On 26 and 27 September, EFA organised its 15th Annual Skillshare ‘Shaping the future of fundraising in Europe: technology, trends and the political landscape’. It was an opportunity to take stock of the impact on the charitable sector of the rise of far-right nationalism in Europe, and of current and forthcoming regulations in Europe.

Laurence Lepetit, executive director of France générosités and member of EFA’s board and public affairs working group, moderated a round table on the European political context with MEP Sergey Lagodinsky and Esther Meester from ECNL. The following week, Sarah Bertail, legal and public affairs director (and also in the working group), alongside Pauline Hery, public affairs officer, and Pia Tornikoski, secretary general, VaLa Finland (and again member of EFA’s board and its public affairs working group), attended the annual meeting of Philea’s Legal Affairs Committee (LAC).

Below is a summary of current and upcoming topics of interest in Europe.

1. Implementation of the Action Plan for the Social Economy

Last June, the European elections took place, during which the Members of the European Parliament were elected. This was followed by the re-election of the President of the European Commission, Ursula Von Der Leyen, who appointed the new European Commissioners. The new Commissioners are due to be sworn in shortly by the European Parliament, after being interviewed by MEPs.

Philea is urging the new European political decision-makers to continue implementing the European Commission’s Action Plan on the Social Economy, and to strengthen the place and role of philanthropy in Europe. In addition, Philea is lobbying, alongside other European organisations (notably Social Economy Europe), for the renewal of the Social Economy Group in the European Parliament.

2. The proposed European Cross-Border Association Directive

In January 2022, MEP Sergey Lagodinsky published a report containing recommendations for the Commission on a statute for European cross-border associations and nonprofit organisations. The Commission then worked on a proposal for a directive to be adopted by the Parliament. Throughout this process, EFA mobilised alongside its partners in Europe (find all our articles here).

Amended and passed by the European Parliament in March 2024, the draft directive is now being discussed by the European Council. The Council members are expected to reach a common position in 2025, after which trialogue discussions will begin.

However, outcry from many governments in Europe means the prospect of this directive being adopted is receding. Sergey Lagodinsky addressed this issue at both the roundtable with the EFA and the LAC in Brussels with members of Philea and representatives of the European Commission’s DG GROW and DG TAX.

At the EFA roundtable, MEP Sergey Lagodinsky called on national representatives to contact their governments in support of the directive. He was disappointed that, given the European political landscape and the rise of far-right nationalism, countries such as France did not fully support the text.

One of the main concerns raised by Member States is the risk associated with money laundering and terrorist financing.

EFA and its partners consider this risk to be limited, particularly as safeguards were included in the directive when it was adopted by Parliament (see Q&A by Civil Society Europe). We call on members to mobilise their national bodies to ensure their full support for this proposed directive, which aims to simplify the life of associations operating in several Member States and to promote associative freedoms.

3. Application of the legislative package to combat money laundering and terrorist financing

The legislative package on the fight against money laundering and terrorist financing (EU AML/CFT) was published in the Official Journal of the European Union on 19 June 2024, after being adopted by the European Parliament and the Council.

It comprises an Anti-Money Laundering and Combating the Financing of Terrorism (AMLR) Regulation, which will be formally implemented on 10 July 2027, a 6th Anti-Money Laundering Directive, which must be transposed into national law by 10 July 2027, and the Regulation establishing the Anti-Money Laundering Authority, which will be formally implemented from 1 July 2025.

During EFA’s 15th Annual skillshare, Esther Meester from ECNL gave us an insight into the consequences of these new provisions for the charitable sector.

The major changes highlighted include the extension of the scope of regulated entities (‘obligated entities’), harmonised rules for the transparency of ‘beneficial owners’, more detailed guidance on customer due diligence, an EU-wide ban on cash payments above €10,000 and a harmonised approach to ‘high-risk’ third countries.

The most significant concerns for the not-for-profit sector are as follows:

– From July 2027, crowdfunding platforms will be considered regulated entities for the first time.

