Effects of subsidiary legislation, public collections regulation on voluntary organisations

Abstract

Purpose: The main aim of this study is to analyse whether the Public Collections Regulation enhances accountability, transparency and legitimacy within the voluntary sector. It assesses the effects of the law on voluntary organisations (VOs) particularly in the sports, education, culture, social, arts and health sectors (sectors that include more than one hundred VOs). The challenges that this law posed on VOs and the impact on the work of accountants/treasurers of VOs are also explored. Design: A mixed research methodology was adopted. Semi-structured interviews were conducted with the CEO of Malta Council for VOs, two officials within the Office of the Commissioner for VOs and with two VOs within each of the six sectors selected. An online questionnaire was also distributed to all the VOs within the chosen sectors. Findings: Various types of fundraising activities exist, however, funds are not necessarily received from public collections. Nearly half of the questionnaire respondents are aware of the law, with fewer actually applying its requirements. It was found that VOs are well aware that scandals led for regulation to be introduced, the importance of good governance and having an appropriate level of monitoring. However, VOs think that a genuine strive for transparency and guidance from the OCVO and Malta CVS are lacking. VOs also experience challenges when it comes to being accountable, transparent and funding. While conflicts of interest and abiding with law requirements were not found to be concerning, the negative effects of bureaucracy were extensively felt even after the amendments were introduced. Since the new regulation was introduced during the pandemic VOs had the opportunity to comply however, struggled as they also had to deal with the extra pressure that COVID-19 brought. VOs also give high importance to accountability, transparency and legitimacy. Despite the negative reaction to the law, no internal controls, administrative changes and changes to the financial statements were added to the work of accountants/treasurers within VOs. Conclusion: VO regulation plays an important role in the protection of VOs and donors. Regulation enhances trust from the public and reduces the risk of abuses. The majority of Maltese VOs are small in size, therefore, the laws needs to be more practical to distinguish between large and small VOs to help every VO to comply with these new regulations. Value: The voluntary sector has become very important in society. Since this sector is always getting bigger the risk of abuse also becomes likelier. It is one of the main reasons why VOs are regulated and why new regulations such as the Public Collections Regulation were introduced. This study sheds light on the impact of regulation on VOs, which can be either positive (increase in accountability, transparency and legitimacy) and negative (bureaucracy, challenges to comply especially small VOs).