. The
remaining initiatives restrict the freedom of assembly.
Parameters of This Article
This article focuses on legal restrictions impeding the inflow of international funding to
CSOs, including cross-border philanthropy. Part I categorizes and surveys constraints. Part II
summarizes arguments frequently presented by governments to justify constraints. Part III
analyzes constraints and justifications under international law. Part IV summarizes conclusions
and suggests areas for further research. Part IV also references the engagement of the U.S.
Government, the Community of Democracies, and other members of the international
community on this issue, but a mapping of these initiatives is provided elsewhere.19
Though this article references fifty-five countries, it is intended to present an illustrative
rather than exhaustive list of country examples. For conciseness, this article presents top-line
summaries; details are available elsewhere.20 In addition, this article focuses primarily on
constraints impeding the inflow of philanthropy, rather than constraints on the outflow of
philanthropy, which also exist in many countries.21 Finally, while this article focuses on legal
18 In recent years, however, there has been an uptick in the percentage of legislative initiative seeking to
constrain the international funding of civil society. This may be due to the fact that many countries have already
enacted restrictive framework legislation, or the fact that many countries are now focused on international funding.
19 ICNL, “Mapping Initiatives to Address Legal Constraints on Foreign Funding,” August 20, 2014,
https://www.icnl.org/news/2014/20-Aug.html.
20 For more detailed information about specific country environments, please see ICNL’s NGO Law
Monitor at https://www.icnl.org/research/monitor/index.html and ICNL’s Online Library at
https://www.icnl.org/research/library/ol/online/search/en, which as of January 2015 contains 3,400 documents from
205 countries and territories.
21 For more information about outflow constraints, please see: David Moore & Douglas Rutzen, “Legal
Framework for Global Philanthropy: Barriers and Opportunities,” International Journal for Not-for-Profit Law 13
(1-2) (April 2011), https://www.icnl.org/research/journal/vol13iss1/special_1.htm.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 10
impediments, it is important to note that cross-border philanthropy is still possible in most
contexts.
Restrictions Impeding the Inflow of Philanthropy
An increasing number of countries constrain the ability of CSOs to receive international
funding, including cross-border philanthropy. Common constraints include:
(1) requiring prior government approval to receive international funding;
(2) enacting “foreign agents” legislation to stigmatize foreign funded CSOs;
(3) capping the amount of international funding that a CSO is allowed to receive;
(4) requiring that international funding be routed through government-controlled entities;
(5) restricting activities that can be undertaken with international funding;
(6) prohibiting CSOs from receiving international funding from specific donors;
(7) constraining international funding through the overly broad application of
counterterrorism and anti-money laundering measures;
(8) taxing the receipt of international funding, including cross-border philanthropy;
(9) imposing onerous reporting requirements on the receipt of international funding; and
(10) using defamation laws, treason laws, and other laws to bring criminal charges
against recipients of international funding.
Illustrative examples of each constraint are presented below.
1. Prior Government Approval
A number of countries require advance governmental approval before a CSO may receive
international funding, including cross-border philanthropy. Two common variants of this
approach are: (a) prior approval of every foreign contribution,
22 and (b) prior approval of every
organization permitted to receive foreign contributions.
A. Prior Approval of Every Foreign Contribution
This approach is common in the Middle East/North Africa (MENA), and Egypt is
perhaps the most well-known example. Under Egyptian law, a CSO must obtain the approval of
the Ministry of Social Solidarity before receiving funds from any foreign source, including
foreign foundations. 23 In 2013, an Egyptian court imposed jail sentences24 on forty-three CSO
22 In this article, the terms “foreign contribution,” “cross-border philanthropy,” and “global philanthropy”
encompass donations, contributions, grants, social investments, and other forms of financial support provided by a
philanthropist in one country to a civil society organization in another country. In addition, the terms “international
funding” and “foreign funding” are used interchangeably, with a preference for the term “international funding”
since certain governments have used the word “foreign” to stigmatize and delegitimize resources coming from other
countries.
23 A draft CSO law issued in late June 2014 retains a similar requirement, stipulating that advance approval
from a government committee is required before an organization may receive international funding.
24 Alastair Beach, “US anger as 43 NGO workers are jailed in Egypt crackdown,” The Independent, June 4,
2013, accessed September 9, 2014, https://www.independent.co.uk/news/world/africa/us-anger-as-43-ngo-workersare-jailed-in-egyptian-crackdown-8644660.html.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 11
representatives for failing to comply with foreign funding requirements and other provisions of
Egyptian law.25
Other MENA countries requiring contribution-by-contribution approval include
Algeria,26 Jordan, 27 and Bahrain.28
This constraint also appears in countries outside of MENA: For example:
• In Uzbekistan, before a CSO may receive a foreign grant, a Commission under
the Cabinet of Ministers must decide that the project to be supported by the grant
is indeed worthy of support.29
• In Turkmenistan, a foreign organization interested in funding a CSO must send a
request to the Ministry of Foreign Affairs. Relevant government agencies then
decide if the proposed international funding is necessary. If government agencies
support the request, the Turkmen CSO must then submit an application to a State
Commission, which makes the final decision.30
• In Belarus and Azerbaijan, CSOs must register grant agreements.31 In both
countries, the process is complex and subjects the receipt of international funding
to political vetting.
• In Bangladesh and Nepal, CSOs must obtain the prior approval of government
ministries to receive international funding.32
• In Eritrea, international CSOs may fund or otherwise engage in relief or
rehabilitation work only if the Ministry of Labor and Human Welfare determines
that the government cannot undertake the specific task.33
25 Illustrating the breadth of discretion vested in government officials, in 2011 the Egyptian government
blocked the New Woman Foundation from receiving a $5,000 “Nelson Mandela- Graça Machel Innovation Award”
from CIVICUS, citing unspecified “security concerns.” See Kareem Elbayar, “Egypt’s restrictions on NGOs violate
international law,” Washington Post Letter to the Editor, March 13, 2012, accessed September 9, 2014
https://www.washingtonpost.com/opinions/egypts-restrictions-on-ngos-violate-internationallaw/2012/03/12/gIQA1hHDAS_story.html.
26 ICNL, NGO Law Monitor: Algeria, last modified April 26, 2014,
https://www.icnl.org/research/monitor/algeria.html
27 ICNL, NGO Law Monitor: Jordan, last modified January 29, 2014,
https://www.icnl.org/research/monitor/jordan.html
28 Government of Bahrain, Law 21 on Associations, Social and Cultural Clubs, Special Committees
Working in the Field of Youth and Sports, and Private Foundations, Article 20.
29 ICNL, NGO Law Monitor: Uzbekistan, last modified February 8, 2014,
https://www.icnl.org/research/monitor/uzbekistan.html
30 ICNL, NGO Law Monitor: Turkmenistan, last modified May 5, 2014,
https://www.icnl.org/research/monitor/turkmenistan.html.
31 ICNL, NGO Law Monitor: Belarus, last modified September 7, 2014,
https://www.icnl.org/research/monitor/belarus.html and ICNL, NGO Law Monitor: Azerbaijan, last modified
December 2, 2014, https://www.icnl.org/research/monitor/azerbaijan.html
32 ICNL, NGO Law Monitor: Bangladesh, last modified October 29, 2014,
https://www.icnl.org/research/monitor/bangladesh.html and ICNL, NGO Law Monitor: Nepal, last modified August
26, 2014, https://www.icnl.org/research/monitor/nepal.html
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 12
B. Prior Approval of Organizations Permitted to Receive Foreign Contributions
Some countries take a slightly different approach: they require the approval of
organizations entitled to receive foreign contributions. India is perhaps the most well-known
example of this approach. CSOs that meet certain requirements for three years are eligible to
register under the Foreign Contribution (Regulation) Act (FCRA) 2010. 34 If FCRA registration
is approved, the organization is authorized to receive foreign contributions for up to five years.35
Other countries in South Asia have considered similar registration requirements for CSOs
seeking to receive international funding. For example:
• In February 2014, the government of Pakistan prepared a bill on foreign funded CSOs.
Among other provisions, domestic CSOs seeking to use at least 50 million rupees
(approximately $476,000) in foreign contributions per year would have to apply for a
certificate from the Securities and Exchange Commission of Pakistan. International CSOs
seeking to use any amount of foreign contributions would have to register with the
Economic Affairs Division. Under the bill, applications for registration would undergo
vetting by the Ministry of Interior, local and provincial governments, and “other
concerned government authorities.”36
• In July 2014, the government of Sri Lanka announced that it was drafting a law
requiring all CSOs to register with the Ministry of Defence; organizations failing to
comply with this requirement would be ineligible to receive international funding.37
2. Stigmatization of International Funding Through “Foreign Agents” Legislation
Other countries do not require prior government approval to receive international
funding, but they have stigmatized the receipt of such funding. At present, the former Soviet
Union is the geographic locus of new legislation in this area. Specifically, several countries in
33 Government of Eritrea, Proclamation No. 145/2005, A Proclamation to Determine the Administration of
Non-governmental Organizations, No. 145/2005, May 11, 2005, Article 9(1), available at:
https://www.unhcr.org/refworld/docid/493507c92.html
34 According to the Centre for the Advancement of Philanthropy, new CSOs must apply for “FCRA Prior
Permission to receive a specific sum of money from a specific foreign source.” After meeting certain spending
requirements over three fiscal years, the CSO may apply for FCRA registration to “receive unlimited sums of funds
from unlimited foreign sources for a period of 5 years.” Organizations “of a political nature”—and associations
engaged in the production or broadcast of news or current affairs programming—are prohibited from accepting
foreign contributions. For more information on the FCRA, please see CAP India’s website,
https://www.capindia.in/resource_bank.htm.
35 The FCRA also contains restrictions on the utilization of foreign contributions and vests the Central
Government with broad powers to regulate foreign contributions. In addition, the FCRA provides the government
with the power to cancel an organization’s FCRA registration. For example, in one month in mid-2012, the
government revoked permission to receive foreign funding of 4,139 CSOs due to FCRA violations, amounting to 9.5
percent of all registered CSOs in India. See Shyamlal Yadav, “4,139 NGOs lose FCRA license, most in TN,” Indian
Express, August 10, 2012, accessed September 10, 2014, https://archive.indianexpress.com/news/4139-ngos-losefcra-licence-most-in-tn/986398/.
36 Government of Pakistan, Draft Foreign Contributions Act, 2014, Article 3.
37 Tamil Guardian, “Government to Close Bank Accounts of NGOs not Registered with MoD,” Tamil
Guardian, July 10, 2014, accessed September 8, 2014, https://www.tamilguardian.com/article.asp?articleid=11504.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 13
this region have enacted or proposed laws roughly modeled38 on the 1938 United States Foreign
Agents Registration Act. For example:
• In July 2012, President Putin of Russia signed a law requiring39 all non-commercial
organizations that receive funds from abroad and engage in “political activities” to
register with the Ministry of Justice as “foreign agents.” Under the law, “political
activities” are broadly defined as “attempts to influence official decision-making or to
shape public opinion for this objective.”40 Moreover, the “foreign agents” label attaches
even if the international funding is used for purposes entirely unrelated to the “political
activities” of the organization. This label is particularly problematic for Russian CSOs
because, in Russian, the term “foreign agent” is synonymous with “foreign spy.”41
• In 2013, the Parliament of Kyrgyzstan introduced a draft law nearly identical to the
Russian “foreign agents” law. The bill, if enacted, would require CSOs receiving foreign
funding and engaging in “political activity” to register as “foreign agents.”42
• In January 2014, the Yanukovych Government in Ukraine enacted a legislative package
of so-called “dictatorship laws,”43 which included a “foreign agents” law similar to
Russian legislation.44
Countries outside of the former Soviet Union have also considered this approach. For
example, a bill in Israel would require certain foreign funded CSOs to state on their website and
official documents that they are foreign agents.45 In addition, the vice chairman of the China
Research Institute of China-Russia Relations has argued that China should enact a law similar to
Russia’s foreign agents law.46 In the United States, some lawyers have called for a review of
38 For example, the U.S. Foreign Agents Registration Act applies to all “persons” and contains an
exemption for organizations engaged in “religious, scholastic, academic, or scientific pursuits or of the fine arts.”
The Russian law solely targets CSOs. In addition, US law requires a connection between the international funding
and the organization’s political activities. Russian legislation does not. For additional differences, see, e.g.,
Vladimir Kara-Murza, “FARA and Putin’s NGO Law: Myths and Reality,” Institute of Modern Russia, May 9,
2013, accessed September 8, 2014, https://imrussia.org/en/politics/455-fara-and-putins-ngo-law-myths-and-reality
and https://www.fara.gov/indx-act.html.
39 In June 2014, President Putin signed into law amendments allowing the Ministry of Justice to register
non-commercial organizations as foreign agents without their consent.
40 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 28, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp-content/uploads/2013/04/A.HRC_.23.39_EN-funding-report-April-2013.pdf.
41 ICNL, NGO Law Monitor: Russia, last modified May 7, 2014,
https://www.icnl.org/research/monitor/russia.html.
42 “Kyrgyzstan: Reject ‘Foreign Agents’ Law,” Human Rights Watch, Dec. 5, 2013, accessed September 8,
2014, https://www.hrw.org/news/2013/12/05/kyrgyzstan-reject-foreign-agents-law.
43 Andrew E. Kramer, “Ukrainian Prime Minister Resigns as Parliament Repeals Restrictive Laws,” New
York Times, January 28, 2014, accessed September 8, 2014,
https://www.nytimes.com/2014/01/29/world/europe/ukraine-prime-minister-resign.html?_r=2.
44 This law never went into force because of the political changes in Ukraine.
45 Gril Ronen, “New Version of ‘NGO Bill’ Headed for Knesset,” Arutz Sheva, May 25, 2014, accessed
September 8, 2014, https://www.israelnationalnews.com/News/News.aspx/181022#.U_O4RvldWbM.
46 Simon Denyer, “China taking the Putin approach to democracy,” Washington Post, October 1, 2014, A7.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 14
whether think tanks receiving funding from foreign governments should register as “foreign
agents” under the 1938 Foreign Agent Registration Act.47
3. Caps on International Funding
Ethiopia serves as the seminal example of caps on international funding. Under the 2009
Proclamation to Provide for the Registration and Regulation of Charities and Societies,
“Ethiopian” charities and societies may not receive more than 10 percent of their total income
from foreign sources. In addition, only “Ethiopian” charities and societies are legally allowed to
work on disability rights, children’s rights, gender equality, conflict resolution, the efficiency of
the justice system, and certain other objectives.
“Income from foreign sources” is broadly defined as “a donation or delivery or transfer
made from foreign source of any article, currency or security. Foreign sources include the
government agency or company of any foreign country; international agency or any person in a
foreign country.”48
The Proclamation has had a significant impact on civil society in Ethiopia. Between 2009
and 2011, the number of registered CSOs in Ethiopia decreased by 45 percent.49 In addition,
most local human rights groups have been forced to close or scale back their operations.50 As but
one example, the Human Rights Council, Ethiopia’s first independent CSO that monitored
human rights, was forced to close nine of its twelve offices in 2009 due to lack of funding.51
Other countries have also considered caps on international funding. For example, in
October 2013, the Kenyan Parliament considered an omnibus bill, which—among other
provisions—would have presumptively52 limited CSOs from receiving more than 15 percent of
their budgets from a foreign source, regardless of the activities undertaken by the CSO. Based on
international advocacy efforts and other provisions of the omnibus bill unrelated to CSOs,
Parliament declined to pass the bill in December. It is currently being reconsidered, and the
outcome remains uncertain.
4. Mandatory Routing of Funding through Government-Controlled Channels
In an effort to monitor and control the flow of international funding to CSOs, some
countries require that funding be routed through a governmental body, ministry, or government-
47 See, for example, Eric Lipton, Brooke Williams, & Nicholas Confessore, “Foreign Powers Buy Influence
at Think Tanks,” New York Times, September 6, 2014, accessed September 17, 2014,
https://www.nytimes.com/2014/09/07/us/politics/foreign-powers-buy-influence-at-think-tanks.html.
48 Government of Ethiopia, Proclamation to Provide for the Registration and Regulation of Charities and
Societies, 2009, Article 2(15).
49 Kendra Dupuy, James Ron, & Assem Prakash, “Who Survived? Ethiopia’s Regulatory Crackdown on
Foreign-Funded NGOs,” (March 10, 2014). Review International Political Economy, Forthcoming: 19. Available at
SSRN: https://ssrn.com/abstract=2407001.
50 Ibid., 14.
51 African Union, “African Commission on Human and Peoples’ Rights Study Group on Freedom of
Association: Freedom of Association and Freedom of Assembly in Law and Practice in Africa,” April 2014.
52 CSOs would only be able to receive more than the 15 percent of their budget from foreign sources if they
demonstrate that they require the funds due to “legitimate and compelling reasons.”
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controlled bank. In practice, this allows the government greater ability to constrain the inflow of
funding to CSOs. For example:
• In July 2014, Nepal released a new Development Cooperation Policy53 requiring
development partners to channel all development cooperation through the Ministry of
Finance, essentially terminating all direct funding of CSOs. CSOs seeking to use
development assistance must be registered with the Social Welfare Council (SWC) and
seek prior approval from the SWC on the programs for which they seek funding.
• CSOs in Uzbekistan must route any foreign grant funding through one of two stateowned banks which then determine if the money will be released to the CSO, often
resulting in blocked disbursements.54
• Eritrea’s Proclamation No. 145/2005 requires that international CSOs engage in
activities only through “the Ministry or other concerned Government entity.”55
• In Sierra Leone, “assets transferred to build the capacity of local NGOs should be done
through” the government-controlled Sierra Leone Association of Non-Governmental
Organizations and the Ministry of Finance and Economic Development.56
• In Uganda, CSOs receiving foreign funding must receive and disburse funds through an
account with the government-controlled Bank of Uganda. According to a recent study,
this requirement has been used by the government to constrain the flow of international
funding to a think tank involved in governance and extractive industry work.57 Far from
an isolated incident, Human Rights Watch reports that this obstruction of funds is
symptomatic of increasing government constraints on CSOs in Uganda “whose focus
includes oil revenue transparency, land acquisition compensation, legal and governance
reform, and protection of human rights.”58
53 Government of Nepal Ministry of Finance, “Development Cooperation Policy, 2014,” unofficial
translation, accessed September 9, 2014,
https://www.mof.gov.np/uploads/document/file/DCP_English_20140707120230_20140721083326.pdf.
54 ICNL, NGO Law Monitor: Uzbekistan, last modified February 8, 2014,
https://www.icnl.org/research/monitor/uzbekistan.html.
55 Government of Eritrea, Proclamation No. 145/2005, A Proclamation to Determine the Administration of
Non-governmental Organizations, No. 145/2005, 11 May 2005, Article 9(1), available at:
https://www.unhcr.org/refworld/docid/493507c92.html
56 ICNL, NGO Law Monitor: Sierra Leone, last modified June 29, 2014,
https://www.icnl.org/research/monitor/uzbekistan.html.
57 Darin Christensen & Jeremy M. Weinstein, “Defunding Dissent: Restrictions on Aid to NGOs,” Journal
of Democracy 24(2) (April 2013): 83.
58 Human Rights Watch, “Uganda: Growing Intimidation, Threats to Civil Society,” August 21, 2012,
accessed September 10, 2014, https://www.hrw.org/news/2012/08/21/uganda-growing-intimidation-threats-civilsociety.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 16
• Kenya recently rejected amendments to the Public Benefit Organisations (PBO) Act that
would have required all funding to PBOs to be routed through one central federation
comprising all PBOs operating in Kenya.59
• A draft bill pending in Nigeria would require “assets transferred to build the capacity of
an organization” to pass through the regulatory agency “which will identify the operation
criteria.”60
5. Burdensome Reporting Requirements
After the receipt of funding from abroad, recipients may be subject to additional
requirements—such as the obligation to notify the government or comply with burdensome
reporting rules—which, while less severe than the requirement to secure advance governmental
approval, may nonetheless impose administrative and other burdens on the receipt of
international philanthropy. For example:
• In Uzbekistan, after obtaining approval to receive grant funding, CSOs must provide
monthly and transactional reports to the Ministry of Finance. Transactional reports must
be submitted by the next business day following each financial transaction with grant
funding. This requirement applies to each transaction, no matter how small, even
including the purchase of pens.61
• On June 18, 2010, President Martinelli of Panama issued Executive Decree No. 57,62
which requires every Panamanian not-for-profit association to publish online extensive
information about all donations received on a monthly basis.
• In Turkey, the law imposes notification requirements relating to the receipt of
international funding. Foundations must notify public authorities within one month of
receiving international funding, and associations must provide notification before using
the funds.63
• In India, the Foreign Contribution (Regulation) Act 2010 requires CSOs to report to the
Central Government all foreign contributions received within thirty days of receipt. CSOs
must also file annual reports with the Home Ministry that include information on the
amount, source, and intended purpose of the contribution, as well as the ways in which it
was received and used.64
59 ICNL, NGO Law Monitor: Kenya, last modified December 16, 2014,
https://www.icnl.org/research/monitor/kenya.html.
60 Nigeria, NGO Regulatory Agency Bill, 2014, Article 28(3).
61 ICNL, NGO Law Monitor: Uzbekistan, last modified October 4, 2014,
https://www.icnl.org/research/monitor/uzbekistan.html
62 Executive Decree No. 57, accessed January 12, 2015, :
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CDAQFjAC&url=http%3A%2F%
2Fwww.impuestospanama.com%2Fleyes_fiscales%2FImpuestosPanama_2010_Ley_033.docx&ei=yzu0VInRK4Kg
gwSC5IKYDw&usg=AFQjCNFTKANRImo6RUFwtLQttjIHdzkB2Q&bvm=bv.83339334,d.eXY
63 ICNL, NGO Law Monitor: Turkey, last modified July 3, 2014,
https://www.icnl.org/research/monitor/turkey.html.
64 Council on Foundations, Global Grantmaking: India, last modified April 2014,
https://www.cof.org/content/india.
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• Associations in Tunisia must not only notify the government of all international funding
sources but must also inform the media about the receipt of international funding.65
6. Restrictions on Activities Supported by International Funding
Some countries explicitly prohibit certain activities from being supported by international
funding. In Sudan, CSOs must seek approval from the Humanitarian Aid Commission (HAC)
before receiving international funding, and the HAC will only grant approval for CSOs that
provide narrowly defined “humanitarian services,” excluding other types of activities of interest
to the international philanthropic community.66 In Zimbabwe, existing law prohibits the use of
international funding for voter-education projects conducted by independent CSOs; instead, such
funds may be contributed directly to the Electoral Commission.67 Notably, this provision was
enforced before the July 2013 presidential election, when the government raided the offices and
arrested the staff of ten CSOs involved in nonpartisan voter education activities.68
Other countries have vague statutory formulations that give the government broad
discretion to prohibit activities that can be supported through international funding. For example,
in Indonesia, a 2008 regulation prohibits foreign assistance causing “social anxiety.”69 In
Bolivia, Supreme Decree No. 29308 bans foreign assistance that carries “implied political or
ideological conditions.” Similarly, Venezuela’s 2010 Law on Defense of Political Sovereignty
and National Self-Determination prohibits organizations with “political objectives” or
organizations for the defense of “political rights” from having assets or income other than
“national” goods and resources.70 These undefined terms vest broad discretion in government
officials to restrict certain activities from being supported by international funding.
7. Restrictions on Funding from Certain Countries or Donors
Certain countries impose outright bans on funds from specific countries or donors. For
example:
• In 2012, Russia enacted a law specifically targeting U.S. donors after the U.S. enacted
the so-called “Magnitsky Law.”71 Among other provisions, the Russian law calls for the
65 Government of Tunisia, Decree Number 88 of 2011 Pertaining to Regulation of Associations, September
24, 2011, Article 41, https://www.icnl.org/research/library/files/Tunisia/88-2011-Eng.pdf.
66 ICNL, NGO Law Monitor: Sudan, last modified December 12, 2014,
https://www.icnl.org/research/monitor/sudan.html
67 Government of Zimbabwe, Electoral Commission Act, Article 40F,
https://www.icnl.org/research/library/files/Zimbabwe/consolidatedelectoralact.pdf.
68 ICNL, NGO Law Monitor: Zimbabwe, last modified August 8, 2014,
https://www.icnl.org/research/monitor/zimbabwe.html.
69 Government of Indonesia, Regulation of the Ministry of Home Affairs Number 38 of 2008 Regarding
Acceptance and Granting of Social/Charity Organization’s Assistance from and to Foreign Parties, Article 6(2)(e),
https://www.icnl.org/research/library/files/Indonesia/indonesia01.pdf.
70 Government of Venezuela, Law on Defense of Political Sovereignty and National Self-Determination,
Article 4, https://www.icnl.org/research/library/files/Venezuela/Leysober.pdf.
71 The Sergei Magnitsky Rule of Law Accountability Act, passed by the U.S. Congress in December 2012,
allows the U.S. to deny visas and freeze the assets of Russian officials involved in the murder of lawyer Sergei
Magnitsky and in other human rights violations. See David Kramer & Lilia Shevtsova, “What the Magnitsky Act
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 18
suspension of CSOs that engage in vaguely defined political activities and receive funds
and other assets from U.S. citizens or organizations.72
• In Eritrea, all CSOs are effectively prohibited from receiving funding from the United
Nations or its affiliates.73
• In Tunisia, associations are prohibited from receiving funding or any other type of
assistance from “countries not linked with Tunisia by diplomatic relations, or from
organizations which defend the interests and policies of those countries.”74 In practice,
this would prevent Israeli philanthropists and organizations from providing funds to
Tunisian civil society.
8. Taxation of International Funding
In several countries, income from foreign grantmakers is subject to taxation unless the
foreign grantmaker is included on a government-approved list. For example, in Russia, grants
can be extended from foreign or international organizations to Russian citizens or CSOs on a taxexempt basis only if the grantmaker is included on a list of organizations approved by the
Russian Government and the grant is made for an approved public benefit purpose. The
government list is tightly controlled and the number of approved organizations was reduced in
2008 by Decree #485. Before the issuance of Decree #485, approximately one hundred
organizations were on the list, including several private foundations. The decree was
subsequently amended to eliminate all private foundations. As a result, grants from private
foundations are potentially liable to a 24 percent tax.75
Similar rules have been in place, at varying times, in Belarus, Kazakhstan, and
Turkmenistan.
76 In addition, in December 2014, Nicaragua enacted legislation subjecting
CSOs to income tax on international funding unless the international donor has a formal
agreement with the government.77
Means,” Freedom House, December 12, 2012, accessed September 8, 2014,
https://www.freedomhouse.org/article/what-magnitsky-act-means.
72 International Center for Not-for-Profit Law, “Overview of Restrictions on Non-Commercial
Organizations Imposed by the ‘Dima Yakovlev’ Law,” January 27, 2013.
73 Rebecca B. Vernon, “Closing the Door on Aid,” International Journal of Not-for-Profit Law 11(4)
(August 2009), https://www.icnl.org/research/journal/vol11iss4/special_1.htm.
74 Government of Tunisia, Decree Number 88 of 2011 Pertaining to Regulation of Associations, September
24, 2011, Article 25, https://www.icnl.org/research/library/files/Tunisia/88-2011-Eng.pdf.
75 A “grant” and a “donation” are distinct concepts under Russian law, and this rule applies to foreign
“grants.” Among other differences, grants can be provided only for the purposes enumerated in Article 251(1)(14)
of the Tax Code. In addition, unlike a donor, a grantor is obligated to require reports from the recipient on the use of
the grant. For further information on the difference between “grants” and “donations” under Russian law, please see
https://www.cof.org/content/russia.
76 Correspondence on file with the author.
77 Article 77, Ley No. 891: Ley de Reformas y Adiciones a la Ley No. 822, “Ley de Concertación
Tributaria.”
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9. Counterterrorism/Anti-Money Laundering
In a number of countries, the inflow of cross-border philanthropy is constrained as a
result of counterterrorism and anti-money laundering measures. Governments have an obligation
to address legitimate concerns relating to terrorism and money laundering, but many of these
measures are overly broad, burdening lawful cross-border philanthropy. For example:
• In Bangladesh, the government recently approved a draft “Foreign Contributions
(Voluntary Activities) Regulation Act 2014, which seeks to eliminate militant and terror
financing and ensure a terrorism-free Bangladesh by 2021.”78 This law would reinforce
and codify a number of restrictions on international funding, including prior approval of
organizations allowed to receive cross-border philanthropy.
• In Azerbaijan, the government imposed grant registration requirements to help “enforce
international obligations of the Republic of Azerbaijan in the areas of combating moneylaundering.”79
• In Kosovo, an anti-money laundering measure prevents CSOs from receiving more than
1,000 Euro from a single source in a single day without governmental permission.80
10. Other Laws and Measures Used to Restrict the Inflow of Philanthropy
Certain governments have also used other laws to target internationally funded civil
society organizations and activists. For example, in July 2014, authorities in Azerbaijan charged
human rights defender Leyla Yunus with illegal entrepreneurship, tax evasion, falsifying
documents, fraud, and treason—which three UN Special Rapporteurs concluded were “trumped
up charges,” part of a “wave of politically-motivated repression of activists in reprisal for their
legitimate work in documenting and reporting human rights violations.”81 In other countries,
defamation laws, treason laws, tax laws, and national security laws—among other legislation—
have also been used to bring criminal charges against recipients of international funding.82 For
78 “Cabinet Approves Foreign Donation Regulation Act,” The Independent, June 3, 2014, accessed
September 8, 2014,
https://www.theindependentbd.com/index.php?option=com_content&view=article&id=217526:cabinet-approvesforeign-donation-regulation-act&catid=132:backpage&Itemid=122.
79 Charity & Security Network, “How the FATF Is Used to Justify Laws That Harm Civil Society, Freedom
of Association and Expression,” May 16, 2013,
https://www.charityandsecurity.org/analysis/Restrictive_Laws_How_FATF_Used_to_Justify_Laws_That_Harm_Civ
il_Society.
80 See USIG Country Note for Kosovo, accessed January 12, 2015, https://www.cof.org/content/kosovo.
81 United Nations Human Rights, “Persecution of Rights Activists Must Stop—UN Experts Call on the
Government of Azerbaijan,” Office of the High Commissioner for Human Rights, August 19, 2014, accessed
September 8, 2014,
https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=14952&LangID=E#sthash.bg1H8K65.dp
uf. In August 2014, at least three other activists were detained on criminal charges: Arif Yunus, Rasul Jafarov, and
Intigam Aliyev. See RFE/RL’s Azerbaijani Service, “Azerbaijani Rights Activist jailed for Three Months,” Radio
Free Europe Radio Library, August 8, 2014, accessed September 10, 2014, https://www.rferl.org/content/azerbaijanrights-activist-detain-intigam-aliyev/26520249.html.
82 A prominent example is Egypt, where 43 CSO employees faced prosecution, criminal conviction, and
prison sentences for illegal receipt of foreign funding in Egypt in 2013. Additionally, in Belarus, human rights
activist Ales Belyatski was sentenced to four and a half years in prison on charges of tax evasion in 2013 (see
“Belarus Activist Ales Belyatski Jailed for Tax Evasion,” BBC, November 24, 2011, accessed September 8, 2014,
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 20
example, in September 2014, Egypt amended its Penal Code to punish with life imprisonment
and a fine anyone who receives funding or other support from a foreign source with the intent to
“harm the national interest,” “compromise national sovereignty,” or “breach security or public
peace.” The amended law likewise imposes the penalty of life imprisonment on anyone who
gives or offers such funds, or “facilitates” their receipt. 83 In many countries, we are witnessing
an uptick in the criminalization of international funding accompanying a more general uptick in
the criminalization of dissent.
Laws Impeding the Formation and Operation of Recipient CSOs
An analysis of legal barriers to the inflow of philanthropy would be incomplete without a
discussion of laws that impede the formation and operation of CSOs. If a country bans or
severely restricts the formation or operation of local CSOs, foundations have fewer choices when
seeking to express their philanthropic intent. Taken together, cross-border philanthropy is
impeded by laws regulating the cross-border flow of funding as well as by laws affecting the
ability of host country CSOs to form, operate, and engage internationally.
Because other reports have comprehensively surveyed restrictions on CSOs,84 this
section addresses only three illustrative barriers, namely: (1) barriers to the formation of CSOs,
(2) barriers to the operation of CSOs, and (3) restrictions on the ability of CSOs to have
international contact.
1. Barriers to Formation of CSOs.
In some countries, the law is used to discourage, burden, and even prevent the formation
of CSOs. Barriers include burdensome registration or incorporation requirements, vague grounds
for denial, and limitations on permissible program activity. As but a few examples:
• Limited right to associate. In Saudi Arabia, the only CSOs that exist were established by
royal decree.85
• Restrictions on founders. In Turkmenistan, national-level associations can only be
established with a minimum of 400 founders.86
• High minimum capital requirements. In Eritrea, Proclamation No. 145/2005 requires
that local CSOs engaged in relief and/or rehabilitation work must have “at their disposal