– The new rules do not provide the desired clarity on the identity of beneficial owners of non-profit organisations (NPOs).

– Due diligence measures will be strengthened for occasional transactions and business relationships involving entities in high-risk third countries, which will most likely lead to greater scrutiny when civil society organisations (CSOs) want to transfer funds to international partners.

– Reducing the anonymity of crypto-assets and virtual currency transfers further limits the possibilities for anonymous donations and the use of crypto-asset exchanges by CSOs and activists who are excluded from the financial system or not allowed to receive foreign funds.

ECNL shares its concern that complex legislation could have an impact not only within the EU but also in other regions where there are not adequate safeguards against over-regulation and incorrect implementation.

ECNL and Philea are working on a detailed briefing note outlining the potential changes and impact for the not-for-profit sector. Finally, advocacy will be developed when the more detailed technical guidelines are developed and before they are transposed into national legislation.

EFA will be following this dossier closely.

4. Impact investing: is the debate moving forward at European level?

To mark European Foundation and Donor Day, Philea and Impact Europe organised a roundtable on ‘How can policy-makers stimulate impact investment activities by philanthropic organisations?’ at the European Parliament’s Info Hub.

The roundtable featured contributions from a number of European players, including MEP Katrin Langensipen (Germany, Greens/EFA) and a number of European officials from the European Commission (DG GROW and DG EMPL), the European Investment Bank and the European Investment Fund.

On this occasion, Philea and Impact Europe published a joint position paper calling on national and European political decision-makers to provide a legal and financial framework favourable to the development of impact investments by philanthropic organisations.

Across Europe, philanthropic organisations have begun to engage in impact investing, in particular by supporting players in the social economy. However, national and European laws are often an obstacle to this type of investment. Philea and Impact Europe support the following recommendations to develop the investment activities of philanthropic organisations:

1. Allow philanthropic organisations to support social economy organisations;
2. Develop a co-investment mechanism within the InvestEU programme;
3. Facilitate impact investment by endowment funds;
4. Integrate philanthropy into the European Union’s next multi-annual financial framework.

Upcoming events

On 12 November, from 10am to 11.30am, there will be a webinar to present the scope and (potential) implications of the anti-money laundering and combating the financing of terrorism legislative package to CSOs, philanthropic foundations, crowdfunding platforms and other stakeholders. (To register, click here).

On 3 December, Philea is organising its annual EuroPhilantopics event with this year’s theme being: ‘New EU mandate, new partnerships with philanthropy’. It will bring together organisations from the philanthropy sector and representatives of the European Union institutions.

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Who is Philea?

Philea is a European organisation that brings together associations, foundations and networks of philanthropic organisations in Europe (Centre français des fonds et fondations – CFF, Fondation de France, Fondation Roi Baudoin, Fundaciones etc.). On a day-to-day basis, it defends the interests of its members in dealings with the European institutions and political players, and works to create an environment conducive to European philanthropy (see European Philanthropy Manifesto).

The LAC (Legal Affairs Committee) is made up of the legal and public affairs officers of Philea’s members, under the supervision of Philea’s public affairs team. LAC meetings provide an opportunity to review members’ legal and political news and to exchange views on European regulatory and political developments in the field of philanthropy. It is also an opportunity to coordinate members’ advocacy activities in Europe.

Who is ECNL?

The European Center for Not-for-Profit Law Stichting (ECNL) is a non-governmental organisation based in The Hague, the Netherlands, which works to empower civil society through the creation of supportive legal and policy frameworks.

Its mission is:

• to protect human rights, including the freedoms of association, assembly, expression and privacy
• support the development of civil society and public participation at local, national and international levels
• promote the democratic legal order
• support the development of appropriate policies and legislation on civil society, philanthropy, impact investment, social enterprise, international development cooperation and the impact of new technologies on human rights and civil society
• provide support to other organisations and undertake research and education initiatives to advance the above objectives.

