15 February 2014

Ethiopia: Agency Sets Out "Special Directive" On Charity Cost Sharing

The Federal Charities and Societies Agency (CSA) plans to introduce a new directive to regulate charitable organizations, setting out how to solicit and invest 25 percent of cost sharing from beneficiary projects.

Recently the CSA has been holding meetings regarding the bill to gather input from concerned organizations.

According to the explanation attached to the proposed bill, the new regulation will design a legal framework to govern organizations on where to invest money they collect from society, as a form of cost sharing.

The bill is intended to bring a transparent directive to insure that money collected as cost sharing is not categorized as a business income.

The bill aims to curb the sense of dependency step-by-step by empowering society with a sense of belongingness.

According to the bill, the maximum amount of money an organization collects from a beneficiary must not exceed 25 percent of the total project that is going to be invested.

In addition, organizations engaged in charitable activities will not be forced to collect the cost sharing for every project they are engaged in, but whenever they seek the cost sharing they will first have to apply for permission from the CSA.

The bill states that the money collected as cost sharing can never be distributed to members of an organization, or spent on administration costs.

Unlike 2009's Charities and Societies Proclamation law, the new draft directive has not sparked any objection from Civil Society Organizations currently operating in Ethiopia, with some even welcoming the proposal. The controversial 2009's proclamation has attracted criticism from a number of international right groups, local civil society actors and international non-governmental organisations since it was introduced first.

The Charities and Societies Proclamation law prohibits local NGOs from engaging in human rights advocacy or political related activities. It also restricts charities from having more than 10 percent of their funding from foreign sources.

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