https://www.bbc.com/news/world-europe-15871582). In August 2014, the Thai army brought a criminal defamation
suit against human rights activist Pornpen Khongkachonkiet (see “Thai Activists Say Army’s Legal Actions Aim to
Silence Rights Workers,” Reuters Africa, August 28, 2014, accessed September 8, 2014,
https://af.reuters.com/article/worldNews/idAFKBN0GS1HB20140828).
83 Government of Egypt, 2014 Amended Penal Code, Article 78, unofficial translation.
84 International Center for Not-for-Profit Law & World Movement for Democracy Secretariat, “Defending
Civil Society Report, Second Edition,” June 2012,
https://www.icnl.org/research/resources/dcs/DCS_Report_Second_Edition_English.pdf.
85 Kareem Elbayar, “NGO Laws in Selected Arab States,” International Journal of Not-for-Profit Law 7(4)
(September 2005), https://www.icnl.org/research/journal/vol7iss4/special_1.htm.
86 ICNL, NGO Law Monitor: Turkmenistan, last modified June 13, 2014,
https://www.icnl.org/research/monitor/turkmenistan.html.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 21
in Eritrea one million US dollars or its equivalent in convertible currency.” This amount
is approximately 15,000 average monthly per capita GDP in Eritrea.87
• Geographic registration requirements. Associations in Burundi must register in the
capital city, Bujumbura. However, the cost of travel prevents many groups from
registering.88 Similarly, organizations in Panama must travel to Panama City to apply for
Legal Personality, for recognition in the Public Registry, and for registration in the
Registry of Organizations maintained by the relevant ministry.89
• Burdensome registration procedures. In China, registration procedures are complex and
cumbersome for many kinds of CSOs, with extensive documentation and approval
requirements. Recent reforms have piloted more streamlined registration for some social
services groups in some regions, particularly in southern China. For advocacy and other
kinds of organizations, however, registration remains difficult and long. In many cases
organizations are required to operate under a system of “dual management,” in which
they must generally first obtain the sponsorship of a specialized government ministry or
provincial government agency in their line of work. They must then seek registration and
approval from the Ministry of Civil Affairs in Beijing or a local civil affairs bureau and
remain under the dual control of both agencies.90
• Vague grounds for denial. In Bahrain, the government can refuse registration of an
association if “society does not need its services or if there are other associations that
fulfill society’s needs in the [same] field of activity.” This provision has been used to
deny registration of human rights groups and other groups disfavored by the government,
and then to arrest activists who continue to carry out activities without registration.91 In
Venezuela, officials routinely deny registration requests of CSOs with terms such as
“democracy” or “human rights” in their names. For example, in 2010, officials denied the
registration request of Asociación Civil Civilis “on the grounds that the document could
not make reference to terms like democracy and politicians.”92
87 Lindsay Coates & Douglas Rutzen, “Policy Brief: Safeguarding Civil Society,” InterAction, January
2013, accessed September 8, 2014, https://www.interaction.org/files/FABB%202013_Sec5_CivilSociety.pdf.
88 ICNL, “NGO Laws in Sub-Saharan Africa,” Global Trends in NGO Law 3(3) (June 2011): 5,
https://www.icnl.org/research/trends/trends3-3.pdf.
89 Alianza Ciudadana Pro Justicia, Entorno Legal de las Organizaciones de Sociedad Civil en Panamá,
2011, 14-15.
90 ICNL, NGO Law Monitor: China, last modified July 1, 2014,
https://www.icnl.org/research/monitor/turkmenistan.html.
91 On August 30, Bahraini authorities arrested Maryam al-Khawaja, a prominent human rights activist.
Among others, she faces charges relating to her involvement with the rights campaign “Wanted for Justice,” which
was organized by the Bahrain Center for Human Rights. Her father, Abdulhadi al-Khawaja, is the co-founder of the
Bahrain Center for Human Rights and is currently serving a life sentence in prison. See Samia Errazzouki, “Maryam
al-Khawaja, the Inconvenient Activist,” Foreign Policy, September 4, 2014, accessed September 10, 2014,
https://www.foreignpolicy.com/articles/2014/09/04/maryam_al_khawaja_the_inconvenient_activist.
92 Annual Report of the Inter-American Commission on Human Rights 2010, Chapter IV Venezuela, 534,
https://www.cidh.org/annualrep/2010eng/Chap.IV.VENEZUELA.doc.
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2. Barriers to Operational Activity
If CSOs are able to form, legislation may also limit the space in which CSOs can operate.
Legal restrictions include direct prohibitions on certain areas of activity, invasive supervisory
oversight, and arbitrary termination and dissolution. For example:
• Direct prohibitions on spheres of activity. In Nigeria, the registration of any “gay club,
society, organization” is banned. Any founder or member of a gay club may be jailed for
up to 10 years.93 In Eritrea, CSOs are limited to “relief and/or rehabilitation works,”
thereby preventing CSOs from engaging in other issues that may be of interest to the
philanthropic community.94
• Advance notification and approval. In Cambodia, local CSOs that wish to conduct
activities in a province other than where they are registered must inform the local
authority five days in advance, according to Ministry of Interior guidelines; in some
provinces the guidelines are interpreted as directives that require approval by provincial
authorities.95 CSOs in Uganda must provide the local government with seven days’
advance written notice before making any direct contact with people in rural areas.96 A
draft law in Nigeria would require approval before the implementation of a project or any
variation from the project estimate. The bill imposes additional pre-approval
requirements for projects addressing the needs of “targeted groups,” an undefined term.97
• Invasive supervisory oversight. In Senegal, the Law on Foundations (Law No. 95-11 of
1995) authorizes the State to designate representatives who sit on the foundation councils
(internal governing bodies) with a deliberative vote. These representatives are
accountable to the administrative authority that named them. In Ecuador, the
government may request any document related to the operations of CSOs.98 In Rwanda,
the government may intervene when there is a dispute among a CSO’s board members.99
The government exercised this authority, most notably, in replacing the leadership of a
prominent human rights organization, LIPRODHOR, in July 2013. In Russia, the law
allows governmental representatives to attend all of the organization’s events, without
restriction, including internal strategy sessions. The government also has the power to
conduct audits and demand documents dealing with the details of an organization’s
93 ICNL, NGO Law Monitor: Nigeria, last modified August 8, 2014,
https://www.icnl.org/research/monitor/nigeria.html.
94 Government of Eritrea, Proclamation No. 145/2005, A Proclamation to Determine the Administration of
Non-governmental Organizations, No. 145/2005, May 11, 2005, available at:
https://www.unhcr.org/refworld/docid/493507c92.html
95 ICNL, NGO Law Monitor: Cambodia, last modified August 1, 2014,
https://www.icnl.org/research/monitor/cambodia.html.
96 Republic of Uganda, NGO Registration Regulations 2009, Regulation 13(a),
https://www.icnl.org/research/library/files/Uganda/NGOReg2009.pdf.
97 Nigeria, NGO Regulatory Agency Bill, 2014, Article 24(1).
98 Government of Ecuador, Presidential Decree No. 16, Article 7.2-7.3.
99 Government of Rwanda, Law No. 4/2012 Article 27.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 23
governance, including day-to-day policy decisions, supervision of the organization’s
management, and oversight of its finances.100
• Termination and dissolution. According to Bolivia’s 2013 Law on Granting Legal
Personality and its implementing regulation, the government may dissolve a CSO if the
Legislature passes a law stating that termination is necessary or in the public interest,
vague terms that can be used to close down CSOs disfavored by the government.101
3. Barriers to International Engagement
Global philanthropists and the international community are not just a source of financial
resources. They are also a source of information and ideas. In some countries, governments have
supplemented restrictions on international funding with restrictions on international engagement.
As but a few examples:
• In the United Arab Emirates, the Federal Law on Civil Associations and Foundations of
Public Benefit restricts CSO members from participating in events outside of the country
without the prior authorization of the Ministry of Social Affairs.102
• In Uzbekistan, CSOs seeking to invite international participants to a conference must
secure advance approval from the Ministry of Justice.103 Governmental approval is also
required for CSOs to organize certain international conferences in Vietnam.
• Egypt’s Law 84/2002 restricts the right of CSOs to join with non-Egyptian CSOs and “to
communicate with non-governmental or inter-governmental organizations.” Under the
law, CSOs that interact with foreign organizations without prior approval face
dissolution.104
• A 2010 Ministry Decree in Libya requires international organizations to go through a
complicated registration process to train, provide technical advice, or implement joint
activities with local CSOs.105
• In July 2014, the Prime Minister of Swaziland threatened civil society representatives
who attended the recent African Leaders Summit in Washington, DC. The Prime Minister
100 ICNL, NGO Law Monitor: Russia, last modified November 24, 2014,
https://www.icnl.org/research/monitor/russia.html
101 Supreme Decree No. 1597 implementing Bolivian Law No. 351 of 2013 on Awarding Legal
Personalities, Article 19b.
102 International Center for Not-for-Profit Law & World Movement for Democracy Secretariat, “Defending
Civil Society Report, Second Edition,” June 2012,
https://www.icnl.org/research/resources/dcs/DCS_Report_Second_Edition_English.pdf.
103 ICNL, NGO Law Monitor: Uzbekistan, last modified February 8, 2014,
https://www.icnl.org/research/monitor/uzbekistan.html.
104 See Government of Egypt, Law No. 84 of the Year 2002 on Non-Governmental Organizations,
https://www.icnl.org/research/library/files/Egypt/law84-2002-En.pdf.
105 Ministry of Culture and Civil Society, Controls on the Activities of International Organizations
Supporting Civil Society in Libya, June 1, 2010 (on file with author).
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told lawmakers, “You must strangle them” when they return to Swaziland.106 In response,
the United States Department of State expressed deep concern about these “threatening
remarks” and that stated that “such remarks have a chilling effect on labor and civil rights
in the Kingdom of Swaziland.”107
In sum, cross-border philanthropy is impeded by laws directly regulating the flow of
funding as well as by laws affecting the underlying ability of CSOs to form, operate, and engage
internationally.
Government Justifications
This section examines common justifications offered by governments to defend
restrictions placed on international funding. These justifications fall into four broad categories:
(1) state sovereignty; (2) transparency and accountability in the civil society sector; (3) aid
effectiveness and coordination; and (4) national security, counterterrorism, and anti-money
laundering concerns.
This section draws heavily upon an April 2013 report by the UN Special Rapporteur
(UNSR) on the freedoms of peaceful assembly and of association, where the UNSR articulated
international norms protecting the ability of CSOs to access resources from international and
foreign sources (hereinafter the “UNSR’s Resource Report”).108
1. State Sovereignty
Some governments invoke state sovereignty as a justification to restrict cross-border
philanthropy. The most blunt form of the argument is that sovereignty entitles a government to
enact whatever law it deems appropriate. This seems to be the position advanced by UN Human
Rights Council representatives from Gabon, Botswana, Burkina Faso, Namibia and seven
other African countries in response to the UNSR’s Resource Report. These governments
appeared before the UN Human Rights Council and argued that “it is for each state in a
sovereign and legitimate manner to define what constitutes a violation of its legislation with
respect to human rights.”109 Similarly, in response to a “civil society space” resolution
introduced by the Irish Government at the September 2014 session of the UN Human Rights
Council, the representative from India asserted:
Civil society must operate within national laws. To treat national laws with
condescension is not the best way to protect human rights, even by civil society with the
106 Christopher Torchia, “Swazi PM Reportedly Threatens Activists,” Yahoo News, August 12, 2014,
accessed September 8, 2014, https://news.yahoo.com/swazi-pm-reportedly-threatens-activists-111618589.html.
107 Marie Harf, “Threatening Remarks by Swazi Prime Minister Cause for Concern,” U.S. Department of
State, Press Statement, August 9, 2014, accessed September 8, 2014,
https://www.state.gov/r/pa/prs/ps/2014/230455.htm.
108 For more information, please see United Nations Human Rights Council, Report of the Special
Rapporteur on the rights to freedom of peaceful assembly and of association, Maina Kiai, UN Doc. A/HRC/23/39
(April 24, 2013) at https://freeassembly.net/wp-content/uploads/2013/04/A.HRC_.23.39_EN-funding-report-April2013.pdf.
109 UN Office of the High Commissioner for Human Rights, “Oral Statement—Gabon on behalf of the
African Group,” May 30, 2013, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Gabon%20on%20be
half%20ofAG_10_1.pdf.
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best of intentions. We wish that caution should be exercised in advocacy of the causes of
civil society. The Resolution is unduly prescriptive on what domestic legislation should
do and should not do. This is the prerogative of the citizens of those countries.110
Other officials have presented a related but narrower argument that restrictions are
necessary to protect the sovereignty of their states from foreign interference in domestic political
affairs.111 For example:
• In justifying the Russian “foreign agents” law, President Putin said, “The only purpose
of this law after all was to ensure that foreign organisations representing outside interests,
not those of the Russian state, would not intervene in our domestic affairs. This is
something that no self-respecting country can accept.”112
• In July 2014, Hungarian Prime Minister Viktor Orban lauded the establishment of a
parliamentary committee to monitor civil society organizations: “We’re not dealing with
civil society members but paid political activists who are trying to help foreign interests
here…. It’s good that a parliamentary committee has been set up to monitor, document,
and publish foreign influence” by CSOs. 113
• In Egypt, forty-three CSO staff members were “charged with ‘establishing unlicenced
chapters of international organisations and accepting foreign funding to finance these
groups in a manner that breached the Egyptian state’s sovereignty.’”114 Egyptian officials
claimed that the CSOs were contributing to international interference in Egypt’s domestic
political affairs.115
• One of the sponsors of a 2011 draft “foreign agents” law in Israel defended the bill,
claiming it represented a “major hurdle en route to cleansing Israel’s policies from
foreign influence, of the kind that do not wish Israel’s favour…. It is the right and duty
of the State of Israel to conduct itself according to the will of the Israeli public, as
opposed to succumbing to foreign attempts to buy influence within Israel.”116
110 Permanent Mission of India, Geneva, “Statement by India in Explanation of Vote before the Vote,”
September 26, 2014 (on file with the author). In the same statement, India also challenged first principles, asserting,
“the resolution fallaciously seeks to make civil society a subject of law.”
111 Ibid.
112 President of Russia, “Remarks at Meeting of Council for Civil Society and Human Rights,” November
12, 2012, accessed September 8, 2014 https://eng.kremlin.ru/news/4613.
113 Zoltan Simon, “Orban Says He Seeks to End Liberal Democracy in Hungary,” Bloomberg News, July
28, 2014, accessed September 8, 2014, https://www.bloomberg.com/news/2014-07-28/orban-says-he-seeks-to-endliberal-democracy-in-hungary.html.
114 Agence France Press, “Egypt Says Working to End NGO Row: McCain,” AlterNet, accessed September
8, 2014, https://www.alternet.org/rss/breaking_news/804643/egypt_says_working_to_end_ngo_row%3A_mccain.
115 Josh Levs & Saad Abedine, “Egypt sentences American NGO workers to jail,” CNN, June 4, 2013,
accessed September 8, 2014, https://www.cnn.com/2013/06/04/world/africa/egypt-ngos/index.html.
116 Paul Vale, “Israel Moves to Limit Foreign Funding of ‘Liberal’ NGOs,” Huffington Post UK, January
13, 2012, accessed September 8, 2014, https://www.huffingtonpost.co.uk/2011/11/13/netanyahu-limits-ngofunding_n_1091047.html.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 26
• A member of the Israeli Knesset sponsoring a similar bill in 2014 justified the
restrictions, arguing that “[t]here are dozens of organizations active in Israel that receive
funding from foreign government entities in exchange for the organization’s promise to
promote the interests of these entities, or of those who are not Israeli citizens…. As of
today, these organizations have no obligation of proper disclosure, in which they have to
present themselves as clearly representing foreign interests that do not accord with Israeli
interests.”117
• In August 2014, a presidential official in Azerbaijan justified the crackdown on civil
society, asserting, “some NGOs under the guise of ‘people’s diplomacy,’ established
cooperation with local organizations controlled by special services of aggressive
Armenia, and became spokesmen for the enemy country’s interests.”118
• In December 2013, Bolivia expelled IBIS, a Danish education CSO, for meddling in
domestic affairs. Announcing the expulsion at a news conference, Minister of the
Presidency Juan Ramon Quintana said, “[w]e are tired of tolerating IBIS’ political
interference in Bolivia.”119
• A September 2014 article in the New York Times asserted that foreign “money is
increasingly transforming the once-staid think-tank world into a muscular arm of foreign
governments’ lobbying in Washington.”120 The following week, United States
Representative Frank Wolf wrote a letter to the Brookings Institution, in which he urged
them to “end this practice of accepting money from … foreign governments” so that its
work is not “compromised by the influence, whether real or perceived, of foreign
governments.”121
Some governments assert that foreigners are not only seeking to meddle in domestic
political affairs, but also seeking to destabilize the country or otherwise engage in “regime
change.” Accordingly, they argue that foreign funding restrictions are necessary to thwart efforts
to destabilize or overthrow the government currently in power.
• In 2013 in Sri Lanka, the government justified a recent registration requirement for all
CSOs on the grounds that it was necessary to “thwart certain NGOs from hatching
117 Jonathan Lis, “Draft bill: NGOs with foreign funding to be defined ‘foreign agents,’” Haaretz, May 26,
2013, accessed September 8, 2014, https://www.haaretz.com/news/national/.premium-1.592754.
118 “Some Azerbaijani NGOs Cooperated with Armenian Special Services Under ‘People’s Diplomacy,’”
Trend, August 15, 2014, accessed September 8, 2014, https://en.trend.az/news/politics/2303147.html.
119 Agence France-Presse, “Bolivia expels Danish NGO for meddling,” Global Post, December 20, 2013,
accessed September 16, 2014, https://www.globalpost.com/dispatch/news/afp/131220/bolivia-expels-danish-ngomeddling-1.
120 Eric Lipton, Brooke Williams, & Nicholas Confessore, “Foreign Powers Buy Influence at Think Tanks,”
New York Times, September 6, 2014, accessed September 17, 2014,
https://www.nytimes.com/2014/09/07/us/politics/foreign-powers-buy-influence-at-think-tanks.html?_r=0.
121 Letter from Representative Frank Wolf to Strobe Talbott of the Brookings Institution, September 9,
2014, accessed September 17, 2014, https://s3.amazonaws.com/s3.documentcloud.org/documents/1301186/repfrank-wolfs-letter-to-strobe-talbott-at.pdf.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 27
conspiracies to effect regime change by engaging in politics in the guise of doing social
work.”122
• A drafter of the Russian “foreign agents” law justified the initiative when it was pending
in parliament, stating, “There is so much evidence about regime change in Yugoslavia,
now in Libya, Egypt, Tunisia, in Kosovo—that’s what happens in the world, some
governments are working to change regimes in other countries. Russian democracy needs
to be protected from outside influences.”123
• In 2005, the Prime Minister of Ethiopia expelled civil society organizations, explaining,
“there is not going to be a ‘Rose Revolution’ or a ‘Green Revolution’ in Ethiopia after the
election” 124—a reference to the so-called “color revolutions” that had recently occurred
in Georgia and elsewhere.
• In June 2012, Uganda’s Minister for Internal Affairs justified the government’s threats to
deregister certain CSOs, stating that CSOs “want to destabilize the country because that
is what they are paid to do…. They are busy stabbing the government in its back yet they
are supposed to do humanitarian work.”125
• In the process of driving civil society organizations out of Zimbabwe, President Mugabe
justified his policies by claiming that the CSOs were fronts for Western “colonial
masters” to undermine the Zimbabwean government.126 Similarly, the central committee
of Mugabe’s party claimed, “Some of these NGOs are working day and night to remove
President Mugabe and ZANU PF from power. They are being funded by Britain and
some European Union countries, the United States, Australia, Canada and New
Zealand.”127
• In a March 2014 interview justifying a draft “foreign agents” law, Kyrgyzstan’s
President Atembaev argued, “Activities conducted by CSOs are obviously aimed at
destabilization of the situation in the Kyrgyz Republic…. Some CSOs do not care about
how they get income, whose orders to fulfill, which kind of work to execute…. There are
122 Xinhua, “Sri Lanka to Investigate NGOs Operating in Country,” Herald, June 13, 2013, accessed
September 8, 2014, https://www.herald.co.zw/sri-lanka-to-investigate-ngos-operating-in-country/.
123 “Russian parliament gives first approval to NGO bill,” BBC, July 6, 2012, accessed September 8, 2014,
https://www.bbc.com/news/world-europe-18732949.
124 Darin Christensen & Jeremy M. Weinstein, “Defunding Dissent,” Journal of Democracy 24(2) (April
2013): 80.
125Pascal Kwesiga, “Govt gets tough on NGOs,” New Vision, June 19, 2012, accessed September 9, 2014,
https://www.newvision.co.ug/news/632123-govt-gets-tough-on-ngos.html.
126 Thomas Carothers, “The Backlash Against Democracy Promotion,” Foreign Affairs, March/April 2006,
accessed September 9, 2014, https://www.foreignaffairs.com/articles/61509/thomas-carothers/the-backlash-againstdemocracy-promotion.
127 “29 NGOs banned in crackdown,” New Zimbabwe, February 14, 2012, accessed September 9, 2014,
https://www.newzimbabwe.com/news-7189-29+NGOs+banned+in+crackdown/news.aspx.
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forces interested in destabilizing the situation in Kyrgyzstan and spreading chaos across
Central Asia and parts of China.”128
• In July 2014, the vice chairman of the China Research Institute of China-Russia Relations
argued that China should “learn from Russia” and enact a foreign agents law “so as to
block the way for the infiltration of external forces and eliminate the possibilities of a
Color Revolution.”129
2. Transparency and Accountability
Another justification commonly invoked by governments to regulate and restrict the flow
of foreign funds is the importance of upholding the integrity of CSOs by promoting transparency
and accountability through government regulation. Consider, for example, the following
responses by government delegations to the UNSR’s Resource Report:
• Egypt: “We agree with the principles of accountability, transparency, and integrity of the
activities of civil society organisations and NGOs. However, this should not be limited to
accountability to donors. National mechanisms to follow-up on activities of such entities,
while respecting their independence have to be established and respected.” 130
• Maldives: “While civil societies should have access to financing for effective operation
within the human rights framework, it is of equal importance that the organizations must
also ensure that they work with utmost integrity and in an ethical and responsible
manner.”131
• Azerbaijan: “The changes and amendments to the national legislation on NGOs have
been made with a view of increasing transparency in this field…. In that regard, these
amendments should only disturb the associations operating in our country on a nontransparent basis.”132
Similarly, in response to a United Nations Human Rights Council panel on the promotion
and protection of civil society space in March 2014, the following government delegations
responded with justifications invoking transparency and accountability:
128 “Алмазбек Атамбаев: “Хочу максимально успеть,” Slovo.kg, March 23, 2014, accessed September
9, 2014, translated by Aida Rustemova, https://slovo.kg/?p=35019.
129 Simon Denyer, “China taking the Putin approach to democracy,” Washington Post, October 1, 2014,
A7.
130 UN Office of the High Commissioner for Human Rights, “Clustered ID with the WG on HR and
Transnational Corporations and the SR on The Rights to Freedom of Assembly and Association: Intervention
delivered by the Permanent Delegation of Egypt,” May 30, 2013, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Egypt_10_1.pdf.
131 UN Office of the High Commissioner for Human Rights, “Interactive Dialogue with the Special
Rapporteur on the Rights to Peaceful Assembly and of Association, Maldives Oral Statement,” May 31, 2013,
accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Maldives_12.pdf.
132 UN Office of the High Commissioner for Human Rights, “Remarks by Azerbaijan,” May 31, 2013,
accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Azerbaijan_12.pdf.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 29
• Ethiopia, on behalf of the African Group: “Domestic law regulation consistent with the
international obligations of States should be put in place to ensure that the exercise of the
right to freedom of expression, assembly and association fully respects the rights of
others and ensures the independence, accountability and transparency of civil society.”133
• India, on behalf of the “Like Minded Group”: “The advocacy for civil society should be
tempered by the need for responsibility, openness and transparency and accountability of
civil society organizations.”134
• Pakistan, on behalf of the Organisation of Islamic Cooperation members: “It may be
underscored that securing funding for its crucial work is the right of civil society,
maintaining transparency and necessary regulation of funding is the responsibility of
states.”135
Kyrgyzstan has also employed this argument to justify a draft “foreign agents” law. The
explanatory note to the draft law claims that it “has been developed for purposes of ensuring
openness, publicity, transparency for non-profit organizations, including units of foreign nonprofit organizations, as well as non-profit organizations acting as foreign agents and receiving
their funds from foreign sources, such as foreign countries, their government agencies,
international and foreign organizations, foreign citizens, stateless persons or their authorized
representatives, receiving monetary funds or other assets from the said sources.”
3. Aid Effectiveness and Coordination
A global movement has increasingly advocated for greater aid effectiveness, including
through concepts of “host country ownership” and the harmonization of development
assistance.136 However, some states have interpreted “host country ownership” to be
synonymous with “host government ownership” and have otherwise co-opted the aid
effectiveness debate to justify constraints on international funding. For example:
133 UN Office of the High Commissioner for Human Rights, “Statement by Ethiopia on behalf of the
African Group at the 25th session of the Human Rights Council On the Panel Discussion on the Importance of the
Promotion and Protection of Civil Society Space,” March 11, 2014, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/25thSession/OralStatements/Ethiopia%20on%20b
ehalf%20of%20African%20Group_PD_21.pdf.
134 UN Office of the High Commissioner for Human Rights, “Joint Statement: India on behalf of likeminded countries,” March 11, 2014, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/25thSession/OralStatements/India_on%20behalf
%20of%20LMG_PD_21.pdf. The “Like Minded Group” consists of Algeria, Bahrain, Bangladesh, Belarus,
China, Cuba, Egypt, India, Indonesia, Malaysia, Pakistan, Russia, Saudi Arabia, Singapore, South Africa, Sri
Lanka, Sudan, Uganda, United Arab Emirates, Vietnam, and Zimbabwe.
135 UN Office of the High Commissioner for Human Rights, “Statement by Pakistan on behalf of OIC:
Panel Discussion on Civil Society Space,” March 11, 2014, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/25thSession/OralStatements/Pakistan%20on%20b
ehalf%20of%20OIC_PD_21.pdf.
136 See the Aid Effectiveness Agenda of the Paris Declaration (2005), the Accra Agenda for Action (2008),
and the Busan Partnership for Effective Development Cooperation (2011).
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• In July 2014, Nepal’s government released a new Development Cooperation Policy137
that will require development partners to channel all development cooperation through
the Ministry of Finance, rather than directly to CSOs. The government argued that this
policy is necessary for aid effectiveness and coordination: “Both the Government and the
development partners are aware of the fact that the effectiveness can only be enhanced if
the ownership of aid funded projects lies with the recipient government.”138
• Sri Lanka’s Finance and Planning Ministry issued a public notice in July 2014 requiring
CSOs to receive government approval of international funding. Justifying the
requirement, the Ministry claimed that projects financed with international funding were
“outside the government budget undermining the national development programmes.”139
• In response to the UNSR’s Resource Report, the representative of Egypt stated, “The
diversification of the venues of international cooperation and assistance to States towards
the funding of civil society partners fragments and diverts the already limited resources
available for international assistance. Hence, aid coordination is crucial for aid
effectiveness.”140
• At the recent Africa Leaders Summit, the Foreign Minister of Benin spoke at a workshop
on closing space for civil society. He asserted that CSOs “don’t think they are
accountable to government but only to development partners. This is a problem.” He said
Benin needs “a regulation to create transparency on resources coming from abroad and
the management of resources,” stating that the space for civil society is “too wide.”141
• The Intelligence Bureau of India released a report in June 2014 claiming that foreignfunded CSOs stall economic development and negatively impact India’s GDP growth by
2 to 3 percent.142 The report stated, “a significant number of Indian NGOs, funded by
some donors based in the US, the UK, Germany, the Netherlands and Scandinavian
137 Government of Nepal Ministry of Finance, “Development Cooperation Policy, 2014,” unofficial
translation, accessed September 9, 2014,
https://www.mof.gov.np/uploads/document/file/DCP_English_20140707120230_20140721083326.pdf.
138 Government of Nepal Ministry of Finance, “Development Cooperation Policy, 2014,” unofficial
translation, Article 2.2, accessed September 9, 2014,
https://www.mof.gov.np/uploads/document/file/DCP_English_20140707120230_20140721083326.pdf.
139 “No foreign funds without approval: Ministry,” Daily Mirror, July 22, 2014, accessed September 9,
2014, https://www.dailymirror.lk/news/50038-no-foreign-funds-without-approval-ministry.html.
140 UN Office of the High Commissioner for Human Rights, “Clustered ID with the WG on HR and
Transnational Corporations and the SR on The Rights to Freedom of Assembly and Association: Intervention
delivered by the Permanent Delegation of Egypt,” May 30, 2013, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Egypt_10_1.pdf.
141 Personal notes of author.
142 “Foreign-funded NGOs stalling development: IB report,” Times of India, June 12, 2014, accessed
September 9, 2014, https://timesofindia.indiatimes.com/india/Foreign-funded-NGOs-stalling-development-IBreport/articleshow/36411169.cms.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 31
countries, have been noticed to be using people centric issues to create an environment
which lends itself to stalling development projects.”143
4. National Security, Counterterrorism, and Anti-Money Laundering
As discussed above, governments also invoke national security, counterterrorism, and
anti-money laundering policies to justify restrictions on international funding, including crossborder philanthropy. For example, the Financial Action Task Force (FATF), an
intergovernmental body that seeks to combat money laundering and terrorist financing, stated:
The ongoing international campaign against terrorist financing has unfortunately
demonstrated however that terrorists and terrorist organisations exploit the NPO
sector to raise and move funds, provide logistical support, encourage terrorist
recruitment or otherwise support terrorist organisations and operations. This
misuse not only facilitates terrorist activity but also undermines donor confidence
and jeopardises the very integrity of NPOs. Therefore, protecting the NPO sector
from terrorist abuse is both a critical component of the global fight against
terrorism and a necessary step to preserve the integrity of NPOs.144
Governments have leveraged concerns about counterterrorism and money laundering to
justify restricting both the inflow and outflow of philanthropy. For example:145
• The government of Azerbaijan justified amendments relating to the registration of
foreign grants, stating that the purpose of the amendments was, in part, “to enforce
international obligations of the Republic of Azerbaijan in the area of combating moneylaundering.”146
143 Rakesh Krishnan Simha, “Why India Should Follow Vladimir Putin’s Lead on NGOs,” Russia & India
Report, June 15, 2014, accessed September 9, 2014,
https://in.rbth.com/blogs/2014/06/15/why_india_should_follow_vladimir_putins_lead_on_ngos_35945.html.
144 Financial Action Task Force, “International Standards on Combating Money Laundering and the
Financing of Terrorism & Proliferation: The FATF Recommendations,” Financial Action Task Force Report, 2013,
54, accessed September 9, 2014,
https://www.fatfgafi.org/media/fatf/documents/recommendations/pdfs/FATF_Recommendations.pdf. See also
Financial Action Task Force, “Risk of Terrorist Abuse in Non-Profit Organisations,” Financial Action Task Force
Report, June 2014, https://www.fatf-gafi.org/media/fatf/documents/reports/Risk-of-terrorist-abuse-in-non-profitorganisations.pdf.
145 Constraints by donor governments on the outflow of cross-border donations, albeit beyond the scope of
this article, similarly present significant barriers to cross-border philanthropy. These states assert that they have an
international responsibility to regulate the outflow of cross-border donations in order to ensure that funding destined
for other countries will not support criminal or terrorist activities in those foreign jurisdictions. For more information
about the justifications employed and the implications for civil society, please see: Ben Hayes, “Counter-Terrorism,
‘Policy Laundering’ and the FATF: Legalizing Surveillance, Regulating Civil Society,” Transnational
Institute/Statewatch Report, February 2012, https://www.statewatch.org/analyses/no-171-fafp-report.pdf.
146 Charity & Security Network, “How the FATF Is Used to Justify Laws That Harm Civil Society,
Freedom of Association and Expression,” Charity & Security Network, May 16, 2013, accessed September 9, 2014,
https://www.charityandsecurity.org/analysis/Restrictive_Laws_How_FATF_Used_to_Justify_Laws_That_Harm_Civ
il_Society.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 32
• The British Virgin Islands (BVI) enacted a law requiring that CSOs with more than five
employees appoint a designated Anti-Money Laundering Compliance Officer.147 The
law also imposes audit requirements for CSOs that are not required of businesses. These
burdens were justified with explicit reference to FATF’s recommendation on nonprofit
organizations and counterterrorism.148
• In response to the UNSR’s Resource Report, a group of thirteen African states responded,
“It is the responsibility of governments to ensure that the origin and destination of
associations’ funds are not used for terrorist purposes or directed towards activities which
encourage incitement to hatred and violence.”149
• In 2013, a Sri Lankan government representative similarly stated, “While we agree that
access to resources is important for the vibrant functioning of civil society, we observe
that Mr. Kiai does not seem to adequately take into account the negative impact of lack of
or insufficient regulation of funding of associations on national security and counterterrorism.”150
• In a National Security Analysis released in August 2014, Sri Lanka’s Ministry of
Defence claimed that some civil society actors have links with the Liberation Tigers of
Tamil Eelam, a group with “extremist separatist ideology,” and that these CSOs thereby
pose “a major national security threat.”151 During the same period, the Sri Lankan
government announced that it was drafting a law requiring CSOs to register with the
Ministry of Defence in order to have a bank account and receive international funding.
5. Hybrid Justifications
While these categories and examples represent the types of justifications offered by
governments for restricting foreign funding, in practice, official statements often combine
multiple justifications. A recent example is the statement made at the UN Human Rights Council
by India on behalf of itself and twenty other “like minded” states, including Cuba, Saudi
147 “Non-Profit Organisations,” British Virgin Islands Financial Investigation Agency, accessed September
9, 2014, https://www.bvifia.org/non-profit-organisations.
148 Charity & Security Network, “How the FATF Is Used to Justify Laws That Harm Civil Society,
Freedom of Association and Expression,” May 16, 2013,
https://www.charityandsecurity.org/analysis/Restrictive_Laws_How_FATF_Used_to_Justify_Laws_That_Harm_Civ
il_Society
149 UN Office of the High Commissioner for Human Rights, “Oral Statement—Gabon on behalf of the
African Group,” 30 May 2013, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Gabon%20on%20be
half%20ofAG_10_1.pdf.
150 UN Office of the High Commissioner for Human Rights, “23rd Session of the HRC Statement by Sri
Lanka—Item 3: Clustered ID with the SR on the rights to peaceful assembly & of association,” May 31, 2013,
accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/Pages/OralStatement.aspx?MeetingN
umber=12.0&MeetingDate=Friday,%2031%20May%202013.
151 Gotabaya Rajapaksa, “Sri Lanka’s National Security,” Ministry of Defence and Urban Development of
Sri Lanka, August 19, 2014, accessed September 9, 2014,
https://www.defence.lk/new.asp?fname=Sri_Lankas_National_Security_20140819_02.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 33
Arabia, Belarus, China, and Vietnam,
152 which weaves together a number of different
justifications, including foreign interference, accountability, and national security:
