Great News for Foreigner-Run Charities!

Great News for Foreigner-Run Charities!

Readers were surprised to see a piece on the cover the Atencion newspaper this week about the new NGO (Non-Government Organization, or charity) law since the new law specifically targets NGOs like the English library that owns the paper. Well, any NGO that is running businesses in fields unrelated to their mission statement. A perspective I’ve lobbied for for years and will help NGOs become more focused by forcing them to drop their newspapers, restaurants, tours, stores and any other non-related businesses many of which drain donor donations.

Unfortunately the act of a charity running one, or several businesses, has become ripe with corruption and conflicts of interest.  For example if the charity’s focus is dental care for children, why are they in an unrelated business getting income and tax bonuses a Mexican citizen, in the same business, can’t receive?

On a more macro level, volunteer management meaning to focus on teaching art spends most of their time running businesses unrelated to the mission statement and often to the mission’s determent as donations and time poured into the business.

Of course, there is nothing wrong with fundraising.  An auction here, a concert there but the new law sees that as different than running an actual business, often called a social enterprise to make it sound, well, less business-y.

As with any transition they’ll be adjustments made but in the bigger view, the charities can return to be solely focused on what they do best, providing a product or service to help those less fortunate.  While taking a charity out of the business of running an unrelated business, the government is insuring the services provided will improve in quality.  A win-win for all involved – employees, volunteers, clients and the government.