Picture by Antoine Schibler on Unsplash

As we announced in September and October (see our articles here and here), the European Commission published on 5 September 2023 a proposal for a directive on European cross-border associations, already well known by its acronym “ECBA”.

As we already mentioned, there are several advantages to this proposal including:

• Definition of nonprofit purpose and non-profit association (article 2);
• Recognition of the place of associations in the EU and renewal of the essential nature of the freedom of association. An entire chapter is dedicated to the rights of the ECBAs and to prohibited restrictions (chapter 2);
• Mutual recognition of the ECBAs across EU Member States, and possibility of relocation of its registered office within the EU without dissolution or the creation of a new legal person;
• Free and non-discriminatory access to funding from public or private sources.

Agenda

This proposal for a directive is subject to a call for feedback until 8 April 2024. EFA’s contribution is currently under review. European networks as Civil society Europe, Philea and Social Economy Europe are following closely the debates. One could argue that the ECBA status could provide a great basis for European Foundation status in the nearby future.

In the meantime, the Legal Affairs Committee (“JURI committee”) has adopted an amended text which must be submitted to the European Parliament for a vote during the plenary session in April.

On the basis of this voted text and after the European elections (June 2024), the so-called “trilogue negotiations” would start with the Council and the Commission.

Note that the presidency of the Council will be held by Hungary during the second half of 2024. It is not certain that the subject of ECBA will be the priority…

Thus, after European elections, we shall mobilise some allies in the new Parliament and within our own government to ensure the right progress of this subject.

We will keep you posted.

Picture by Lara Jameson on Pexels

The fight against money laundering and financing of terrorism remains an important priority at international, EU and national level for both policymakers and civil society organisations. Despite this, international and EU legislation have produced a number of unintended consequences on the work of legitimate public benefit organisations, including public benefit foundations, limiting their ability to provide humanitarian assistance, social support, aid in the education and culture fields, and to contribute to the fight against climate change, but also to hold governments accountable and fight corruption.

For this reason, on 6 June 2023 Philea and Civil Society Europe hosted a webinar to discuss the impact of EU anti-money laundering and counter-terrorism financing policy on civil society with high-level policymakers and national representatives from the sector. The discussion came at a timely moment, as the final negotiations (trilogues between the European Commission, Parliament, and Council) on the new EU anti-money laundering and counter-terrorism financing policy legislative package (EU AML/CFT Package)[1] are unfolding, with the final legislation to be adopted in the coming months and to enter into force in 2027.

Legislation objective

As explained at the beginning of the webinar by Raluca Pruna, Head of Unit for Financial Crime at the Commission, the main objective of the new legislation is to achieve a harmonisation of the rules at EU level through a “single EU Rulebook” comprising a Regulation[2] – the first of its kind in this field – and a Directive, which will replace the previous one from 2018. Importantly, Raluca Pruna stressed the fact that harmonisation does not mean a one-size-fits-all approach, and that a risk-based approach should remain a guiding principle when applying the new policy.

To better understand the unintended consequences of EU AML/CFT policy, the discussion highlighted some concrete examples of unintended consequences happening at Member State level, mostly in the form of overregulation and bank de-risking.

Interpretations of the law by national governments

Thanks to insightful interventions by civil society and foundation representatives and nonprofit law experts, it was interesting to learn how certain national governments have adopted even stricter rules than what is currently required by EU legislation. This is the case, for example, in Spain, where associations and foundations are considered partial obliged entities, and in Bulgaria, where all civil society organisations are classified as obliged entities, meaning that they must keep records of all donors and beneficiaries – which can number in the thousands – and identify who is the beneficial owner, a difficult task, given that non-profit structures are set up to serve the general public and not private interests.

Unintended implications

Furthermore, some Member States require public benefit foundations to list as their “beneficial owners” – not only board members but also founders (who in most cases have no say in the running of the organisation or may have passed away), and in some countries such as Austria listing of all grant recipients (beneficiaries) as “beneficial owners” is required. Reporting on all grant recipients is not in line with the rationale of identifying the individuals who own or direct the organisation and implies significant administrative burdens for foundations, and also raises important privacy issues.