[C]ivil society cannot function effectively and efficiently without defined
limits…. Civil society must also learn to protect its own space by guarding against
machinations of donor groups guided by extreme ideologies laden with hidden
politicized motives, which if allowed could potentially bring disrepute to the civil
society space…. There have also been those civil society organizations, who have
digressed from their original purpose and indulged in the pursuit of donor-driven
agendas. It is important to ensure accountability and responsibility for their
actions and the consequences thereof and also guard against compromising
national and international security.153
Similarly, Ethiopia, in its statement in response to the UNSR’s Resource Report,
referenced justifications relating to state sovereignty, aid coordination, and accountability and
transparency:
It is our firm belief that associations will play their role in the overall
development of the country and advance their objectives, if and only if an
environment for the growth of transparent, members based and members driven
civil society groups in Ethiopia providing for accountability and predictability is
put in place. We are concerned that the abovementioned assertion [about
lightening the burdens to receive donor funding] by the special rapporteur
undermines the principle of sovereignty which we have always been guided by.154
Similarly constructed statements have also been put forward by Pakistan and other states.155
152 The “Like Minded Group” consisted of Algeria, Bahrain, Bangladesh, Belarus, China, Cuba, Egypt,
India, Indonesia, Malaysia, Pakistan, Russia, Saudi Arabia, Singapore, South Africa, Sri Lanka, Sudan, Uganda,
UAE, Vietnam, and Zimbabwe. UN Office of the High Commissioner for Human Rights, “Joint Statement: India on
behalf of like-minded countries,” March 11, 2014, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/25thSession/OralStatements/India_on%20behalf
%20of%20LMG_PD_21.pdf.
153 Ibid.
154 UN Office of the High Commissioner for Human Rights, “Oral Statement: Ethiopia,” May 31, 2013,
accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Ethiopia_12.pdf.
155 See, e.g., UN Office of the High Commissioner for Human Rights, “Statement by Pakistan on Behalf of
OIC: Panel Discussion on Civil Society Space,” March 11, 2014, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/25thSession/OralStatements/Pakistan%20on%20b
ehalf%20of%20OIC_PD_21.pdf: “By virtue of its dynamic role civil society is well poised to build convergences
with the view to develop synergies between state institutions and their own networks. These synergies would
facilitate proper utilization of resources at the disposal state institutions and civil society actors. In this regard, it
may be underscored that securing funding for its crucial work is the right of civil society, maintaining transparency
and necessary regulation of funding is the responsibility of states…. Within this social space, the civil society can
play its optimal role by working in collaboration with state institutions. Better coordination between civil society
actors and state institution [sic] would also facilitate enhancement of international cooperation in the field of human
rights.”
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In this section, the article briefly surveyed justifications presented by governments to
constrain the inflow of international funding, including philanthropy. In the following section,
we analyze constraints and their justifications under international law.
International Legal Framework
1. International Norms Protecting Access to Resources and Cross-Border Philanthropy
Article 22 of the International Covenant on Civil and Political Rights (ICCPR) states,
“Everyone shall have the right to freedom of association with others….”156 According to the
UNSR:157
The right to freedom of association not only includes the ability of individuals or legal
entities to form and join an association158 but also to seek, receive and use resources159—
human, material and financial—from domestic, foreign and international sources.160
The United Nations Declaration on Human Rights Defenders161 similarly states that
access to resources is a self-standing right:
“[E]veryone has the right, individually and in association with others, to solicit, receive
and utilize resources for the express purpose of promoting and protecting human rights
and fundamental freedoms through peaceful means….”162
According to the Office of the United Nations High Commissioner for Human Rights, this right
specifically encompasses “the receipt of funds from abroad.”163
156 United Nations International Covenant on Civil and Political Rights, Article 22, December 16, 1966,
https://www.ohchr.org/en/professionalinterest/pages/ccpr.aspx.
157 While reports of the UNSR are not binding international law, his reports are referenced here because
they provide a comprehensive articulation and explanation of international law.
158 International law generally recognizes the freedom of association, and this section follows that
formulation. Addressing the applicability of international law to non-membership organizations is beyond the scope
of this article, but for more information, please see: International Center for Not-for-Profit Law & World Movement
for Democracy Secretariat, “Defending Civil Society Report, Second Edition,” June 2012, 35,
https://www.icnl.org/research/resources/dcs/DCS_Report_Second_Edition_English.pdf.
159 The UNSR defines “resources” as a broad concept that includes financial transfers (e.g., donations,
grants, contracts, sponsorship, and social investments), loan guarantees, in-kind donations, and other forms of
support. See United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 10, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp-content/uploads/2013/04/A.HRC_.23.39_EN-funding-report-April-2013.pdf.
160 Ibid., para. 8.
161 The UNSR notes that while “the Declaration is not a binding instrument, it must be recalled that it was
adopted by consensus of the General Assembly and contains a series of principles and rights that are based on
human rights standards enshrined in other international instruments which are legally binding. Ibid., para. 17.
162 United Nations General Assembly, Declaration on the Right and Responsibility of Individuals, Groups
and Organs of Society to Promote and Protect Universally Recognized Human Rights and Fundamental Freedoms,
UN Res. 53/144, Article 13, https://www.un.org/Docs/asp/ws.asp?m=A/RES/53/144.
163 United Nations Office of the High Commissioner for Human Rights, “Declaration on Human Rights
Defenders,” UN OHCHR, accessed September 9, 2014,
https://www.ohchr.org/EN/Issues/SRHRDefenders/Pages/Declaration.aspx.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 35
Reinforcing this position,164 in 2013 the United Nations Human Rights Council passed
resolution 22/6, which calls upon on States “[t]o ensure that they do not discriminatorily impose
restrictions on potential sources of funding aimed at supporting the work of human rights
defenders,” and “no law should criminalize or delegitimize activities in defence of human rights
on account of the origin of funding thereto.”165
The freedom to access resources extends beyond human rights defenders. For example,
the Declaration on the Elimination of All Forms of Intolerance and of Discrimination Based on
Religion or Belief states that the right to freedom of thought, conscience, and religion includes
the freedom to “solicit and receive voluntary financial and other contributions from individuals
and institutions.”166 Access to resources is also an integral part of a number of other civil,
cultural, economic, political, and social rights. As the UNSR states:167
For associations promoting human rights, including economic, social and cultural rights,
or those involved in service delivery (such as disaster relief, health-care provision or
environmental protection), access to resources is important, not only to the existence of
the association itself, but also to the enjoyment of other human rights by those benefitting
from the work of the association. Hence, undue restrictions on resources available to
associations impact the enjoyment of the right to freedom of association and also
undermine civil, cultural, economic, political and social rights as a whole.168
Accordingly, “funding restrictions that impede the ability of associations to pursue their statutory
activities constitute an interference with article 22” of the International Covenant on Civil and
Political Rights.169
2. Regional and Bilateral Commitments to Protect Cross-Border Philanthropy
164 This article briefly examines international norms governing global philanthropy. But it also recognizes
that there are distinct limits to the impact of international law. For example, there is often an implementation gap
between international norms and country practice. In addition, there are few binding international treaties, such as
the ICCPR, and details are often left to “soft law,” such as the reports of the UNSR. At the same time, there is
concern that any effort to create a new global treaty on cross-border philanthropy or foreign funding would lead to a
retrenchment of existing rights.
165 United Nations General Assembly, Protecting Human Rights Defenders, March 21, 2013, UN Human
Rights Council, Resolution 22/6, para. 9, https://ap.ohchr.org/documents/dpage_e.aspx?si=A/HRC/RES/22/6.
166 United Nations General Assembly, Declaration on the Elimination of All Forms of Intolerance and of
Discrimination Based on Religion or Belief, November 25, 1981, UN General Assembly Resolution A/RES/36/55,
Article 6(f), https://www.un.org/documents/ga/res/36/a36r055.htm.
167 In similar fashion, the UN Committee on Economic, Social and Cultural Rights recognized the link
between access to resources and economic, social and cultural rights, when it expressed “deep concern” about an
Egyptian law that “gives the Government control over the right of NGOs to manage their own activities, including
seeking external funding.” See Egypt, ICESCR, E/2001/22 (2000) 38 at paras. 161, 176,
https://www.bayefsky.com/themes/public_general_concluding-observations.php.
168 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 9, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp-content/uploads/2013/04/A.HRC_.23.39_EN-funding-report-April-2013.pdf.
169 Human Rights Committee, communication No. 1274/2004, Korneenko et al. v. Belarus, Views adopted
on October 31, 2006, para. 7.2.
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While this article is focused on global norms, cross-border philanthropy is also
protected at the regional level. For example:
• The Council of Europe Recommendation on the Legal Status of NGOs states:
“NGOs should be free to solicit and receive funding—cash or in-kind donations—
not only from public bodies in their own state but also from institutional or
individual donors, another state or multilateral agencies….” 170
• According to the Inter-American Commission on Human Rights, “states should allow and
facilitate human rights organizations’ access to foreign funds in the context of
international cooperation, in transparent conditions.”171
• In May 2014, the African Commission on Human and Peoples’ Rights (ACHPR)
adopted, in draft form, a report of the ACHPR Study Group on Freedom of Association
and Peaceful Assembly, with a specific recommendation that States’ legal regimes should
codify that associations have the right to seek and receive funds. This includes the right to
seek and receive funds from their own government, foreign governments, international
organizations and other entities as a part of international cooperation to which civil
society is entitled, to the same extent as governments.
• The European Court of Justice (ECJ) has issued a series of important decisions about the
free flow of philanthropic capital within the European Union.172
In addition, many jurisdictions have concluded bilateral investment treaties, which help
protect the free flow of capital across borders. Some treaties, such as the U.S. treaties with
Kazakhstan and Kyrgyzstan, expressly extend investment treaty protections to organizations not
“organized for pecuniary gain.”173 Indeed, the letters of transmittal submitted by the White
House to the U.S. Senate state that these treaties are drafted to cover “charitable and non-profit
entities.”174
170 Council of Europe, “Recommendation CM/Rec (2007)145 of the Committee of Ministers to member
states on the legal status of non-governmental organisations in Europe,” adopted October 10, 2007, Article 50,
https://wcd.coe.int/ViewDoc.jsp?id=1194609.
171 Inter-American Commission on Human Rights, Report on the Situation of Human Rights Defenders in
the Americas, March 7, 2006, Recommendation 19, https://www.icnl.org/research/resources/assembly/oas-humanrights-report.pdf.
172 For more information on these decisions, see: European Foundation Center and Transnational Giving
Europe, “Taxation of Cross-Border Philanthropy in Europe After Persche and Stauffer: From landlock to free
movement?”, European Foundation Center Report, 2014,
https://www.efc.be/programmes_services/resources/Documents/TGE-web.pdf; European Foundation Centre, “ECJ
rules in favour of cross-border giving,” EFC briefing, January 27, 2009, accessed September 9, 2014,
https://www.efc.be/programmes_services/resources/Documents/befc0908.pdf.
173 U.S.-Kyrgyz Bilateral Investment Treaty, Article 1(b); U.S.-Kazakh Bilateral Investment Treaty, Article
1(b). See also Article 1(2) of the China – Germany BIT: “the term ‘investor’ means … any juridical person as well
as any commercial or other company or association with or without legal personality having its seat in the territory
of the Federal Republic of Germany, irrespective of whether or not its activities are directed at profit.”
174 Letters of Transmittal available at the U.S. State Department website:
https://www.state.gov/documents/organization/43566.pdf and
https://www.state.gov/documents/organization/43567.pdf.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 37
A detailed discussion of investment treaty protection for cross-border philanthropy is
beyond the scope of this article. This issue is presented in brief form, however, because it is a
significant avenue for further exploration, as it expands the international legal argument beyond
human rights and implicates bilateral investment treaties with binding enforcement
mechanisms.175 For further information on this issue, please see International Investment Treaty
Protection of Not-for-Profit Organizations176 and Protection of U.S. Non-Governmental
Organizations in Egypt under the Egypt-U.S. Bilateral Investment Treaty.177
3. Restrictions Permitted Under International Law
Continuing the discussion of global norms, ICCPR Article 22(2) recognizes that the
freedom of association can be restricted in certain narrowly defined conditions. According to
Article 22(2):
No restrictions may be placed on the exercise of this right other than those which are
prescribed by law and which are necessary in a democratic society in the interests of
national security or public safety, public order (ordre public), the protection of public
health or morals or the protection of the rights and freedoms of others.178
In other words, international law allows a government to restrict access to resources if the
restriction is:
(1) prescribed by law;
(2) in pursuance of one or more legitimate aims, specifically:
o national security or public safety;
o public order;
o the protection of public health or morals; or
o the protection of the rights and freedoms of others; and
175 In addition, the European Court of Human Rights has held that Article 1 of the First Protocol of the
European Convention on Human Rights protects the right to peaceful enjoyment of one’s possessions. (Article 1 of
the First Protocol of the European Convention reads: “Every natural or legal person is entitled to the peaceful
enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to
the conditions provided for by law and by the general principles of international law. The preceding provisions shall
not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of
property in accordance with the general interest or to secure the payment of taxes or other contributions or
penalties.” In addition, the right to property includes the right to dispose of one’s property (Clare Ovey & Robin
White, The European Convention on Human Rights, 3rd edition (Oxford: Oxford University Press, 2002)), which
would seem to embrace the right to make contributions to CSOs for lawful purposes.
176 Luke Eric Peterson & Nick Gallus, “International Investment Treaty Protection of Not-for-Profit
Organizations,” International Journal of Not-for-Profit Law 10(1) (December 2007),
https://www.icnl.org/research/journal/vol10iss1/art_1.htm.
177 Nick Gallus, “Protection of U.S. Non-Governmental Organizations in Egypt under the Egypt-U.S.
Bilateral Investment Treaty,” International Journal of Not-for-Profit Law 14(3) (September 2012),
https://www.icnl.org/research/journal/vol14iss3/art2.html.
178 United Nations International Covenant on Civil and Political Rights, Article 22, December 16, 1966,
https://www.ohchr.org/en/professionalinterest/pages/ccpr.aspx. Article 22, ICCPR
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(3) “necessary in a democratic society to achieve those aims.”179
Moreover:
States should always be guided by the principle that the restrictions must not impair the
essence of the right … the relations between right and restriction, between norm and
exception, must not be reversed.180
The burden of proof is on the government.181 In addition:
When a State party invokes a legitimate ground for restriction of freedom of expression,
it must demonstrate in specific and individualized fashion the precise nature of the threat,
and the necessity and proportionality of the specific action taken, in particular by
establishing a direct and immediate connection between the [activity at issue] and the
threat.182
The following section amplifies this three-part test contained in Article 22(2).
A. Prescribed by law
The first prong requires a restriction to have a formal basis in law. This means that:
restrictions on the right to freedom of association are only valid if they had been
introduced by law (through an act of Parliament or an equivalent unwritten norm of
common law), and are not permissible if introduced through Government decrees or other
similar administrative orders.183
As discussed above, in July 2014, the Sri Lankan Department of External Resources of
the Ministry of Finance and Planning disseminated a notice to the public, declaring that any
organization or individual undertaking a project with foreign aid must have approval from
relevant government agencies. Similarly, in July 2014, Nepal’s government released a new
Development Cooperation Policy that will require development partners to channel all
development cooperation through the Ministry of Finance, rather than directly to civil society. In
both cases, the restrictions were based on executive action and not “introduced by law (through
179 Case of Vona v. Hungary (App no 35943/10) (2013) ECHR para. 50,
https://hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=001-122183.
180 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 16, UN Doc. A/HRC/20/27 (May 21, 2012),
https://www.ohchr.org/Documents/HRBodies/HRCouncil/RegularSession/Session20/A-HRC-20-27_en.pdf.
181 UN Office of the High Commissioner for Human Rights (OHCHR), Fact Sheet No. 15, Civil and
Political Rights: The Human Rights Committee, May 2005,
https://www.ohchr.org/Documents/Publications/FactSheet15rev.1en.pdf.
182 United Nations Human Rights Committee, General Comment No. 34, para. 35, UN Doc.
CCPR/C/GC/34 (September 12, 2011), https://www2.ohchr.org/english/bodies/hrc/docs/GC34.pdf.
183 See UN Special Rapporteur on the situation of human rights defenders, Commentary to the Declaration
on the Right and Responsibility of Individuals, Groups and Organs of Society to Promote and Protect Universally
Recognized Human Rights and Fundamental Freedoms, July 2011, 44,
https://www.ohchr.org/Documents/Issues/Defenders/CommentarytoDeclarationondefendersJuly2011.pdf: “It would
seem reasonable to presume that an interference is only “prescribed by law” if it derives from any duly promulgated
law, regulation, order, or decision of an adjudicative body. By contrast, acts by governmental officials that are ultra
vires would seem not to be ‘prescribed by law,’ at least if they are invalid as a result.”
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 39
an act of Parliament or an equivalent unwritten norm of common law).” Accordingly, they
appear to violate the “prescribed by law” standard required under Article 22(2) of the ICCPR.
This prong of Article 22(2) also requires that a provision be sufficiently precise for an
individual or NGO to understand whether or not intended conduct would constitute a violation of
law.184 As stated in the Johannesburg Principles, “The law must be accessible, unambiguous,
drawn narrowly and with precision so as to enable individuals to foresee whether a particular
action is unlawful.”185
This prong helps limit the scope of permissible restrictions. As discussed above, certain
laws ban funding of organizations that cause “social anxiety,” have a “political nature,” or have
“implied ideological conditions.” These terms are undefined and provide little guidance to
individuals or organizations about prohibited conduct. Since they are not “unambiguous, drawn
narrowly and with precision so as to enable individuals to foresee whether a particular action is
unlawful,” there is a reasonable argument that these sorts of vague restrictions fail the
“prescribed by law” requirements of international law.
B. Legitimate aim
The second prong of Article 22(2) requires that a restriction advance one or more
“legitimate aims,”186 namely:
• national security or public safety;
• public order;
• the protection of public health or morals; or
• the protection of the rights and freedoms of others.
This prong provides a useful lens to analyze various justifications for constraint. For
example, governments have justified constraints to promote “aid effectiveness.” As the UNSR
notes, aid effectiveness “is not listed as a legitimate ground for restrictions.”187 Similarly, “[t]he
protection of State sovereignty is not listed as a legitimate interest in the [ICCPR],” and “States
cannot refer to additional grounds … to restrict the right to freedom of association.”188
Of course, assertions of national security or public safety may, in certain circumstances,
constitute a legitimate interest. Under the Siracusa Principles, however, assertions of national
security must be construed restrictively “to justify measures limiting certain rights only when
184 Though not a fully precise comparison, this concept is somewhat similar to the “void for vagueness”
doctrine in U.S. constitutional law.
185 Article 19, Johannesburg Principles on National Security, Freedom of Expression and Access to
Information (London: Article 19, 1996), Principle 1.1(a),
https://www.article19.org/data/files/pdfs/standards/joburgprinciples.pdf. The Johannesburg Principles were
developed by a meeting of international experts at a consultation in South Africa in October 1995.
186 Case of Vona v. Hungary (App no 35943/10) (2013) ECHR para. 50,
https://hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=001-122183.
187 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 40, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp-content/uploads/2013/04/A.HRC_.23.39_EN-funding-report-April-2013.pdf.
188 Ibid., para. 30.
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they are taken to protect the existence of the nation or its territorial integrity or political
independence against force or threat of force.”189 In addition, a state may not use “national
security as a justification for measures aimed at suppressing opposition … or at perpetrating
repressive practices against its population.”190 This includes defaming or stigmatizing foreign
funded groups by accusing them of “treason” or “promoting regime change.”191
Accordingly, under international law, governments cannot rely on generalized claims of
“state sovereignty” to justify constraints on global philanthropy. In the words of the UNSR:
Affirming that national security is threatened when an association receives funding from
foreign sources is not only spurious and distorted, but also in contradiction with
international human rights law.192
This brief analysis is not intended to explore the details of the aid effectiveness and
sovereignty justifications. Rather, the goal is to illustrate how the “legitimate aim” requirement
of international law can help inform the analysis of certain justifications presented by
governments, such as arguments based on “aid effectiveness” and “sovereignty.”
C. Necessary in a Democratic Society
Even if a government is able to articulate a legitimate aim, a restriction violates
international law unless it is “necessary in a democratic society.” As stated by the Organization
for Security and Co-operation in Europe, the reference to necessity does not have “the flexibility
of terms such as ‘useful’ or ‘convenient’: instead, the term means that there must be a ‘pressing
social need’ for the interference.”193 Specifically, “where such restrictions are made, States must
demonstrate their necessity and only take such measures as are proportionate to the pursuance of
legitimate aims in order to ensure continuous and effective protection of Covenant rights.”194
As stated by the UNSR:
In order to meet the proportionality and necessity test, restrictive measures must be the
least intrusive means to achieve the desired objective and be limited to the associations
189 See the “Siracusa Principles” [United Nations, Economic and Social Council, U.N. Sub-Commission on
Prevention of Discrimination and Protection of Minorities, Siracusa Principles on the Limitation and Derogation of
Provisions in the International Covenant on Civil and Political Rights, Annex, UN Doc E/CN.4/1985/4 (1984)],
which were adopted in May 1984 by a group of international human rights experts convened by the International
Commission of Jurists, the International Association of Penal Law, the American Association for the International
Commission of Jurists, the Urban Morgan Institute for Human Rights, and the International Institute of Higher
Studies in Criminal Sciences. Though not legally binding, these principles provide an authoritative source of
interpretation of the ICCPR with regard to limitations clauses and issue of derogation in a public emergency. They
are available at: https://graduateinstitute.ch/faculty/clapham/hrdoc/docs/siracusa.html.
190 Ibid.
191 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 27, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp-content/uploads/2013/04/A.HRC_.23.39_EN-funding-report-April-2013.pdf.
192 Ibid., para. 30
193 OSCE/Office for Democratic Institutions and Human Rights (ODIHR), Key Guiding Principles of
Freedom of Association with an Emphasis on Non-Governmental Organizations, para. 5
194 United Nations Human Rights Committee, General Comment No. 31 (2004), para. 6, UN Doc.
CCPR/C/21/Rev.1/Add. 13, May 26, 2004.
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falling within the clearly identified aspects characterizing terrorism only. They must not
target all civil society associations….195
Consider, for example, Ethiopian legislation imposing a 10 percent cap on the foreign
funding of all CSOs promoting a variety of objectives, including women’s rights and disability
rights. As discussed above, Ethiopia has asserted a counterterrorism rationale to justify foreign
funding constraints. Ethiopia does not establish a “direct and immediate connection between the
[activity at issue] and the threat.”196 In addition, the cap is not the “least intrusive means to
achieve the desired objective and … limited to the associations falling within the clearly
identified aspects characterizing terrorism.” Accordingly, the counterterrorism objective fails to
justify the Ethiopian cap on foreign funding.
The UNSR also applied this test to the “aid effectiveness” justification. In response, he
stressed that:
even if the restriction were to pursue a legitimate objective, it would not comply with the
requirements of “a democratic society.” In particular, deliberate misinterpretations by
Governments of ownership or harmonization principles to require associations to align
themselves with Governments’ priorities contradict one of the most important aspects of
freedom of association, namely that individuals can freely associate for any legal
purpose.197
In addition, “longstanding jurisprudence asserts that democratic societies only exist
where ‘pluralism, tolerance and broadmindedness’ are in place,”198 and “minority or dissenting
views or beliefs are respected.”199
Applying this test, the UNSR has noted that constraints are frequently justified with
reference to rhetorically appealing terms, such as “sovereignty,” “counterterrorism,” and
195 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 23, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp-content/uploads/2013/04/A.HRC_.23.39_EN-funding-report-April-2013.pdf.
196 United Nations Human Rights Committee, General Comment No. 34, para. 35, UN Doc.
CCPR/C/GC/34 (September 12, 2011), https://www2.ohchr.org/english/bodies/hrc/docs/GC34.pdf.
197 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 41, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp-content/uploads/2013/04/A.HRC_.23.39_EN-funding-report-April-2013.pdf. The UNSR
finds support for this position in the global framework for aid effectiveness. For example, the Accra Agenda for
Action, which has been adopted by 138 countries, states that civil society organizations are “independent
development actors in their own right.” Similarly, in the Busan Partnership for Effective Development Cooperation,
162 countries and territories agreed to “implement fully our respective commitments to enable CSOs to exercise
their roles as independent development actors, with a particular focus on an enabling environment, consistent with
agreed international rights, that maximises the contributions of CSOs to development.” 4th High Level Event on Aid
Effectiveness, “Busan Partnership for Effective Development Co-Operation,” December 1, 2011, Para. 22(a),
https://www.oecd.org/dac/effectiveness/49650173.pdf (emphasis added).
198 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 17, UN Doc. A/HRC/20/27 (May 21, 2012),
https://www.ohchr.org/Documents/HRBodies/HRCouncil/RegularSession/Session20/A-HRC-20-27_en.pdf.
199 Ibid. at para. 84(a). Volumes have been written on the attributes of a democratic society, and this article
does not seek to enter into this general conceptual debate. Rather, it focuses on international legal documents that
give meaning to this provision of the ICCPR.
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“accountability and transparency.” Upon inspection, however, the asserted justification is often
“a pretext to constrain dissenting views or independent civil society,”200 which violates
international law.201 Raising a similar argument, a civil society representative in China recently
told the Washington Post, “The target is not the money, it is the NGOs themselves. The
government wants to control NGOs by controlling their money.”202
Several recent studies examining foreign funding constraints and the political
environments in which they arise support the UNSR’s claim. One study found that in most
countries where political opposition is unhindered and voting is conducted in a “free and fair”
manner, foreign funding restrictions are generally not imposed on CSOs. Rather, the study found
a correlation between states where election manipulation takes place and states where the
government restricts CSO access to foreign support.203 This can be explained, according to the
study’s authors, by regime vulnerability, or fears that well-funded CSOs could contribute to the
defeat of the ruling regime at the ballot box. In these cases, restrictions on foreign funding may
be a tactic for a vulnerable regime to cling to power by defunding the opposition.
In addition, the study suggests that in some countries, foreign funding of CSOs is
unpopular among the electorate. Therefore, restrictions on foreign funding may be a political
tactic to appeal to these voters. For example, according to a Gallup poll conducted in 2012, 85
percent of Egyptians opposed direct aid from the U.S. to Egyptian CSOs. The study concludes
that “by restricting foreign funding, Egyptian politicians appear to be responding to electoral
incentives.”204
Another study analyzed the 2009 passage of new legislation restricting the ability of
Ethiopian CSOs to access international funding.205 This study asserted that the ruling party’s
intentions “were likely aimed at shutting down opposition altogether, rather than at creating a
more vibrant, locally rooted civil society.”206 These findings are representative of a more general
200 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 23, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp-content/uploads/2013/04/A.HRC_.23.39_EN-funding-report-April-2013.pdf.
201 Russia is an interesting example to illustrate this point. Within a few months of the adoption of the
foreign agents law, numerous other laws to restrict civic space were introduced and adopted. These include a treason
law, a law banning NGOs that engage in political activities and receive funding from the U.S., a law on public
assemblies, and a law restricting internet content. See, for example, Human Rights Watch, “Laws of Attrition:
Crackdown on Russia’s Civil Society after Putin’s Return to the Presidency,” Human Rights Watch, 2013, accessed
September 9, 2014, https://www.hrw.org/sites/default/files/reports/russia0413_ForUpload_0.pdf.
202 Simon Denyer, “China taking the Putin approach to democracy,” Washington Post, October 1, 2014,
A7.
203 Darin Christensen & Jeremy M. Weinstein, “Defunding Dissent: Restrictions on Aid to NGOs,” Journal
of Democracy 24(2) (April 2013): 81.
204 Ibid.
205 Kendra Dupuy, James Ron, & Aseem Prakesh, Reclaiming Political Terrain: The Regulatory
Crackdown on Overseas Funding for NGOs, CIDE 1 (October 2012).
206 Ibid., 4.
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trend that “governments are more likely to restrict external support to civil society when they
feel vulnerable to domestic challenges.”207
Conclusion
As of January 2015, fifteen laws are pending that would restrict access to international
funding, including cross-border philanthropy. These restrictions are justified with reference to
concerns about political interference in domestic political affairs, CSO accountability and
transparency, and aid effectiveness, as well as terrorism and national security.
International law provides a useful analytic lens to examine these restrictions. Under
international law, restrictions are permissible only if they are:
(1) prescribed by law;
(2) in pursuance of one or more legitimate aims, specifically:
o national security or public safety;
o public order;
o the protection of public health or morals; or
o the protection of the rights and freedoms of others; and
(3) “necessary in a democratic society to achieve those aims.”208
In some cases, restrictions will fail the “prescribed by law” standard because they are not
contained in a law enacted by the legislative branch of government. In other cases, restrictions
fail to meet the “foreseeability” requirement of the prescribed by law standard because they are
insufficiently precise. Restrictions will also fail if they are based on grounds other than those
listed in Article 22(2) of the ICCPR.
If these hurdles are overcome, it is then necessary to engage in a detailed analysis of the
constraint and the country context. The key questions are whether the restriction is necessary or
proportionate to the legitimate interest articulated by the government, and whether the
justification is a pretext to constrain dissent or independent civil society.
Applying this analysis, the UNSR has found that many constraints are presumptively
problematic:
Under international law, problematic constraints include, inter alia, outright prohibitions
to access funding; requiring CSOs to obtain Government approval before receiving
funding; requiring the transfer of funds to a centralized Government fund; banning or
restricting foreign-funded CSOs from engaging in human rights or advocacy activities;
stigmatizing or delegitimizing the work of foreign-funded CSOs by requiring them to be
labeled as “foreign agents” or other pejorative terms; initiating audit or inspection
207 Darin Christensen & Jeremy M. Weinstein, “Defunding Dissent: Restrictions on Aid to NGOs,” Journal
of Democracy 24(2) (April 2013): 83.
208 Case of Vona v. Hungary (App. no. 35943/10) (2013) ECHR para. 50,
https://hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=001-122183.
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campaigns to harass CSOs; and imposing criminal penalties on CSOs for failure to
comply with the foregoing constraints on funding.209
At the same time, this article recognizes that international law is but one lens through
which to examine this issue, and there are limits to the practical impact of international law on
national law. ICNL recently conducted a mapping study, which discusses an array of
initiatives.210 To supplement these ongoing initiatives, there is a need for further scholarly
research to inform policy development in this field. Research needs include:
• Demonstrating the link between an enabling environment for civil society and
development outcomes. As the international community develops the Post-2015
Development Agenda, the question frequently arises as to whether there is evidence to
show that a more enabling environment for civil society leads to better development
outcomes.
• Analyzing the impact of philanthropic pluralism versus philanthropic protectionism. This
is related to the prior point but is specifically focused on the legal framework for crossborder philanthropy. Governments often argue that tight control over cross-border
philanthropy promotes donor coordination and alignment with national priorities, thereby
increasing the impact of cross-border philanthropy. Accordingly, it would seem important
to collect empirical evidence on the extent to which restrictions affect cross-border
philanthropy.
• Extracting lessons learned from the free trade debate. It took decades for globalization to
take root and for countries to reduce barriers for trade. It would be interesting to study the
process of reform to see if there are lessons learned to reduce barriers to the free flow of
philanthropic capital across borders.
• Deepening the discussion on foreign funding and CSO “political activities.” Whether one
considers the “foreign agents” law in Russia or U.S. Representative Wolf’s letter urging
the Brookings Institution not to accept funding from foreign governments,211 there is ongoing concern about CSOs that receive foreign funding and engage in “political
activities.” While some research has been undertaken to disaggregate the concept of
“political activities,”212 the field would benefit from further research and
recommendations on what kinds of rules should attach to CSOs engaged in different
types of “political”/public policy activities.
209 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 20, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp-content/uploads/2013/04/A.HRC_.23.39_EN-funding-report-April-2013.pdf.
210 ICNL, “Mapping Initiatives to Address Legal Constraints on Foreign Funding,” August 20, 2014,
https://www.icnl.org/news/2014/20-Aug.html.
211 See, for example, Eric Lipton, “Lawmaker Assails Foreign Donations to Think Tanks,” New York
Times, September 12, 2014, accessed September 17, 2014, https://www.nytimes.com/2014/09/13/us/lawmakerassails-foreign-giving-to-think-tanks.html.
212 International Center for Not-for-Profit Law, “Political Activities of NGOs: International Law and Best
Practices,” International Journal of Not-for-Profit Law 12(1) (November 2009),
