By Helen K. Liu.
Nonprofits in Taiwan face turbulence from two major sources: the global challenge from the pandemic and the local uncertainty from the newly passed Foundations Act. Nonprofits must respond quickly to both.
The pandemic has brought a decline in donations, an increase in administrative and overhead costs, and challenges in providing direct services to clients. While some nonprofits have reduced their operations and activities, others have explored new strategies and grabbed opportunities to scale up their digital capacities.
In October 2020, the conference of the Association of Digital Culture Taiwan (ADCT) highlighted such opportunities – including crowdfunding, online registration systems, remote working and service delivery. These ideas have not remained on the drawing board. The Child Welfare League Foundation launched the family emergency relief fund project in April last year that accepts case referrals through regular online meetings. Similarly, social workers and educators are learning and experimenting with long-distance services and education. Because these technological options are now available to service providers, they appear more willing to follow restrictions on social gatherings. Collectively, nonprofits, faith-based organizations, and foundations have reduced their in-person activities and moved their operations online to protect their employees and clients from COVID-19.
Additional Turbulence from the Foundations Act
The Act came into force in 2019 with the goals of fostering sound management of foundations, encouraging their active participation in charitable affairs, improving public welfare and preventing fraud. It distinguishes government-endowed from publicly-endowed foundations, separates and enhances their supervision, instructs authorities to introduce measures to combat money laundering and the financing of terrorism, requires all foundations to establish internal control and audit mechanisms and a higher degree of transparency, and specifies the conditions in which foundations can merge, dissolve, or have their approval rescinded.
In the wake of the Act’s enforcement, foundations are beset with the challenges of restructuring and reorganization. In some respects, the burdens are greater for government-endowed foundations. Unlike publicly endowed foundations, they need to establish comprehensive, personnel systems and submit these for approval.
Across all foundations, the Act puts boards of directors on the front line, assigning them greater legal responsibilities. Such expectations change the criteria for determining board members’ competency, could discourage people from taking up the position, and increase the potential for conflict with CEOs. In addition, administrative costs will increase, information gathering being a case in point: the Ministry of Education requires foundations to disclose and submit information at its request to be posted on the Ministry’s website. Information disclosure raises other issues: according to the Deputy Director of World Vision Taiwan, the Act’s requirements (Subpara.2, Para.3, Art. 25) could intrude upon the privacy of sponsors, donors and beneficiaries.
Helen K. Liu is an Associate Professor in the Department of Political Science and the Graduate Institute of Public Affairs, National Taiwan University (NTU), and is currently serving on the ARNOVA board. She gratefully acknowledges the assistance of Lo Ching Hua in preparing this report. (Photo of mountain in Taiwan is courtesy of Lisanto and Unsplash.)
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Thursday, May 13, 2021 in Asia-Australia
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