Other examples presented in the webinar concerned Belgium, where associations must report the same details on ownership structures in four different registers, and Finland, which has adopted a very strict act on fundraising. Participants also reported on banks delaying processes and even not providing services to the public benefit sector, often without giving an explanation: this issue of so-called bank de-risking is also considered as an unintended consequence of the AML/CFT policy.

These cases of unintended consequences or overregulation have a chilling effect on legitimate PBOs’ work.

All civil society representatives stressed the importance of dialogue with their respective governments, with examples of constructive, or very constructive engagement, reported in Spain, Belgium, the Netherlands and Finland.

Limiting the impact 

How can the new EU legislation potentially limit some of these unintended consequences as trilogue negotiations unfold? What good practices can be identified in the adoption and implementation of the legislation at Member State level? The panel discussion focused on these questions.

Lia van Broekhoven, executive director at Human Security Collective, presented the main asks of a civil society coalition around the EU AML/CFT package. To avoid unintended consequences that ultimately divert civil society from its role, it is necessary to clarify that public-benefit organisations associations or foundations are not obliged entities and that the beneficial owner for these entities is the one directing the organisation, and not also the beneficiaries or grant recipients. She then stressed the importance of allowing cross-references to company/foundation registers where the Beneficial Ownership information is stored, to avoid multiple reporting obligations. Lia also highlighted the need for civil society to apply political pressure and to engage in meaningful multi-stakeholder sector dialogues. This has been the case in the Netherlands, where risk-based standards have recently been developed as a result of this dialogue.

The importance of dialogue with civil society organisations was echoed by the policymakers who participated in the panel. Elina Rantakokko, ministerial advisor on these issues at the Finnish Ministry of Finance, shared some good practices put in place in the Finnish context, including a thorough analysis of the sector to determine the diverse areas of risk. Gwendoline Delbos-Corfield, from the Greens at the European Parliament and member of LIBE, one of the committees in charge of the EU AML/CFT Package, stressed the importance of monitoring the impact on fundamental rights and in particular civic space. She also reminded us of the need to remove obstacles for activities of associations as well as cross-border philanthropy across the internal market. Raluca Pruna from the European Commission also stressed the need to continue this dialogue once the legislation is adopted, to limit as much as possible erroneous application by Member States, as- she stated – was the case for beneficiaries considered as beneficial owners.

Carlotta Besozzi of Civil Society Europe and Hanna Surmatz representing Philea concluded the event by stressing that it is hoped that the momentum of the trilogue negotiations will still be used, in particular to clarify some definitions around Beneficial Ownership to ensure that in the case of public-benefit foundations and associations, the Beneficial Owner is the one directing the organisation. For the future, both considered that multi-stakeholder engagements and dialogues among banks, policymakers and the public-benefit sector should be deepened at national, EU and international levels to ensure a risk-based, proportionate and fit for purpose AML/CFT policy that does not unduly restrict the millions of legitimate associations, foundations and their beneficiaries.

[1] The Package comprises 4 Proposals: New Regulation on AML/CFT, 6th Directive on AML/CFT (AMLD 6) Regulation establishing EU AML Authority (AMLA), Revision of the 2015 Regulation on Transfers of Funds

[2] Type of EU Act which becomes immediately enforceable as law in all member states simultaneously when it enters into force

Picture by Alex Fotos on Pixabay

The European Commission’s upcoming Defence of Democracy package contains initiatives designed to enhance democratic participation and civic space, but its proposed ‘foreign interference’ directive has raised concerns among civil society across Europe.

The proposed directive would introduce ‘transparency and accountability standards’ for civil society organisations, requiring them to disclose funding from outside the EU and creating a register of organisations that receive such funding.

In a joint statement, the organisations say that it could unintentionally hinder CSOs’ ability to fulfil their role as defenders of democracy in Europe and beyond, and limit the EU’s capacity to support civil society and human rights defenders.