https://www.icnl.org/research/journal/vol12iss1/special_1.htm.
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• Assessing lessons learned and developing good practices for governments and
international organizations interested in promoting an enabling legal environment for
cross-border philanthropy and civil society. As demonstrated by President Obama’s
September 2014 speech at the Clinton Global Initiative, the shrinking space for crossborder philanthropy and civil society is a priority for the U.S. government. The Swedish
government, the Community of Democracies, the European Union, the United Nations,
and a number of other governments and international organizations have also prioritized
this issue. At the same time, the engagement of the international community can prompt a
backlash. Accordingly, it would seem important to identify lessons learned and options to
promote constructive engagement by the international community. It would also seem
important to study the infrastructure for response, including the role of policies, practices,
and personnel in institutionalizing support for civil society and cross-border philanthropy.
• Developing good practices to address terrorist financing concerns, while protecting
human rights and cross-border philanthropy. There is anecdotal evidence that CSOspecific measures have limited impact on the detection of terrorist financing by CSOs.213
In addition, counterterrorism officials have complained that there is an opportunity cost
to FATF’s focus on CSOs, which detracts from resources available to go after more
significant counterterrorism targets. It would be interesting to have further research on
the impact of CSO-specific measures, as well as empirical evidence about the amount of
terrorist financing flowing through states, quasi-state actors like ISIL, for-profit entities,
and CSOs. The sector would also benefit from scholarly research on proportionate,
effective measures to inform FATF’s upcoming “Best Practices Paper” on terrorist
financing and the nonprofit sector.
In conclusion, cornerstone concepts of civil society are currently being discussed,
developed, and—at times—violently contested. After the fall of the Berlin Wall, a number of
countries recognized the importance of defending civil society. In the current environment,
however, many countries are defunding civil society. The outcome of this ongoing debate will
shape the future of civil society, and global philanthropy, in many countries for decades to come.
213 Emile van der Does de Willebois, “Nonprofit Organizations and the Combatting of Terrorism
Financing: A Proportionate Response,” World Bank Working Paper No. 208, 2010,
https://issuu.com/world.bank.publications/docs/9780821385470.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 46
Cross-Border Philanthropy
ALLIES OR ADVERSARIES?
FOUNDATION RESPONSES TO GOVERNMENT POLICING OF
CROSS-BORDER CHARITY
DR. OONAGH B. BREEN*
I. The Context for Cross-Border Philanthropy: Framing the Policy Issue
At what moment in time does government policing of cross-border charitable activities
leave the realm of the regulation of civil society and enter the realm of civil society repression?
Does the legitimacy of a measure restricting civil society action depend on the legal or political
context in which it is made, or are such measures simply transplantable across jurisdictional
lines? Research shows that authoritarian regimes are not alone in recent attempts to constrain
civic space,1 with examples of restrictive measures present in semi-authoritarian and democratic
regimes alike. From east to west, new restrictions on the rights of NGOs to receive or use foreign
funding in their philanthropic work are emerging. From Russia’s foreign agents’ laws2 to
Ethiopia’s clampdown on human rights organizations supported by foreign aid3 to India’s recent
decision to disassociate itself from the UN HRC Consensus Resolution on Civil Society Space,4
there is growing evidence that countries are viewing NGOs as troublesome adversaries more
than as supportive allies. This article seeks to explore the legal and policy underpinnings for
these restrictions, which are often imposed in the name of enhancing development effectiveness
or efficiency against a backdrop of the host country ownership of the deliberative space.
Particular attention is paid to the drivers behind these restrictions and the context in which these
measures arise.
* Dr. Oonagh B. Breen, oonagh.breen@ucd.ie, is Senior Lecturer in Law, Sutherland School of Law,
University College Dublin.
An earlier version of this article was presented at the 2014 Annual Conference of the National Center on
Philanthropy and the Law, New York University, on “Regulation or Repression: Government Policing of CrossBorder Charity,” October 26, 2014.
1 Second Thematic Report of the Special Rapporteur to the UN on the rights to freedom of peaceful
assembly and of association, Maina Kiai (April 2013), A/HRC 23/39; ICNL, Legal and Regulatory Framework for
Civil Society: Global Trends in 2012-2013 (Vol. 4, Iss. 2, October 2013).
2 See Russian Federation Laws on Introducing Amendments to Certain Legislative Acts of the Russian
Federation 2006; and Introducing Amendments to Certain Legislative Acts of the Russian Federation Regarding the
Regulation of Activities of Non-commercial Organizations Performing the Function of Foreign Agents 2012.
3 Proclamation to Provide for the Registration and Regulation of Charities and Societies 2009 (restricting
NGOs that receive more than 10 percent of their financing from foreign sources from engaging in essentially all
human rights and advocacy activities).
4 Permanent Mission of India, Geneva, Agenda Item 3: Resolution on Civil Society Space, Statement by
India in explanation of vote before the vote (27th Session of the Human Rights Council, September 26, 2014).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 47
Understanding the legal restrictions imposed in the name of host country ownership gives
rise to two broader questions. First, to what extent should foreign foundations be free to fund
their own development priorities when engaged in cross-border philanthropy, or should such
donors be required to abide by the policy priorities set by the host country or government? This
first question examines the thorny issue of national sovereignty and a nation’s autonomy over its
destiny and its ability to exclude “outside influence,” on the one hand; and the place of civil
society—both local and international—in negotiating that space, on the other. The second
separate, albeit related, question considers the extent to which a host country should be able, in
the name of good regulation, to control local philanthropic activity supported by foreign
foundation funding. When does a legitimate regulatory tool in one jurisdiction become a
regulatory tool of oppression in another? Can an apparently measured requirement have a far
more invidious practical effect on foreign foundations or foundations that enjoy foreign funding
than on those organizations enjoying government favor? If the regulatory framework indirectly
discriminates against foreign donors or local NGOs enjoying their support, is there a policy
mechanism through which these issues can be discussed and resolved?
The context for this “country ownership” debate in philanthropy circles has, in the past
and with good reason, focused on the area of development aid. Development experts and
economists have debated whether the billions spent on aid for developing countries, particularly
in Africa, has helped or hindered those nations and the individual citizens who most need
assistance. In his works, The White Man’s Burden
5 and The Tyranny of Experts,
6 Bill Easterly
makes a strong case that the approach of those he refers to as the “development technocrats” or
the “planners” (in short, the aid agencies, the NGOs, the development experts sent out to the
field) has been far from successful. He argues that growth comes from within a nation and not
from development, and he has urged donors to be much more modest about what they can
achieve, bearing in mind the risk that in providing aid, a foreign donor may do more harm than
good if such aid undermines the host country’s ability to deliver on its national development
strategy. Perhaps a more interesting critique, which follows in Easterly’s vein, comes from
Dambisa Moyo, a Zambian economist who, in her book Dead Aid,7 argues that development
assistance has failed demonstrably and has in fact contributed to poverty in Africa. Moyo makes
the case that there are more effective ways of accelerating development outside of foreign
aid/philanthropy. The debate to date in this arena has focused very much on larger
development/economic growth issues in teasing out the interplay between host country
autonomy and foreign donor freedom. This article revisits the development arena but attempts to
look at existing problems through a legal lens.
There are other spheres in which the ownership questions at the heart of this paper are
equally relevant – for instance, in the sphere that I will call the “non-development arena.” A
foundation does not have to be operating in a development context before encountering legal
restrictions that adversely affect cross-border philanthropic activity. In a first-world context, a
foundation established in one country but wishing to operate in the territory of another state may
5 William Easterly, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much
Ill and So Little Good (OUP, 2007).
6 William Easterly, The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor
(Basic Books, 2014).
7 Dambisa Moyo, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa (FSG,
2010).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 48
find itself subject to restrictions that hinder or undermine its organization’s ability to work or, at
least, to work as effectively as it might otherwise do. These restrictions may arise in relation to
issues of establishment or registration, or in the area of taxation or accountability. On occasion,
they may spring from a governmental concern over state sovereignty or security or differing
views on the role of democracy and the legitimacy and value of an unelected and perhaps
“uncontrollable” civil society. Depending on the context, these restrictions can have serious
consequences – sometimes unintended, sometimes very much intended – on a foreign NGO’s
ability to fund or carry out activities in a host country. Consideration of these issues common to
both the development and non-development spheres is important, as it forces us to adopt a
critical and hopefully more honest approach to the feasibility of policy proposals.
Part II of this article focuses on the development aid arena, acknowledging the problems
that have given rise to a loss of political momentum and the steps taken to reset the international
development agenda. Moving away from development, Part III explores briefly the cross-border
restrictions hampering philanthropic engagement in the areas of European and international law.
To this end, attention is first focused on the European Commission’s ill-fated proposal to
develop the European Foundation Statute (“EFS’) to facilitate greater foundation cross-border
interaction within the EU and the legal and political difficulties that this proposal has
encountered. Second, and more briefly, consideration is given to the policy reasons advanced to
justify emerging, increasingly endemic government constraints on NGOs (whether foreign or
foreign-supported) active in the area of democracy promotion and rights-based advocacy.
Underlying all three case studies – development and non-development – is the common thread of
“host country ownership” and autonomy. Part IV turns to this specific concept in light of the case
studies and seeks to understand which institutions represent “the host country” and whether there
is an agreed understanding of “ownership” – its scope and its limitations. This article concludes
with a review of whether the balance of rights between country ownership and stakeholder/civil
society participation therein has been properly struck, and provides a tentative outline of some of
the possible tools open to recalibrate the balance between government and civil society power.
Judicious use of these tools requires, in the spirit of the Serenity Prayer, knowledge of all
avenues and their relationships to each other so that we might have the serenity to appreciate the
things that we cannot change, the courage to change the things we can, and the all-important
wisdom to know the difference.
II. Contextualizing the Development Aid Agenda – Identifying the Problems
The last forty years have seen dramatic changes in the traditional list of development aid
recipient countries. Between 1970 and 2010, 15 new countries joined the list of OECD/DAC
supported countries, with a further 35 leaving the aid recipient list during this period.8 This shift
can be attributed both to the improved rate of economic development and rise in country income
level (of those leaving) and to the emergence of new states in need of independent assistance
8 OECD/DAC, Development Cooperation Report 2011 (50th anniversary ed., Paris) at 225. Among those
joining the recipient list for the first time were China, Albania, Ukraine, and South Africa. Those leaving the list
during this period included Cyprus, Singapore, Qatar, Portugal, and Korea.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 49
upon the collapse of the former Soviet Union and the dismantling of the apartheid system in
South Africa.9
The last ten years have witnessed growing concerns over the effectiveness of aid and the
emergence of an international consensus that the aid system was in urgent need of reform. In the
first instance, development aid was seen to be part of the problem that it wished to resolve. A
proliferation in the number of donors to recipient countries led to a consequent fragmentation of
projects.
For recipient host countries, this proliferation gave rise to a series of related problems.
First, the large number of development actors increased transaction costs10 and administrative
and reporting burdens on the recipient country.
11
Second, the sheer number of philanthropic and development projects (as opposed to more
coherent programs) and the attendant complexity of interactions between foreign donors, local
intermediaries, government agencies, and ultimate beneficiaries gave rise to principal-agent
problems. Host country governments found it difficult to coordinate the various donors and to
fully integrate them into the broader national development plan.12 As effectiveness and
efficiency were thereby adversely affected, so, too, ultimately was host country ownership.13
Third, aid conditionality could result in the host country being primarily answerable to
the donor rather than through traditional parliamentary and budgetary processes of
accountability, thereby unintentionally weakening further the domestic political infrastructure. In
the words of Barder,
Donors can also have the perverse effect of reducing accountability by enabling line
ministries to obtain resources in the form of projects and sector funding which releases
ministers from the disciplines of the budget process. Neither the Parliament nor the
Cabinet and Finance Ministry can effectively prioritize government spending or hold
ministers to account for their performance if a substantial amount of discretionary
spending is financed outside the fiscal systems that parliaments use to control the
executive.14
9 Guido Ashoff and Stephan Klingebiel, Transformation of a Policy Area: Development Policy is in a
Systemic Crisis and Faces the Challenge of a More Complex System Environment (German Development Institute
Discussion Paper 9/2014) at 16.
10 William Easterly, “Are Aid Agencies Improving?” (2007), 52 Economic Policy 633, at 640-41; Arnab
Acharya, Ana Teresa Fuzzo de Lima, & Mick Moore, “Proliferation and fragmentation: Transactions costs and the
value of aid” (2006), 42(1) Journal of Development Studies 1.
11 See Eliott Morss, “Institutional destruction resulting from donor and project proliferation in Sub-Saharan
African countries” (1984), 12(4) World Development 465; Yutaka Arimoto and Hisaki Kono, “Foreign Aid and
Recurrent Cost: Donor Competition, Aid Proliferation, and Budget Support” (2009), 13(2) Review of Development
Economics, 276. In an effort to begin to address these issues, the OECD organised the first High Level Forum on
Aid Effectiveness in Rome in 2003. It concluded with a commitment by donor governments to harmonize practices
in view of reducing transaction costs for partner countries.
12 Easterly, n. 5, above.
13 David Booth, “Aid effectiveness: bringing country ownership (and politics) back in” (2012), 12(5)
Conflict, Security & Development, 537-558.
14 Owen Barder, Are the planned increases in aid too much of a good thing?, Centre for Global
Development, Working Paper Number 90, July 2006, at 17. See also the work of Tony Killick, “Principals, Agents
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 50
This would present a problem in any well-developed economy but is particularly acute in the
least-developed countries and lower-income countries that tend to be the traditional recipients of
such aid.15 For recipient countries that rely heavily (or exclusively) on overseas development aid,
such funding may diminish the host government’s political and economic accountability.16 These
countries share a plethora of problems characterized by an absence of working state structures
and poorly functioning or insufficiently legitimate governments. The issues faced by fragile or
failing states add further complexity to the picture, marked as they are by instability, insecurity,
deficits in government, and limited implementation capacity.
Recent moves away from measuring development aid success solely in terms of
development outputs (“bean-counting” donation amounts and the number of engagements
through projects or otherwise with a host country) to a more systematic consideration of
development outcomes achieved (such as achievement of the Millennium Development Goals)
has both highlighted the very modest set of achievements made to date while simultaneously
demonstrating the empirical difficulties of measuring effectiveness in host countries.17
In light of these acknowledged shortfalls in the development aid regime, international
efforts to reform the aid system began in earnest in early 2000, and as outlined by Ashoff and
Klingebiel,18 comprise four distinct aspects:
1) The development in 2000 of the UN’s Millennium Development Goals (“MDGs”),
representing for the first time goals as content-based yardsticks for measuring
development;19
2) The provision of resources for achieving the MDGs in the form of the UN’s 2002
Monterrey Consensus on Financing for Development and related EU measures;20
and the Failings of Conditionality” (1997), 9(4) Journal of International Development, 483-495 (finding that “
conditionality does not meet its promise of greater aid effectiveness . . . over-reliance on conditionality leads to
major misallocations of resources and large-scale waste of public monies”).
15 Dean Chahim and Aseem Prakash, “NGOization, Foreign Funding and the Nicaraguan Civil Society”
(2014), 24 Voluntas 487-513.
16 German Development Institute, n. 9 above. C.f. Almuth Scholl, “Aid effectiveness and limited
enforceable conditionality” (2009), 12 Review of Economic Dynamics 377–391.
17 OECD, Better Aid: Aid Effectiveness Survey 2011: Progress in Implementing the Paris Declaration at
15. The report, which reviews the progress made in implementing the targets set by the 2005 Paris Declaration,
reveals that at the global level, only one out of the 13 targets established for 2010 was met, however, considerable
progress had been made towards many of the remaining 12 targets.
18 Above, n. 9.
19 See https://www.un.org/millenniumgoals/. The Millennium Development Goals (MDGs) are eight
international development goals, established following the Millennium Summit of the United Nations in 2000,
following the adoption of the United Nations Millennium Declaration. All 189 United Nations member states (there
are 193 currently) and at least 23 international organizations committed to help achieve these goals by 2015.
20 See Monterrey Consensus (United Nations, 2003),
https://www.un.org/esa/ffd/monterrey/MonterreyConsensus.pdf (last accessed September 18, 2014). See also EU
Commission Communication to the Council and the European Parliament of March 5, 2004, Translating the
Monterrey Consensus into practice: the contribution by the European Union, COM (2004), 150 final; and progress
towards attaining the Millennium Development Goals – Financing for Development and Aid Effectiveness, COM
(2005), 133 final.
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3) The development and rollout of the Paris (2005), Accra (2008), and Busan (2011)
Agendas,21 which set down principles and procedures designed to ensure effective
resource deployment, thereby improving aid effectiveness;
4) The broader focus on creating greater policy coherence for international development.
A. Highways and Byways from Paris to Busan
From a legal policy perspective, the Paris Declaration, the Accra Agenda for Action, and
the Busan Partnership attempt to renegotiate the “development contract” between donor and
recipients countries in the first iteration, broadened in later instances to define “country” beyond
an individual governing regime to include a role for parliament and civil society actors. The
extent to which this latter broadening is fully accepted by all signatory stakeholders remains a
question of some debate.22
The 2005 Paris Declaration set down for the first time a framework of common principles
to govern donor and recipient country government interaction, promoting the concept of “host
country ownership.”23 The idea behind this concept is not new – relating to the old principle of
helping people to help themselves. The Paris Declaration expressed host country ownership as
one of the key commitments of the OCED DAC donor, recipient country, and international
organization signatories. Recipient governments agreed to exercise effective leadership over
their development policies and strategies and to coordinate development actions, and, in return,
donors committed to respect partner country leadership and help strengthen their capacity to
exercise it.24 The Paris Declaration, while emphasising the importance of host country
ownership, did not spell out which institutions constituted the “host country,” leaving it open to
states to define ownership very narrowly as being “host government ownership” to the exclusion
of other relevant stakeholders. Moreover, it made no reference to the role of civil society in the
delivery of effective aid.
The Accra Agenda for Action, which followed three years later in 2008 and again was
initiated and driven by the OECD DAC countries, took a stronger political line than Paris. It
highlighted the important roles that national parliaments and civil society play in host
countries,25 and it expressly called for more effective and inclusive partnerships to occur
between civil society, the private sector, and host governments.26 The Accra meeting was the
21 OECD, Paris Declaration on Aid Effectiveness (2005) and OECD, Accra Agenda for Action (2008),
available at https://www.oecd.org/dac/effectiveness/34428351.pdf; and Busan Partnership for Effective Development
Cooperation (2011), available at https://www.oecd.org/dac/effectiveness/49650173.pdf (last accessed September 18,
2014).
22 Carolyn Gibb Vogel and Mercedes Mas de Xaxás, Making Country Ownership a Reality: An NGO
Perspective,(2007), 2(3) Population Action International, available at https://populationaction.org/wpcontent/uploads/2012/01/CountryOwnership.pdf (last accessed February 3, 2015).
23 The Paris High-Level Forum on Aid Effectiveness was not the first in the series. The first High-Level
Forum took place in Rome in 2003, two years prior to the Paris forum. The Rome Forum discussions focused on
why aid was not producing the desired results and how efforts to meet the MDG targets could be improved. It
concluded with a commitment by donor governments to harmonize practices so as to reduce transaction costs for
partner countries.
24 Paris Declaration on Aid Effectiveness (2005) at [14]–[15].
25 See Accra Agenda for Action (2008) at [13]-[15].
26 Ibid. at [16].
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first high-level forum to convene a parallel conference for 325 civil society organizations from
more than 88 countries. The convening of civil society and the express recognition of its role in
the Accra Agenda represented a deliberate attempt to overcome the latter’s glaring omission
from the Paris Declaration.
B. The Emergence of Civil Society: From Advisory Groups to Open Forums
The greater visibility of civil society at Accra was no accident; it had been carefully
orchestrated in the intervening years following the Paris Declaration. It began in 2007 when a
steering group of civil society organizations (CSOs) called “the BetterAid Coordinating Group”
came together with the support of some donor governments to form a temporary multistakeholder Advisory Group on Civil Society and Aid Effectiveness (AG-CS). AG-CS provided
civil society with a formal link to the OECD and enabled discussions to be held whereby a
common understanding could be reached on the part played by civil society in the international
development system. The holding of the parallel CSO conference at Accra reflected the
achievements of the AG-CS in bringing these issues into the room, if not quite to the table,
although many civil society representatives feared that the references to civil society in the Accra
Agenda amounted merely to lip service.27
The Accra Agenda for Action (AAA) prompted the civil society community to come
together and to initiate a consensus process to define the role of civil society in international
development and specifically “to reflect on how [CSOs] can apply the Paris principles of aid
effectiveness from a CSO perspective.”28 Convening as the Open Forum for CSO Development
Effectiveness, more than 70 CSO representatives embraced this challenge in 2008 by meeting to
explore the roles played by CSOs in development and how these roles differed from those of
official development institutions and donor governments. The objectives of the Open Forum for
Development Effectiveness were threefold:
• To achieve a consensus on a set of global principles for development effectiveness;
• To develop guidelines for CSOs to implement these principles; and
• To advocate to governments for a more enabling environment for CSOs to operate.
Following a worldwide consultation process, involving thousands of CSOs in more 70
countries and two global assemblies (in Istanbul in 201029 and in Siem Reap in 2011), a
consensus was reached on the content of the Principles and a Framework for Development
Effectiveness. The Istanbul Principles, as they have become known, set out the conditions for
effective CSO participation as development actors. They focus on civil society promotion of
human rights, gender equality, people empowerment, and environmental sustainability. They
27 See Tina Wallace, “On the road to Accra, via Canada and County Kerry” (2009), 19(6) Development in
Practice 759, at 762 (noting that civil society the delegates “were reminded – gently at first but then more
persistently – by some of the donors and members of the advisory group that there was no chance of challenging or
changing the PD at Accra; politically there was very little room for manoeuvre. All that was possible was to bring
forward an amendment or two, acknowledging the role of CSOs and the need for their inclusion in future PD
work.”).
28 Accra Agenda for Action, [20].
29 Involving the participation of 170 CSO delegates from 82 countries.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 53
also commit CSOs to realizing positive sustainable change, practicing transparency and
accountability, sharing knowledge and mutual learning, and pursuing equitable partnerships.30
The International Framework for CSO Development Effectiveness, agreed at the Siem
Reap Global Assembly in Cambodia in 2011, expanded on the Istanbul Principles by explaining
the significance of each principle and elaborating on how civil society is already implementing
them. Starting from the Accra Agenda recognition that CSOs are “independent development
actors in their own right” and the commitment of AAA signatories to deepen their engagement
with them,31 the framework for CSO Development Effectiveness sought to identify the critical
conditions for enabling CSO involvement in the development of government policies and
practices. The need for an enabling environment for CSOs is captured well by the framework
agreement, which notes:
In almost all countries, CSOs, their staff and volunteers are experiencing political,
financial and institutional vulnerability, arising from the changing policies and restrictive
practices of their governments. CSOs are concerned about the impact of these restrictive
policies on democratic and legal space for CSOs. This CSO vulnerability is exemplified
in the use of pervasive anti-terrorism legislation, more restrictive government financial
and regulatory regimes and the exercise of government power to limit “political” activity
and sometimes repress CSOs and their leaders, who may be human rights defenders or
critical of government policies.32
Institutional recognition of the difficulties facing civil society came with the UN Human
Rights Council’s passing of Resolution on the rights to freedom of peaceful assembly and of
association in 2010,33 which bestowed further international recognition and legitimacy on the
role played by CSOs. This Resolution mandated the establishment of a UN Special Rapporteur to
monitor these rights with subsequent UN Resolution 21/16 emphasizing “the critical role of the
rights to freedom of peaceful assembly and of association for civil society, and recogniz[ing] that
civil society facilitates the achievement of the purposes and principles of the United Nations.”
With the holding of the Fourth High Level Forum on Development Aid in Busan, Korea
in 2011, a new milestone was reached with civil society actors participating in the negotiations as
full and equal participants for the first time. The Busan Partnership expressly affirmed the work
of the Open Forum for CSO Development Effectiveness in recognizing the vital role of these
organizations in “enabling people to claim their rights, in promoting rights-based approaches, in
shaping development policies and partnerships, and in overseeing their implementation.”34 It
30 See https://csoeffectiveness.org/IMG/pdf/final_istanbul_cso_development_effectiveness_principles_footnote_december_2010-
2.pdf (last accessed September 25, 2014).
31 See n. 28 above.
32 See n. 30 above, at 22.
33 A/HRC/RES/15/21, October 6, 2010. The Human Rights Council renewed its commitment to promote
and protect the rights to freedom of peaceful assembly and of association, by adopting resolution 21/16,
https://ap.ohchr.org/documents/dpage_e.aspx?si=A/HRC/RES/21/16 (October 2012) and resolution 24/5,
https://ap.ohchr.org/documents/dpage_e.aspx?si=A/HRC/RES/24/5 (October 2013).
34 Busan Partnership for Effective Development Co-Operation, Fourth High Level Forum on Aid
Effectiveness, Busan, Republic of Korea, 29 November-1 December 2011, at [22], available at
https://www.oecd.org/dac/effectiveness/49650173.pdf.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 54
endorsed CSO usage of both the Istanbul Principles and the International Framework for CSO
Development Effectiveness, and it called on signatories to Busan to:
implement fully our respective commitments to enable CSOs to exercise their roles as
independent development actors, with a particular focus on an enabling environment,
consistent with agreed international rights, that maximises the contributions of CSOs to
development.35
To a degree, the Busan Partnership agreement reset the stakeholder debate in more ways
than one. Civil society was joined at the negotiation table by another set of new entrants in the
form of the BRICS countries,36 enabling the reform process to be called a truly global
partnership and recognizing the changes in development partnerships beyond North-South aid to
South-South cooperation.37 Complementing this move beyond DAC donor countries, a second
change, in part spurred by the growing South-South interactions, was reflected in a language
shift in Busan away from “aid effectiveness” towards a broader platform of “development
effectiveness.”38
C. Post Busan – Current Developments
Three years on from Busan, giving full effects to the commitments agreed in the
Partnership Agreement remains difficult. Civic space continues to contract in a number of
countries – not just in authoritarian and semi-authoritarian states but also more worryingly in
nations held out as more normally adhering to the principles of democracy.39 Most recently, the
UN Human Rights Council adopted by consensus a resolution on civil society, tabled by Ireland,
which enjoyed the support of more than 66 cosponsors.40 Drawing on existing principles of
international law, the Resolution highlighted crucial points of principle regarding the workings
of civil society, restating that:
• The ability of people to collectively solicit, receive and utilise resources is a key
component of the right of freedom of association;41
• National security and counter-terrorism legislation and provisions on funding should not
be abused to hinder the work or safety of civil society;42
35 Ibid.
36 Brazil, Russia, India, China, and South Africa.
37 This change is further evidenced by the replacement of the OECD/DAC secretariat, the Working Party
for Aid Effectiveness (“WP-EFF” which oversaw Paris and Accra), with the Global Partnership for Effective
Development Cooperation in 2012, the steering committee of which has one OECD and one civil society
representative, and is charged with overseeing the Busan Partnership deliverables.
38 Busan Partnership, [28]–[29]. On the difference between “aid effectiveness” and “development
effectiveness” see Shannon Kindornay and Bill Morton, “Development Effectiveness: Towards New
Understandings” in Issues Brief (North-South Institute, September 2009).
39 See Douglas Rutzen, “Aid Barriers and the Rise of Philanthropic Protectionism,” in this issue; and
Barbara L. Ibrahim, “States, Public Space and Cross-Border Philanthropy: Observations from within the Arab
Transitions,” presented at Conference on Regulation or Repression: Government Policing of Cross-Border Charity,
National Center on Philanthropy and the Law, New York University, October 23-24, 2014.
40 UN Human Rights Council, Resolution on Civil Society Space, A/HRC/27/L.24 (September 23, 2014).
41 A/HRC/27/L.24 at 10.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 55
• Civil society space is particularly important for minorities, the marginalised and other
disadvantaged groups as well as those espousing minority or dissenting views or
beliefs;43
• The real and effective participation of people in decision-making processes should be
secured, including at the domestic level in the development, implementation or review of
legislation, but also at the regional and international levels.44
Ten countries proposed ultimately unsuccessful amendments to the initial Irish draft
which would have seriously weakened the Resolution had they been adopted. Included among
those ten were India and South Africa.45 In light of this, India chose to disassociate itself from
the Consensus Resolution on September 26. Pinning its objections to the very issue of host
country ownership and autonomy, the Indian explanation of its position before the vote declared
that:
Civil society must operate within national laws. To treat national laws with
condescension is not the best way to protect human rights, even by civil society with the
best of intentions. We wish that caution should be exercised in advocacy of the causes of
civil society. The Resolution is unduly prescriptive on what domestic legislation should
do and should not do. This is the prerogative of the citizens of those countries.46
Accusing the Resolution of “fallaciously seek[ing] to make civil society a subject of
law,”47 the Indian Statement went on to expressly dissociate India from the paragraphs of the
Resolution concerning the valuable role played by civil society in the decision-making process
regarding legislation; the need to ensure a legally enabling environment for civil society; the
right for CSOs to solicit, receive, and utilize funds; the work of the office of the UN High
Commissioner for Human Right in the promotion and protection of civil society space; and the
right of civil society to unhindered access to regional and international bodies, including the UN.
The Indian perspective on civil society sits in stark contrast to the views expressed in the
U.S. Presidential Memorandum to the heads of U.S. government executive departments and
agencies, issued on the same day as the UN HRC Consensus Resolution. The memorandum,
expressly acknowledging the participation of civil society as fundamental to democracy, directed
U.S. agencies engaged abroad to “take actions that elevate and strengthen the role of civil
society; challenge undue restrictions on civil society and foster constructive engagement between
governments and civil society.”48
42 A/HRC/27/L.24, Preamble.
43 A/HRC/27/L.24 at 4.
44 A/HRC/27/L.24 at 8, 12 and 13.
45 The other states that proposed constraining amendments were Bahrain, China, Cuba, Egypt, Russia, the
United Arab Emirates, and Venezuela.
46 Permanent Mission of India, Geneva, Agenda Item 3: Resolution on Civil Society Space, Statement by
India in explanation of vote before the vote (27th Session of the Human Rights Council, September 26, 2014).
47 Ibid., at [2].
48 Office of the Press Secretary, Presidential Memorandum: Deepening US Government Efforts to
Collaborate with and Strengthen Civil Society (The White House, September 23, 2014).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 56
Making sense of these very different attitudes toward the role of civil society in
development, the civic space accorded to such entities, and the scope of those rights guaranteed
requires a look at the larger policy picture beyond the minutiae of regulation. To appreciate the
bigger picture, it is therefore useful to shift the lens of inquiry away from the development
sphere and to look instead at the non-development arena in the context of, first, the role of
foundations in the European Union, and, second, the role of foundations in opening democratic
spaces outside of the international development law field.
III. The Non-Development Arena: Squaring the Circle
The pushback against civil society autonomy and the space in which it operates extends
far beyond the realm of development aid and is not limited to authoritarian regimes. Part III
seeks to explore the policy drivers behind current trends toward disenabling civil society by
examining, on the one hand, intentional pushback, and on the other, the apparently innocuous
restrictions promoted in the name of good regulation and governance that have a
disproportionately adverse effect on cross-border philanthropy.
A. The Proposal for a European Foundation Statute: Righting Unintentional Wrongs?
According to a 2009 European Commission Feasibility Study on a European Foundation
Statute (EFS), an astonishingly high percentage of foundations based in the EU (in the region of
67 percent) engage in international activities.49 Although doubts remain over the empirical
reliability of the data,50 the general trend towards increasing cross-border activities of national
foundations in Europe is indisputable. With approximately 110,000 foundations in Europe
holding assets in excess of €1,000bn and an approximate annual expenditure in the region of
€153bn,51 it has been estimated that the economic importance of the sector outstrips that of the
U.S. foundation sector.52 Notwithstanding its scale, foundations wishing to operate in more than
