EDITORIAL – Being charitable, this bill deserves a decent burial

Bodden Town MLA Alva Suckoo said legislation proposed to regulate the country’s charitable organizations is going to be a “disaster.” Mr. Suckoo is correct.

The Non-Profit Organisations Bill is lawmakers’ latest effort to compel Cayman Islands charities to register with and provide financial information to the government.

In brief, the bill would require charities to register with a newly created “Registrar of Non-Profit Organisations,” appointed by the governor to become the face of what will no doubt metastasize into a sprawling bureaucratic apparatus.

Non-profits that bring in more than $250,000 per year, and which remit 30 percent or more of that income outside of Cayman, must have their financial statements reviewed by an accountant and the reviews submitted to the Registrar. The bill also grants wide discretion to the Registrar and the Attorney General to gain access to financial information of charities of any size.

Additionally, the legislation exposes people involved in a charity, such as its board of directors, to administrative and possibly even criminal penalties if the charity fails to adhere to the law’s requirements.

And, yes (Cayman pastors, are you ready for this?), religious organizations are included in the bill.

It is unclear (perhaps deliberately so) what level of detail will be required in regard to individual donors and their donations. According to the bill, it includes “all sums of money received and expended and the matters in respect of which the receipt and expenditure relate; … all sums of money raised through fundraising; … and any other matter that may be prescribed.”

The bill gives sweeping powers to Cabinet, including determining “the particulars contained in the financial statements and annual returns,” and deciding what non-profit entities may or may not be excluded from the legislation.

“Cabinet can effectively pardon [a] non-profit entity if they break the law. This law allows Cabinet to become judge and jury. It’s dangerous,” Mr. Suckoo said.

He’s right again.

Fundamentally, this bill jeopardizes Cayman’s robust culture and tradition of charitable activity. By exposing charities, their directors and potentially their donors to the whims of government prosecution (or persecution), the passage of the bill will almost certainly lead to a dramatic reduction in charitable giving.

Let us not overlook the fact that Cayman’s charities provide services, on a tremendous scale, that the public sector would otherwise have to fund and provide through its welfare apparatus … vital causes such as feeding the hungry, clothing the poor, healing the sick, educating the young, etc.

Why would our legislators even consider a scheme that almost certainly would victimize the beneficiaries of these charities?

We suspect what is going on here is that politicians and financial services industry representatives are attempting to put on a façade of respectability for the Caribbean Financial Action Task Force, which is set to conduct a review of our anti-money laundering/anti-terror financing regulations in the second half of next year.

In the absence of evidence of serious misuse of Cayman’s charitable entities, the entire exercise is for the sake of appearances, not reality.

Considering the discretionary powers of exemption granted to Cabinet, it is possible that lawmakers plan to pass this legislation and then never enforce it. That’s the worst kind of law because it erodes respect for all law.

In an editorial we published in May 2014, we challenged supporters of similar legislation “to present to the public one documented case of substantial abuse of a Cayman Islands charity that would justify installing the expensive and tedious bureaucratic structure contemplated under the legislation.”

We’re still awaiting a response.



  1. Let me respectfully disagree with this editorial.

    Nonprofits must be financially transparent and produce basic financial statements. It is so easy to commit unauthorized taking of funds for personal use, misappropriate public donations. Theft, embezzlement and other unauthorized uses of funds are quite common among nonprofits. Nonprofits are vulnerable because they usually have no internal controls, lack business and financial expertise and rely on volunteer boards. Frauds involving collusion and purchasing schemes are quite common.
    It would be naive to expect that people in charge of non-for-profit organizations are saint. The “most dedicated, honest, sweetest” person could be a skillful embezzler.

    I personally had an experience when collected funds for one of the Cayman charities were given unaccounted to a person in charge, who just took it without producing a document confirming the receipt of money. She did not bother to count it and enter the collected amount into a register (there got to be one). This was rather shocking to me.

  2. One has to audit a nonprofit in order “to present to the public one documented case of substantial abuse of a Cayman Islands charity”. There would be no documented cases of abuse otherwise. Complete freedom from accountability?

  3. Some non-profits, like Mr. Trump’s for example, are under the microscope for fmcs-management, fraud and money laundering. I agree whole heartedly with L.Bell. If you are above board and truly acting for the benefit of the community there should be no problem in submitting your financials. Mr. Suckoo is either being short-sighted or simply appealing to the lowest common denominator.


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