9. The different cultures of the "non-profit" world: reform proposals of the Italian System.
The growth of the "non-profit" world has provoked lively discussion about the opportunity of reforming the present discipline of non profit organizations . The two main aspects examined are: control over such organizations (particularly, the opportunity to switch from administrative to juridical controls) and the applicable rules in the event of a business enterprise carried on by the organization. In this last case, the problem would be whether or not to apply the bankruptcy rules normally applicable to profit corporations.
What is clear is that the discipline of non-prorit organizations should comply with the different aims of these organizations, so that different rules for different kinds of organizations would probably work better. The risk, in this case, would be an excessive growth of legislation and, at the same time, a heavy burden on the Italian Public Administration, which certainly is not famous in Europe for its efficiency. But this is a risk worth running, in order to enhance the different functions brought about by non-profit organizations.
The suggestion, then, is twofold:
a) to sketch a simple discipline-framework, common to all non-profit organizations and based on the "non-distribution constraint" principle. This is not an unknown principle in our system, although it is negatively qualified (non-distribution income).
b) simple and clearly detailed rules, able to qualify the function of the non-profit organizations, as well as simple and clear fiscal rules.
A very acute observer - whom we still mourn with deep emotion - -who dealt with the non-profit sector in his brilliant book published in 1988, divided the non-profit world into three categories :
a) the first is characterized by strict rules of non-distribution constraint; by the prohibition of reimbursment of the fund to the members; by equal protection rules among the members; by controls over the changes in by-law; and finally by a privileged fiscal drag (provided that the net income is entirely re-invested).
b) the second category is characterized by much more generous fiscal legislation that needs a stricter control system, that complies with the general principles stated in a discipline-framework. (See Law n. 266, 11 August, 1991, on volunteerism);
c) a third category of non-profit is one that greatly respects private freedom, within the limits of non-distribution constraint.
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It is now clear that a large part of Italian professors agree with the necessity of changing the Civil Code. But there are very different views among these scholars, that influence both the juridical aspects and their discipline. The debate which started in the past ten years reflects three main cultural perspectives:
a) a catholic approach recommends a policy giving large support to non-profit organizations, in compliance with art. 2 of the Italian Constitution. This thesis is based on the idea that society preceeds the State, and not viceversa, both in time and in dignity. From this point-of--view, society is an autonomous entity, where people "in action" are closer to the individual needs. The State shall support society: this is what the sociological approach would call "subsidiary principle", recently re-stated by the Pope in his encyclica "Centesimus annus": "A higher order of society must not interfere with the workings of a lower order of society, depriving it of its natural abilities. On the contrary, the first should support the second if necessary, and help it to co-operate with other social entities in order to achieve the public good~. Therefore, the Government should support the self-organization process of non-profit organizations, with rules and policies that can aid their activities. For this reason, there should be almost no economic or political controls;
b) there is a second theory, according to which the Government should direct and encourage private organizations operating in our society, as they are not able to promote themselves. This thesis is based on the pluralistic idea of social entities. Consequently, there might be some economic controls, but no political interference;
c) lastly, there are those that support the philosophy of respecting the rules: in order to comply with the equal protection rule, there cannot be any political or economic immunity in favor of non-profit organizations (and against for-profit organizations). The only possible immunity would be a fiscal one, provided that the privileged entity pursued public aims.
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The next step will be to bring together all the different opinions on the non-profit world. If we succeed, we might change F. Fukuyama's negative opinion of Italy. In his recent book , China, France, South Korea and Italy suffer from a very low level of trust (in other words, the belief that each individual member of the community observes the same rules and shares the same values). Second: they have "low social stock" (or more clearly: people are unable to work together to achieve common aims). Lastly, they have a low spontaneous "sociability", the skill to create new kinds of organized groups: cultural, entertainment, entrepreneurial, religious, trade and welfare unions, and so on). Fukuyama's essay evokes the images offered by Alexis de Tocqueville: we hope that in the future, North-Americans visiting Europe might be just as surprised as the young French aristocrat was when he first visited the United States of America. How many non-profit organizations, how many law schools, have been built on the immortal Yale model! And now, let's all sing together...