one European Member State have faced legal and regulatory difficulties when it comes to
establishment, registration, and operation from both a civil law and a tax law perspective. Apart
from adversely affecting philanthropic activity, the associated legal costs of these legal barriers
to foundations are substantial and estimated to cost foundations between €101m and €178m per
annum.53
Consequently, foundations face structural obstacles when they seek to operate on a crossborder basis across the EU. These obstacles take the form of differing legal and fiscal regimes
that operate in each of the EU’s Member States, with which foundations must comply if
established in any of these States.54 Imagine, for instance, a donor who wishes to establish a panEuropean foundation enjoying charitable tax-exempt status in the EU Member States of Ireland,
49 University of Heidelberg, Centre for Social Investment, Feasibility Study on a European Foundation
Statute – Final Report (2009) at 149 available at
https://ec.europa.eu/internal_market/company/docs/eufoundation/feasibilitystudy_en.pdf (last accessed March 11,
2013), hereinafter “Feasibility Study”.
50 Ibid., at 150–2.
51 Ibid., at 18.
52 Ibid., at 2.
53 Ibid., at 178.
54 Information for this comparison is drawn primarily from the European Foundation Centre, Foundations’
Legal and Fiscal Environments — Mapping the European Union of 27 (2007).
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France, Germany, and Malta.55 To establish the organization, French law requires both
registration and State approval, and approval is subject in practice (although not in law) to a
minimum capital requirement of €1 million. Germany also requires registration and State
approval, but the State enjoys no discretion regarding approval; although there is no official
minimum capital requirement for establishment, the foundation must have sufficient assets to
carry out its purpose, which generally requires a minimum capital requirement of €50,000.
Ireland requires registration with the Revenue Commissioners and the Charities Regulatory
Authority, with no minimum capital requirement. An organization in Malta must register and, if
it wishes to take the form of a “voluntary organization,” must seek State approval. There are de
minimis Maltese minimum capital requirements, with the prescribed amount being €240 for
social purpose foundations and €1,200 for all others.
Once an organization is established, it faces a variety of governance requirements. Ireland
alone requires that a majority of the governing board reside within the jurisdiction. French law
requires all foundations to appoint an auditor and a substitute and to file annual returns and
financial statements with administrative authorities. These reports must be made publicly
available only if the foundation receives annual gifts in excess of €153,000 or support from
public authorities. By contrast, German law does not have any publication requirement, although
if tax exemption is sought, dual filing is required both to State authorities and to the relevant
financial authorities. Irish law requires all charities with an annual income of over €100,000 to
prepare audited accounts, and until 2014, it imposed a public filing requirement only on
incorporated charities.56
Concerted efforts by a number of stakeholders in the EU over the past decade have made
headway in dismantling existing obstacles to free movement of philanthropy.57 The European
Court of Justice’s growing jurisprudence has affirmed that the right of free movement of capital
extends to non-profit entities.58 The Court, spurred on by an active European Commission, has
also prohibited tax discrimination between charities based on whether the donor/recipient is
55 These four States are chosen simply to illustrate existing national regulatory divergences — a
combination of other Member States might not provide the same logistical difficulties but would provide others.
Thus as Dube, Rossi & Surmatz point out in EFFECT 13 (Summer, 2007), “While you need at least 3,000 Euros to
start a foundation in Copenhagen, Denmark, just a short drive across the Oresund Bridge in Malmö, Sweden, there is
no such fixed requirement, although your assets should be adequate to pursue your planned purpose for five years.
And if you set up a foundation in Cieszyn, Poland, you can run a business activity to generate income for it, but you
can’t do so if you set one up just across the Friendship Bridge in Tešin, Czech Republic.”
56 Revised reporting requirements are currently being introduced in Ireland as a result of the newly
commenced Charities Act 2009. The more stringent reporting requirements are expected to come into effect in late
2015.
57 The EU is founded upon a series of fundamental freedoms laid down in the Treaty of Rome, namely free
movement of workers, free movement of goods, free movement of capital and freedom of establishment, thereby
creating a common market between European Member States in which goods, services, and people flow freely,
uninhibited by country barriers. The term “free movement of philanthropy” is used in this vein to express the
aspiration of inter-state free movement of charitable donations and activities unencumbered by legal or taxation
barriers.
58 See Case C-386/04, Centro di Musicologia Walter Stauffer v. Finanzamt München für Körperschaften,
[2006] ECR I-8203.
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domestic or foreign-based.59 As a result of Commission infringement actions since 2005, 28
cases have been successfully closed due to changes in Member State legislation, eliminating
discriminatory tax treatment.60 Private initiatives, in the form of the Transnational Giving Europe
(TGE) Network, have also sought to assist donors in making tax-efficient charitable donations to
foreign charities. Established in 1999 and covering 17 European countries, the TGE network
assisted more than 6,800 donors to channel €8.5 million to chosen charities across Europe in
2013.61 Notwithstanding all of these initiatives, foundations across Europe have long called for
the creation of a supranational legal form for public benefit foundations to enable them to
operate seamlessly throughout the European Union.62
In February 2012, the European Commission published its proposal for a Council
Regulation for the EFS63 which, if adopted, would establish a new European legal structure for
certain public benefit organizations. Use of this new European form would enable foundations
and other incorporated public benefit organizations (but not charitable trusts) to operate
uniformly across EU Member States in a recognizable form, thereby dispensing with separate
national legal and administrative establishment requirements and barriers to operation. The
proposal for the Statute faced innumerable legal and political difficulties. To take effect, the
Statute required the unanimous consent of all 28 Member State governments – a feat that the
consecutive Irish, Greek, Lithuanian and Italian Presidencies of the European Council ultimately
failed to bring about.
So, what made this proposal, concerning as it does a scheme to enable public benefit
purposes to be advanced more freely across the EU, so controversial? Or to put the question
another way, if it was generally agreed that the introduction of a European Foundation Statute
would make philanthropy more effective in the EU, freeing up resources currently spent
surmounting legal and fiscal obstacles so that they could be dedicated to achieving public benefit
purposes instead, how could Member State objections to its introduction be justified?
59 Case C-318/07 Hein Persche v. Finanzamt Lüdenscheid, [2009] ECR I-359; Case C-25/10 Missionswerk
Werner Heukelbach v. Belgium, [2011] 2 C.M.L.R. 35; Case C-10/10 Re Taxation of Gifts to Research and
Teaching Institutions: European Commission v. Austria, [2011] 3 C.M.L.R. 26.
60 See European Foundation Centre and the Transnational Giving Europe network, Taxation of crossborder philanthropy in Europe after Persche and Stauffer – From landlock to free movement? (2014), at [3.1],
available at https://www.efc.be/programmes_services/resources/Documents/TGE-web.pdf; see also F. Liberatore
(2012), “Tax Aspects of the Commission’s Proposal for a European Foundation Statute,” presented at ERA, A New
Legal Form for European Philanthropy: The Commission’s Proposal for a European Foundation (FE) Statute,
Brussels, October 30–31.
61 See EFC and TGE, n. 60, above. See also
https://www.transnationalgiving.eu/tge/default.aspx?id=219948&langtype=1033 (last accessed January 30, 15).
62 See European Commission, DG for Internal Market and Services, Report on Consultation and Hearing
on Future Priorities for the Action Plan on Modernising Company Law and Enhancing Corporate Governance in
the European Union (2006) at 26, available at
https://ec.europa.eu/internal_market/company/docs/consultation/final_report_en.pdf;European Foundation Centre
18th Annual General Assembly (AGA) and Conference, Why is a European statute for foundations needed?,
Madrid, June 1-3, 2007; University of Heidelberg, Feasibility Study (2009), supra n. 49; European Foundation
Centre, It’s Time for a European Statute (2012a), available at
https://www.efc.be/programmes_services/resources/Documents/EFS_brochure_2012_FINAL.pdf (last accessed
March 21, 2013).
63 Proposal for a Council Regulation on the Statute for a European Foundation (FE), COM(2012) 35 final.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 59
Comprising 28 Member States of both common law and civil law legal systems, the EU’s
lack of a harmonized approach to charitable giving and the absence of a shared definition or
indeed common understanding of “charitable purpose” or “public benefit” should not, perhaps,
be surprising.64 In many cases, the regulation of charitable foundations in a Member State is
closely linked to valuable tax exemptions and deductions such that the right to claim this status is
tightly regulated. Tax law is an area in which Member States have retained their sovereignty and
so it follows that Member States are anxious to keep a firm control over which organizations can
claim either tax-exempt status or tax rebate privileges. Traditionally, tax exemptions on
charitable donations were reserved solely for donations to domestic charities. The European
Court of Justice, however, in a series of judgments has ruled that when it comes to charitable tax
exemptions or tax reliefs, a member state must treat EU charities – whether established
domestically or established in another Member State but operating in that jurisdiction –
equivalently. In other words, it cannot discriminate against a foreign charity (and I use this term
narrowly to mean a charity coming from another EU Member State) for tax purposes if that
charity is equivalent to the national charity in all other respects other than the place of its
establishment.
As initially proposed, the European Foundation Statute would have provided for a new
legal vehicle – a European Foundation (FE) – that could be established in any one Member State
and be active in any other Member State, in line with the requirements of the EFS, without any
further national formalities being required. In the initial Commission draft, the FE would have
enjoyed, without any further proof being necessary, the same tax advantages bestowed on
domestic charities in those host Member States in which it carried out its activities by virtue of
its formation as an FE.65 The proposed statute also allowed for the de novo creation of FEs and
for the conversion of existing national foundations into FEs provided that certain requirements
were met.66
Although enjoying the support of the European Parliament, the European Committee of
the Regions, and the European Economic and Social Council, the proposed statute met with
opposition in the European Council, which began its scrutiny in 2012. For many Member States
the automatic entitlement to tax relief by virtue of formation of an FE was a step too far.
Taxation policy remains a matter within the competence of national member states and not an
area in which the EU enjoys federal competence. The matter was complicated by the scope of the
EFS’s definition of what constituted a “public benefit purpose.”67 Representing the first attempt
ever to define what constitutes public benefit activity at the European level, the scope of this
definition proved to be an issue of extreme political sensitivity from the outset. When the
rewards for qualifying as an FE under the EFS are borne in mind – automatic tax equivalency for
tax exemption purposes with domestic public benefit entities – it is no wonder that this perceived
backdoor to national charitable tax exemption was the subject of such scrutiny.
64 For an informative discussion of the differing approaches of common law and civil law jurisdictions to
the categorization of non-profit organizations, see ECNL Study on Recent Public and Self-regulatory Initiatives
Improving Transparency and Accountability of Non-profit Organisations in the European Union (2009) at 123-125.
65 European Commission, Proposal for a Council Regulation on the Statute for a European Foundation
(FE), COM(2012) 35 final (Brussels, February 8, 2012).
66 Ibid., Article 12.
67 Ibid., Article 5.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 60
The list of public benefit purposes in Article 5 of the EFS caused much concern in this
regard given that in some instances it was both wider and narrower than existing national
definitions.68 Thus, on the one hand, the European definition included reference to the promotion
of amateur sports, civil rights, and human rights, matters that were deliberately excluded from
the Irish definition of charitable purpose. On the other hand, to garner the support of certain
secular civil law states, the European definition excluded the advancement of religion as a public
benefit purpose, a decision that did not sit well with the common law Member States (which
recognize advancement of religion as charitable) or indeed with religious foundations operating
in civil law jurisdictions. Moreover, the use of the wording “public benefit purpose” caused angst
for the common law member states, which operate a two-stage test for charitable status under
which an entity must both have a charitable purpose (akin to those listed in Article 5) and
demonstrate sufficient public benefit (an entirely separate concept that looks to the emotional
and obligational distance between the donor and donee and seeks to measure the negligibility of
any related private benefit and the size of the benefitting class). The confusion caused by the
truncated European public benefit definition approach made it particularly difficult for common
law countries to see their way through to its ratification.
The widespread Member State discomfort with the proposed tax provisions ultimately
resulted in the Lithuanian Presidency of the European Council agreeing to drop universal tax
exemption entirely from the proposal in 2013. Without the tax albatross, one might have
assumed that promulgation of the EFS would have been fairly plain sailing, but this turned out
not to be the case. Host country ownership issues once more came to the fore with Member
States experiencing difficulty agreeing on principles relating to minimum capital and formation
requirements, and supervision of the new entity that differed from the current practice in their
own home jurisdictions. A last-ditch attempt to salvage a compromise proposal by the Italian EU
Presidency proved unsuccessful in November 2014, with some Member States rejecting entirely
the principle of an EFS initiative while others were unhappy with the proposed compromise
text.69 In the face of such host country opposition, the European Commission decided to
withdraw the EFS proposal from its legislative agenda in December 2014.70
The journey of the EFS proposal is informative if we reflect upon the issues it raises for
us in the broader theme of enhancing policy effectiveness and efficiency in the context of crossborder philanthropy. Here is an idea, which at its heart, sets out to tackle administrative, fiscal,
and legal difficulties that national foundations experience when they wish to work internationally
within the context of the EU’s common market. Provision of a new European legal structure for
philanthropic cross-border purposes availing of universally recognized and coherent formation
requirements that can operate effectively in any Member State would seem to be a positive
development. And yet, even in its slimmed-down form (minus the up-front tax recognition that
68 See Oonagh B. Breen, “The European Foundation Statute Proposal: Striking the Balance between
Supervising and Supporting European Philanthropy?” (2013) 5(1) Nonprofit Policy Forum, 5-43.
69 Gail Moss, “European Foundation Statute suffers setback,” Investments & Pensions Europe (November
28, 2014), available at https://www.ipe.com/news/regulation/european-foundation-statute-sufferssetback/10005189.fullarticle (last accessed January 29, 2015).
70 European Foundation Centre Press Release, “European Commission halts negotiations on the European
Foundation Statute – What’s next?” (December 16, 2014).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 61
would have made it exceptionally appealing to foundations), the viability of the proposed
Statute’s hung in the balance71 before falling off the legislative agenda entirely.
Understanding the politics of the EFS provides a useful insight into the concept of hostcountry ownership principles in action in first-world states. Notwithstanding the broader societal
benefits that might flow from the passage of the EFS, national priorities influenced each Member
State’s support or lack thereof for the proposal. Foundations throughout the EU, many of which
are members of the European Foundation Centre, consistently lobbied Member State
governments in seeking their support for the Statute.72 Introduction of the EFS would have
required Member States to make a national agency responsible for the oversight and registration
of these European entities formed in their jurisdiction. As the recognized supervisory authority,
that national agency would bear responsibilities, if called upon by a neighbor state in which the
FE was active, to investigate its activities and ensure its compliance with the foundation’s own
statutes, the FE statute and any other relevant governing law. At a time when the budgets of
many state agencies are shrinking, the capacity-building required to take on additional
monitoring responsibilities for a new European legal structure proved to be far from enticing.73
Moreover, the proposed definition of “public benefit purpose entity” in the EFS would
have excluded both charitable trusts and charitable companies (whether limited by guarantee or
in the new CIO form) from becoming FEs. As originally drafted, Article 2(5) defined a publicbenefit-purpose entity as “a foundation with a public benefit purpose and/or similar public
benefit purpose corporate body without membership formed in accordance with the law of one of
the Member States.” The requirement of incorporation precluded charitable trusts from enjoying
the benefits of the statute, whereas the insistence upon absence of members prevented charitable
companies from constituting a public-benefit-purpose entity. With limited public budgets, there
was little incentive for Member States with few foundations to expend time or money on an area
71 It is notable that no mention was made of the need to progress on the European Foundation Statute in the
priority list of the Italian Presidency of the European Council. See “Italian Presidency Priorities Discussed by EP
committees” (2014 0722 IPR53208), available at https://www.europarl.europa.eu/news/en/newsroom/content/20140722IPR53208/pdf. By contrast in its full program for the Italian Presidency, the EFS merited a
fleeting reference to the effect that “the Italian Presidency will pursue a thorough examination of the recently
adopted Proposal for a Directive on single-member private limited liability companies, and will follow up on the
work carried out by the Greek Presidency on the Regulation on the Statute of the European foundation” (emphasis
added), in Europe – A Fresh Start: Programme of the Italian Presidency of the Council of the European Union at 50
(available at https://italia2014.eu/en/presidency-and-eu/programme-and-priorities/programme-of-the-italianpresidency-of-the-council-of-the-european-union/).
72 See Gerry Salole, “Why is the European Foundation Statute Needed?” (2008), 11(1) International
Journal for Not-for-Profit Law 75, available at https://www.icnl.org/research/journal/vol11iss1/special_5.htm;
European Foundation Centre, Let’s Move the European Foundation Statute Forward (June 2012); EFC, It’s time for
a European Foundation Statute (2012), available at
https://www.efc.be/programmes_services/resources/Documents/EFS_brochure_2012_FINAL.pdf (last accessed
October 3, 2014); EFC, Philanthropy sector urges Governments to adopt the European Foundation Statute
(November 19, 2013) available at
https://www.efc.be/programmes_services/resources/Documents/EFSappeal_November2013.pdf
73 In this regard, the Charity Commission for England and Wales, the likely statutory agency in the UK that
would be assigned the task of overseeing the FE, has seen a budget cut of almost 50 percent in real terms since
2007-2008, when it received a settlement of £32.6m from the British government.
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not viewed as a political priority.74 Acceptance of the regulation, which would have been directly
applicable in all Member States, would have required states to host and facilitate FEs with all the
associated administrative costs of so doing (in terms of registration, supervision, and reporting),
in a situation in which common-law domestic charities (in the forms of trusts and companies)
would have been precluded from using the structure to further their philanthropic efforts abroad.
Given that the Treaty basis for the EFS regulation is Article 352 TFEU, which requires Member
State unanimity for the EFS to pass, it took only one uninterested or disengaged (as opposed to
even hostile) Member State to veto the proposal.75
In a nutshell, the difficulties encountered in the unsuccessful negotiation of the EFS
reveal the delicacies of host-country ownership as a controlling concept. Each Member State has
developed its own internally consistent way to regulate charitable foundations. Those rules,
informed by the distinct culture and legal system of each Member State, differ from one another.
From a foundational perspective, these variances in reporting and registration procedures are
cumbersome, costly, and unnecessary. From a Member State perspective, the rationality of the
variance or whether the underlying raison d’être can be achieved in a less administratively
burdensome way matter less than the fact that each Member State individually controls the
political process by which foundations are formed at present, but this control would be diluted if
the EFS were to enter into force.
B. Forging Democracy in a Shrinking Civic Space: The Legal Repression of CSOs
In 2014, the Carnegie Endowment for International Peace published an influential report,
Closing Space: Democracy and Human Rights Support Under Fire,
76 that sought to analyze
current trends in governmental restrictions on civil society, as well as to identify the causes for
such pushback and the underlying shifts in international politics fuelling this movement, before
considering the responses of affected organizations, their relative success to date, and the need
for a more coordinated coherent international response to these worrying developments. This
report was not the first to highlight the shrinking legal space for civil society77 but it does
provide a thoughtful reflection on the broader political explanations for the current hostilities.
74 In 1999, Ireland’s foundation sector was rated by the European Foundation Centre to be the smallest in
Europe, with just 0.7 grant-making foundations per 100,000 inhabitants. While the Celtic Tiger fuelled the growth of
the sector by 257 percent, Ireland still lags behind the European average of 20 foundations per 100,000 inhabitants.
See further Oonagh B. Breen, “In Search of Terra Firma: The Unpacking of Charitable Foundations in Ireland,” in
Chiara Prele (ed.), Developments in Foundation Law in Europe (Springer Publications, 2014). Equally, speaking
under Chatham House Rules at a conference on the European Foundation Statute at the Office of the Attorney
General for Northern Ireland, on February 14, 2014, an informed source made the point that British foundations had
not been strongly lobbying Westminster in favor of the introduction of the EFS.
75 In the end, there were far more than one: the UK, the Netherlands, Denmark, Austria, and Slovakia all
rejected the principle of the EFS initiative.
76 Thomas Carothers & Saskia Brechenmacher, Closing Space: Democracy and Human Rights Support
Under Fire (Carnegie Endowment for International Peace, 2014).
77 See, for instance, the individual reviews of 48 countries in the International Center for Not-for-Profit
Law (ICNL) NGO Law Monitor series, available at https://www.icnl.org/research/monitor/ (last accessed October 5,
2014); ICNL & World Movement for Democracy Secretariat at the National Endowment for Democracy, Defending
Civil Society Report (2nd ed., June 2012); ICNL, “Barred from the Debate: Restrictions on NGO Public Policy
Activities,” in Global Trends in NGO Law (2009); ICNL, “Wave of Constraint: Recent Developments in Venezuela,
Ecuador, Honduras, Iran, Bahrain, and Cambodia,” in Global Trends in NGO Law (2010).
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The global reach of the current political and legal pushback against CSOs transcends the
usual suspects of authoritarian and semi-authoritarian78 regimes, although the latter remain
responsible for the introduction of the vast majority of new restrictions. The nature of the civic
space available in semi-authoritarian regimes such as Venezuela, Cambodia, Azerbaijan, and
Ethiopia is always tentative in nature – being a reluctantly conceded and bounded space that is
liable to contract if government perceives any significant challenge to its political hold.79
Authoritarian regimes such as Uzbekistan, the United Arab Emirates, Zimbabwe, and Belarus, by
contrast, already severely restrict NGO freedom to engage in democratic rights programs within
their territories, leaving little room for additional pressure other than to further restrict external
funding.80 More worrying still, many commentators note the growing tendency of relatively
democratic governments to engage in similar restrictive sanctioning of NGOs’ freedom of
association.81
1. The Scope of Existing Restrictions
The authors of Closing Space identify many of the legal restrictions that have been the
subject of discussion. Noting the reality that many countries that had previously allowed or even
welcomed democracy and rights support activities inside their borders are now working to stop
them, reference is made to the many measures to block external support for civil society through
funding restrictions, the increased level of vilification and harassment of foreign-funded NGOs,
and the creation of political climates in which foreign-funded civil society is viewed with
suspicion, subject to intimidation in carrying out its activities, and publicly delegitimized.
The number of national governments imposing restrictions on foreign funding of NGOs
has increased exponentially over the past decade. In a CIVICUS survey of civil society
organizations in 33 countries in 2011, 87 percent identified national or internal factors
constraining funding.82 More recent research has found that out of 98 countries for which
comprehensive data was available, 39 countries now restrict foreign funding of NGOs and a
further 12 countries prohibit it.83 Examples cited in the Closing Space Report range from the
78 Defined in Closing Space Report, n.76 above, at 6, as “a regime that attempts a continual balancing act
between maintaining sufficient control over the political process to secure an indefinite hold on power while
allowing enough pluralism and openness to preserve at least some international political legitimacy.”
79 Ibid.
80 Since 2004, Uzbekistan has required all foreign assistance of NGOs to be transmitted through one of two
government-controlled banks and to be subject to additional government scrutiny. This regulation has enabled the
Uzbek government to obstruct the transfer of more than 80 percent of foreign grants to local NGOs. See David
Moore, “Civil Society Under Threat: Common Legal Barriers and Potential Responses,” Briefing Paper (DG for
External Policy Affairs, European Parliament, Brussels, September 2006), at 8. Available at
https://www.europarl.europa.eu/meetdocs/2004_2009/documents/dv/civil_society_under_threat_/civil_society_under
_threat_en.pdf (last accessed October 5, 2014).
81 See Closing Space Report, above n. 76, at 7 referring to Bangladesh, Ecuador, Honduras, India, Kenya
Nicaragua, and Peru as all taking steps to limit external resources and support for civil society organizations,
labelling such assistance as “foreign political meddling.” See also Moore, above n. 80, at 8, noting Latvian proposals
to ban NGOs that receive foreign financing from participating in the political process or from receiving state
financing for any research that could influence the choices of the electorate.
82 Cited in Closing Space, above n. 76, at 7.
83 Darin Christensen and Jeremy Weinstein, “Defunding Dissent: Restrictions on Aid to NGOs” (April
2013), 24(2) Journal of Democracy 77-91.
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Ethiopian Charities and Societies Proclamation 2009, which defines any NGO that receives more
than 10 percent of its funding from a foreign source as a “foreign charity” and prohibits such
bodies from implementing politically related activities or those related to human rights or rules
of law; Algeria’s Law on Associations 2012, which precludes Algerian NGOs from receiving
foreign funding outside of “official cooperation relationships,” a term left undefined by the Act;
and India’s revised Foreign Contribution (Regulation) Act 2010, which prohibits foreign funding
for “any organisations of a political nature” as defined by central government.84
The restrictions go beyond funding. The governmental use of tax laws, registration laws,
auditing, and reporting regulatory procedures are increasingly used to harass and stymie NGOs
in receipt of foreign funding. Examples of such restrictions in action abound in Russia,85 Egypt,
and Uzbekistan.86
2. The Drivers of Civic Space Constraint
What has triggered such endemic governmental hostility towards CSO activity in the
sphere of democracy promotion and rights-based programs across such a broad range of political
regimes? What are the underlying causes? Can they be classified as transitory hiccups in the
evolution of new(er) nation states, perhaps attributable to personality clashes? Or should such
developments be categorized as more deeply seated political problems that give rise not to a
short-lived hiatus in the creation of civic space but rather to an ongoing, chronic political
condition?
The Closing Space report provides valuable insights into the underlying causes for the
rights retrenchment experienced by civil society organizations over the past decade. The 1990s
ushered in the end of the Cold War and a rapid expansion in democracy and rights support, a
phenomenon that was not lost on aid providers who began funding NGOs rather than
government in aid-recipient countries in the name of civil society development. Recipient postcommunist and developing countries tolerated this more politically focused aid for two reasons:
first, many of them were attempting to transition from authoritarian rule; and second, the
provision of aid to such scattered, small-scale NGO initiatives often appeared to lack significant
organizational weight or coherence, with the result that recipient governments did not take
84 According to the Closing Space Report, above n. 76, at 9, the Act has resulted in the revocation of
foreign funding permission from more than 4,000 small NGOs since its introduction. Ironically, India’s revision of
the Foreign Contributions Act was in response to an FATF finding that India was non-compliant with then Special
Recommendation VIII of the FATF. According to Hayes, U.S. Treasury officials welcomed the Act’s 2010 reform
as “an excellent example to other countries in South Asia region.” See Ben Hayes, “How International Rules on
Countering the Financing of Terrorism Impact Civil Society,” in State of Civil Society 2013: Creating an Enabling
Environment, 120 (CIVICUS, 2013), available at https://socs.civicus.org/wpcontent/uploads/2013/04/2013StateofCivilSocietyReport_full.pdf.
85 The Russian Federation Law on Introducing Amendments to Certain Legislative Acts of the Russian
Federation (the 2006 Russian Non-Commercial Organizations Law) introduced burdensome and difficult-to-meet
reporting requirements for NCOs, accompanied by severe penalties for non-compliance; new and similarly
burdensome registration procedures for Russian and foreign NCOs operating in Russia; and new broad powers for
the registration bodies to audit the activities of NCOs. President Putin took these measures further in 2012 and 2014,
legislating to increase the extent of the restrictions that can be imposed. The law requires all NCOs to register in the
registry of NCOs, which is maintained by the Ministry of Justice, before receiving funding from any foreign sources
if they intend to conduct political activities. Such NCOs are called “NCOs carrying functions of a foreign agent.”
86 See n. 80, above.
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democracy and rights-support aid seriously. As Carothers and Brechenmacher put it, “resistance
to international support for democracy and rights seemed out of synch with the prevailing global
zeitgeist.”87 With the fall of the Berlin Wall and disintegration of geopolitical superpowers,
cross-border political interventionism in the developing world could no longer be automatically
labelled as political manipulation.88
With the turn of the 21st century, “democratic recession” set in,89 leaving many former
authoritarian regimes that were transitioning to democracy in the 1990s in a hybrid state of
partial democratization. Into this political void, the Western-coordinated overthrow of Serbia’s
Slobodan Milosevic and the success of the Color Revolutions in Georgia, the Ukraine, and
Kyrgyzstan90 led many power-holders in post-Soviet countries to question whether the
innocuous agenda of democracy promotion was actually more closely related to invidious,
Western-imposed attempts at regime change. The legitimacy of democracy assistance to civil
society in developing countries was thus called into question and gained “the (inflated)
reputation of being almost uncannily effective at helping civic and political opposition forces
mobilize against undemocratic regimes.”91 Added to these factors were the growing concerns
over development aid effectiveness and the new emphasis on host country ownership as a means
to achieve better local development outcomes through greater recipient country control, an
opening that encouraged some regimes to repress civil society under the banner of ensuring
greater accountability and aid effectiveness. The emergence of social media and the ability of
individuals (as well as CSOs) to share their grievances with the broader world in an uncensored
and immediate fashion has also caused great unease among semi- and fully authoritarian
regimes, giving rise to government fears of NGO-western government conspiracy theories
(which in themselves are seen as justification for limiting foreign funding or influence). Social
media also create new fears of the extreme vulnerability of what before were viewed as the
impenetrable powers of the governing elite by the uncontrollable and unpredictable power of the
citizenry, as evidenced during the Arab Spring.
IV. The Concept of Host Country Ownership
The concept of host country ownership – whether arising in the development or nondevelopment arena, and whether defined narrowly to refer simply to “government or regime
ownership” or more broadly to include stakeholder ownership of parliamentarians, civil society,
and the private sector – is a central concept. Host country ownership envisages a state being
responsible for its own policy direction and acting autonomously in its achievement. The flipside
of “the country ownership” coin, however, is the assumption that a state has engaged in the
necessary capacity building (whether political, organizational, or structural) to enable it to
exercise this leadership role in a responsible, sustainable, and effective manner.92
87 Closing Space Report, n. 76 above, at 22.
88 Ibid., at 23.
89 Larry Diamond, “The Democratic Rollback: The Resurgence of the Predatory State,” Foreign Affairs
(March/April 2008); Diamond, “Democracy’s Deepening Recession” Atlantic (May 2, 2014).
90 Georgia’s Rose Revolution occurred in 2003, followed by Ukraine’s Orange Revolution in 2004 and
Kyrgyzstan’s Pink (or Tulip) Revolution in 2005.
91 Closing Space Report, n. 76 above, at 25.
92 Jessica Goldberg and Malcolm Bryant, “Country ownership and capacity building: the next buzzwords in
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In the development context, the term came to the fore in the 2005 Paris Declaration on
Aid Effectiveness. Countries, territories, and international organizations adhering to the
Declaration agreed that partner countries would commit to exercise effective leadership over
their development policies and strategies, and to coordinate development actions, while donors
would commit to respect such country leadership and to help strengthen their capacity to exercise
it.93 The movement away from donor-driven aid relief was seen as part of the solution to the
“failed aid” crisis in international development. If aid were now to be viewed as only one part of
the development solution, its purpose would have to lead to recipient country self-sustainability
rather than long-term over-reliance. This result, it was felt, was more likely to be achieved if the
recipient country bought into its own development future and played a role in its attainment.
By loosening the bonds on the ownership of aid/development, the hope was that such aid
would thus have a “crowding in” as opposed to a “crowding out” effect on other resources that
might assist a state. The international support for a shift from donor-country-driven to recipientcountry-driven development remains visible in both the Accra Agenda and the Busan Partnership
Agreements. In prioritizing the importance of host-country ownership, the AAA declared:
Country ownership is key. Developing country governments will take stronger leadership
of their own development policies, and will engage with their parliaments and citizens in
shaping those policies. Donors will support them by respecting countries’ priorities,
investing in their human resources and institutions, making greater use of their systems to
deliver aid, and increasing the predictability of aid flows.94
Thus, ownership of development was not to be the sole prerogative of the executive, a view
further specifically elaborated upon in the Busan Partnership Agreement in relation to the roles
of parliament and local government95 but only implicitly referenced with regard to the role of
civil society.96 Nonetheless, the High Level Forum commitments indicate that ownership refers
to wider national ownership of the decisions relating to how aid should be allocated. A wellintentioned principle, it nevertheless raises serious implementation challenges in practice. First, it
requires a recipient country to develop a meaningful and useful statement of the country’s
directions and priorities with regards to development and aid expenditure.97 Second, it raises the
related challenge of ensuring that the national plan, as presented, properly reflects the priorities
of the whole country – including those who are the most marginalized or poor – and not just the

