A prayer for religious reform

This week, a certain religious leader came under fire for fallacious claims made in a demeaning manner regarding another religion. This is certainly not the first instance of religious leaders causing distrust toward other religious groups, and this individual’s actions, in particular, have been publicly criticised before. However, the threat of legal sanction, dealt to religious figures only in the most serious of instances, is unexpected especially when this individual in question had other alleged criminal links suspected, which were exposed by major international news outlets. 

Therefore, while the criminality of religious intolerance and the impunity of community leaders enter the social discussion, a re-examination of these sources of power and necessary procedures to prevent future harm is opportune.   

Religious groups have an important role in society, not only in terms of spiritual advice but also in terms of financial support. Understanding how these organisations are funded and manage their financial resources is critical to understanding their operations and effectiveness. 

One survey, published in the Journal of Business Ethics, asked members of religious groups and found that around 89% of respondents were personally involved in the investment decision-making process inside their organisations in some capacity. This participation reflects the importance they have in managing financial resources in accordance with their religious views.

Donations and charitable assistance are extremely important to religious groups. Donors in the United States alone gave over $ 131 billion to religious-based groups in 2020. Non-profit practitioners in this area stress the need for strong confidence in their organisation’s goal and everyday operations in sustaining their effect, especially in difficult circumstances. This was made clear, for example, during the COVID pandemic, as places of worship and congregants were a beacon of hope to many. 

This, to an extent, justifies certain financial benefits and exemptions offered to religious organisations. If a not-for-profit were to declare and pay taxes, it would erode some degree of the institution’s ability to continue its ‘good work’. Individuals and companies in many countries can claim tax breaks or credits for donations made to religious groups. These tax breaks are intended to stimulate generosity and assist religious groups’ activity. Donors may be able to deduct the amount contributed from their taxable income or claim tax credits, decreasing their overall tax burden.

Religious groups that participate in charity operations are frequently granted tax-exempt status in many countries, especially developing ones. These organisations are registered charities, and their earnings may be tax-free due to their principal goal of giving public benefits through charity operations. Religious groups in many countries, including Sri Lanka, sometimes receive tax breaks on their earnings, particularly if they participate in philanthropic activities that benefit the general population.

These exemptions are often provided with the premise that religious groups contribute to society’s well-being via religious, spiritual, and social services. Religious groups in Sri Lanka may also get funding from foreign organisations, non-governmental organisations (NGOs), or donor agencies with similar goals. These organisations frequently sponsor programs in education, healthcare, poverty reduction, disaster relief, and other social and humanitarian purposes.

However, the need to manage these funds as well as ensure no foul play becomes evident, especially in lesser-developed economies, that historically have not had the necessary institutions to protect against dubious financial practices. 

Donations to religious and charity groups come from a variety of sources, including international benefactors. Countries may have legislation requiring religious groups to comply with AML procedures while accepting and handling donations in order to maintain transparency and avoid financial system misuse. Such restrictions may require contributors to undergo due diligence, keep correct records, and report questionable transactions or big gifts to the appropriate authorities.

Many nations have aligned their anti-money laundering (AML) laws with international standards established by organisations such as the Financial Action Task Force (FATF). The FATF makes recommendations and gives assistance to governments on anti-money laundering and counter-terrorism funding measures. Compliance with these suggestions assists nations in developing strong AML regimes and maintaining international cooperation in the fight against money laundering and terrorist funding. Therefore, while the general public is aware of the good that churches do, they should not be led astray by any institutions unchecked potential to do bad.