Realist, not conformist analysis of the latest financial, business and political news

Let’s Copy Ethiopia’s Excellent Method Of Dealing With Foreign NGOs

Ethiopia might seem a strange place to be taking governance tips from but there’s merit in this proposal – limits upon what foreign financed charities and non-governmental organisations may do. Note that the restrictions, the first set at least, don’t limit what the people may decide to do about their own governance – that’s fine, government is for and by the people. It only places restraints upon what foreign money may buy which seems fair enough.

The second restriction might seem a little more limiting but again there’s merit to it – how much of a charitable flow of funds has to be spent upon actually doing something?

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]A new draft bill to repeal the existing restrictive Civil Society and Charity Proclamation has been tabled before the House of People’s Representatives (HPR) on Thursday proposing a resolution to lift the restriction imposed on CSO’s source of finance and the associated status of these organizations as resident or foreign Charities.[/perfectpullquote]

Note that this is in fact a liberalisation from the current situation.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]According to the existing law, charities registered as resident association and hence allowed to engage in advocacy work related to politics were prohibited from sourcing more than 10 percent of their funding from foreign sources.[/perfectpullquote]

It’s the old law that I’d praise, not the lifting of the restriction. For example, past 29 March the European Union will be a foreign place to the United Kingdom. Such a restriction would mean that people like Friends of the Earth Europe – a plurality of whose funding comes from the EU itself – would not be able to engage in public or policy advocacy in Britain. I’m entirely sure that such a restriction would make us all richer.

However, the second idea seems good:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] The draft bill also reduces the percentage of the overall budget that can be spent on administrative cost from 30 percent to 20 percent. The administrative cost of an organization established for the benefit of the general public or to that of a third party may not exceed twenty percent of its total income, draft reads. These are expenses not related to the project activities of an organization but are necessary to ensure the continuity of an organization and related to administrative activities including: salaries and benefits of administrative employees; purchase of consumables and fixed assets and repair and maintenance expenses related to administrative matters; office rent, parking fees, audit fees, advertisement expense, bank service fees, fees for electricity, fax, water and internet services; postal and printing expenses; tax, purchase and repair of vehicles for administrative purposes, and procurement of oil and lubricants for the same; insurance costs, penalties and attorney fees, according to the draft bill. [/perfectpullquote]

The actual killer in there is “advertisement expense”. Such a law, such a restriction, would get rid of those “charities” which exist to raise money to feed their advertising budgets to raise money. We’ve far too many of them.

Just as with the advice to study history – the past is a foreign country, they do things differently there – we should indeed study other places in the world. For they do things differently there and often enough those differences lead to something we might want to consider using too. Kneecapping civil society isn’t a good idea, abolishing the third sector an equally bad one. But trying to make sure that both are us peeps deciding our politics, or that perhaps a charity needs to actually do something, don’t seem like bad ideas.

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Dodgy Geezer
Dodgy Geezer
5 years ago

“…….The draft bill also reduces the percentage of the overall budget that can be spent on administrative cost from 30 percent to 20 percent……..”

This sounds like a policy for encouraging creative accountancy. Did the local KPMG rep advise on the drafting of the legislation?

Adv Trek
Adv Trek
5 years ago

Good luck trying to get compliance.

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