Editorial: Wake up call for NGOs
NGOs need to ensure they have robust self-regulatory mechanisms in place
Anti-corruption civil society organisations are essential to help prevent and raise awareness about corruption. As a result, they need to maintain public and donor confidence that they themselves are upholding standards of accountability within their own organisations.
Other non-profit organisations have similar accountability obligations to their stakeholders, including donors, beneficiaries, the media, civil society and the public. As private entities, NGOs are not submitted to the same information disclosure laws that apply to donors and government entities. Still, they all depend for their success on the trust of the public in their activities.
The golden passports scheme obliges prospective applicants to donate a minimum of €10,000 to an NGO or philanthropic organisation. NGOs are not automatically notified when a donation granted to them is listed in an application. Some organisations do their due diligence before accepting contributions while others may fall a little short.
NGOs Repubblika and Moviment Graffitti were among 38 organisations that received donations through the scheme. Both NGOs are vocal critics of the scheme. They issued statements denying they ever knowingly received donations from anyone who bought Maltese citizenship. The Commissioner for Voluntary Organisations, Jesmond Saliba acknowledged the risks of the absence of a legal obligation for NGOs to be notified when they receive funds through the citizenship scheme.
NGOs understand they must demonstrate to their stakeholders that they are using their resources in an efficient, accountable and transparent manner. They also want to be held responsible for their organisational reliability and legitimacy. In particular, they must show their adherence to their mission, the transparency of processes and their effectiveness in fulfilling their mandate.
Rather than wait for the passport scheme rules on donations to be updated, NGOs must act to ensure accountability is enforced primarily through self-regulatory mechanisms, internal rules and procedures and independent external oversight. The minimum standards imposed by legislation on non-profit NGOs is not enough to ensure donors are not using these organisations to hide ulterior motives like obtaining an unintended endorsement of their presumed respectability.
The annual reports of NGOs could be an excellent tool to ensure that they are fulfilling the required activities responsibly. The quality of the financial reporting is critically important to reassure all stakeholders that the integrity framework of a voluntary organisation is fit for purpose. Donors and supporters of NGOs reinforce their trust and commitment to help when transparency underpins an organisation’s financial reporting.
Some NGOs rely on evaluation and external audits as an accounting and governance tool. External reviews help these organisations to confirm that they are complying with their legal and self-imposed obligations. NGOs would do well to voluntarily adhere to the same information disclosure laws that apply to political donors and governments. This is one way of committing to high transparency and information disclosure standards.
Repubblika’s president, Robert Aquilina, in his letter to the unidentified donor, correctly argues: “We cannot, in the process of raising funding for our work, accept to become enablers to a scheme we consider as unfair and unlawful.”
NGOs depend for their success on the trust they enjoy from their stakeholders. Therefore, they must ensure that they have strong internal integrity management systems and policies to prevent and effectively address corruption risks that may exist in the internal and external environments in which they operate.