Chilean president announces plan to relax country’s philanthropy laws
So far, making a charitable contribution has not been an easy task in Chile. The red tape and heavy taxes that accompany this onerous process deter many potential donors from giving, which in turn leaves many environmental organizations without the funding they need to operate. But these complex bureaucratic rules could soon become obsolete: Chilean President Sebastián Piñera has announced a plan to change the country’s laws on philanthropy.
“Soon we will be presenting a bill to Congress that will help fund community groups and other NGOs and, for the first time, will also help protect the environment,” President Piñera said in his speech on June 1. annual.
The complex rules and logistics that have made philanthropy in the country so difficult for decades can be summed up in a single data point: Chile has over 90 regulations for giving, each with its own distinct category of donors and donors. recipients, their own donation requirements. the purpose of the contributions, as well as its own advantages and limits. In addition, Chile is one of the few countries where the work of environmental and health non-governmental organizations is not classified as being of public interest, which means that contributions to these NGOs are subject to a 40% tax which often discourages donations, effectively limiting a major source of group funding. (Donations to cultural organizations, for example, are not taxable.)
Stimulated by the COVID-19 pandemic and its impact on nonprofits, the Chilean Patagonia project of Pew Charitable Trusts organized a series of webinars to present the urgent needs of NGOs and their role in the public interest, and to help provide technical support and information to the nonprofit community. . And from those sessions, a roundtable emerged: a space for academics, experts, and leaders of cultural, environmental, and anti-poverty organizations to discuss ways to improve the country’s systems for charitable contributions. Together, they worked out the proposal that President Piñera now defends.
If approved by Congress in the coming months, the new regulations will greatly facilitate the process of donating to environmental and health NGOs, a historic step towards the expansion of philanthropy in Chile. The bill also includes a provision ensuring that donations from abroad will not be taxed. The current regulations are open to government interpretation, but this amendment would make the rules clearer and more consistent.
Francisco Solís Germani heads the Chilean Patagonia project of The Pew Charitable Trusts.