NGOs White Paper, draft Bill out soon

The government has moved an important step closer to the legislation for non-profit making organisations.

The Ministry for the Family and Social Solidarity will within the coming weeks simultaneously issue a White Paper and the draft of the Bill, for public consultation, after this has been presented to and approved by Cabinet.

One of the main challenges remains coming up with a format that could apply to everything from the Malta Scrabble Club to band clubs and from Church organisations to the political parties.

A draft of the legislation was prepared by lawyer Max Ganado.

The Prime Minister and the Minister for the Family and Social Solidarity met the Non-Governmental Organisation Legislation Working Group and Douglas Rutzen, who was brought to Malta recently by the American Embassy to address a seminar on the subject. A copy of the draft legislation is being sent to Mr Rutzen for his feedback.

The representatives of the NGO Legislation Working Group, founded by 20 organisations to lobby for not-for-profit legislation, were reassured to learn that many of the points raised in the memo presented to the government last summer had already been taken on board.

Family and Social Solidarity Minister Dolores Cristina believes the law will greatly benefit not-for-profit organisations. "This country relies a great deal on voluntary organisations. We acknowledge their valuable work and would like to help them in establishing themselves on a stronger footing. Up to now there has been no regulatory framework to protect the voluntary organisations, their consumers or society," Ms Cristina said.

"The law will also give them legal status which is necessary and which will facilitate accession to EU funds and other benefits."

The legislation would be applicable to any entity that makes public collections that are ploughed back into the organisation itself, often for the provision of a service. The organisation cannot make any profit that goes into the pockets of its founders, its board of directors, its administrators or its members.

Maria Sciriha, a legal consultant to the ministry, said that because of the range of organisations it would be left up to each organisation to decide whether to enrol. There are two parts to the legislation: the Voluntary Organisations Act and amendments to the Civil Code.

The Voluntary Organisations Act will be the legislation regulating those entities which decide to opt for enrolment. "The organisation can enrol with a commissioner who would be established by law. One of the many important tasks of the commissioner will be to assist and advise all voluntary organisations and not only those organisations that decide to enrol. Enrolled organisations will be required to abide by certain conditions but will also benefit from privileges. Other conditions, however, will still be applicable for those who do not enrol," Dr Sciriha said.

"There are many voluntary organisations that consist of a few people, who might be wary of something that is too structured. It may be the case that if they do not make public collections, they may not see the need to enrol."

Although enrolment will be optional, the ministry encourages it. For example, the ministry has Lm720,000 available as funds, for which only enrolled organisations will be eligible.

There may also be other benefits, but Ms Cristina declined to give further details as meetings are currently being held with the relevant authorities and departments on the subject.

With the amounts raised by not-for-profit organisations running into millions of liri, the law would also improve accountability. "We need to establish a balance: We are trying to help these organisations to reach their aims, while at the same time ensuring that there is no abuse. One bad egg would ruin everyone else's credibility, which is why so many voluntary organisations themselves have been clamouring for this legislation," Ms Cristina said.

One aspect that may generate debate is the financial reporting obligations, as the statutes of some small clubs only impose minimal financial statements. Ms Cristina is of the opinion that "issues like this are best ironed out as we go along. But I can tell you that we do not want to make life difficult for organisations, especially those which act in good faith. On the contrary, our aim is to help them become more professional while achieving the transparency and accountability that the public demands."