The group warns that the proposed directive is similar to legislation that the EU has itself opposed in the past and “risks inconsistency with international and EU human rights law, and in particular the exercise of civic freedoms.”

The civil society organisations are calling on the Commission to consider three factors ahead of any proposed legislation:

1. The requirement for a fundamental rights impact assessment
2. Clarity and purpose of such a directive
3. The EU’s fundamental rights obligations

They state “the need for exceptionally careful consideration and a formal impact assessment – to determine whether such a legislative instrument is a necessary and proportionate response, to what is currently a very undefined aim.”

The group has been brought together by Civil Society Europe, and includes European and international civil society organisations including Philea, the European Civic Forum, and the European Centre for Not-for-Profit Law, as well as national organisations. The full statement can be read here.

Every six months, one of the 27 EU Member States takes over the Presidency of the Council of the European Union. The reason why this is often referred to as the “EU Presidency”, rather than just the Council Presidency, is the fact that the agenda set by the Presidency sets the course for all EU decision-making for that six-month period.

These days EU Presidencies are organised in “Trios” which means that three consecutive EU Presidencies agree on an overarching programme ahead of their combined 18-month term. In other words, whatever course they decide to take will have a significant impact on the legislation coming out of Brussels during that time. The Czech Republic is the second Presidency in this trio, preceded by France and followed by Sweden.

The past years and months have seen a big push by the EU towards strengthening the rights and freedoms of citizens. Whilst this is of course a positive development in principle, we have also seen that an overzealous approach towards privacy protection can have negative implications for fundraisers and other not-for-profit organisations (NPOs). In the Programme of the Czech Presidency of the Council of the European Union, the Czechs announced that they will build on the work of their French predecessors, keeping a strong focus on the protection of (digital) rights of citizens. Whilst supporting the general principle, it is important for EFA and its members to remain vigilant and to educate decision-makers regarding any undue negative implications legislative proposals might have on the sector.

Whilst there is not much EU legislation drafted specifically for the fundraising sector, we have been following and reporting on a number of EU legislative proposals that can have a direct or indirect impact on how fundraisers and NPOs carry out their day-to-day business. Most of these proposals are designed to protect citizens’ rights, and more specifically their privacy. Whilst these proposals are drafted in essence to curb large online players, EU legislators often underestimate the collateral damage on the NPO sector.

We all know the General Data Protection Regulation by now, and the limitations it imposed on the work of NPOs, as well as a significant increase in administrative and regulatory burden. More recently, an ongoing revision of European e-Privacy legislation could kill all telephone and online outreach to existing and potential donors. But it is not just online limitations, for some time now the EU has been mulling the introduction of an opt-in regime for unaddressed mailings, which would make it virtually impossible to deliver leaflets or any other materials door-to-door in order to attract donors.

In their Presidency Programme, the Czechs outline that they will keep on this same course and take over the agreement of the European Declaration on Digital Rights and Principles, which was presented during the French Presidency. EFA will keep monitoring our relevant legislative files closely, together with our coalition partners, and we will set out to educate decision-makers regarding the potential implications of these proposals on the sector. This way we hope to contribute to a balanced approach that considers all stakeholders involved.

Patrick Gibbels, Gibbels Public Affairs

About Patrick Gibbels

Patrick is EFA’s public affairs columnist in Brussels.

He is the director of Gibbels Public Affairs.

Follow Patrick @GPA_Brussels.

Read more from Patrick in our View from Brussels column here.

Main photo by Martin Krchnacek on Unsplash

The legal battle began in 2017, when Hungary’s parliament approved new rules requiring Hungarian organisations receiving over 7.2 million Hungarian forints (about €20,000) from outside the country to formally register and present themselves as foreign-funded entities.

The law applies exclusively to associations and foundations receiving financial support sent from other Member States or third countries, and its introduction made Hungary the first EU country to introduce a so-called “foreign funding” restriction inside the EU.