health systems strengthening or a truly new approach to development?” (2012), 12 BMC Public Health 531.
93 Paris Declaration on Aid Effectiveness (2005).
94 OECD, Accra Agenda for Action (2008) at [8].
95 Busan Partnership Agreement 2011, at [21] noting “Parliaments and local governments play critical roles
in linking citizens with government, and in ensuring broad-based and democratic ownership of countries”
development agendas”.
96 Ibid. at [22], noting “Civil society organisations (CSOs) play a vital role in enabling people to claim their
rights, in promoting rights-based approaches, in shaping development policies and partnerships, and in overseeing
their implementation.
97 See, in this regard, the World Bank Definition of “country ownership” as being the existence of
“sufficient political support within a country to implement its developmental strategy, including the projects,
programs, and policies for which external partners provide assistance,” at
https://web.worldbank.org/archive/website01013/WEB/0__CON-5.HTM, defined within the context of the
“comprehensive development framework” (last accessed on February 3, 2015).
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views of the country’s elite.98 In the words of then-Secretary Hillary Rodham Clinton in 2012,
“country ownership is about far more than funding. It is principally about building capacity to set
priorities, manage resources, develop plans, and carry them out.”99
By their very nature, aid recipient countries rank among the least-developed and lowestincome countries. Giving effect to the principles of host-country ownership is difficult in an
environment in which the government may be, at best, dysfunctional due to poor political or
economic infrastructure, or, at worst, hostile to foreign assistance/influence. The capacity of a
recipient country to develop a national development plan depends greatly on the availability of
reliable empirical information on the extent of a country’s problems, data which may be hard to
come by.100 If the government has newly come to power, it may lack experience but not want to
show weakness and so keep its counsel close, excluding local stakeholders from participatory
decision-making. If the government regime has long enjoyed unchallenged power, its ability to
engage in creative or innovative policy planning may be paralyzed, either because it is heavily
aid-dependent101 or because the regime is corrupt yet politically untouchable.
In either instance, there may not be a strong political opposition to challenge government
decisions, or there may be no incentives to raise domestic funding through increased domestic
taxation. In both cases, government may be suspicious of civil society input (even at the local
level), viewing it as threat to government legitimacy (particularly if the incumbent government
came to power through popular revolt or social movement agitation) or as a pseudo-opposition
party, particularly if the latter is absent and civil society organizations fill this void by calling the
government to account and advocating for social justice. Suspicions of civil society in this latter
vein would equally be a cause for disenfranchisement in regimes where democracy assistance
more than development assistance is on the agenda.
There is a very clear temptation for recipient countries to fund only those projects or
programs that fall within their own bailiwick, ignoring perhaps the needs of more marginalized
citizens whose activities are view with contempt or as criminal by the ruling party. This is a
particular risk in aid areas relating to health, gender, and equality. Examples abound, with donors
98 See to this effect the definitions of “country ownership” of InterAction Aid Effectiveness Working
Group as “the full and effective participation of a country’s population via legislative bodies, civil society, the
private sector, and local, regional and national government in conceptualizing, implementing, monitoring and
evaluating development policies, programs and processes,” in Country Ownership: Moving from Rhetoric to Action.
(InterAction, Washington DC, 2011); and the Millennium Challenge Corporation, “Country ownership … occurs
when a country’s national government controls the prioritization process during compact development, is
responsible for implementation, and is accountable to its domestic stakeholders for both decision-making and
results,” in MCC’s Approach to Country Ownership (2009), Working Paper, MCC, Washington, DC.
99 Remarks of Secretary of State Hillary Rodham Clinton, A world in transition: charting a new path in
global health, June 1, 2012, Oslo, Norway, available at www.state.gov/secretary/rm/2012/06/191633.htm.
100 See “The Power of Information: New Technologies for Philanthropy and Development” conference
hosted by the Indigo Trust in collaboration with The Institute for Philanthropy and The Omidyar Network
(September 15, 2011).
101 Ongoing aid dependence adversely impacts domestic accountability and can weaken existing
parliamentary processes.
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reporting cases in which recipient governments’ own sense of beneficiary legitimacy controlled
whether funded healthcare reached the intended target population.102
In the non-development context, the concept of country ownership remains equally
important. In the case of the EFS proposal, the fact that the legal basis for the proposal required
unanimous support from Member States for the EFS to pass provided an extreme example of the
effect of national government resistance to an idea which was broadly supported by CSOs in
civil law countries and which enjoyed the backing of EU institutions. Capacity issues trumped
the EFS proposal in a context in which country ownership ultimately was king.
V. Conclusion: Is Philanthropic Effectiveness in the Eye of the Beholder?
If we accept that the freedoms of association, assembly, and expression protect CSOs just
as much as individuals, the importance of a legally enabled civic space within which these rights
can be exercised becomes a sine quo non. If, at the same time, we accept and acknowledge the
fact that national governments enjoy political sovereignty and are entitled to set limits on what
outside actors can do to influence domestic political life, it follows that a contested space will
emerge when civil society organizations working within a given nation state are either funded,
supported, or influenced by “outsiders” that overstep this line. Reconciling these competing
interests will not always be possible.103 Deciding which right (national sovereignty versus
foundational autonomy) takes precedence, and under what circumstances, and according to
whom, are questions to which answers are not readily available; in fact, they may vary according
to the vested interests of those asking the question. The democracy-aid community has not, for
one, been very good at defining for itself or conveying to others what it believes those limits
should be.104
As philanthropic donors, knowing the limits of our knowledge is important. Even the
most well-intentioned donor will not always know best, and the need to learn from past mistakes
and from the indigenous philanthropic cultures and experiences of the recipient society are
messages that resonate from commentators on both sides of the debate.105 This matters as much
if you are the European Commission hoping to introduce a new legal form that will be directly
applicable in all European Member States but is not known as an existing legal concept in all, or
if you are the Ford Foundation intent on introducing the alien concept of community foundations
102 See USAID, PEPFAR, AMFAR, Planned Parenthood, and IPPF, Advancing Country Ownership: Civil
Society’s Role in Sustaining Public Health (June 2013), drawing on examples from Romania, Peru, and other Latin
American countries to illustrate the point that where at-risk populations (e.g., sex workers, people who use drugs,
gay men) are criminalized in-country for their behaviors, the likelihood of a recipient country providing the
necessary resources to target these populations was low and required continual international donor direct
intervention.
103 Some countries, for instance, do not grant the right to associate or form organizations, e.g., Saudi
Arabia, Libya, and China. See ICNL, “Recent Laws and Legislative Proposals to Restrict Civil Society and Civil
Society Organizations” (2006), 8(4) International Journal for Not-for-Profit Law, 76, at 78.
104 Closing Space Report, n. 76, above.
105 See Tade Akin Aina & Bhekinkosi Moyo, Giving to Help, Helping to Give: The Context and Politics of
African Philanthropy (Trust Africa, 2013); Dambisa Moyo, Dead Aid: Why Aid is Not Working and How There is a
Better Way For Africa (Penguin, 2009); William Easterly, The White Man’s Burden (OUP, 2006).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 69
in Africa where indigenous philanthropy has no analogue with which to compare.106 In both
instances, walking in the shoes of the recipient government/people and seeing the activity and its
implications through their eyes is an important part of the process of successful collaboration.107
To this end, what follows is a list of possible avenues to consider as one contemplates the
balancing of rights and duties of stakeholders within a state in which the deepening of
democratic ownership, the role of civil society within that process, and the special
responsibilities of foreign foundations that become involved either directly in the field or through
support of local NGOs on the ground are issues of concern.
Reserving the right not to follow local laws . . .
What if a host country imposes restrictive conditions on local NGOs working in its
territory, making it difficult for them to register or to receive funding for the work they were set
up to carry out? Should the donor respect the requirements of the local law? In what
circumstances is it justifiable to ignore the law and to engage with or fund those organizations
directly? Given the growing difficulties for NGOs to meet newly restrictive registration
requirements in many countries, such quandaries are no longer merely hypothetical in nature. Is
local law – in the name of the rule of law – sacrosanct? Some might argue that if one is sincerely
concerned with legally enabling civil society, such enablement can only come about from within
the legal system which requires respect for existing laws and a willingness to work for their
reform from within, as opposed to without the system.108
Another policy approach that eschews this softly incremental approach is that proposed
by then U.S. Secretary of State Hillary Clinton, whereby the U.S. Government reserves the right
not to respect local laws that it believes impede legitimate democracy and rights support.109 Such
a policy, if it is to have any legitimacy, would have to appeal to a higher source of rights as a
justification for this stance, such as the Universal Declaration of Rights, and even then any such
reliance could be subject to question if the same respect was not accorded to CSOs at home as
abroad.
Taking the diplomatic route of sharing best practice . . .
Sharing best practices on the legal enablement of civil society, while engaging in bettercoordinated diplomatic discouragement of restrictive NGO laws, can be a useful avenue. The
diplomatic route, however, is a two-way street, and governments should be aware that it is not
106 Christiana Akpilima-Atibil, Panel on The Role of Philanthropy in Civil Society under Siege: Historical
Perspectives for Contemporary Practice at International Society for Third Sector Research Conference, Muenster
Germany, July 2014.
107 Bhekinkosi Moyo, Panel on The Role of Philanthropy in Civil Society under Siege: Historical
Perspectives for Contemporary Practice at International Society for Third Sector Research Conference, Muenster
Germany, July 2014.
108 John Rawls, “Legal Obligation and the Duty of Fair Play,” in Law and Philosophy, S. Hook (ed.), (New
York: New York University Press, 1964).
109 Cited in Closing Space Report, n. 76, at 52. Legal philosophers, like legal positivist Joseph Raz, have
also made strong arguments in support of the right not to follow an unjust law. See Raz, The Moral Authority of the
Law (Clarendon Press, 1979).
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only best practice that is disseminated between nations.110 Broadly (or badly) drafted legislation
to regulate political activity (whether in the form of pre-registration requirements for the funding
of NGO advocacy or a complete prohibition on foreign funding of NGOs’ domestic activities in
areas such as right-based work) may be something that we more readily associate with repressive
regimes.111 Yet liberal democracies do not always have a clean slate in this regard and may have
been the source of inspiration for the legislation that now actively restricts civil society in
another jurisdiction.
It is thus interesting on the one hand to see Ireland tabling the UN HRC Resolution on
Civil Society that respects the rights of CSOs to solicit and utilize (foreign) funds while
simultaneously maintaining a provision on its own statute books that requires NGOs engaged in
advocacy (where this falls within the definition of “political purposes” – a term not defined in the
legislation) to register with the Standards in Public Office Commission and not only to account
for all funding received in support of such activity but to be absolutely prohibited from accepting
foreign funding in support of such activity by law.112 Claims that the statutory provisions are not
intended to dampen NGO activity and would not be interpreted in this manner have less
resonance when NGOs claim that such provisions have a chilling effect on nonprofit
advocacy.113 Thus, the stance of Department of Foreign Affairs (in promoting the protection of
civic space at UN level) does not always tally with the domestic treatment of civil society by the
Department of Justice (in charge of charity legislation that deliberately omits the promotion of
human rights as a charity purpose) or the Department of Local Government, Heritage and the
Environment (responsible for the Electoral Acts referred to above restricting funding for NGO
advocacy).
Taking the economic route to shore up civil society . . .
Deciding in which pack of cards the “civil society” ace sits is another issue worth
pondering. Is it better to channel development-aid funding through a bilateral agency or to house
it under the control of the Department for Foreign Affairs? What message does the home of
development aid send to recipient countries? And in the context of country diplomacy, what
issues trump aid? To what extent are we even aware of the trade-offs made at the government
level between competing trade or even competing security interests?114 These issues remain
outside the current scope of this article, but it would be folly to ignore more broadly the impact
and the relevance of agreements like Cotonou, which combines commitments between the EU
110 See ICNL, “Recent Laws and Legislative Proposals to Restrict Civil Society and Civil Society
Organizations” (2006), 8(4) International Journal for Not-for-Profit Law, 76, at 77 (detailing the sharing of
legislative restrictions on NGOs between sister regimes, such as Belarus, Russia and the Middle East).
111 Ibid.
112 Electoral (Amendment) Act 2001, (no. 38 of 2001), s.49, inserting s.23A in the Electoral Act 1997. See
also Standards in Public Office Commission, Third Parties and the Referendum on The Treaty of Lisbon: Report to
the Minister for the Environment, Heritage and Local Government (March 2009), at 19-24.
113 Standards in Public Office Commission Report, n. 112 above, at 20 (citing the charity Barnados, “the
real effect of this legislation, whatever its purpose, will be to slowly stifle an important voice…. The Standards in
Public Office Commission has pointed out that the flaw in the legislation is that it generates an unnecessary and
undesirable impediment to that voice. What is surprising is that the Standards Commission has made its views
known to Government, and the reaction of Government has so far been a deafening silence.”).
114 Ngaire Woods, “Whose aid? Whose influence? China, emerging donors and the silent revolution in
development assistance,” (2008), 84(6) International Affairs, 1205-1221.
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and ACP countries on development cooperation, peace and security, arms trade, and migration
with commitments on trade cooperation.115
Within the economic sphere, if the political will existed, there would be potential to use
bilateral investment treaties to protect NGO foreign funding by making it a breach of the treaty’s
obligations on permitting free investment-related transfers for a recipient government to prohibit
or restrict foreign funding to a foreign NGO.116
Still in an economic vein, there is, as there was in the diplomatic setting, a need to avoid
double standards when it comes to what we expect nonprofits to achieve when working abroad
vis-à-vis our expectations around for-profit enterprise undertaken abroad. The latitude for failure
in the for-profit arena is far more broadly accepted, and it is arguable that the freedom to fail
accorded to for-profits is what ultimately contributes to their success. In the words of David
Damberger, the problem with NGOs is that they do not fail often enough or learn from those
failings.117 Foundations active in the field or funding those who are active can contribute to our
understanding of development effectiveness by sharing not just stories of success but also, more
importantly, stories of failure. Thus Engineers Without Borders’ decision to publish an annual
Failure Report since 2010, outlining matters that they could have handled better, as well as
facilitating a website that seeks to learn from the failures of other NGOs is an innovative and
brave decision.118
Taking account of cultural and historical backgrounds . . .
No country has a blank slate when it comes to matters of philanthropy and charitable
giving. Foundations working outside of their home territory will arguably fare better when their
actions are informed by an appreciation of the historical and cultural background that permeates
the host country’s understanding of that concept. Lack of awareness can adversely affect the
ability to deliver cross-border philanthropy effectively.
In a European historical context, part of the rationale for the slow emergence and
recognition of philanthropic mobility lies in the focus in the Rome Treaty on establishing the
European Economic Community. The EEC, as established, was intended as an economic union.
115 See
https://europa.eu/legislation_summaries/development/african_caribbean_pacific_states/r12101_en.htm; for a critique
of the Cotonou Agreement in terms of civil society interaction, see UN HRC Working Group on the Right to
Development High Level Task Force on the Implementation of the Right to Development, fifth session, Geneva,
April 1-9, 2009, A/HRC/12/WG.2/TF/CRP.3/Rev.1, at [6] (noting “From a Right to Development viewpoint, the
[Economic Partnership Agreements (EPAs)] fall short of a number of set standards. This includes the manner in
which the negotiation process was carried out, the lack of consultation with civil society organizations and the lack
of ownership by the ACP states. It also includes the lack of evidence of positive impact predictions of EPAs on
development and the lack of Human Rights benchmarks.”).
116 See further Nick Gallus, “Protection of U.S. Nongovernmental Organizations in Egypt Under the EgyptU.S. Bilateral Investment Treaty” (2012), 14(3) International Journal for Not-for-Profit Law 62; see also, CCIC,
Bilateral Investment Treaties: A Canadian Primer, available at
https://www.ccic.ca/_files/en/what_we_do/trade_2010-04_investmt_treaties_primer_e.pdf; Nick Gallus & Luke Eric
Peterson, “International Investment Treaty Protection of NGOs” (2006), 22(4) Arbitration International 527-548.
117 David Damberger, Engineers Without Borders, “Learning From Failure,” at TEDxYYC 2011, available
at https://www.youtube.com/watch?v=HGiHU-agsGY. Engineers Without Borders maintains a website devoted to
NGO failure stories and what can be learned from them at https://www.admittingfailure.com/.
118 Engineers Without Borders website, above n. 117.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 72
Nowhere is this more apparent than in Article 58 EEC’s exclusion of not-for-profit bodies from
those bodies eligible to benefit from the right of establishment.119 The exclusion of nonprofit
bodies lives on today in Article 54 TFEU.120 This historical context has political implications
when it comes to finding a valid legal basis from which to regulate nonprofits at a European
level. From a cultural perspective, the differences between civil law and common law
understanding of the nature of a foundation, coupled with a lack of European consensus on
fundamental matters such as the meaning of public benefit, has made the achievement of
European-wide regulation extremely difficult. That is not to imply the impossibility of building a
European consensus on the regulation and/or facilitation of nonprofit activity within the EU, but
rather to recognize that achievement of any such agenda is much more likely to occur slowly and
incrementally over time rather than be ushered in with a legislative flurry.121
Similar issues arise in the context of development aid to Africa and the attempts of some
foundations to transplant western concepts of philanthropy without necessarily appreciating the
indigenous forms of and different approaches to strengthening philanthropy in these developing
nations. Examples of the difficulties experienced in embedding community foundations in
Africa122 point to the newness of the Community Foundation concept with case studies
indicating the need to further adapt the community concept “to suit the context of different
societies because the political, economic, and legal environment varies from country to country
[resulting in] a lot of unexpected problems, and no roadmap to show the way.”123 Recognition at
the 2014 High Level Meeting of the Global Partnership for Effective Development Cooperation
in Mexico of the need for a mix of funding mechanisms that support locally owned and demanddriven objectives that draw on CSO-defined objectives alongside complementary government
defined objectives further emphasizes the need to take cultural and historical perspectives into
account.124
Engaging academia . . .
Conference meetings hosted by ARNOVA, ISTR, and the National Centre on
Philanthropy and the Law at New York University, which bring nonprofit academics from
different disciplines, also play an important role in allowing all sides of the issue to be
considered and enabling us to gain a better understanding of the complexity of the problem at
hand. Sometimes the role of the academic may not be to find the answer but rather to pose or
rephrase the question, thereby crystallizing the issue, perhaps, in a way that enables the
119 See Arts. 52 & 58 EEC. Article 58 EEC provided “‘Companies or firms’ means companies or firms
constituted under civil or commercial law, including co-operative societies, and other legal persons governed by
public or private law, save for those which are non-profit-making.”
120 Article 58 EEC became Article 48 EC before becoming Article 54 TFEU.
121 See Oonagh B. Breen, “EU Regulation of Charitable Organizations: The Politics of Legally Enabling
Civil Society” (2008), 10(3) International Journal of Not-for-Profit Law 50.
122 See, for example, Joyce Malombe, Community Development Foundations: Emerging Partnerships
(World Bank, 2000), at 37-64; and more generally Tade Akin Aina & Bhekinkosi Moyo (eds.), Giving to Help,
Helping to Give: The Context and Politics of African Philanthropy (Trust Africa, 2013).
123 Malombe, above n. 122, at 37.
124 Task Team on Civil Society Development Effectiveness and Enabling Environment, Key Messages: An
Extract for the 2014 Mexico High Level Meeting of the Global Partnership for Effective Development Cooperation
(April 2014).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 73
practitioner, policymaker, or foundation donor to reconsider the matter afresh. The role of the
foundation in enhancing efficiency and development effectiveness will depend on whether one
views foundation involvement as part of the problem or part of the solution. The larger questions
concerning the role of civil society in making a better society – whether through development
aid, democracy assistance, or public benefit enhancement – and how this role is undertaken and
the principles underpinning it, are issues deserving constant analysis and discussion on an
ongoing basis.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 74
Cross-Border Philanthropy
STATES, PUBLIC SPACE,
AND CROSS-BORDER PHILANTHROPY:
OBSERVATIONS FROM THE ARAB TRANSITIONS
BARBARA LETHEM IBRAHIM1
Overview
In a quiet announcement in the official Gazette, the government of Egypt amended its
provisions on foreign funding in the Penal Code (Article 78) to provide much harsher
punishments in cases involving the offer or receipt of foreign funding. This move, taken in fall of
2014, signals the intent of the military-dominated government to exercise tighter control over
which non-state actors can receive funding and for what purposes. An assessment of the ways
states are currently attempting to regulate capital flows across their borders is an important
element of the power struggles that mark a transition process under way across the Arab region
today.
After four years of chaotic and unpredictable politics, earlier euphoria over the fall of
aging dictators has given way to a weary public who desire stability. At least for the time being,
the majority appear willing to trade their short-lived freedoms for a modicum of order. Countries
like Egypt have seen increased public support for measures to restrict the space for civil society,
including arrest of peaceful demonstrators, journalists, and bloggers, and reduced access to
cross-border funding. For those who fought and paid a high price to rid the region of dictatorial
leaders, these are disheartening reversals. By 2013, articles began to appear arguing that civil
liberties had become more limited under the post-uprising state than during the Mubarak years.2
In light of these and other developments, some observers have been ready to declare the
Arab spring over and its uprisings a failure. But on closer analysis, irreversible changes are
occurring in the relationship between the state and its citizens, a dynamic that has yet to play
itself out fully. State leaders are now required to take account of their politically awakened
citizenry in ways that were unthinkable before. The present analysis is a mid-course attempt to
identify some of the key issues molding policy regulation of an important aspect of civic life, the
mobilization of funds for public purposes, particularly international funding flows for
philanthropic purposes. We examine the impact of policy changes on domestic civic life, as
observed through the lens of recent developments in the Arab region. Many examples are drawn
from Egypt, where the author has most experience, with additional material from Tunisia, where
civil society has arguably maintained a freer status over the past four years.
1 Senior Advisor and Founding Director, John D. Gerhart Center for Philanthropy and Civic Engagement,
American University in Cairo. Email: bibrahim@aucegypt.edu.
Special thanks are due to Rahma Ali for excellent assistance in tracking down elusive references for this
paper.
2 For example, see Al-Ahram Online (May 2013).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 75
Three main premises are explored. The first is that when states restrict the flow of
international philanthropic capital, the effects are felt most strongly by the citizen sector,
predominately actors in civil society such as political parties, NGOs and more informal social
action groups. This is because states reserve to themselves the right to accept foreign grants and
donations with minimal or no oversight of how they are utilized. Furthermore, in recent years
most countries have reduced restrictions on foreign direct investment in the private sector, a
move necessary to remain competitive in the global economy. Thus it is predominately civil
society that is weakened vis-à-vis the other sectors of society when policy restrictions are
tightened.
Thomas Carothers has noted that more than 50 countries in recent years have enacted or
seriously considered legislative or other restrictions on the ability of local NGOs to form and
operate. At the core of many of these efforts are measures to impede or block foreign funding for
civil society groups.
3 Measures adopted include administrative and legal obstacles, propaganda
campaigns against NGOs that accept foreign funding, and harassment or expulsion of external
aid groups offering civil society support. The majority of governments engaged in pushback are
semi-authoritarian regimes, a category applying to many Arab states before and during the Arab
transitions.
The second premise is that it is generally agreed to be reasonable for contemporary
governments to maintain some monitoring of and legal restrictions on the flow of capital and
goods across their borders. As crime and terrorism have become increasingly globalized, these
may constitute legitimate threats to public welfare when cash, weapons, drugs, or undocumented
persons can move unimpeded across borders. Nonetheless, groups or individuals who are
determined to use illicit means to send or receive funds across borders will be unlikely to be
deterred by laws, which are notoriously difficult to enforce consistently. This leaves citizens and
groups whose intent is to respect the law most likely to be disadvantaged when restrictive laws
are passed.
In assessing restrictive cross-border funding policies and their implementation, some sort
of means test is desirable that weighs the likely threat to basic public order or human welfare
before judging those policies to be too harsh or lenient. Because such standards have yet to be
agreed upon among western countries, let alone across the vastly different countries of the global
south, there is ample room for debate and differences of opinion as to how these laws should be
applied.
Thus a third premise of the paper is that one useful way to gauge the reasonableness of a
law or policy restricting cross-border philanthropy is to apply a principle of proportionality: do
the means of control and the punishments for noncompliance in a particular law match the
purported severity of threats to society that it was designed to address? Are the laws precise
enough to be effective in targeting harmful behavior, or are they written in such a way as to bring
collateral damage to socially desirable entities or causes? A related problem is identified in the
dearth of studies that measure concretely the societal good generated from those civil society
programs and services supported by external funding. In the absence of empirical evidence of
benefit, it becomes easier for governments to argue that blanket restrictions serve the public
interest.
3 Carothers (2014).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 76
Protection, Civic Freedoms, and the Social Contract
In liberal democracies, the basic pact between the government and the governed should
be one of balanced power. Officials face popular elections on a regular basis, and in the interim
period it is understood that a free and active citizen sector (including an independent media) acts
as a watchdog to guarantee the proper functioning of government. Thus legislation to curtail the
activities of civil society faces special scrutiny; in cases justified by special circumstances such
as war or terrorist threats, laws typically include sunset clauses to limit the duration of
application. In recent years, strong opposition to laws such as the U.S. Patriot Act or policies
framed around protecting homeland security have received harsh and sustained public criticism
as contested issues in election campaigns and elsewhere.
The situation in authoritarian states and in many transitioning countries of the global
South is quite different. There the state assumes a position elevated above the people it governs,
in a form of dominance that does not recognize inalienable rights of assembly or civic rights for
citizens. In the Arab region in particular we can see a blend of this kind of state supremacy,
which exists alongside a form of paternalism that is fundamentally hostile to a free and open civil
society. In this view of correct governance, often spearheaded by security forces, citizens are
incapable of acting for their own benefit in organizing civic life. They must therefore be
regulated by agencies that take on the moral authority to decide what is beneficial and what
brings harm. This fundamentally patronizing stance by governments toward their citizens is
typically expressed in the language of “protection” or maintenance of order, with state media
utilized to support policies through fear or mobilization of anger toward opposition groups. For
example, throughout 2014 in Egypt, young activists and revolutionaries were blamed regularly
by state-affiliated television and newspaper commentators for the state of the economy or the
lack of order in society. This deflects attention from responsibility of the security forces to
maintain order, and from state management of the economy and the transition process in general.
The patriarchal framework is applied to cross-border philanthropic giving in authoritarian
settings through two official tenets, repeated throughout the state bureaucracy until large parts of
the public accept their veracity as well. The first is that foreign donors never have helpful or
altruistic motives for their donations, and in fact they are in the service of foreign governments
and/or political groups. The second operating assumption is related—that those in the local
society who accept foreign-sourced donations must therefore be working as external agents and
cannot be patriotic citizens. These damaging assertions are made routinely and in multiple
venues, so that they take on the air of invincible truths. State media, public statements of high
officials, security prosecution investigations, and judicial verdicts all operate to reinforce these
views.
Thus the place of “foreign funding” in political discourse in many if not all Arab states is
to keep large parts of the organized citizen sector alienated from the broader public, constantly
on the defensive, and fearful of legal action should their activities or budgets grow to have
significant impact. This is possible, in turn, because of the underdevelopment of local
philanthropic sources, especially in the sensitive areas of rights, democracy promotion, and
protection of minorities.
It initially appeared that the anti-foreign funding discourse would lose its potency
following the Arab uprisings beginning in 2010. Young revolutionaries were globally connected
in terms of ideas and networks but not for the most part beholden to outside financing. These
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 77
were initially seen as largely domestic uprisings with domestic consequences, although in each
case elements of external political influence eventually interceded, Bahrain being the most
dramatic case in point. Regional and international influence became increasingly apparent in the
transition period of early elections (in Egypt) or constitutional negotiations (in Tunisia). It was
often unclear whether states or private actors were behind the money flows, especially in support
of groups like the Salafists, which entered politics for the first time after 2011. In Egypt, the
picture became increasingly murky, with Qatar, the U.S., and Turkey ultimately accused of
supporting the election and subsequent conduct of the short-lived Mohamed Morsi regime in
Egypt. A discourse of dangerous foreigners that had prevailed during the Mubarak years was
once again installed as a way of mobilizing public support for the post-Morsi interim government
and presidency of Abdel Fattah al Sissi.
Domestic Politics in Transition: The Case of Egypt
With that framework in mind, a quick review of Egypt’s 2011 uprising and subsequent
transition period illustrates how the dialectic between local and international politics has
impacted the free expression of dissent and the funding of democratic forces in that country. This
sets the backdrop for a closer look at restrictions on international or cross-border funding of civic
and philanthropic entities that have emerged over the ensuing transition years.
The relationship of state, law, and civil society shifted multiple times during the four
years following Egypt’s January 25th revolution.
4 That uprising was sparked by converging
forces within the citizen sector, including labor unions, opposition parties and groups like Kefaya
(“Enough”), and newer youth movements such as 6th of April and We are All Khaled Said.
Within days the protests in Tahrir were joined by a range of Islamist factions, most prominently
the Muslim Brotherhood. By the end of the dramatic 18 days, it was clear, however, that it was
the armed forces who were firmly in control and behind the sudden departure of President
Mubarak on February 11. Over the early months of rule by the Supreme Council of the Armed
Forces, street protests and labor actions were continuous, and the army was initially reluctant to
intervene. Then a sit-in in Tahrir square was aggressively removed mid-summer, and a peaceful
march in support of Coptic Christians was violently dispersed with many deaths in October
2011.
As police forces began to reappear on the streets, and in response to a series of bloody
protests, security forces steadily regained the upper hand. Presidential elections took place before
a constitution was drafted and under an election law that did not stipulate or enforce transparency
in campaign finance or equal access to media. Following the announcement of victory for
Muslim Brotherhood leader Mohamed Morsi in June 2012, public demonstrations took on a
sectarian tone, largely male and unfriendly to women, with flags of Gulf countries, al Qaida, and
the Brotherhood appearing alongside the ubiquitous Egyptian flags of previous periods.
However, as opposition to the policies of the Morsi regime mounted, huge street demonstrations
reemerged, particularly following his unilateral decree increasing presidential powers at the
expense of the judiciary. These were reminiscent of the original Tahrir protests, more diverse in
terms +of class and gender, but preyed upon violently by murky groups that were variously
identified with the Brotherhood or remnants of the Mubarak regime. By July 2013 two huge
4 Egyptians tend to call the events of January and early February 2011 a revolution, while political
scientists and others prefer to use the term uprising. In all cases, it will be several more years before we know
definitively if those events result in profound governance changes.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 78
opposing camps had gathered in major squares in Cairo, one supporting the elected government
and the other challenging its legitimacy and calling for early elections.
Military and pro-Mubarak groups aligned with the young leaders of the Tamarod
movement mounted a massive anti-Morsi recall petition and encouraged throngs to gather in
Tahrir. State-controlled media kept sentiments high against the MB as the army once again
stepped in to “save the nation,” calling on Morsi to negotiate. He refused, the military moved to
arrest him and his top officials, and formal power transferred to the armed forces once again.
Under a military “roadmap” for the country, an interim president was appointed along with a
new prime minister and cabinet.
From that point onward and until early 2015, independent citizen action was
progressively curtailed, whether it was initiated by pro-Morsi supporters or secular rights groups
opposed to military actions they believed violated human rights or due process. The military
regime accomplished this with little public outcry, using media campaigns around an official
“war on terror,” and later by encouraging a “back to work” and normality campaign. These were
welcomed by what appeared to be a majority of Egyptians, tired of the chaos and hopeful of
restoring a seriously dysfunctional economy.
How are the tightening restrictions on domestic political expression linked to laws and
regulations governing cross-border giving? Given the global communications and networks in
which civil society operates now in all parts of the world, lines between domestic and
international actions are increasingly blurred. Governments use this to their advantage to paint
local citizen groups as unpatriotic for associating internationally, as noted above. In a sense, this
might be seen as a validation of the strength and impact of empowered citizen-led initiatives. But
a vibrant civil society sector can be quickly undermined by legal restrictions on cross-border
relationships coupled with threats of prosecution and jail time. That is clearly illustrated in
Egypt, both in the past by the overreactions of an aging Mubarak regime with a weak hold on
power, and later during the uncertainties of a transition period. The means used by both
governments are surprisingly similar, as described below. In that evolving context in Egypt, we
can examine the three interlinked propositions.
Premise 1. Cross-border funding restrictions disproportionately impact civil society
This first premise may appear obvious; nonetheless, through examining the factors
underpinning it, avenues for redress could become clearer. In the Arab region, a close reading of
laws restricting access to cross-border partnership and funding suggest that behind state
discourse around protecting national interests and public order are a set of alternative
motivations. First, one can see a clear distinction between the application of laws to primarily
development organizations—those providing social services like health care, education or
childcare, for example, which are largely left to work unfettered—and those engaged in rights or
democracy promotion. States selectively apply restrictive laws and regulations to civil
organizations in those fields based on the perception that they exist to provoke opposition to the
state or its policies. With no quarter allowed for the concept of loyal criticism, the fact that these
organizations maintain foreign ties is in itself evidence of disloyalty. Proof of harm is rarely or
never established except for guilt by association. Usually it is enough to publicly imply
unpatriotic motives to the group under scrutiny and then subject it to legal prosecution.
5
5 NGO Law Monitor: Egypt (2014).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 79
Thus the Mubarak regime in Egypt repeatedly assured western governments that its antiterror laws would never be used except to prosecute drug traffickers, armed groups, and avowed
terror organizations. However, local human rights and democracy defenders were subjected to
legal proceedings based on its provisions, including the provisions against accepting foreign
funding without permission.6 Civil society organizations with close ties to the regime during the
Mubarak years received large grants, including many from external sources, without being
subject to review or prosecution.
Similarly, in the period immediately following the fall of Mubarak, international NGOs
in the process of registering to operate in Egypt found themselves subject to prosecution for
democracy-promotion activities that had been frequently and carefully coordinated with relevant
officials. The line between civic education and politics is murky in transitioning countries, and
when the military leaders wanted to stop those activities, it was enough to circulate rumors that
NGOs were using foreign grants to “divide” the country and to carry out Israeli plots; arrests,
trials, and prison sentences ensued. It stretches credulity that those who ordered these
investigations really believed the NGOs capable of “undermining national sovereignty,” but it
was convenient to use those charges for two reasons: to signal to other international groups that
Egypt was not welcoming to cross-border philanthropy, and to intimidate local groups from
developing independence through their funding sources. This case is discussed further below in
the context of disproportionate punishment.
By 2014 there were heightened fears among the human rights and civic education
community in Egypt that similar selective prosecution was on the increase. A directive from the
Ministry of Social Solidarity over the summer of 2014 required all entities serving a social
purpose, regardless of their current registration, to re-register with the Ministry and be subjected
to its regulations. A 45-day deadline for registration was renewed until October, with notice that
violators after that date would be prosecuted. The fact that similar requirements were not
enforced for private companies, which routinely engage in social responsibility projects and
grant-making, and whose foreign funding infusions are many multiples higher, suggest the
targeting of civil society.
Taken together, selective application of laws and regulations create a crushing
environment for the citizen sector and reduce much-needed support for Egypt’s transition at a
time of economic crisis. Under the current trend to increase penalties and prison sentences for
infractions of the foreign funding laws in Egypt, for example, organizations such as Oxfam UK,
which has operated in the country for over 30 years, suspended its local operations and later
closed down. Other western donors have shifted their programs to Tunisia, where the climate for
international cooperation is more open. Egyptian human rights organizations have made
arrangements to place staff on indefinite leave in order to protect them should an investigation
take place, and some are moving their core operations to other countries in the region for an
indefinite period.
This has the effect of further weakening a sector already suffering from the extreme
polarization of politics that arose in 2013 around the removal of Mohamed Morsi’s Muslim
Brotherhood government and subsequent prosecution of his followers. It removes from public
6 The case of the Ibn Khaldun Center and its 28 defendants shook Egyptian civil society over the period
2000 to 2003, when the state subjected its staff and chairman to three trials involving seven-year prison sentences,
for accepting foreign funding without state permission.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 80
life the very organizations with the leadership and values that could enable them to initiate
reconciliation efforts across that deep divide.
Premise 2: Reasonable monitoring of and restrictions on the flow of capital and goods across
borders are acceptable, but not selective application
Following the first parliamentary elections in Egypt in 2012, the Carter Center, which
maintained an office in Cairo, commented on a range of issues it felt warranted concern, though
it was unable to investigate them fully under its international observer mission. One was the
apparent influx of unattributed outside funding to election campaigns and the lack of effective
oversight of campaign contributions. Rights activists have long decried the practice of paying
voters in cash or food for going to the polls. Further concerns were raised when raids on the
Muqattam headquarters of the Muslim Brotherhood in 2013 allegedly turned up documents
detailing large sums of Gulf funding allocated for specific individual candidates who were also
members of that group. These appear to be legitimate instances of potential harm to the free and
fair election process. It is an area where established democracies have labored for long to set
limits on funding sources and amounts and to enforce them.
Outside campaign funding and lack of transparent accounting for campaign spending
were the most frequently mentioned concern in transitioning Tunisia as well, as reported in a
recent FRIDE study on foreign funding there.7 Opposition politicians and their supporters
expressed the view that Ennahda’s electoral victory was a result of the party’s deeper financial
coffers, which they were convinced came from abroad. Ennahda party’s “funding from Qatar” is
a recurrent theme that many in Tunisia take for granted, despite the lack of hard evidence.8
Interestingly, other civil society groups like human rights and community-based NGOs have
mostly welcomed external donor support, noting that local philanthropy is almost completely
lacking. When questions are raised, it is usually by community members who can be reassured
by open sharing of information about the project in question and origin of funding.
Tunisia seems on the whole to have escaped the media-fed suspicion around external
funding sources that is rampant in Egypt, and its interim government has encouraged
international partners in the transition process. At least three major private donors that originally
planned to establish programs in Egypt in 2011 have switched to working in Tunisia. The same
is true of a consortium of European donors who wanted to contribute to the Arab spring
opportunity but were discouraged by Egypt’s unwelcoming climate and are now operating in
rural Tunisia.
In Egypt, suspicions of possible cross-border funding of political candidates and parties
rose to new heights in the period following Morsi’s removal and the lead-up to presidential
elections in 2014, with the arrest and prosecution of a number of foreign journalists on
allegations of working for the Muslim Brotherhood. These cases, and the standards of evidence
allowed during the ensuing court trials, have raised both local and international concern. A
different area of media bias was raised by the Carter Center observer mission in 2014, which
commented on the unequal access to local media during the presidential campaign, noting that
one candidate had excessive access to state media through a position in the cabinet. Similar
concerns have been raised by Egyptian authorities, who shut down a number of local private
7 FRIDE (2013).
8 Kausch (2013).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 81
satellite channels for alleged ties to the MB, yet have little control over channels viewed in Egypt
but licensed and broadcast from abroad. If non-Egyptian channels choose to promote a political
viewpoint or party (as was the accusation against channels in the Al Jazeera group) there is very
little legal recourse. These are the gray areas of cross-border funding and influence that bear
further scrutiny and standards that are internationally accepted.
But what about cases where “harm” is a shifting matter and states change course in their
views on cross-border cooperation? In the previously mentioned NGO trial case, accused
organizations had early indications from Egyptian authorities that their activities were welcome.
The prosecuted international organizations originated in the U.S. and Germany, two countries
where Egypt has strong links through joint counterterrorism programs. During the protracted
legal proceedings, prosecutors ignored attempts to convince them that NGO activities for
democratic education and training, such as preparing women and youth to compete in legislative
elections, are in fact one way of building a strong non-violent polity and civil sector, essential in
the fight against terrorism.
Support for the view that these prosecutions and others like them may have intentions
other than protection from harm comes from the case mounted against Dr. Amr Hamzawy, an
activist, professor of political science and politician elected to the first short-lived parliament
after January 25. In one tweet, he used his Twitter account to express dismay over the way
evidence was marshaled and the verdict reached in the NGO case. As a result he was prevented
from traveling to attend an overseas academic conference and charged with insulting the
judiciary, a serious criminal act. Many similar Twitter comments by other irate Egyptians with
less public prominence were ignored. In a letter to the Egyptian Minister of Justice concerning
the case, the Academic Freedom Committee of the Middle East Studies Association stated in
part:
… At the beginning of June 2013, an Egyptian court ruled that several Western-backed
non-governmental organizations operating in Egypt aimed to “undermine Egypt’s
national security and lay out a sectarian, political map that serves United States and
Israeli interests” and were receiving funding from outside to pursue that aim. The ruling
prompted critical responses from both inside and outside Egypt. Several critics suggested
that insufficient evidence had been provided to prove the allegations and so, they
appeared to be political in intent. Indeed, this was precisely what Dr. Hamzawy posted in
a single tweet on June 5. It reads: “Verdict in case of foreign funding of CS shocking,
transparency lacking, facts undocumented & politicization evident.” It is for these words
that he is now being accused of insulting the Egyptian judiciary.
We are fully aware that insulting the judiciary is a crime in Egyptian law; however, we
fail to see how the above words can be read as defamatory. Instead, the charges against
Dr. Hamzawy appear to be part of a broader, systematic effort to stifle critical free
expression….9
That legal case was eventually dropped against Dr. Hamzawy, who remains a critic of the
government’s ban and prosecution of the Muslim Brotherhood, though himself an avowed
secular liberal within the Egyptian political constellation. From past experience, however, it can
be revived whenever his public statements run afoul of official positions.
9 Letter Concerning Charges Against Amr Hamzawy (2014).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 82
The most direct threat to free citizen expression in Egypt came with the passage by
presidential decree of a controversial Protest Law in November 2013. Public expressions of
opposition to government policy or practice were effectively silenced through intensified arrests
and prosecution of citizens who mount peaceful demonstrations. The stiff penalties in this law
for any form of protest not directly approved in advance by the Interior ministry was the clearest
indication to date that the same citizen mobilization that had enabled the military to topple Morsi
was no longer to be tolerated.
Article 8 of the new law requires that organizers of any public assembly, whether a
protest, march, or general meeting, submit a written notice to the nearest police station with their
plans at least three working days in advance. Article 10 allows the Minister of Interior or the
concerned security director to cancel, postpone, or change the route of a protest.
10 The terms of
this law will receive constitutional challenge in due time. They violate access to free association
enshrined in the latest constitution of 2014, which grants rights for public demonstrations
following “notification of the relevant authorities” only.
Currently, hundreds of activists are in prison, some held without charge, others serving
three- to five-year prison sentences for violating the provisions of the new law. They view their
actions as peaceful civil disobedience of an unconstitutional law. Many face deteriorating health
following prolonged hunger strikes. However, public opinion appeared willing to accept these
measures, along with others like the closure of private television channels and newspapers, and
bringing security forces back onto university campuses. The approval rating for the performance
of President Al Sissi ranged between 45 percent in early summer to 82 percent in September
2014 as terror threats against security forces escalated.11 These are well beyond the actual
numbers he garnered in the spring presidential ballot, where turnout was low. At least in the
short run, a combination of suppression of dissent and fear of increasing violence trump public
support for free expression.
Premise 3: Protecting domestic political space from external “harm”: is proportionality
applied?
Whereas the previously mentioned registration directive and the Protest Law are aimed
primarily toward curbing domestic political expression, the September amendments to Article 78
of the criminal code are a direct challenge to foreign funding and cross-border capital flows for
philanthropic purposes. The new provisions impose life imprisonment and a fine of 500,000 LE
(roughly US$72,000) for anyone who solicits, assists, or receives funding or other support from a
foreign source with the intent to “harm the national interest,” “compromise national
sovereignty,” or “breach[] security or public peace.” A foreign source is defined in the law to
include “a foreign country, any individual who works for it, a legal person, a local or foreign
organization, or any other entity not affiliated or working for a foreign country.” The amended
law likewise imposes the penalty of life imprisonment on anyone who gives or offers such funds,
or “facilitates” their receipt.
That means in theory that the entire staff of an organization, whether a private foundation
like the Ford Foundation or the semi-governmental Canadian International Research Center
(IDRC), donor agencies operating in Egypt for over 50 years, could be subject to these draconian
10 Egypt’s Protest Law Nov (2013).
11 The Egyptian Center for Public Opinion Research (Baseera) (2014).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 83
punishments. Could an IDRC grant to teach research methods to young policy change advocates
be seen as “harming the national interest?” Would the program officer who made the grant and
the clerk who issued the check be liable to life sentences mandated under the new penalty
clauses? Proportionality is absent in this law, both because of its vague wording and because it
does not specify graduated penalties for differing degrees of responsibility and harm.
While the expressed intent of the law is to curtail funding for armed insurrection or terror
organizations, such vague wording leaves open to wide interpretation those activities or causes
that could be seen as harmful. Generic language such as “harm the national interest” or
“compromise national sovereignty” gives prosecutors vast discretion to use the law selectively.
The potential effect on fragile democratic practices is great, given that common acts—such as
criticizing the indictment of individuals in political cases or sending observer missions to
monitor national elections in Egypt—have been defined repeatedly by the state as infringements
on sovereignty. The latter is invoked so regularly that most citizens believe monitoring—whether
by local citizens or international observers—to be a suspicious political act. However, the
Egyptian Ministry of Foreign Affairs routinely sends its own observer missions to monitor other
countries’ elections. Consistency does not seem to be a high priority in these matters. Or perhaps,
as was previously noted, the state takes for itself privileges that citizens are not felt to be capable
of managing.
State sovereignty often emerges as the value that trumps all other values or rights in nondemocratic states, especially during periods of military rule. It is a curiously elastic concept
because on the one hand, state powers are free to define what are perceived as threats to
sovereignty, while allowing themselves free access to the very resources or relationships that are
described as “harmful.” So funding for citizen groups that originates beyond national borders is
automatically suspect and subject to scrutiny or oversight in the laws of many Arab states. But
government bodies have license to freely solicit huge amounts of foreign-sourced grants, loans,
and in-kind supplies of weaponry and surveillance equipment, for example, for which there is no
oversight or concern over potential harm. 12
From the perspective of foreign donor states and organizations, the amended law has
similarly dangerous implications, as their representatives may be held liable under the new
provisions. The amendments state: “Anyone who gives, offers or promises any of the above
mentioned things for the purpose of committing any of the crimes stated for in the previous
paragraph shall be subject to the same penalties. Anyone who facilitates the commission of any
of the above mentioned crimes shall be subject to the same penalties.” This puts donors as well
as their Egyptian partners and employees at potential risk as well.
It has been noted by the International Center for Not-for-Profit Law and others that the
new amendment specifies even stronger punishment for state employees than for private citizens
who violate this law, including death sentences for public officials. Those provisions open the
way for legitimate court challenges to members of regimes that solicit foreign donations if those
can be shown to harm the vague concept of national interests. This double-edged sword aspect of
12 Interestingly, however, a case brought against the state by rights groups in Egypt late in 2014 does appear
to have halted, at least temporarily, the application of a sweeping effort to collect and review email and other
internet communication using foreign-sourced equipment and software. The case is based on the new penalty
clauses and the argument that such indiscriminate infringement of the privacy of normal citizens creates a form of
national harm.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 84
the law, clearly drafted with Morsi government officials in mind but capable of application to
any subsequent government, may in fact be sufficient reason for its further amendment in the
future.
Conclusion and Recommendations
The above assessment is bleak on a first reading, with wider implication in the Arab
region given the historic role Egypt plays as an intellectual and political trend-setter. Tunisia
presents a more hopeful case where pluralistic politics and openness to international cooperation
mark for the most part their transitions period. Some historians of Egypt would balance the
picture by noting that xenophobic tendencies have coexisted with periods of cosmopolitan
assimilation for millennia in Egypt. And experiences in Latin America and elsewhere suggest
that heightened nationalism and rejection of foreign influence were hallmarks of military regimes
throughout the 1980s and 1990s. That did not prevent the ultimate ascendance of more
democratic and open societies at the end of a transition period.
What efforts might local civil society and its partners internationally take to ease the
current restrictive situation in Egypt and elsewhere in the region? The suggestions made here are
an amalgam of observations from working inside the philanthropy sector and from studying the
role of philanthropy in transition successes elsewhere. They are also indebted to an interesting
set of ideas by Akrum Bastawi,
13 who reviewed the methods utilized by Mubarak-era economic
reformers in Egypt for possible lessons applicable to civil society and cross-border donors.
1. The international philanthropic community can help by developing codes of conduct
for cross-border work based on respect for local cultures and legal traditions that also
enshrine basic shared principles of human welfare as well as operating procedures that
lend greater transparency and accountability to their endeavors. They also have a role
to play in compiling and sharing effective practices with governments and lobbying
through their global associations such as WINGS and the OECD Net-Forward group
of private donors.
2. International donors would be well-served to work more collaboratively with each
other in cross-border settings, especially during the unpredictable and fast-changing
situations brought on by sudden regime change or the end of war or civil conflict. This
would enable them to share credible insights on the political and social environment in
which they hope to invest and therefore be more likely to “do no harm” when
engaging with local counterparts. This would also increase chances that programs are
sustained beyond the usual two- to three-year post-regime change period in which
international enthusiasm is highest. Civil society development needs long incubation
and steady support, especially in environments such as Libya or Yemen where the
sector was severely restricted under an ancien régime.
3. Cross-border donors who are reluctant to take risks in a transition setting such as
Egypt or Tunisia with direct grant-making have a number of alternatives. The one with
longest-term potential impact is to support the growth and effectiveness of local
philanthropy. Whether foundations, endowments, social businesses, or more informal
citizen and community funds, local philanthropy has a better chance of staying the
13 Akrum Bastawi is a specialist in international economic relations and a former adviser to the Egyptian
government.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 85
course regardless of the restrictions that may be placed on external capital. When a
flourishing and diverse local philanthropy sector emerges in the Arab region, foreign
funding will recede as a political hot-button issue. It can then take its rightful place as
one auxiliary source of support among others.
4. Consider support for (and the registration of) local for-profit entities that have both an
income-generating and a social purpose. While an unusual move for most donors, this
could have a dual advantage. Social businesses, as they are often called, can crosssubsidize their public benefit activities with the revenues from for-profit activities,
whether fee-based social services, consulting, or a novel solution to a pressing societal
problem. They may also be able to maintain company legal status and avoid the harsh
measures applied currently to non-profits.
5. Civil society in local settings can begin a serious process of self-assessment and selfregulation. This begins with admitting that violations of law and ethical standards do
occur, which hurt everyone else. Standards can be drawn up and education programs
instituted within the sector that display to government bodies a seriousness of purpose
about truly serving the public good.
6. Local civil society needs to take itself seriously in the coming period and act less like
youthful rebels and more like professional partners in development. By this we mean
that the strategies built around street politics and engagement have their place and will
always be one of the tools in the struggle for civil liberties. But the waning support for
young activists in countries like Egypt is a wake-up call that the important work of
building broad constituencies, raising awareness beyond the urban centers, and
providing tangible benefits to the public must also be part of the next phase of Arab
civic life.
7. This does not in any way suggest a deflection from the essential watchdog and defense
functions of rights and public policy groups. It will require, however, taking steps
toward greater empathy with one’s supposed “enemy.” If security forces awake each
day to deal with suicide bombers, drug lords, and fraudsters, and they see evidence
that civic groups have no respect for their work, how can the wall of mistrust ever be
lowered? What are the tactics for finding and working with individuals within state
agencies who may be sympathetic and willing to show flexibility and innovation?
How do we prepare “our” candidates for influential public office? There are lessons to
be learned from other transition contexts where pressure to change institutions was
exercised while also making concerted efforts to reduce levels of mistrust on both
sides.
8. One data-driven lever for greater influence of the civil sector might come from a
credible estimation of its total contribution to the GDP. Using economic models to
monetize the services, information dissemination, and voluntary labor generated by the
sector would shift the debate from one of liabilities to one of assets. In countries like
Egypt where the sector is large, it could eventually shift the way government agencies
negotiate with civic leaders and bring them to the policy table. An academic research
team in Egypt is pursuing this project in 2015, on the assumption that once a new
parliament is seated in the summer, its members will benefit from factual evidence to
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 86
enable them to evaluate a draconian NGO draft law which the government recently
circulated.
9. Western governments need to do more to put teeth and consequences into their
rhetoric about support for civil society around the globe. If the U.S., Canada, Japan,
and EU countries were to work in tandem to impose meaningful consequences on
governments that are happily receiving foreign aid but restricting their civil sector
from doing the same, it is certain that changes would happen rapidly.
10. Perhaps with serious collective efforts at all levels, the unfortunate momentum of anticivil society and anti-global cooperation legislation can be stemmed and reversed.
References
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Law (ICNL), 2012. Website. Sept. 2014.
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“April 6 Founder Says Political Climate ‘worse than under Mubarak.’” Al-Ahram Online. May 12, 2013. Web. Feb.
2015. https://english.ahram.org.eg/News/71234.aspx
“Full English Translation of Egypt’s New Protest Law.” Al-Ahram Online. Nov. 25, 2013. Web: Sept. 2014.
https://english.ahram.org.eg/News/87375.aspx
Bastawi, Akrum. Bridging National Security Challenges to the Role of Civil Society in Egypt: Are There Lessons
from Economic Reform? Chapter in the online proceedings of Takaful 2014 – Fourth Annual Conference
on Arab Philanthropy and Civic Engagement, John D. Gerhart Center for Philanthropy and Civic
Engagement, American University in Cairo. Conference held in Beirut, Lebanon, June 4-6, 2014.
Bastawi, Akrum, Telephone interview. Sept. 15, 2014.
Carothers, Thomas, and Brechenmacher, Saskia. Closing Space: Democracy and Human Rights Support Under
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“Protest Law to Be Appealed before SCC.” Daily News Egypt. June 17, 2014. Web: Sept. 2014.

