The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian non-profits need “a stronger relationship with the banks” if the sector is to grow and better meet society’s ever-increasing needs, a governance reformer argued yesterday.

Matt Aubry, the Organisation for Responsible Governance’s (ORG) executive director, told Tribune Business that The Bahamas needed to follow the lead established by countries such as the US, Canada and the UK in developing products specifically tailored to the needs of non-profits.

Agreeing that the volume of paperwork faced by ORG and other non-profits remains “onerous”, he nevertheless joined Anthony Hamilton, Civil Society Bahamas president, as both men said they were unaware that such groups are still being denied access to bank accounts or having such facilities closed by banks without any warning.

That assertion came from Human Rights Bahamas, which said it was speaking on behalf of non-profits and non-governmental organisations (NGOs) that did not want to be identified. Yet, while he and others were unable to support the claims, Mr Aubry nevertheless told this newspaper: “What we want to do is support small non-profits; those focused on grass roots communities.

“We have to figure out a better mechanism for them to manage their affairs, and a stronger relationship with the banks would be beneficial. It’s beneficial to start the conversation. If you have a segment that has well over 1,000 non-profits, and we want to facilitate the growth of small grassroots non-profits to do work in communities, it makes sense there be a stronger relationship with the banks.

“In some countries they have products tailored to the needs of groups doing social and community work, and we don’t seem to have that in this country.....  It ultimately doesn’t create an environment for small non-profits to grow. If an inordinate amount of time is spent on paperwork and follow up, it will not generate that kind of growth.”

The ORG chief said non-profits in major countries such as the US enjoyed easier access and lower fees for banking and related financial services in recognition that they were providing services that meet community needs, filling voids where national and local governments were not present or lacked the necessary resources.

Mr Aubry said he knew of no specific cases where non-profits have been denied the chance to open a bank account, or have had an existing facility closed on them, but said the latter measure can be enforced if a group is in non-compliance with legislation passed to regulate the NGO sector in 2019.

That was driven by the need for The Bahamas to comply with rules set by the Financial Action Task Force (FATF), the global anti-money laundering and terror financing standard setter, for the regulation of non-profits to prevent their potential abuse in the commission of financial crimes. It remains one of two areas where The Bahamas has yet to be deemed in sufficient compliance with the FATF’s 40 recommendations, although submissions have been made for an upgrade.

Mr Aubry, who disclosed that ORG is set to release a study on the non-profit sector’s impact this fall, said the group had “allocated a portion of its time” over the past five years to help build capacity among NGOs because “there are so many rules”.

“I would say the challenge with banking has been noted for a while. It’s not anything new that non-profits had complained about, and the ease of doing business,” he added. The ORG chief said that, when the 2019 Act and subsequent revisions were introduced, some non-profits had been “waiting eight years” to obtain their registration from the Registrar General’s Department and be recognised as a legal entity able to open a bank account.

Registrations “accelerated” after the legislation was passed, and Mr Aubry said: “The Attorney General did share information earlier this year that over 1,000 entities were registered under the Act. The vast majority were affiliated with churches.....”

However, he added that after obtaining their registration, non-profits need “a legal body to exist or operate under”, meaning they have to incorporate under either the Companies Act or the Foundations Act. In doing so, they thus have to comply with the requirements of whichever Act is relevant, which Mr Aubry said can be “prohibitive” for small non-profits with minimal staff that are focused on serving community needs.

Civil Society’s Mr Hamilton, meanwhile, urged Human Rights Bahamas and the non-profits involved to contact himself so that he can try to address their bank woes having dealt with a similar matter previously. “We know there was a backlog of non-profits to be registered. We’ve got quite a bit of it cleared, although I can’t say it’s all cleared,” he added.

“I think we’ve come a long way in the sector with regard to bringing the regulations to the sector. There’s still some work to be done, and it’s not complete at this point. We’ve made some tremendous headway but there’s still work to be done, and I’d be happy to lend assistance to help them get resolution. Whatever the situation is, we’d like to have an opportunity to help them get that addressed.”