The European Court of Justice has now held that the transparency law runs contrary to Member States’ obligations of the free movement of capital laid down in the Charter of Fundamental Rights of the European Union. This is specifically in regards to the right to respect for private and family life, the right to the protection of personal data and the right to freedom of association.

The court concluded that the transparency law establishes a non-justifiable difference in treatment between domestic and cross-border movements of capital.

It found the requirement for these organisations to declare themselves and to register as “organisations in receipt of support from abroad” to be a restriction to the freedom of capital, and that the Hungarian government had failed to justify this. 

The court also identified a limitation to the freedom of association because, it found, the law made the operations of the associations falling within the scope of that law much more difficult.

In addition, it held that declaration and publication requirements laid down by the transparency law limit the right to respect private and family life, and that the right to the protection of personal data was also affected. The stated limitations to fundamental rights could not be justified by any of the objectives of general interest expressed by Hungary.

Philanthropy Advocacy and ECNL among other partners have stated that they are now working to analyse in more depth the law’s implications.

EFC, DAFNE and ECNL recently put together a handbook to provide practical guidance for CSOs to advocate and litigate using EU law to protect their rights and civic space in the EU.

Urging the European Commission to lower the rating, EFA and its cosignatories, Donors & Foundations Networks in Europe (DAFNE) European Centre for Not for Profit Law (ECNL), European Foundation Centre (EFC), Human Security Collective (HSC) and Civil Society Europe (CSE), state that:

“While we fully support the fight against Money Laundering and the Financing Terrorism, we are deeply concerned about the impact of the SNRA on the Not for Profit sector as a whole and on fundamental rights, and more particularly civic freedoms.”

According to information received informally, they state, they do not believe that the European Commission has developed a more robust methodology for assessing the sector than that used for its earlier 2017 SNRA and therefore, “are of the opinion that the EC cannot be confident that it reflects the actual risk areas or risk level (or lack of it).”

The letter also argues that the high risk rating may in fact prove counter-productive to the SNRA’s overall goal of countering terrorism, by potentially prompting Member States to introduce more sector regulation that could place the work of NPOs at risk and affect philanthropy and cross-border giving, whether intentionally or inadvertently.

It highlights the potential consequences of such a rating on a regional and national level, which could include affecting NPO access to funding and services, and their ability to deliver aid and services, and could also see mitigation efforts re-directed towards risk areas which are not at risk, side-lining ones where risk may actually exist.

In addition, the cosignatories state, they do not consider the consultation on the draft to have been sufficiently wide, nor that there has been any evidence produced to support the Commission’s proposed high risk rating.

As such, they request that the risk assessment of NPOs to terrorism financing is lowered significantly in the final text, unless evidence justifying such a high risk rating and showing a clear threat and vulnerability of the whole sector is shared and discussed with the sector.

The final text is expected to be approved on 16 July.

Tracking Direct Debit trends

Charity payment specialist Rapidata Services unveiled the latest regular giving trends at the Institute of Fundraising event, showing that GDPR had a ‘major’ impact on Direct Debit donations. Cancellations fell to all-time low during 2018, but the acquisition of new supporters also dropped by almost a third as charities pulled back on donor recruitment campaigns to adjust to the new data protection requirements.

According to Rapidata’s Charity Direct Debit Tracking Report 2019, the 32% fall in acquisition volume from 2017-2018 is attributed to a reduction in ‘traditional’ fundraising activity through channels such as direct mail, telephone and face-to-face during the build up to and implementation of GDPR. But the 2019 dataset indicates strong signs of recovery with high growth (53%) in the acquisition of regular givers during the first quarter of the year.

An increased focus on supporter care and the fall in acquisitions is thought to have prompted the decrease in the proportion of donors cancelling their regular gifts. Cancellations fell steadily from month to month across the first half of 2018. In May 2018, the month that GDPR came in to force, cancellations dropped below the 2% threshold (at 1.95%), compared with 3.07% in 2017. For the year as a whole, the average charity Direct Debit cancellation rate plummeted to a record low of 2.14%, less than half the level seen ten years previously.

