Allies or Adversaries? Foundation Responses to Government Policing of Cross-Border Charity

For optimal readability, we highly recommend downloading the document PDF, which you can do below.

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 45

Cross-Border Philanthropy
Allies or Adversaries? Foundation Responses to Government Policing of Cross-Border Charity


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’ laws 2 to
Ethiopia’s clampdown on human rights organizations supported by foreign aid 3 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.

Understanding the legal restrictions imposed in the name of host country ownership gives
rise to two broad er 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?

* Dr. Oonagh B. Breen, , 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 Cross –
Border 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; IC NL, 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 Soc ieties 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 Societ y Space, Statement by
India in explanation of vote before the vote (27th Session of the Human Rights Council, September 26, 2014).

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
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.

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,

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 NG O’ 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
upon the collapse of the former Soviet Union and the dismantling of the apartheid system in
South Africa. 9

8 OECD/DAC, Deve lopment 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, Por tugal, and Korea.
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.

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

For recipient host countries, this proliferation gave rise to a series of related problems.

First, the large number of development actors increased transaction costs 10 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

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 Developm ent 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 Compe tition, 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 commit ment 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, “Pri ncipals, Agents
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 misall ocations of resources and large -scale waste of public monies”).

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
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;

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 . The Millennium Development Goals (MDGs) are eight
international develo pment 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 organi zations committed to help achieve these goals by 2015.
20 See Monterrey Consensus (United Nations, 2003), (last accessed Sept ember 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 attain ing the Millennium Development Goals – Financing for Development and Aid Effectiveness, COM
(2005), 133 final.
21 OECD, Paris Declaration on Aid Effectiveness (2005) and OECD, Accra Agenda for Action (2008),
available at ; and Busan Partnership for Effective Development


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 accept ed 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 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

Cooperation (2011), available at iveness/49650173.pdf (last accessed September 18,
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 –
content/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].

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 Bett erAid Coordinating Group”
came together with the support of some donor governments to form a temporary multi –
stakeholder 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 institution s 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 2010 29 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
also commit CSOs to realizing positive sustainable change, practicing transparency and
accountability, sharing knowledge and mutual learning, and pursuing equitable partnerships. 30
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

28 Accra Agenda for Action, [20].
29 Involving the participation of 170 CSO delegates from 82 countries.
30 See https://cso – –
2.pdf (last accessed September 25, 2014).

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

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.o (October 2012) and resolution 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 .


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
 Civil society space is particularly important for minorities, the marginalised and other
disadvantaged groups as well as those espousing mino rity or dissenting views or
beliefs; 43

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” s ee 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
Barb ara 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.
42 A/HRC/27/L.24, Preamble.


 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, In dia 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

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

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.

43 A/HRC/27/L.24 at 4.
44 A/HRC/27/L.24 at 8, 12 and 13.
45 The o ther 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 o f 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 Ho use, September 23, 2014).


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 Notwith standing 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 cross –
border 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 pan –
European foundation enjoying charitable tax-exempt status in the EU Member States of Ireland,
France, Germany, and Malta. 55

49 University of Heidelberg, Centre for Social Investment, Feasibility Study on a European Foundation
Statute – Final Report (2009) at 149 available at 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 Fisc al Environments — Mapping the European Union of 27 (2007).
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 prov ide 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 requir ement, although your assets should be adequate to pursue your planned purpose for five years.


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
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

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 l ate
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 Eu ropean 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 activit ies unencumbered by legal or taxation
58 See Case C -386 /04 , Centro di Musicologia Walter Stauffer v . Finanzamt M nchen f r K rperschaften ,
[2006] ECR I -8203.
59 Case C -318 /07 Hein Persche v . Finanzamt L denscheid , [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 Eu rope network, Taxation of cross –
border philanthropy in Europe after Persche and Stauffer – From landlock to free movement? (2014), at [3.1],


(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 EFS 63 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?
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.

available at rogrammes_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.transnatio (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 an d Enhancing Corporate Governance in
the European Union (2006) at 26, available at df;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 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.
64 For an informative discussion of the differing approaches of common law and civil law jurisdic tions 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.


