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Proposed administrative procedure - CIVIL.04
Improving management of charities


  1. Preface
  2. CIVIL.04.01 --- Code to improve medical charities
  3. CIVIL.04.02 --- Code improve relegious charities
  4. CIVIL.04.03 --- Code to improve other charities
  5. Draft of the act to enact CIVIL.04


While charity is a good concept, it has seldom been practical. There is a lot of evasion of taxes, and siphoning of govt grants in the name charities, How can all this be redcued?

I will classify charities into three groups
  1. food/medical : those who provide subsidized food, medicine and medical care
  2. relegious : those who run relegious establishments
  3. others : rest,i.e.non-relegious, non-medical
I will suggest means to improve each of them separately.

CIVIL.04.01 --- proposed laws to improve medical charities

The medical charities can do activities then provide free/subsidized food, medicine and medical care. The donors will get 50% deduction of income from their tax, maximum being 10% of net taxable income.

The land/building of the trust which are used for medical purposes will be exempt from the wealth tax.

The trust will have at least 2 trustees and maximum of 10 trustees. No individual can be trustee on same trust for over 10 years. The existing trustees, via election, will appoint the new trustee to replace the out going trustee.

The trust will be supervised ONLY by the District Govt's Health Department.

If any citizen has complaint that trust is spending funds on non-medical activies, they may complaint to the local Grand Jurors, who are if convinced prima facie can order Review by Jurors. If the Jurors are also convinced that the trust is spending funds on non-medical activities, they may fine the trust or trustees or both.

CIVIL.04.02 --- proposed laws to improve relegious charities

The solution is to democratise these trusts.

  1. If two relegious trusts, if it they think are of same relegions, they may merge themselves by unanimous resolution of ALL trustees of both trusts, and the resolution should also contain name of new 2 to 10 trustees.

  2. A trust can register itself in a district where it thinks it has a presence. The trustees will appoint 1-5 District Representatives in the district where it registers.

  3. Each citizen will specify at most one trust with whom he is affiliated by relegion. The District Representatives by majority will decide if they want to accept that citizen as a follower or not. If they do, the citizen will become member of that trust.

  4. The members can replace the trustees by RLPP.

  5. The trusts will be required to pay taxes

  6. The donations to the trusts will be get 50% deduction, with maximum of 10% of net taxable income. The trusts will have to pay income tax on its donations from unknown sources and interest incomes and will get a deduction of Rs 500 per member per year. The trusts will also get a deduction of Rs 100 per member on it wealth (land/building) and pay wealth tax on the wealth over and above that.

CIVIL.04.03 --- proposed laws to improve non-medical non-relegious charities

The best way to improve their management is to privatize them, as follows :
  1. A trust will have three options
    1. It can register itself as medical trust, and apply code CIVIL.04.01 on itself
    2. It can register itself as relegious trust, and apply code CIVIL.04.02 on itself
    3. apply for its privatization

  2. I described how medical and relegious trusts can be managed. If a trust opts for privatization, following code will apply

    1. For all the liquid assets of the trust, such as cash, FDs, bonds etc, the govt will confiscate 33% and remaining 67% will become PRIVATE property of the chairman of the trust.

    2. If land is given by govt to a trust for free, the chairman MUST pay 67% of the prevailing market price or else the land will be confiscated. If the trust got the land by paying part of the market price, the chairman will only need to pay 67% of the remaining part. After the payment, the land will become the PRIVATE property of chairman of the trust.
      Example-1 : Say a trust got land from govt for free. Say present day market price is Rs 100,000. Then the chairman will need to pay 2/3rd i.e. Rs 67,000 and then land will become private property of the chairman.
      Example-2 : Say a trust got land from govt at subsidized price i.e. paying only say 40% of the then market price. Now say today's market price of that land is Rs 100,000/-. Then subsidy component is Rs 60,000, and the Chairman will needed to pay 2/3rd of it i.e. Rs. 40,000/-. After that the land will become chairman private property.

    3. In case the chairman of the trust does NOT pay the above sum, the govt will confiscate the land, auction it, and give 33% of the money obtained to the chairman, and keep the rest.

IOW, we need tax subsidized charities in ONLY in education/relegious sector and NO other sector. The charities in other areas should be privatized i.e. individuals may do for their own fulfil their wishes, but need no tax breaks.

Draft of the act to create procedure CIVIL.04

One law needs to be passed in Parliament to enact CIVIL.04. To see the draft, please click here.

     Now citizens can ask MPs to pass this Act. But IMO, it will be wiser for citizens to first enact procedure LM.03 then use LM.03 to pass this CIVIL.04 draft WITHOUT any help from MPs. To know about procedure LM.03, please click here.

If you have any other question, please mail it to Thousand thanks in advance.

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