Scott Gray, head of payments at the Access Group and research lead on Rapidata’s tracking study, which reports on data from over 600 charities, says:

“We are now seeing greater emphasis on building engagement and deeper relationships, as well as smarter and more considered use of data.

“Initial results for 2019 are extremely promising with what looks to be a return to a more typical – but lower – cancellations cycle, as well as a strong increase in acquisition volumes. It seems unlikely we’ll ever again see the high cancellations rates of old.”

Payments body Bacs reports that over 4.3 billion Direct Debits are being processed annually in the UK, with charities receiving 108 million donations in this way in 2018.

Benchmarking fundraisers’ views

At the same event, the Institute of Fundraising and Blackbaud Europe came together to launch the second edition of the Status of UK Fundraising Benchmarking Report, covering a broad range of topics including job satisfaction for fundraising, the sector’s approach to income, strategy and use of digital.

When it comes to the impact of GDPR, the findings echoed those of Rapidata’s report indicating that the new legislation certainly had an impact, but it was not the ‘bogeyman’ that many had feared.

Less than a third (30%) of the 1,000+ UK fundraisers surveyed said that it had a negative impact on their ability to raise funds, with the large majority (77%) saying it made them think differently about engagement strategies. And yet, almost six in ten said the change in regulations was a drain on their resources.

Daniel Fluskey, IoF head of policy and external affairs adds:

“Undoubtedly, GDPR had an impact and effect last year on time and resources within organisations as they made the changes needed to systems and procedures, as well as staff training, but it’s interesting that the area of biggest impact was in leading charities to think differently about engagement.”

The draft legislative proposal ‘Transparency for civil society organisations’ went into consultation just before Christmas 2018 and would require civil society organisations in the Netherlands to report on their websites the amount of donations received worth €15,000 or above, as well as the name and residence of the donors.

Goede Doelen Nederland and charities association SBF labelled the proposal as ‘unacceptable’, calling for it to be rejected as soon as possible. Jan van Berkel, chair of Goede Doelen Nederland and board member of the SBF said:

“This draft legislative proposal is unacceptable and must be thrown out. If it becomes law, we fear it will deter donors from giving higher amounts as it is damaging for their privacy, their safety and the Dutch willingness to donate. For example, someone with HIV who donates twice a year to an AIDS charity may not want their neighbours to know this. Or an elderly person living alone may not want others to know that he or she donates high amounts to different charities each month? People should be able to donate in privacy.”

EFC and DAFNE have also filed their concerns as a joint contribution to the consultation, stating that the draft law is potentially in conflict with human rights and EU law, that it is not in line with the overall environment for philanthropy in Europe, and puts the status of the Netherlands as a philanthropy-friendly country at risk. The bodies warns that it could have a significant ‘chilling effect’ on donors and philanthropy in Europe.

The response has been contributed in consultation with other legal experts, including ECNL (The European Center for Not-for-Profit Law), analysing the draft law from a human rights and EU law perspective. Their contribution emphasises that the law would affect the work of funders and donors both in and outside the Netherlands and would also have a wider impact on European philanthropy and civil society by potentially setting a precedent that other member countries might follow.

Their key objections include the negative impact they believe it will have on donor privacy and safety, and therefore the willingness to give, which would affect donation levels. They also state that it does not take into account other laws and regulations that already address the transparency issue, and will involve additional and unacceptable workload for charities. Legally, they say it is in breach with the spirit and intentions of the GDPR, and does not meet international and EU human rights conventions or EU legislation on data protection.

The consultation concluded at the end of February. It received 187 responses from across all areas of civil society including churches, funds, museums, performing arts, and other charities, as well as from outside of the sector, including from business association VNO/NCW, the Council of Annual Reporting, Network of Notaries, PWC and the Committee of Corporate Law.

A response from Minister for Legal Protection Sander Dekker (Ministry of Justice and Security) on the results of the internet consultation is expected imminently, following the Dutch Provincial Council elections.