Since gaining independence in 1966, Lesotho’s government has been characterized by insecure democracy. This in turn has constituted a constraint to the various types of nonprofits. Several organizations are unable to carry out their mandates as intended.
Maintaining active and vigorous democratic institutions as well as civil society was suggested as a way to solve the many challenges of the nation. Hence, when it comes to addressing first-order collective action issues and forming peace-building agreements, the nonprofit intervention has been more effective than that of foreign actors.
In this article, we will consider the various types of nonprofits and their functions.
- By and large, nonprofits play a variety of roles in strengthening democracy.
- Nonprofits encourage and foster civic engagement.
- When the various types of nonprofits are effective, they become a force for change in the nation.
What are the types of nonprofits in Lesotho?
There are three classes of nonprofits legally recognized in Lesotho. They are;
1. Company Limited by guarantee
These types of nonprofits are governed by The Companies Act 2011. A company limited by guarantee has no shareholders or share capital. Likewise, the corporation is held by guarantee members rather than shareholders since it is restricted by guarantee rather than capital. As a result, no profits are awarded to the members.
All earnings are put toward the company’s non-profit goals. Even more, if the firm is wound up, its liability is constrained to the sum they agree to contribute. Hence, these distinct factors make companies limited by guarantee an excellent option for nonprofit organizations.
2. Societies
These types of nonprofits are created when people with similar interests or ideologies come together to form an association.
The Cooperative Societies Act and Cooperative Societies (Amendment) Act, was passed in Lesotho in 2000 and 2014. Altogether, this Act unifies the legal framework for all varieties of cooperatives. The roles, responsibilities, rights, and internal structure of registered organizations are outlined therein.
Furthermore, the act sums up the constitution and registration of cooperative societies. This also includes societies established at the national level in Lesotho to support cooperative development.
3. Charitable Trust
In a trust, a person or organization (the “grantor”) transfers fiduciary control of assets to another person or entity (the “trustee”) for the benefit of beneficiaries. These types of nonprofits are exempt from all taxes under the Income Tax Act 1993.
All trusts must be registered with the High Court’s Master. Likewise, following the Trust Property Control Act of Lesotho, a nonprofit must register a trust deed. What the trustees may and may not do with the assets in their custody will be specifically stated in the trust deed.
Consequently, trusts must be established legally and with legal protection. Before being named a trustee by the Master of the High Court, no one is permitted to act on behalf of a trust. All such acts shall be unlawful and unenforceable and shall not be ratified.
How have nonprofits in Lesotho contributed to policy development in the nation?
The various types of nonprofits continue to address a variety of issues in Lesotho. This includes advocacy and lobbying, human rights, democracy and government, capacity building, gender equality, and development. Additionally, nonprofits are active in the areas of policy development, national reforms, election monitoring, and civic education.
In May 1990, the Lesotho Council of NGOs (LCN) was established to serve as an umbrella organization for NGOs. It rose to prominence as a prospective partner in development. As a result, the institution is well-positioned to take advantage of prospects for increased involvement in the nation’s development process.
Also, the umbrella group strengthens nonprofits’ organizational capacity and plays a key role in mobilizing NGOs for the objectives of policy discussion.
Although nonprofits in the country are essential to the development of democracy, they have not always been the ones to propose new laws. Likewise, a large populace has the impression that nonprofits have been more “reactive” than “proactive.” Hence, the role of nonprofits in national development is constrained by the lack of a formalized structure and method of interaction.
There is a sense that nonprofits are “opposition in disguise” or “unwelcome watchdogs” since their roles are not always understood. Nevertheless, they foster relationships between local and global communities, serve as political watchdogs, and communicate the needs of the general public to the ruling class and political elites. Nonprofits work to change and reform the political system by mobilizing the public around issues and concerns.
Conclusion
When the various types of nonprofits are effective, they become a force for change in the nation. Hence, NGOs in Lesotho have been successful in accelerating the democratic transition of the country. By and large, nonprofits play a variety of roles to strengthen democracy and one such role is: encouraging civic engagement.
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