New law shouldn’t discourage service
Non-profit organisations in the Virgin Islands need to be held accountable, but government should ensure that the new legislation designed to regulate them will not discourage the valuable work they do.
Many organisations chafed at the draft law presented at recent public meetings, which levies fees and establishes new requirements that they find onerous.
Passing the law in its present form, then, may be unwise. Currently, non-profit organisations do much for the betterment of the territory. To understand their importance, one need only consider Virgin Islands Search and Rescue, the Family Support Network, and the Humane Society of the BVI, to name a few.
These organisations, which typically rely on the hard work of civic-minded volunteers, often offer services that government would need to provide in their absence. Most of them, however, operate on shoestring budgets that could be significantly impacted by the new legislation.
Still, a new law is clearly necessary.
Firstly, the territory’s international reputation as a financial services centre depends on its compliance with a recent Financial Action Task Force recommendation to regulate non-profit organisations here.
Secondly, the legislation is needed for purely local reasons: Any non-profit organisation should be held properly accountable for the funds it receives from businesses, government and other donors.
Moving forward, then, government should consider easing the financial burden of the requirements in the draft legislation, even if this means absorbing some of the cost itself.
For example, the current draft law would require smaller organisations whose gross annual income is less than $25,000 to pay a $200 registration fee and an annual fee of $150. Meanwhile, organisations that exceed the $25,000 threshold would be charged double that annual renewal fee, and they would be required to obtain an annual audit that some organisations have said could cost thousands of dollars.
As attendees suggested at last week’s meeting, government should consider lowering or eliminating some of these fees and using its own manpower to audit larger organisations as necessary rather than requiring them to fund their own audits each year.
Government might also go a step further, implementing measures to encourage community-minded groups. Many countries, for example, exempt certain non-profit organisations from paying income tax. The VI might consider establishing a similar exemption from payroll tax here.
Ultimately, the territory stands to benefit from the proposed legislation, and we applaud the Deputy Governor’s Office for bringing it to the public for feedback. Now, we trust that the draft law will be revised with an eye toward supporting non-profit organisations and the many community-minded citizens who drive them.
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