Chile’s President Announces Plan to Ease Country’s Philanthropy Laws

Until now, making a charitable contribution hasn’t been an easy feat in Chile. The red tape and hefty taxes that accompany this onerous process dissuade many potential donors from giving, which in turn leaves many environmental organizations without the funding they need to operate. But these complex bureaucratic rules may soon be obsolete: Chilean President Sebastián Piñera has announced a plan to change the country’s philanthropy laws.

“Soon we’ll present a bill in Congress that will help fund community groups and other NGOs and, for the first time, also help protect the environment,” President Piñera said June 1 in his annual address.

The complex rules and logistics that have made philanthropy in the country so challenging for decades can be summed up in a single data point: Chile has more than 90 regulations for donations, each with its own distinct category of donors and beneficiaries, its own requirements for the purpose of contributions, and its own benefits and limits. In addition, Chile is one of the few countries where nongovernmental organizations’ environmental and health work is not classified as serving the public interest, meaning that contributions to these NGOs are subject to a 40% tax that often discourages donations, effectively limiting an important source of the groups’ funding. (Donations to cultural organizations, for example, are not taxable.)

Spurred by the COVID-19 pandemic and its impact on nonprofit organizations, The Pew Charitable Trusts’ Chilean Patagonia project hosted a series of webinars to showcase NGOs’ pressing needs and public interest role,  and to help provide technical support and information to the nonprofit community. And from these sessions, a roundtable emerged: a space for academics, experts, and leaders of cultural, environmental, and anti-poverty organizations to discuss ways to improve the country’s systems for charitable contributions. Together, they crafted the proposal that President Piñera is now championing.

If approved by Congress in the coming months, the new regulation would greatly ease the process of donating to environmental and health NGOs—a historic step toward expanding philanthropy in Chile. The bill also includes a provision ensuring that donations from abroad won’t be taxed. Current regulations are open to government interpretation, but this amendment would make the rules clearer and more consistent.

Francisco Solís Germani directs The Pew Charitable Trusts’ Chilean Patagonia project.