Why regulation is important
A vibrant NGO sector has a significant economic and political value to a country. The economic and other values of NGOs are analysed in detail in an ongoing study by the Johns Hopkins University. Effective regulation allows a country to realise the value of NGOs by enabling the sector to function in the best possible way:
- Underpinning the achievement of the Millennium Development Goals. A clearly defined operating space allows NGOs to be more ambitious in their work, whether that involves implementation or lobbying. Effective regulation also widens the development agenda by bridging the gap between support to governments (through budget relief or governance programmes) and support to individual NGOs. It improves the range of possible local partners, as well as donor confidence and aid flows. Indeed, development may not be sustainable without a growing body of effective NGOs operating in an increasingly strong sector.
- Promoting good governance, both directly through improvements to the local regulator and to the NGOs, as well as indirectly by improving a NGO sector’s ability to suggest change in governance.
- Reducing the risk of NGOs or branch offices being misused by supporting internal governance, financial good practice and risk management.
For a variety of reasons countries all around the world are under increasing pressure to review and improve NGO regulation. For more details, see international and regional influences.