Protest Law to be appealed before SCC

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The President’s Approval Rate After 100 Days. Egyptian Center for Public Opinion Research (Baseera). Cairo:
Egyptian Center for Public Opinion Research, 2014. Print.
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Supporting Countries in Transition: A Framework Guide for Foundation Engagement. Joint publication of the
Institute for Integrated Transitions (IFIT) and Gerhart Center for Philanthropy and Civic Engagement,
AUC. Nov. 2013. Web. Oct. 2014. https://www.aucegypt.edu/research/gerhart/Documents/ATR.pdf
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International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 88
Article
LEGISLATION ON FINANCING PUBLIC BENEFITACTIVITIES
FROM TAX DESIGNATION IN POLAND
GRAZYNA PIECHOTA, PH.D.1
Regulations concerning public benefit activities in Poland were adopted with the Act on
Public Benefit Activity and Volunteerism of April 24, 2003 (the Dziennik Ustaw journal of laws
of 2003 no. 96 item 873). In this way a special type of nongovernmental organization (NGO)
was introduced into the legal system, known as the public benefit organization (PBO). PBOs had
been operating in Poland long before the introduction of the Act, but it was only then that they
received a special “public benefit status” that ensures legal recognition of organizations
performing public benefit activities. Nongovernmental organizations of different legal forms
(such as associations, foundations, and religious organizations) can get the public benefit status
after meeting certain formal requirements. Such status gives them access to certain benefits
reserved for PBOs. Should they lose this status, they can continue with their activities but no
longer have access to these benefits.
The main benefit is the right to collect a 1 percent tax designation from personal income
tax. Polish taxpayers have the right to assign part of their tax liability to public benefit
organizations. Other CEE countries that adopted such solutions include Hungary, Slovakia,
Lithuania, and Romania.
NGOs that carry out socially useful activity within the realm of public tasks and meet
certain criteria can become PBOs. Organizations eligible to become PBOs include the following:
1. Nongovernmental organizations that are not units of the public-finance sector and do
not act in order to achieve profit.
2. Legal persons and organizational units of churches or religious organizations.
3. Local government associations.
4. Social cooperatives.
5. Joint-stock companies and limited-liability companies and sports clubs that do not
operate in order to achieve a profit and that assign all profits to the implementation of
their statutory objectives.
The following entities cannot become PBOs:
• Political parties.
• Trade unions and organizations of employers.
• Professional associations.
• Foundations created by political parties.
1 Faculty of Management and Social Communication, Andrzej Frycz Modrzewski Cracow University,
Poland.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 89
Thus public benefit organizations encompass institutions implementing social functions and not
seeking profits. They may be both religious and secular.
Two groups of tasks qualify as public benefit activities in Poland. First are public tasks
carried out by organizations themselves, including social aid and charity; activity for the benefit
of national minorities; protection and promotion of health, science, education and upbringing;
activities supporting the development of local communities; and promotion of voluntary service
(Art. 4(1) of the Act). Another group includes activities that organizations implement in
cooperation with public administration bodies, including the following:
1. Performing public tasks delegated by administrative bodies.
2. Sharing information and cooperation in order to harmonize planned activities.
3. Consulting draft legislation in areas concerning statutory activities of these
organizations.
4. Creating joint advisory and initiative teams comprising representatives of NGOs,
entities enumerated in Art. 3(3) of the Act, and representatives of bodies of public
administration.
5. Concluding contracts and partnership agreements for the execution of local initiatives
and development policies.
Public tasks may be outsourced to organizations in two ways: delegating the tasks with grants for
financing them, or supporting the tasks with grants for co-financing them.
Statutory activity of organizations may be carried out as unpaid or paid activity. The
difference lies in receiving remuneration for statutory activities of the organization.
Organizations that apply for public benefit status must meet the following criteria,
defined in detail in Art. 20(1) of the Act:
• Carry out statutory activity to benefit the general public or a certain group of entities,
on condition that such a group is singled out on the basis of a particularly difficult
situation or material status.
• Carry out business activity only in addition to public benefit activity, and the excess
of revenues over expenses must be spent on statutory activity.
• Have a statutory supervisory or control body and a statute containing the clauses
required by the Act.
• Have a management authority whose members have not been convicted by a final
judgment for a publicly prosecuted intentional offense or a fiscal offense.
• Have conducted uninterrupted operation concerning public benefit for at least two
years before applying for public benefit status.
A nongovernmental organization receives public benefit status when entered into the National
Court Register. It loses this status after being crossed off the register.
A PBO is obliged to file an annual narrative report from its activities. Since 2013, entities
with an income of less than 100,000 zlotys may file simplified narrative reports (Art. 23(6c)–(6e)
of the Act). Besides the narrative report (or simplified narrative report), the organization must
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 90
prepare financial reports. Both approved documents should be published by entities on their
website or elsewhere. The organization is also obliged to publish both reports before July 15 of
the following year on the website of the office of the minister for social welfare. If an
organization fails to meet this condition, it loses the right to apply for 1 percent of tax. That is,
the organization is excluded from the list of organizations to which taxpayers can dedicate their
tax designation.
Financing Public Benefit Activities from Tax Designations
When the mechanism of financing public benefit activities from 1 percent designations
was introduced into the Polish legal system, it was accompanied by a number of limitations. In
the regulations for the years 2004-2007, the group of taxpayers who had the right to allocate 1
percent of their income tax was narrowed down: the right could not be exercised by
entrepreneurs who paid their tax according to the so-called flat rate of 19 percent, or taxpayers of
lump sum taxes or capital gains tax. Also, in order to effectively contribute the 1 percent, the
taxpayer had to pay the chosen organization themselves, before filing a tax return. Amounts from
the 1 percent of tax were returned to the taxpayer after the tax office settled the tax return.
Another problem was requirement that the taxpayer provide complicated information about the
beneficiary organization in the tax return.
Despite these problems, the number of organizations applying for the public benefit status
rose annually. The number rose between 2004 and 2005 by 82 per cent, exceeding the rate of
growth in the following years. Obtaining such a result was possible thanks to the large-scale
conversion of NGOs into organizations with the public benefit status. There was also an annual
increase in the number of taxpayers making 1 percent designations and in the amounts
transferred to the accounts of organizations. In 2004 80,320 taxpayers jointly allocated
10,365,000 zlotys to organizations. In the following year, more than 680,541 taxpayers allocated
41,616,000 zlotys. Both the number of taxpayers and the amounts assigned from 1 percent of tax
grew every year, despite the existing restrictions.2
In 2008 the mechanism for allocating the 1 percent was simplified. In 2008, as a result,
33 percent more organizations applied for PBO status than in 2007. Allocating 1 percent of tax
was made easier by shifting the burden of the transfer of money from taxpayers to tax offices.
Since 2008, taxpayers have been obliged only to mark in the tax return the organization to which
they want to allocate the 1 percent and the amount that the tax office is to transfer. Also in 2008,
more types of taxpayers were permitted to designate the 1 percent.
Changes introduced into the regulations on public benefit activity and voluntary service
in the years 2008-2012 also concerned conditions that need to be met by organizations to apply
for the 1 percent.
3 In 2010 the obligation of filing annual narrative and financial reports to the
minister responsible for social security was introduced, as a condition of placing an entity on the
list of PBOs entitled to receive the tax designation, which is updated every year. In the narrative
report, the organization must reveal the purposes for which the money from the 1 percent
2 Summary of data elaborated on the basis of information from the Ministry of Finance for each year:
https://pl.wikipedia.org/wiki/1%25_podatku (accessed on September 5, 2014).
3 Act on Public Benefit Activity and Volunteerism (Elaborated on the basis of: Dziennik Ustaw of 2010, no.
234, item 1536, of 2011 no. 112, item 654, no. 149, item 887, no. 205, item 1211, no. 208, item 1241, no. 209, item
1244, no. 232, item 137), consolidated text published https://isap.sejm.gov.pl/DetailsServlet?id=WDU20030960873
(accessed on September 6, 2014).
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 91
designation has been spent. The report must also be published on the organization’s website. In
addition, since 2011 organizations have been able to apply for public benefit status and gain the
right to 1 percent allocations only if they have operated uninterruptedly for at least two years.
Also funds obtained from the 1 percent may be used only to finance public benefit activity, so
campaigns whose aim is to obtain the tax designation must be financed from other sources.
In 2013 simplified narrative reports were introduced that must only be published on the
website of the office of the minister responsible for social security. This obligation concerns
those PBOs whose profit did not exceed 100,000 zlotys in a given financial year.4
These legal changes were aimed at decreasing the number of PBOs operating primarily
for activities funded by the 1 percent mechanism. Another goal was increasing financial
transparency of organizations’ activities. A step toward support for small, mainly local
organizations was limiting the requirements of making and publishing reports.
Influence of Legal Regulations on Financing Public Benefit from Tax Designations
At the end of 2011, 8,669 organizations were registered as having public benefit status.
Of them, 62 per cent were associations, 23 per cent foundations, and the rest were organizations
with other legal structure. The largest number of organizations operate in the Mazowieckie
(1,406) and Dolnośląskie (1,060) Voivodships, and the smallest in the Świętokrzyskie
Voivodship (168). In the following years there were no significant changes in the number of
organizations and in their activity in each voivodship.5
Table 1 – 1 percent of tax in each year
Year Number of taxpayers
allocating 1 percent
Taxpayers allocating 1
percent as percentage of
taxpayers entitled to do so
Allocated
amount in PLN
2004 80,320 0.33 percent 10,365,000
2005 680,541 2.78 percent 41,616,000
2006 1,156,510 4.71 percent 62,332,000
2007 1,604,142 6.49 percent 105,438,000
2008 5,134,675 no data 291,594,362.90
2009 7,324,953 no data 380,133,384.70
2010 8,623,928 33 percent 357,141,279.41
2011 10,134,625 38 percent 400,241,359.84
2012 11,165,578 43 percent 457,315,813.63
2013 11,537,414 44 percent 480,042,179.27
Figures: own elaboration on the basis of data published by the Ministry of Finance,
https://www.finanse.mf.gov.pl/pit/statystyki;jsessionid=A72ECE7A3B59C6228CBD6185B90AF975
4 Art. 23 (6c–6e) of the Act on Public Benefit Activity and Volunteerism – consolidated text published
https://isap.sejm.gov.pl/DetailsServlet?id=WDU20030960873 – access on 6 September 2014.
5 See https://wiadomosci.ngo.pl/wiadomosci/933303.html – access on 6 September 2014.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 92
The above table presents the number of taxpayers making the tax designation each year
and the amounts transferred to PBOs.
The number of taxpayers who allocate 1 percent of tax to a selected organization each
year (and in the years 2004-2007 the money was transferred directly to organizations’ accounts)
increases each year. In the first year the tax designation was made by only 80,320 people, but in
the following year it rose to 680,541 people. The highest increase occurred between 2007 and
2008, from 1,604,142 to 5,134,675 people. As previous research showed,
6 the main reason for
the growing number of taxpayers declaring 1 percent of tax between 2007 and 2008 was the
change in regulations that made it easier to allocate money to organizations. (Organizations
surveyed in the Silesia Voivodship declared that they carried out information and promotional
activities before 2008, but they reported a significant increase in amounts obtained from the 1
percent allocation in 2008, after the introduction of changes in regulations.) Also, the amounts
allocated to organizations increased. In 2004 a total amount of PLN 10,365,000 was allocated, in
the following year it was PLN 41,616,000 and in 2008, after a change in the principles of
allocating the tax designation, the amount increased to PLN 296,227,000. In each following year
the amount was higher. The year 2010 was an exception; in tax returns filed for 2009, the
adjustment of tax brackets was accounted for, which led to lower taxes due and as a consequence
lower amounts of the 1 percent.
A specific solution allowed in the Polish legal system is creating individual accounts,
called sub-accounts, by organizations for collecting funds for individuals and sometimes also for
other organizations. By providing the possibility of creating an individual account, an
organization can collect funds from a tax designation and then make them available to a
particular person or organization. Such a solution really contradicts the idea of public benefit,
because organizations in fact support the private benefit of certain beneficiaries. Also, they
switch the responsibility for gathering and spending the obtained amounts to beneficiaries. In
Poland, organizations that collect money on sub-accounts get the highest amounts every year.7 In
the case of collecting money on sub-accounts, usually the beneficiaries must seek support in their
environment, also using traditional or social media to collect money. Some people deal with
collecting money on sub-accounts better than others. This approach may help people who are
most resourceful rather than those with the greatest need. Purposes most often financed from tax
designations via sub-accounts are healthcare and rehabilitation.
Summary
Regulations introduced in Poland concerning financing public benefit from amounts
declared by citizens who allocate their tax designation to a certain organization changed the
attitude of Poles to activities for the benefit of the third sector. In the first years after the Act was
introduced, when allocating money required the taxpayer to take certain actions, much less
money was transferred to organizations’ accounts, but at the same time it was allocated to
organizations the taxpayers identified with to some extent. After amendment of the regulations,
the activities have become large-scale and declaring funds often became accidental (research
6 See chapter 5.1. (pp 59-78), G. Piechota, Organizacje pożytku publicznego – w drodze do społeczeństwa
obywatelskiego? (Public benefit organizations – on the way to a civil society?),
https://sbc.org.pl/dlibra/docmetadata?id=30220&from=publication (accessed on September 12, 2014).
7 In 2013 one organization that collects money on sub-accounts received a total of 25 percent of the whole
amount allocated in the year.
International Journal of Not-for-Profit Law / vol. 17, no. 1, March 2015 / 93
shows that many Poles do not pay attention to choosing an organization to which they declare
their 1 percent, and a few weeks after the declaration they do not remember the organization they
have chosen).8
The highest budget allocation is given to organizations that in fact execute tasks that
belong to the state, including healthcare, rehabilitation of the disabled, and social assistance. This
happens mainly due to the possibility of creating sub-accounts for individuals. The legal
possibility of creating sub-accounts and allocating tax designations to certain people, rarely
organizations, additionally leads to a situation in which private benefit, not public benefit, is
supported.
The main purpose of introducing the regulations, included in the justification of the draft
Act,
9was to create a mechanism independent of state and local authority for financing NGOs that
perform public benefit tasks. The regulations also ought to create incentives for citizens to
support organizations that contribute to common benefit with their tax designation, at the same
time shaping habits of civil engagement of individuals in other areas. In sum, the tax designation
was intended to support the development of civil society, particularly in the local dimension. But
the construction of legal regulations concerning public benefit activity and the established
practice of executing them have not so far provided any indications that civil society in Poland
has been strengthened.
The Act, however, significantly influenced the growing professionalism of NGOs that
have public benefit status and apply for tax designations. Due to the social advertisements and
other activities that are carried out every year in order to encourage people to declare their tax
designations, the organizations have become an important subject of public life. Also,
communications competence in organizations grew, as well as transparency of activities. These
two elements are particularly important because, as research shows, Poles are interested in how
funds from their tax designations are spent. Therefore, organizations are obliged to communicate
their aims and expenditures.
It should also be added that such a construction of the existing regulations has indirectly
led to the increase of the level of healthcare in Poland, which is financed from the state budget.
Thanks to allocation of funds to organizations of public benefit that implement tasks concerning
healthcare or rehabilitation of people who are ill or disabled, Polish NGOs are able to save lives
and increase the quality of life of the ill and the disabled as well as their families.
To sum up, regulations concerning the tax designation in Poland have not fulfilled the
basic goals that had been set: locally active public benefit organizations have not been supported.
Social effects of the regulations have been obtained in other areas, which should lead to
reflecting upon amending the regulations.
8 More in Organizacje pożytku publicznego – w drodze do społeczeństwa obywatelskiego? (Public benefit
organizations – on the way to a civil society?), e-book, Śląska Biblioteka Cyfrowa, Katowice 2011,
https://www.sbc.org.pl/dlibra/docmetadata?id=30220&from=&dirids=1&ver_id=&lp=1&QI= (accessed on
September 30, 2014).
9 See
https://orka.sejm.gov.pl/Druki4ka.nsf/($vAllByUnid)/BCA6153FDEC2F609C1256B660044D29F/$file/263.pdf –
(accessed on September 30, 2014).

e are tired of tolerating IBIS’ political
interference in Bolivia.” 119
 A September 2014 article in the New York Times asserted that foreign “money is
increasingly transforming the once -staid think -tank world into a muscular arm of foreign
governments’ lobbying in Washington.” 120 The following week, United States
Representative Frank Wolf wrote a letter to the Brookings Institution, in which he urged
them to “end this practice of accepting money from … foreign governments” so that its
work is not “compromised by the influence, whether real or perceived, of foreign
governments.” 121
Some governments assert that foreigners are not only seeking to meddle in domestic
political affairs, but also seeking to destabilize the country or otherwise engage in “regime
change.” Accor dingly, they argue that foreign funding restrictions are necessary to thwart efforts
to destabilize or overthrow the government currently in power.
 In 2013 in Sri Lanka , the government justified a recent registration requirement for all
CSOs on the grounds that it was necessary to “thwart certain NGOs from hatching
117 Jonathan Lis, “Draft bill: NGOs with foreign funding to be defined ‘foreign agents,’” Haaretz , May 26,
2013, accessed September 8, 2014, https://www.haaretz.com/news/national/.premium -1.592754 .
118 “Some Azerbaijani NGOs Cooperated with Armenian Special Services Under ‘People’s Diplomacy,’”
Trend, August 15, 2014, accessed September 8, 2014, https://en.trend.az/news/politics/230 3147.html .
119 Agence France -Presse, “Bolivia expels Danish NGO for meddling,” Global Post , December 20, 2013,
accessed September 16, 2014, https://www.gl obalpost.com/dispatch/news/afp/131220/bolivia -expels -danish -ngo –
meddling -1.
120 Eric Lipton, Brooke Williams, & Nicholas Confessore, “Foreign Powers Buy Influence at Think Tanks,”
New York Times , September 6, 2014, accessed September 17, 2014,
https://www.nytimes.com/2014/09/07/us/politics/foreign -powers -buy -influence -at-think -tanks.html?_r=0 .
121 Letter from Representative Frank Wolf to Strobe Talbott of the Brookings Institution, September 9,
2014, accessed September 17, 2014, https://s3.amazonaws.com/s3.documentcloud. org/documents/1301186/rep –
frank -wolfs -letter -to-strobe -talbott -at.pdf .

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 23

conspiracies to effect regime change by engaging in politics in the guise of doing social
work.” 122
 A drafter of the Russian “foreign agents” law justified the initiative when it was pending
in pa rliament, stating, “There is so much evidence about regime change in Yugoslavia,
now in Libya, Egypt, Tunisia, in Kosovo — that’s what happens in the world, some
governments are working to change regimes in other countries. Russian democracy needs
to be prot ected from outside influences.” 123
 In 2005, the Prime Minister of Ethiopia expelled civil society organizations, explaining,
“there is not going to be a ‘Rose Revolution’ or a ‘Green Revolution’ in Ethiopia after the
election” 124 — a reference to the so -called “color revolutions” that had recently occurred
in Georgia and elsewhere.
 In June 2012, Uganda’s Minister for Internal Affairs justified the government’s threats to
deregister certain CSOs, stating that CSOs “want to destabilize the country because that
is what they are paid to do…. They are busy stabbing the government in its back yet they
are supposed to do humanitarian work.” 125
 In the process of driving civil society organizations out of Zimbabwe , President Mugabe
justified his policies by claiming that the CSOs were fronts for Western “colonial
masters” to undermine the Zimbabwean government. 126 Similarly, the central committee
of Mugabe’s party claimed, “Some of these NGOs are working day and night to remove
President Mugabe and ZANU PF from power. They are being funded by Britain and
some European Union countries, the United States, Australia, Canada and New
Zealand.” 127
 In a March 2014 interview justifying a draft “foreign agents” law, Kyrgyzstan’s
President Atembaev argued, “Activities conducted by CSOs are obviously aimed at
destabilization of the situation in the Kyrgyz Republic…. Some CSOs do not care about
how they get income, whose orders to fulfill, which kind of work to execute…. There are
122 Xinhua, “Sri Lanka to Investigate NGOs Operating in Country,” Herald , June 13, 2013, accessed
September 8, 2014, https://www.herald.co.zw/sri -lanka -to-investigate -ngos -operating -in-country/ .
123 “Russian parliament gives first approval to NGO bill,” BBC , July 6, 2012, accessed September 8, 2014,
https://www.bbc.com/news/world -europe -18732949 .
124 Darin Christensen & Jeremy M. Weinstein, “Defunding Dissent,” Journal of Democracy 24(2) (April
2013): 80.
125Pascal Kwesiga, “Govt gets tough on NGOs,” New Vision , June 19, 2012, accessed Septembe r 9, 2014,
https://www.newvision.co.ug/news/632123 -govt -gets -tough -on-ngos.html .
126 Thomas Carothers, “The Backlash Against Democracy Promotion,” Foreign Affairs , March/April 2006,
accessed September 9, 2014, https://www.foreignaffairs.com/articles/61509/thomas -carothers/the -backlash -against –
democracy -promotion .
127 “29 NGOs banned in crackdown,” New Zimbabwe , February 14, 2012, accessed September 9, 2014,
https://www.newzimbabwe.com/news -7189 -29+NGOs+banned+in+crackdown/new s.aspx .

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 24

forces interested in destabilizing the situation in Kyrgyzs tan and spreading chaos across
Central Asia and parts of China.” 128
 In July 2014, the vice chairman of the China Research Institute of China -Russia Relations
argued that China should “learn from Russia” and enact a foreign agents law “so as to
block the way for the infiltration of external forces and eliminate the possibilities of a
Color Revolution.” 129
2. Transparency and Accountability
Another justification commonly invoked by governments to regulate and restrict the flow
of foreign funds is the importance of upholding the integrity of CSOs by promoting transparency
and accountability through government regulation. Consider, for example, the following
responses by government delegations to the UNSR’s Resource Report:
 Egypt : “We agree with the principles of accountability, transparency, and integrity of the
activities of civil society organisations and NGOs. However, this should not be l imited to
accountability to donors. National mechanisms to follow -up on activities of such entities,
while respecting their independence have to be established and respected.” 130
 Maldives : “While civil societies should have access to financing for effective operation
within the human rights framework, it is of equal importance that the organizations must
also ensure that they work with utmost integrity and in an ethical and responsible
manner.” 131
 Azerbaijan : “The changes and amendments to the national legisl ation on NGOs have
been made with a view of increasing transparency in this field…. In that regard, these
amendments should only disturb the associations operating in our country on a non –
transparent basis.” 132
Similarly, in response to a United Nations Hum an Rights Council panel on the promotion
and protection of civil society space in March 2014, the following government delegations
responded with justifications invoking transparency and accountability:
128 “Алмазбек Атамбаев: “Хочу максимально успеть,” Slovo.kg , March 23, 2014, accessed September
9, 2014, translated by Aida Rustemova, https://slovo.kg/?p=35019 .
129 Simon Denyer , “China taking the Putin approach to democracy,” Washington Post, October 1, 2014,
A7.
130 UN Office of the High Commissioner for Human Rights, “Clustered ID with the WG on HR and
Transnational Corporations and the SR on The Rights to Freedom of Assembly an d Association: Intervention
delivered by the Permanent Delegation of Egypt,” May 30, 2013, accessed September 9, 2014,
https://extran et.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Egypt_10_1.pdf .
131 UN Office of the High Commissioner for Human Rights, “Interactive Dialogue with the Special
Rapporteur on the Rights to Peaceful Assembly and of Association, M aldives Oral Statement,” May 31, 2013,
accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/ 23rdSession/OralStatements/Maldives_12.pdf .
132 UN Office of the High Commissioner for Human Rights, “Remarks by Azerbaijan,” May 31, 2013,
accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Azerbaijan_12.pdf .