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

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.
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

65 European Commission, P roposal 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.
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.


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 cross –
border 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 upfront tax recognition that
would have made it exceptionally appealing to foundations), the viability of the proposed
Statute’s hung in the balance 71 before falling off the legislative agenda entirely.

69 Gail Moss, “European Foundation Statute suffers setback,” Investments & Pensions Europe (November
28, 2014), available at -foundation -statute -suffers –
setback/10005189.fullarticle (last accessed January 29, 2015).
70 European Foundation Centre Press Rel ease, “European Commission halts negotiations on the European
Foundation Statute – What’s next?” (December 16, 2014).
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 Pr esidency of the European Council. See “Italian Presidency Priorities Discussed by EP
committees” (2014 0722 IPR53208), available at /en/news –
room/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


Understanding the politics of the EFS provides a useful insight into the concept of host –
country 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 public –
benefit -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
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.

(available at residency -and -eu/programme -and -priorities/programme -of-the -italian –
presidency -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, avai lable at ;
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 (last accessed
Oct ober 3, 2014); EFC, Philanthropy sector urges Governments to adopt the European Foundation Statute
(November 19, 2013) available at es_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 pe rcent in real terms since
2007 -2008, when it received a settlement of £32.6m from the British government.
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 foundation s 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 Unpacki ng 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 Att orney
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.


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 society 77 but it does
provide a thoughtful reflection on the broader political explanations for the current hostilities.
The global reach of the current political and legal pushback against CSOs transcends the
usual suspects of authoritarian and semi-authoritarian 78 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

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 (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).
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.


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 NGO s’ 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 restriction s, 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
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

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, Brussel s, September 2006), at 8. Available at r_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 ta king 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.
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 Fin ancing of Terrorism Impact Civil Society,” in State of Civil Society 2013: Creating an Enabling
Environment , 120 (CIVICUS, 2013), available at https://soc –
content/uploads/2013/04/2013StateofCivilSocietyReport_full.pdf .


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 hiccup s in the
evolution of new(er) nation-states, perhaps attributable to personality clashes? Or should such
developments be categorized as more deeply seated political problem s that give rise not to a
short-lived hiatus in the creation of civic space but rather to an ongoing, chronic political

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 post –
communist 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
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.

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.
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).


Into t his political void, the Western -coordinated overthrow of Serbia’s
Slobodan Milosevic and the success of the Color Revolutions in Georgia, the Ukraine, and
Kyrgyzstan 90 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 non –
development 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
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.

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
health systems strengthening or a truly new approach to development?” (2012), 12 BMC Public Health 531.
93 Paris Declaration on Aid Effectiveness (2005).

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 recipient –
country-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 role s
of parliament and local government 95 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 well –
intentioned 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
views of the country’s elite. 98

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 -5.HTM , defined within the context of the
“comprehensive development framework” (last accessed on February 3, 2015).
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.


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 lowest –
income 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-dependent 101 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
reporting cases in which recipient governments’ own sense of beneficiary legitimacy controlled
whether funded health care 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 CSO s in
civil law countries and which enjoyed the backing of EU institutions.

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 .
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.
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


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 foundation s
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.

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).
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.

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

Taking the diplomatic route of sharing best practice . . .
Sharing best practices on the legal enablement of civil society, while engaging in better –
coordinated 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
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 NGO s’ 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.

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).
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.


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 provision s 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 Departmen t of Local Government, Heritage and the
Environment (responsible for the Electoral Acts referred to above-restricting funding for NGO

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
and ACP countries on development cooperation, peace and security, arms trade, and migration
with commitments on trade cooperation. 115

112 Electoral (Amendment) Act 2001, (no. 38 of 2001), s.49, inserting s.23A in the Electoral Act 1997. Se e
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 deaf ening 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.
115 See ; 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 Agreeme nts (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.”).


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.
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.

