EDITORIAL – Using Cayman’s charities as pawns in a ‘rigged game’

The altruistic individuals who comprise the Cayman Islands charitable community toil tirelessly (and for the most part, for no pay) to make our community safer, kinder and healthier.

Through a network of an estimated 300 nonprofit organizations, including sports associations, community groups, service clubs and charitable entities, Cayman’s “Mother Teresas” feed the hungry, raise funds for medical research and minister to the infirm. They clean up neighborhoods, reefs and beaches, support young people and struggling families, and offer comfort and companionship to our elders. In other words, through their good deeds, our nonprofits fulfill a litany of societal obligations that, in many cases, rightfully fall within the aegis of government, but have been left unattended.

That is our view. But after reading the severely worded email sent this week from the Ministry of Financial Services and Home Affairs, one would be forgiven for thinking our nonprofit community constitutes a syndicate of criminals, thieves and money-laundering terrorists.

Their “offense?” A failure to rush to comply with an absurd law rubberstamped by local legislators to appease foreign powers who, over the years, have proven unappeasable.

Specifically, a primary purpose of passing the Non-Profit Organisations Law was to “tick a checkbox” on the requirements list promulgated by inspectors from the Caribbean Financial Action Task Force, an intergovernmental body with the grandiose-sounding goals of combatting potential money laundering and terrorist financing.

Cayman’s new law (which, in September 2016, while it was still in bill form, we said “deserves a decent burial”) requires nonprofits to register and submit financial records and information about directors, controllers and owners to the General Registry. Nonprofits that take in more than $250,000 per year and send 30 percent or more of those funds overseas also must have their accounts audited and file the results of that audit with government.

The quixotic legislation targets the best-behaving members of our community, for example, the Pink Ladies, Meals on Wheels, Cayman’s ARK, One Dog at a Time, etc. It distracts them from their good works, creates new layers of administrative overhead (and government bureaucracy) and discourages donations from privacy-conscious individuals … and for what? To try to look good for outside organizations that are so inherently opposed to the idea of offshore finance that they will never be satisfied by either appearances or reality. (Exhibit A: The recent “betrayal” of Cayman and other overseas territories by the U.K. Parliament in regard to beneficial ownership registers.)

Can our government, or the CFATF, identify one single instance ever in Cayman’s history where a local nonprofit was a front or conduit for money laundering or terrorism financing?

The nonprofit community seems to be speaking with its silence. Despite the government’s efforts and exhortations, as of last month, only 63 nonprofit organizations (roughly one-in-five) had registered under the law.

In response, the ministry issued an acrid demand that nonprofits not only abide by the statutory Aug. 1 deadline for compliance – but submit applications no later than June 15, a full six weeks early, to give the registry time to process the paperwork.

The at-best tone-deaf statement warned that non-registering nonprofits will be struck off the Companies Register, face fines of up to $3,000, and may have their assets seized.

Further, leaders of non-registered nonprofits may be subject to “criminal sanctions.”

It seems our government has become confused as to who the “good guys” and the “bad guys” are in Cayman.

Let’s be clear. Our nonprofit sector deserves nothing more, or less, than our unequivocal gratitude and support. Who do you think would make wiser use of, say, a $500 contribution: The Pink Ladies or the Cayman Islands government?

When it comes to foisting nonsensical and onerous regulations on Cayman’s charitable organizations, here’s what Cayman’s government needs to do: Back off. (And that is being charitable!)


  1. We have a friend who was considering starting a charity to help under privileged children.

    She has decided that the paperwork of complying with this law is too much and now won’t be going ahead.

    The losers: under privileged children.

  2. Totally agree with Compass on this. The basis of our society is that we are all responsible for ensuring those disadvantaged are supported and as society has grown more complex, we have abrogated the responsibility to Government, assuming they will act fairly and equally to all.

    Unfortunately that assumption is wrong and Governments act in their own self interest and that of the rich and powerful who support them

  3. As I haven’t read the Cayman Islands Charity Law and Regulations. But reading everything else . I wonder if there are different categories of Charities, i.e International Charity and Local Charity .
    From reading Norman comment , it sound like his friend had to do a International charity to operate locally. I would also say that the government need to go back to drawing board , and figure out how to let a charitable organization operate locally and locally only , and not be bound by International rules and regulations, but be legally registered for.

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