In Chile, there is a high level of social entrepreneurs (foundations, corporations, and other NGOs) as well as business entrepreneurs (SMEs). Each of these sectors has approximately 235,000 institutions. All face major obstacles and problems; few survive the first two years of life.
Social entrepreneurs start with the illusion of obtaining funding from those who share their dreams and causes, but they are faced with the harsh reality that most of the resources mobilised in the third sector are motivated by peculiarities rather than by philanthropic motivation, understood as the tendency to seek the good of people in a selfless way, even at the cost of self-interest.
There is very little information available on non-profit organisations (NPOs) in general, let alone in peculiarity. Law 20.500, on Associations and Citizen Participation in Public Management, establishes the general guidelines for the sector and the role of the state but does not contemplate oversight mechanisms, and public information requirements are limited to the need to publish their annual balance sheets on their websites.
The “convenios case” has put the foundations in the eye of the storm and the discussion has focused on the political dimension of the scandal and has not delved into the structural causes of our institutional framework that made it possible for these situations to occur.
There is much to be done. President Boric has created the Ministerial Commission for the Regulation of the Relationship between Private Non-Profit Institutions (IPSFL). The objective is to “establish a new deal with private non-profit institutions”, in which the principles of transparency, effectiveness, efficiency, and accountability of the collaboration agreements that arise between these entities and the Executive take precedence.
First, it is necessary to create a superintendency to supervise, oversee, control, and issue instructions to all non-profit organisations that access tax benefits, and receive public funds or financing from companies that have received tax incentives. Secondly, and more importantly, as state institutions that directly or indirectly operate with public funds, the Transparency Law No. 20.285, which establishes rules on access to public information and promotes transparency in the management of state administration bodies, should apply to them.
Tens of thousands of non-profit organisations play an irreplaceable role every day in supporting the State and also in social innovation, culture, science, sports, democracy, citizenship, environment, human rights, education, etc… This is why we must protect them with good institutions, strong oversight, and transparency in order to have a robust, efficient third sector, focused on the common good and free of corruption.