116 See further Nick Gallus, “Protection of U.S. Nongovernmental Organizations in Egypt Under the Egypt –
U.S. Bilateral Investment Treaty” (2012), 1 4(3) International Journal for Not -for -Profit Law 62; see also, CCIC,
Bilateral Investment Treaties: A Canadian Primer , available at /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 -agsGY . Engineers Without Borders maintains a website devoted to
NGO failure stories and what can be learned from them at .
118 Engineers Without Borders website, above n. 117 .
119 See Arts. 52 & 58 EEC. Article 58 EEC provided “‘Companies or firms’ mean s 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.


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 strengthen ing philanthropy in these developing
nations. Examples of the difficulties experienced in embedding community foundations in
Afric a122 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 demand –
driven 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 . . .
Con ference meetings hosted by ARNOVA, ISTR , and the National Centre on
Philanthropy and the Law at New Y ork 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
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 p art 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 underpinni ng it, are issues deserving constant analysis and discussion on an
ongoing basis.

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 Found ations: 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).

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, -1.592754 .
118 “Some Azerbaijani NGOs Cooperated with Armenian Special Services Under ‘People’s Diplomacy,’”
Trend, August 15, 2014, accessed September 8, 2014, 3147.html .
119 Agence France -Presse, “Bolivia expels Danish NGO for meddling,” Global Post , December 20, 2013,
accessed September 16, 2014, -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, -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, 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, -lanka -to-investigate -ngos -operating -in-country/ .
123 “Russian parliament gives first approval to NGO bill,” BBC , July 6, 2012, accessed September 8, 2014, -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, -govt -gets -tough -on-ngos.html .
126 Thomas Carothers, “The Backlash Against Democracy Promotion,” Foreign Affairs , March/April 2006,
accessed September 9, 2014, -carothers/the -backlash -against –
democracy -promotion .
127 “29 NGOs banned in crackdown,” New Zimbabwe , February 14, 2012, accessed September 9, 2014, -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,” , March 23, 2014, accessed September
9, 2014, translated by Aida Rustemova, .
129 Simon Denyer , “China taking the Putin approach to democracy,” Washington Post, October 1, 2014,
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 .
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, 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, .

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,
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,
%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 ://
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, .
138 Government of Nepal Ministry of Finance, “Development Cooperation Policy, 2014,” unofficial
translation, Article 2.2, acces sed September 9, 2014, .
139 “No foreign funds without approva l: Ministry,” Daily Mirror , July 22, 2014, accessed September 9,
2014, -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, 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, -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, .
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, 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 -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, -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,
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, -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, e_Laws_How_FATF_Used_to_Justify_Laws_That_Harm_Civ
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,
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,
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, .

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
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,
%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, 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,
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

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, .
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, 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 -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, .
163 United Nations Office of the High Commissioner for Human Rights, “Declaration on Human Rights
Defenders,” UN OHCHR, accessed September 9, 2014, .

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 31

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, /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), .
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, -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 -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.

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 32

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, .
171 Inter -American Commission on Human Rights, Report on the Situation of Human Rights Defenders in
the Americas , March 7, 2006, Recommendation 19, /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, -web.pdf ; European Foundation Centre, “ECJ
rules in favour of cross -border giving ,” EFC briefing, January 27, 2009, accessed September 9, 2014, 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: and 3567.pdf .

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 33

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), .
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), .
178 United Nations International Covenant on Civil and Political Rights, Article 22, December 16, 1966, . Article 22, ICCPR

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 34

(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, -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, .
182 United Nations Human Rights Committee, General Comment No. 34, para. 35, UN Doc.
CCPR/C/GC/34 (September 12, 2011), .
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, : “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.”

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 35

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), . 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, -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 -content/uploads/2013/04/A.HRC_.23.39_EN -funding -report -April -2013.pdf .
188 Ibid., pa ra. 30.

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 36

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: 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 -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.

International Journal of Not -for -Profit Law / vol. 17 , no. 1, March 2015 / 37

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