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Anti-Corruption and Transparency International Canada

October 29, 2011

Transparency International Canada held a day of dialogue on corruption back in May, and I was a member of a panel on “Corruption abroad by Canadian charities and NGOs: Does it happen? Should it be penalized by Canadian law?”

I chose to turn the question on its head a bit and spoke from my experience with SAPP about two themes:

First, I spoke about how in an era of globalization, charitable dollars are flowing in all kinds of directions, not just from Canada abroad.  For example, on our blog, we’ve reported quite a bit about Indian millionaires and billionaires who make huge gifts back to North America, mainly to universities.  We should think about corruption in all sectors and regions.  What does corruption really mean?  For example, do large gifts to universities lead to better admissions results for family members?  Is that a form of corruption?

Second, I talked about how corruption is related to a lack of proper governance and oversight practices, and how this is often reflected in the creation of tons of small NGOs that do not conduct proper needs assessments, do not follow best practices with regard to transparency and accountability, and do not have standards in place to prevent corruption in developing countries.  While we at SAPP have observed a proliferation of NGOs in India and elsewhere in South Asia, I imagine this is an issue for other diaspora communities as well.

Here’s a summary of the entire panel from TI-Canada’s Fall 2011 newsletter:

There is virtually no public discourse about corruption in Canadian charities. Some participants thought that if there is such corruption, it is probably occurring at such a low level that it is below the radar… [But,] there are OECD publications suggesting there are Canadian NGOs involved in corrupt pharmaceutical schemes. An OECD review of Canada points out that the “for profit” element of the Corruption of Foreign Public Officials Act prevents that statute from applying to NGOs… Canadian charities do not want the act to apply to them, saying that a small number of charities are causing the majority of the problems. However, there was considerable sympathy for the view that, if there is corruption in NGOs, it should be penalized by Canadian law.

There was some discussion about the non-profit sector’s ability to regulate itself. It was noted that Imagine Canada has launched a governance standard starting with the largest NGOs in an attempt to improve NGO governance from the top down. The first reporting on these accountability and transparency requirements will take place in fall 2011.

One thing is obvious: Financial controls and accountability cost money and implementation of them can have a negative impact on a charity’s ability to achieve its goals. So, the question arises, how do you achieve a balance between enforcing anti-corruption standards and effectiveness and not eroding donor confidence?

It was a really interesting discussion – I encourage you to check out the Full Rapporteur Reports about this and other panels, which are available here.

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