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 25

 Ethiopia , on behalf of the African Group: “Domestic l aw regulation consistent with the
international obligations of States should be put in place to ensure that the exercise of the
right to freedom of expression, assembly and association fully respects the rights of
others and ensures the independence, accou ntability and transparency of civil society.” 133
 India, on behalf of the “Like Minded Group”: “The advocacy for civil society should be
tempered by the need for responsibility, openness and transparency and accountability of
civil society organizations.” 134
 Pa kistan , on behalf of the Organisation of Islamic Cooperation members : “It may be
underscored that securing funding for its crucial work is the right of civil society,
maintaining transparency and necessary regulation of funding is the responsibility of
sta tes.” 135
Kyrgyzstan has also employed this argument to justify a draft “foreign agents” law. The
explanatory note to the draft law claims that it “has been developed for purposes of ensuring
openness, publicity, transparency for non -profit organizations, inc luding units of foreign non –
profit organizations, as well as non -profit organizations acting as foreign agents and receiving
their funds from foreign sources, such as foreign countries, their government agencies,
international and foreign organizations, fo reign citizens, stateless persons or their authorized
representatives, receiving monetary funds or other assets from the said sources.”
3. Aid Effectiveness and Coordination
A global movement has increasingly advocated for greater aid effectiveness, including
through concepts of “host country ownership” and the harmonization of development
assistance. 136 However, some states have interpreted “host country ownership” to be
synonymous with “host government ownership” and have otherwise co -opted the aid
effectivene ss debate to justify constraints on international funding. For example:
133 UN Office of the High Commissioner for Human Rights, “Statement by Ethiopia on behalf of the
African Grou p at the 25th session of the Human Rights Council On the Panel Discussion on the Importance of the
Promotion and Protection of Civil Society Space,” March 11, 2014, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/25thSession/OralStatements/Ethiopia%20on%20b
ehalf%20of%20African%20Group_PD_21.pdf .
134 UN Office of the High Commissioner for Human Rights, “Joint Statement: India on behalf of like –
minded countries,” March 11, 2014, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/25thSession/OralStatements/India_on%20behalf
%20of%20LMG_PD_21.pdf . The “Like Minded Group” consists of Algeria, Bahrain, Bangladesh, Belarus,
Chi na, Cuba, Egypt, India, Indonesia, Malaysia, Pakistan, Russia, Saudi Arabia, Singapore, South Africa, Sri
Lanka, Sudan, Uganda, United Arab Emirates, Vietnam , and Zimbabwe .
135 UN Office of the High Commissioner for Human Rights, “Statement by Pakistan on be half of OIC:
Panel Discussion on Civil Society Space,” March 11, 2014, accessed September 9, 2014,
https ://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/25thSession/OralStatements/Pakistan%20on%20b
ehalf%20of%20OIC_PD_21.pdf .
136 See the Aid Effectiveness Agenda of the Paris Declaration (2005), the Accra Agenda for Action (2008),
and the Busan Partn ership for Effective Development Cooperation (2011).

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 26

 In July 2014, Nepal ’s government released a new Development Cooperation Policy 137
that will require development partners to channel all development cooperation through
the Ministry of Fi nance, rather than directly to CSOs. The government argued that this
policy is necessary for aid effectiveness and coordination: “Both the Government and the
development partners are aware of the fact that the effectiveness can only be enhanced if
the owne rship of aid funded projects lies with the recipient government.” 138
 Sri Lanka ’s Finance and Planning Ministry issued a public notice in July 2014 requiring
CSOs to receive government approval of international funding. Justifying the
requirement, the Ministry claimed that projects financed with international funding were
“outside t he government budget undermining the national development programmes.” 139
 In response to the UNSR’s Resource Report, the representative of Egypt stated, “The
diversification of the venues of international cooperation and assistance to States towards
the fund ing of civil society partners fragments and diverts the already limited resources
available for international assistance. Hence, aid coordination is crucial for aid
effectiveness.” 140
 At the recent Africa Leaders Summit, the Foreign Minister of Benin s poke a t a workshop
on closing space for civil society. He asserted that CSOs “don’t think they are
accountable to government but only to development partners. This is a problem.” He said
Benin needs “a regulation to create transparency on resources coming from a broad and
the management of resources,” stating that the space for civil society is “too wide.” 141
 The Intelligence Bureau of India released a report in June 2014 claiming that foreign –
funded CSOs stall economic development and negatively impact India’s GDP growth by
2 to 3 percent. 142 The report stated, “a significant number of Indian NGOs, funded by
some donors based in the US, the UK, Germany, the Netherlands and Scandinavian
137 Government of Nepal Ministry of Finance, “Development Cooperation Policy, 2014,” unofficial
translation, accessed September 9, 2014,
https://www.mof.gov.np/uploads/document/file/DCP_English_20140707120230_20140721083326.pdf .
138 Government of Nepal Ministry of Finance, “Development Cooperation Policy, 2014,” unofficial
translation, Article 2.2, acces sed September 9, 2014,
https://www.mof.gov.np/uploads/document/file/DCP_English_20140707120230_20140721083326.pdf .
139 “No foreign funds without approva l: Ministry,” Daily Mirror , July 22, 2014, accessed September 9,
2014, https://www.dailymirror.lk/news/50038 -no -foreign -funds -without -approval -ministry.html .
140 UN Office of the High Commissioner for Human Rights, “Clustered ID with the WG on HR and
Transnational Corporations and the SR on The Rights to Freedom of Assembly and Association: Intervention
delivered by the Permanent Delegation of Egypt,” May 30, 2013, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Egypt_1 0_1.pdf .
141 Personal notes of author.
142 “Foreign -funded NGOs stalling development: IB report,” Times of India , June 12, 2014, accessed
September 9, 2014, https://timesofindia.indiatimes.com/india/Foreign -funded -NGOs -stalling -development -IB –
report/articleshow/36411169.cms .

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 27

countries, have been noticed to be using people centric issues to create an enviro nment
which lends itself to stalling development projects.” 143
4. National Security, Counterterrorism, and Anti -Money Laundering
As discussed above, governments also invoke national security, counterterrorism, and
anti -money laundering policies to justify restr ictions on international funding, including cross –
border philanthropy. For example, the Financial Action Task Force (FATF), an
intergovernmental body that seeks to combat money laundering and terrorist financing, stated:
The ongoing international campaign against terrorist financing has unfortunately
demonstrated however that terrorists and terrorist organisations exploit the NPO
sector to raise and move funds, provide logistical support, encourage terrorist
recruitment or otherwise support terrorist organi sations and operations. This
misuse not only facilitates terrorist activity but also undermines donor confidence
and jeopardises the very integrity of NPOs. Therefore, protecting the NPO sector
from terrorist abuse is both a critical component of the globa l fight against
terrorism and a necessary step to preserve the integrity of NPOs. 144
Governments have leveraged concerns about counterterrorism and money laundering to
justify restricting both the inflow and outflow of philanthropy. For example: 145
 The governm ent of Azerbaijan justified amendments relating to the registration of
foreign grants, stating that the purpose of the amendments was, in part, “ to enforce
international obligations of the Republic of Azerbaijan in the area of combating money –
laundering.” 146
143 Rake sh Krishnan Simha, “Why India Should Follow Vladimir Putin’s Lead on NGOs,” Russia & India
Report, June 15, 2014, accessed September 9, 2014,
https://in.rbth.com/blogs/2014/06/15/why_india_should_follow_vladimir_putins_lead_on_ngos_35945.html .
144 Financial Action Task Force, “International Standards on Combating Money Laundering and the
Financing of Terrorism & Proliferation: The FATF Recommendations,” Financial Action Task Force Report, 2013,
54, accessed September 9, 2014,
https://www.fatfgafi.org/media/fa tf/documents/recommendations/pdfs/FATF_Recommendations.pdf . See also
Financial Action Task Force, “Risk of Terrorist Abuse in Non -Profit Organisations,” Financial Action Task Force
Report, June 2014, https://www.fatf -gafi.org/media/fatf/documents/reports/Risk -of-terrorist -abuse -in-non -profit –
organisations.pdf .
145 Constraints by donor governments on the outflow of cross -border donation s, albeit beyond the scope of
this article, similarly present significant barriers to cross -border philanthropy. These states assert that they have an
international responsibility to regulate the outflow of cross -border donations in order to ensure that fu nding destined
for other countries will not support criminal or terrorist activities in those foreign jurisdictions. For more information
about the justifications employed and the implications for civil society, please see: Ben Hayes, “Counter -Terrorism,
‘Policy Laundering’ and the FATF: Legalizing Surveillance, Regulating Civil Society,” Transnational
Institute/Statewatch Report, February 2012, https://www.statewatch.org/analyses/no -171 -fafp -report.pdf .
146 Charity & Security Network, “How the FATF Is Used to Justify Laws That Harm Civil Society,
Freedom of Association and Expression,” Charity & Security Network , May 16, 2013, accessed September 9, 2014,
https://www.charityandsecurity.org/analysis/Restrictive_Laws_How_FATF_Used_to_Justify_Laws_That_Harm_Civ
il_Society .

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 28

 The British Virgin Islands (BVI) enacted a law requiring that CSOs with more than five
employees appoint a designated Anti -Money Laundering Compliance Officer. 147 The
law also imposes audit requirements for CSOs that are not required of businesses. These
burdens were justified with explicit reference to FATF’s recommendation on nonprofit
organizations and counterterrorism. 148
 In response to the UNSR’s Resource Report, a group of thirteen African states responded,
“It is the responsibility of governments to ensure that the origin and destination of
associations’ funds are not used for terrorist purposes or directed towards activities which
encourage incitement to hatred and violence.” 149
 In 2013, a Sri Lankan government representative similarly stated, “While w e agree that
access to resources is important for the vibrant functioning of civil society, we observe
that Mr. Kiai does not seem to adequately take into account the negative impact of lack of
or insufficient regulation of funding of associations on natio nal security and counter –
terrorism.” 150
 In a National Security Analysis released in August 2014, Sri Lanka’s Ministry of
Defence claimed that some civil society actors have links with the Liberation Tigers of
Tamil Eelam, a group with “extremist separatist i deology,” and that these CSOs thereby
pose “a major national security threat.” 151 During the same period, the Sri Lankan
government announced that it was drafting a law requiring CSOs to register with the
Ministry of Defence in order to have a bank account and receive international funding.
5. Hybrid Justifications
While these categories and examples represent the types of justifications offered by
governments for restricting foreign funding, in practice, official statements often combine
multiple justifications. A recent example is the statement made at the UN Human Rights Council
by India on behalf of itself and twenty other “like minded” states, including Cuba, Saudi
147 “Non -Profit Organisations,” British Virg in Islands Financial Investigation Agency, accessed September
9, 2014, https://www.bvifia.org/non -profit -organisations .
148 Charity & Security Network, “How the FATF Is Used to Justify Laws That H arm Civil Society,
Freedom of Association and Expression,” May 16, 2013,
https://www.charityandsecurity.org/analysis/Restrictiv e_Laws_How_FATF_Used_to_Justify_Laws_That_Harm_Civ
il_Society
149 UN Office of the High Commissioner for Human Rights, “Oral Statement — Gabon on behalf of the
African Group,” 30 May 2013, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Gabon%20on%20be
half%20ofAG_10_1.pdf .
150 UN Office of the High Co mmissioner for Human Rights, “23rd Session of the HRC Statement by Sri
Lanka —Item 3: Clustered ID with the SR on the rights to peaceful assembly & of association,” May 31, 2013,
accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/Pages/OralStatement.aspx?MeetingN
umber=12.0&MeetingDat e=Friday,%2031%20May%202013 .
151 Gotabaya Rajapaksa, “Sri Lanka’s National Security,” Ministry of Defence and Urban Development of
Sri Lanka, August 19, 2014, accessed September 9, 2014,
https://www.defence.lk/new.asp?fname=Sri_Lankas_National_Security_20140819_02 .

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 29

Arabia , Belarus, China, and Vietnam ,152 which weaves together a number of different
justifications, including foreign interference, accountability, and national security:
[C]ivil society cannot function effectively and efficiently without defined
limits…. Civil society must also learn to protect its own space by guarding against
machinations of donor groups guided by extreme ideologies laden with hidden
politicized motives, which if allowed could potentially bring disrepute to the civil
society space…. There have also been those civil society organizations, who have
digressed from their original purpose and indulged in the pursuit of donor -driven
agendas. It is important to ensure accountability and responsibility for their
actions and the consequences thereof and also guard against compromising
national and international security. 153
Similarly, Ethiopia, in its statement in response to the UNSR’s Resource R eport,
referenced justifications relating to state sovereignty, aid coordination, and accountability and
transparency:
It is our firm belief that associations will play their role in the overall
development of the country and advance their objectives, if a nd only if an
environment for the growth of transparent, members based and members driven
civil society groups in Ethiopia providing for accountability and predictability is
put in place. We are concerned that the abovementioned assertion [about
lightening the burdens to receive donor funding] by the special rapporteur
undermines the principle of sovereignty which we have always been guided by. 154
Similarly constructed statements have also been put forward by Pakistan and other states. 155
152 The “Like Minded Group” consisted of Algeria, Bahrain, Bangladesh, Belarus, China, Cuba, Egypt,
India, Indonesia, Malaysia, Pakistan, Russia, Saudi Arabia, Singapore, South Africa, Sri Lanka, Sudan, Uganda,
UAE, Vietnam, and Zimbabwe. UN Office of the Hig h Commissioner for Human Rights, “Joint Statement: India on
behalf of like -minded countries,” March 11, 2014, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/25thSession/OralStatements/India_on%20behalf
%20of%20LMG_PD_21.pdf .
153 Ibid.
154 UN Office of the High Commissioner for Human Rights, “Oral Statement: Ethiopia,” May 31, 2013,
accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/23rdSession/OralStatements/Et hiopia_12.pdf .
155 See, e.g., UN Office of the High Commissioner for Human Rights, “Statement by Pakistan on Behalf of
OIC: Panel Discussion on Civil Society Space,” March 11, 2014, accessed September 9, 2014,
https://extranet.ohchr.org/sites/hrc/HRCSessions/RegularSessions/25thSession/OralStatements/Pakistan%20on%20b
ehalf%20of%20OIC_PD_21.pdf : “By virtue of its dynamic role civil society is well poised to build convergences
with the view to develop synergies between state institutions and their own networks. These synergies would
facilitate proper utilization of resources at the disposal state institutions an d civil society actors. In this regard, it
may be underscored that securing funding for its crucial work is the right of civil society, maintaining transparency
and necessary regulation of funding is the responsibility of states…. Within this social space, the civil society can
play its optimal role by working in collaboration with state institutions. Better coordination between civil society
actors and state institution [sic] would also facilitate enhancement of international cooperation in the field of hu man
rights.”

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 30

In this section, the a rticle briefly surveyed justifications presented by governments to
constrain the inflow of international funding, including philanthropy. In the following section,
we analyze constraints and their justifications under international law.
International Legal Framework
1. International Norms Protecting Access to Resources and Cross -Border Philanthropy
Article 22 of the International Covenant on Civil and Political Rights (ICCPR) states,
“Everyone shall have the right to freedom of association with others….” 156 Acco rding to the
UNSR: 157
The right to freedom of association not only includes the ability of individuals or legal
entities to form and join an association 158 but also to seek, receive and use resources 159 —
human, material and financial — from domestic, foreign and in ternational sources. 160
The United Nations Declaration on Human Rights Defenders 161 similarly states that
access to resources is a self -standing right:
“[E]veryone has the right, individually and in association with others, to solicit, receive
and utilize reso urces for the express purpose of promoting and protecting human rights
and fundamental freedoms through peaceful means….” 162
According to the Office of the United Nations High Commissioner for Human Rights, this right
specifically encompasses “the receipt of funds from abroad.” 163
156 United Nations International Covenant on Civil and Political Rights, Article 22, December 16, 1966,
https://www.ohchr.org/en/professionalinterest/pages/ccpr.aspx .
157 While reports of the UNSR are not binding international law, his reports are referenced here because
they provide a comprehensive articulation and explanation of international law.
158 International law generally recognizes the freedom of association, and t his section follows that
formulation. Addressing the applicability of international law to non -membership organizations is beyond the scope
of this article, but for more information, please see: International Center for Not -for -Profit Law & World Movement
for Democracy Secretariat, “Defending Civil Society Report, Second Edition,” June 2012, 35,
https://www.icnl.org/research/resources/dcs/DCS_Report_Second_Editi on_English.pdf .
159 The UNSR defines “resources” as a broad concept that includes financial transfers (e.g., donations,
grants, contracts, sponsorship, and social investments), loan guarantees, in -kind donations, and other forms of
support. See United Nation s Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 10, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp -content/uploads/2013/04/A.HRC_.23.39_EN -funding -report -April -2013.pdf .
160 Ibid., para. 8.
161 The UNSR notes that while “the Declaration is not a binding instrument, it must be recalled tha t it was
adopted by consensus of the General Assembly and contains a series of principles and rights that are based on
human rights standards enshrined in other international instruments which are legally binding. Ibid., para. 17.
162 United Nations General Assembly, Declaration on the Right and Responsibility of Individuals, Groups
and Organs of Society to Promote and Protect Universally Recognized Human Rights and Fundamental Freedoms ,
UN Res. 53/144, Article 13, https://www.un.org/Docs/asp/ws.asp?m=A/RES/53/144 .
163 United Nations Office of the High Commissioner for Human Rights, “Declaration on Human Rights
Defenders,” UN OHCHR, accessed September 9, 2014,
https://www.ohchr.org/EN/Issues/SRHRDefenders/Pages/Declaration.aspx .

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Reinforcing this position, 164 in 2013 the United Nations Human Rights Council passed
resolution 22/6, which calls upon on States “[t]o ensure that they do not discriminatorily impose
restrictions on potential sources of funding aimed at supporting the work of human rights
defenders,” and “no law should criminalize or delegitimize activities in defence of human rights
on account of the origin of funding thereto.” 165
The freedom to access resources extends beyond human rights defenders. For example,
the Declaration on the Elimination of A ll Forms of Intolerance and of Discrimination Based on
Religion or Belief states that the right to freedom of thought, conscience, and religion includes
the freedom to “solicit and receive voluntary financial and other contributions from individuals
and in stitutions.” 166 Access to resources is also an integral part of a number of other civil,
cultural, economic, political, and social rights. As the UNSR states: 167
For associations promoting human rights, including economic, social and cultural rights,
or those involved in service delivery (such as disaster relief, health -care provision or
environmental protection), access to resources is important, not only to the existence of
the association itself, but also to the enjoyment of other human rights by those benef itting
from the work of the association. Hence, undue restrictions on resources available to
associations impact the enjoyment of the right to freedom of association and also
undermine civil, cultural, economic, political and social rights as a whole. 168
Acc ordingly, “funding restrictions that impede the ability of associations to pursue their statutory
activities constitute an interference with article 22” of the International Covenant on Civil and
Political Rights. 169
2. Regional and Bilateral Commitments to Pro tect Cross -Border Philanthropy
164 This article briefly examines international norms governing global philanthropy. But it also recogniz es
that there are distinct limits to the impact of international law. For example, there is often an implementation gap
between international norms and country practice. In addition, there are few binding international treaties, such as
the ICCPR, and de tails are often left to “soft law,” such as the reports of the UNSR. At the same time, there is
concern that any effort to create a new global treaty on cross -border philanthropy or foreign funding would lead to a
retrenchment of existing rights.
165 United Nations General Assembly, Protecting Human Rights Defenders, March 21, 2013, UN Human
Rights Council, Resolution 22/6, para. 9, https://ap.ohchr.org/documents/dpage_e.aspx?si=A/HRC /RES/22/6 .
166 United Nations General Assembly, Declaration on the Elimination of All Forms of Intolerance and of
Discrimination Based on Religion or Belief , November 25, 1981, UN General Assembly Resolution A/RES/36/55,
Article 6(f), https://www.un.org/documents/ga/res/36/a36r055.htm .
167 In similar fashion, the UN Committee on Economic, Social and Cultural Rights recognized the link
between access to resources and economic, social and cultural rights, when it expressed “deep concern” about an
Egyptian law that “gives the Government control over the right of NGOs to manage their own activities, including
seeking external funding.” See Egypt, ICESCR, E/2001/22 (2000) 38 at paras. 161, 176,
https://www.bayefsky.com/themes/public_general_concluding -observations.php .
168 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 9, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp -content/uploa ds/2013/04/A.HRC_.23.39_EN -funding -report -April -2013.pdf .
169 Human Rights Committee, communication No. 1274/2004, Korneenko et al. v. Belarus, Views adopted
on October 31, 2006, para. 7.2.

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While this article is focused on global norms, cross -border philanthropy is also
protected at the regional level. For example:
 The Council of Europe Recommendation on the Legal Status of NGOs states:
“NGOs should be free to s olicit and receive funding — cash or in -kind donations —
not only from public bodies in their own state but also from institutional or
individual donors, another state or multilateral agencies ….” 170
 According to the Inter -American Commission on Human Rights, “states should allow and
facilitate human rights organizations’ access to foreign funds in the context of
international cooperation, in transparent conditions.” 171
 In May 2014, the African Commission on Human and Peoples’ Rights (ACHPR)
adopted, in draft for m, a report of the ACHPR Study Group on Freedom of Association
and Peaceful Assembly, with a specific recommendation that States’ legal regimes should
codify that associations have the right to seek and receive funds. This includes the right to
seek and re ceive funds from their own government, foreign governments, international
organizations and other entities as a part of international cooperation to which civil
society is entitled, to the same extent as governments.
 The European Court of Justice (ECJ) has issued a series of important decisions about the
free flow of philanthropic capital within the European Union. 172
In addition, many jurisdictions have concluded bilateral investment treaties, which help
protect the free flow of capital across borders. Some treaties, such as the U.S. treaties with
Kazakhstan and Kyrgyzstan, expressly extend investment treaty protections to organizations not
“organized for pecuniary gain.” 173 Indeed, the letters of transmittal submitted by the White
House to the U.S. Senate sta te that these treaties are drafted to cover “charitable and non -profit
entities.” 174
170 Council of Europe, “Recommendation CM/Rec (2007)145 of the Committ ee of Ministers to member
states on the legal status of non -governmental organisations in Europe,” adopted October 10, 2007, Article 50,
https://wcd.coe.int/ViewDoc.jsp?id=1194609 .
171 Inter -American Commission on Human Rights, Report on the Situation of Human Rights Defenders in
the Americas , March 7, 2006, Recommendation 19, https://www.icnl.org /research/resources/assembly/oas -human –
rights -report.pdf .
172 For more information on these decisions, see: European Foundation Center and Transnational Giving
Europe, “Taxation of Cross -Border Philanthropy in Europe After Persche and Stauffer: From landloc k to free
movement?”, European Foundation Center Report, 2014,
https://www.efc.be/programmes_services/resources/Documents/TGE -web.pdf ; European Foundation Centre, “ECJ
rules in favour of cross -border giving ,” EFC briefing, January 27, 2009, accessed September 9, 2014,
https://www.efc.be/programmes_services/resources/Documents/befc09 08.pdf .
173 U.S. -Kyrgyz Bilateral Investment Treaty, Article 1(b); U.S. -Kazakh Bilateral Investment Treaty, Article
1(b). See also Article 1(2) of the China – Germany BIT: “the term ‘investor’ means … any juridical person as well
as any commercial or other c ompany or association with or without legal personality having its seat in the territory
of the Federal Republic of Germany, irrespective of whether or not its activities are directed at profit.”
174 Letters of Transmittal available at the U.S. State Departm ent website:
https://www.state.gov/documents/organization/43566.pdf and
https://www.state.gov/documents/organization/4 3567.pdf .

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A detailed discussion of investment treaty protection for cross -border philanthropy is
beyond the scope of this article. This issue is presented in brief form, however, beca use it is a
significant avenue for further exploration, as it expands the international legal argument beyond
human rights and implicates bilateral investment treaties with binding enforcement
mechanisms. 175 For further information on this issue, please see International Investment Treaty
Protection of Not -for -Profit Organizations 176 and Protection of U.S. Non -Governmental
Organizations in Egypt under the Egypt -U.S. Bilateral Investment Treaty. 177
3. Restrictions Permitted Under International Law
Continuing the discussion of global norms, ICCPR Article 22(2) recognizes that the
freedom of association can be restricted in certain narrowly defined conditions. According to
Article 22(2):
No restrictions may be placed on the exercise of this right other than those wh ich are
prescribed by law and which are necessary in a democratic society in the interests of
national security or public safety, public order (ordre public), the protection of public
health or morals or the protection of the rights and freedoms of others. 178
In other words, international law allows a government to restrict access to resources if the
restriction is:
(1) prescribed by law;
(2) in pursuance of one or more legitimate aims, specifically:
o national security or public safety;
o public order;
o the protection of public health or morals; or
o the protection of the rights and freedoms of others; and
175 In addition, the European Court of Human Rights has held that Article 1 of the First Protocol of the
European Convention on Human Rights protects the right to peaceful enjoyment of one’s possessions. (Article 1 of
the First Protocol of the Euro pean Convention reads: “Every natural or legal person is entitled to the peaceful
enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to
the conditions provided for by law and by the general p rinciples of international law. The preceding provisions shall
not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of
property in accordance with the general interest or to secure the payment o f taxes or other contributions or
penalties.” In addition, the right to property includes the right to dispose of one’s property (Clare Ovey & Robin
White, The European Convention on Human Rights , 3rd edition (Oxford: Oxford University Press, 2002)), which
would seem to embrace the right to make contributions to CSOs for lawful purposes.
176 Luke Eric Peterson & Nick Gallus, “International Investment Treaty Protection of Not -for -Profit
Organizations,” International Journal of Not -for -Profit Law 10(1) (December 2007),
https://www.icnl.org/research/journal/vol10iss1/art_1.htm .
177 Nick Gallus, “Protection of U.S. Non -Governmental Organizations in Egypt under the Egypt -U.S.
Bilat eral Investment Treaty,” International Journal of Not -for -Profit Law 14(3) (September 2012),
https://www.icnl.org/research/journal/vol14iss3/art2.html .
178 United Nations International Covenant on Civil and Political Rights, Article 22, December 16, 1966,
https://www.ohchr.org/en/professionalinterest/pages/ccpr.aspx . Article 22, ICCPR

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(3) “necessary in a democratic society to achieve those aims.” 179
Moreover :
States should always be guided by the principle that the restrictions must not im pair the
essence of the right … the relations between right and restriction, between norm and
exception, must not be reversed. 180
The burden of proof is on the government. 181 In addition:
When a State party invokes a legitimate ground for restriction of freed om of expression,
it must demonstrate in specific and individualized fashion the precise nature of the threat,
and the necessity and proportionality of the specific action taken, in particular by
establishing a direct and immediate connection between the [ activity at issue] and the
threat. 182
The following section amplifies this three -part test contained in Article 22(2).
A. Prescribed by law
The first prong requires a restriction to have a formal basis in law. This means that:
restrictions on the right to free dom of association are only valid if they had been
introduced by law (through an act of Parliament or an equivalent unwritten norm of
common law), and are not permissible if introduced through Government decrees or other
similar administrative orders. 183
As discussed above, in July 2014, the Sri Lankan Department of External Resources of
the Ministry of Finance and Planning disseminated a notice to the public, declaring that any
organization or individual undertaking a project with foreign aid must have appro val from
relevant government agencies. Similarly, in July 2014, Nepal’s government released a new
Development Cooperation Policy that will require development partners to channel all
development cooperation through the Ministry of Finance, rather than directly to civil society. In
both cases, the restriction s were based on executive action and not “introduced by law (through
179 Case of Vona v. Hungary (A pp no 35943/10) (2013) ECHR para. 50,
https://hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=001 -122183 .
180 United Nations Human Rights Council, Report of the Special Rappo rteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 16, UN Doc. A/HRC/20/27 (May 21, 2012),
https://www.ohchr .org/Documents/HRBodies/HRCouncil/RegularSession/Session20/A -HRC -20 -27_en.pdf .
181 UN Office of the High Commissioner for Human Rights (OHCHR), Fact Sheet No. 15, Civil and
Political Rights: The Human Rights Committee, May 2005,
https://www.ohchr.org/Documents/Publications/FactSheet15rev.1en.pdf .
182 United Nations Human Rights Committee, General Comment No. 34, para. 35, UN Doc.
CCPR/C/GC/34 (September 12, 2011), https://www2.ohchr.org/english/bodies/hrc/docs/GC34.pdf .
183 See UN Special Rapporteur on the situation of human rights defenders, Commentary to the Declaration
on the Right and Responsibility of Individuals, Groups and Organs of Society to Promote and Protect Universally
Recognized Human Rights and Fundamental Fre edoms, July 2011, 44,
https://www.ohchr.org/Documents/Issues/Defenders/CommentarytoDeclarationondefendersJuly2011.pdf : “It would
seem reasonable t o presume that an interference is only “prescribed by law” if it derives from any duly promulgated
law, regulation, order, or decision of an adjudicative body. By contrast, acts by governmental officials that are ultra
vires would seem not to be ‘prescribe d by law,’ at least if they are invalid as a result.”

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an act of Parliament or an equivalent unwritten norm of common law).” Accordingly, they
appear to violate the “prescribed by law” standard required under Article 22(2) of the ICCPR.
This prong of Article 22(2) also requires that a provision be sufficiently precise for an
individual or NGO to understand whether or not intended conduct would constitute a violation of
law. 184 As stated in the Johannesburg Principles, “The law must be accessible , unambiguous,
drawn narrowly and with precision so as to enable individuals to foresee whether a particular
action is unlawful.” 185
This prong helps limit the scope of permissible restrictions. As discussed above, certain
laws ban funding of organizations that cause “social anxiety,” have a “political nature,” or have
“implied ideological conditions.” These terms are undefined and provide little guidance to
individuals or organizations about prohibited conduct. Since they are not “unambiguous, drawn
narrowl y and with precision so as to enable individuals to foresee whether a particular action is
unlawful,” there is a reasonable argument that these sorts of vague restrictions fail the
“prescribed by law” requirements of international law.
B. Legitimate aim
The second prong of Article 22(2) requires that a restriction advance one or more
“legitimate aims,” 186 namely:
 national security or public safety;
 public order;
 the protection of public health or morals; or
 the protection of the rights and freedoms of others.
This prong provides a useful lens to analyze various justifications for constraint. For
example, governments have justified constraints to promote “aid effectiveness.” As the UNSR
notes, aid effectiveness “is not listed as a legitimate ground for restricti ons.” 187 Similarly, “[t]he
protection of State sovereignty is not listed as a legitimate interest in the [ICCPR],” and “States
cannot refer to additional grounds … to restrict the right to freedom of association.” 188
Of course, assertions of national security or public safety may, in certain circumstances,
constitute a legitimate interest. Under the Siracusa Principles, however, assertions of national
security must be construed restrictively “to justify measures limiting certain rights only when
184 Though not a fully precise comparison, this concept is somewhat similar to the “void for vagueness”
doctrine in U.S. constitutional law.
185 Article 19, Johannesburg Principles on National Security, Fre edom of Expression and Access to
Information (London: Article 19, 1996), Principle 1.1(a),
https://www.article19.org/data/files/pdfs/standards/joburgprinciples.pdf . The Johannesburg Principles were
developed by a meeting of international experts at a consultation in South Africa in October 1995.
186 Case of Vona v. Hungary (App no 35943/10) (2013) ECHR para. 50,
https://hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=001 -122183 .
187 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 40, UN Doc . A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp -content/uploads/2013/04/A.HRC_.23.39_EN -funding -report -April -2013.pdf .
188 Ibid., pa ra. 30.

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they are taken to protect the existence of the nation or its territorial integrity or political
independence against force or threat of force.” 189 In addition, a state may not use “ national
security as a justification for measures aimed at suppressing opposition … or at perpetrating
repressive practices against its population.” 190 This includes defaming or stigmatizing foreign
funded groups by accusing them of “treason” or “promoting regime change.” 191
Accordingly, under international law, governments cannot rely on generalized claims of
“state sovereignty” to justify constraints on global philanthropy. In the words of the UNSR:
Affirming that national security is threatened when an association receives funding from
foreign sources is not only spurious and distorted, but also in contradiction with
international human rights law. 192
This brief analysis is not intended to explore the details of the aid effectiveness and
sovereignty justifications. Rather, the goal is to illustrate how the “legitimate aim” requirement
of in ternational law can help inform the analysis of certain justifications presented by
governments, such as arguments based on “aid effectiveness” and “sovereignty.”
C. Necessary in a Democratic Society
Even if a government is able to articulate a legitimate aim , a restriction violates
international law unless it is “necessary in a democratic society.” As stated by the Organization
for Security and Co -operation in Europe, the reference to necessity does not have “the flexibility
of terms such as ‘useful’ or ‘conv enient’: instead, the term means that there must be a ‘pressing
social need’ for the interference.” 193 Specifically, “where such restrictions are made, States must
demonstrate their necessity and only take such measures as are proportionate to the pursuance of
legitimate aims in order to ensure continuous and effective protection of Covenant rights.” 194
As stated by the UNSR:
In order to meet the proportionality and necessity test, restrictive measures must be the
least intrusive means to achieve the desired ob jective and be limited to the associations
189 See the “Siracusa Principles” [United Nations, Economic and Social Council, U.N. Sub -Commission on
Prevention of Discrimination and Protection of Minorities, Siracusa Principles on the Limitation and Derogation of
Provisions in the International Covenant on Civil and Political Rights, Annex, UN Doc E/CN.4/1985/4 (1984)],
which were adopted in May 1984 by a group of international human rights experts convened by the International
Commission of Jurists, the International Association of Penal Law, th e American Association for the International
Commission of Jurists, the Urban Morgan Institute for Human Rights, and the International Institute of Higher
Studies in Criminal Sciences. Though not legally binding, these principles provide an authoritative s ource of
interpretation of the ICCPR with regard to limitations clauses and issue of derogation in a public emergency. They
are available at: https://graduateinstitute.ch/f aculty/clapham/hrdoc/docs/siracusa.html .
190 Ibid.
191 United Nations Human Rights Council, Report of the Special Rapporteur on the rights to freedom of
peaceful assembly and of association, Maina Kiai, para. 27, UN Doc. A/HRC/23/39 (April 24, 2013) at
https://freeassembly.net/wp -content/uploads/2013/04/A.HRC_.23.39_EN -funding -report -April -2013.pdf .
192 Ibid., para. 30
193 OSCE/Office for Democratic Institutions and Human Rights (ODIHR), Key Guiding Principles of
Freedom of Association with an Emphasis on Non -Governmental Organizations , para. 5
194 United Nations Human Rights Committee, General Comment No. 31 (2004), para. 6, UN Doc.
CCPR/C/21/Rev.1/Ad d. 13, May 26, 2004.

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falling within the clearly identified aspects characterizing terrorism only. They must not
target all civil society associations…. 195
Consider, for example, Ethiopian legislation imposing a 10 percent cap on the for eign
funding of all CSOs promoting a variety of objectives, including women’s rights and disability
rights. As discussed above, Ethiopia has asserted a counterterrorism rationale to justify foreign
funding constraints. Ethiopia does not establish a “ direct and immediate connection between the
[activity at issue] and the threat.” 196 In addition, the cap is not the “least intrusive means to
achieve the desired objective and … limited to the associations falling within the clearly
identified aspects characterizi ng terrorism.” Accordingly, the counterterrorism objective fails to
justify the Ethiopian cap on foreign funding.
The UNSR also applied this test to the “aid effectiveness” justification. In response, he
stressed that:
even if the restriction were to purs ue a legitimate objective, it would not comply with the
requirements of “a democratic society.” In particular, deliberate misinterpretations by
Governments of ownership or harmonization principles to require associations to align
themselves with Government s’ priorities contradict one of the most important aspects of
freedom of association, namely that individuals can freely associate for any legal
purpose. 197
In addition, “longstanding jurisprudence asserts that democratic societies only exist
where ‘pluralis m, tolerance and broadmindedness’ are in place,” 198 and “minority or dissenting
views or beliefs are respected.” 199
Applying this test, the UNSR has note