Best practices in the Italian third sector law

The Italian legislation is implementing its third sector law.  “The single national registry for the third sector will enter into force in April 2021”, says Monica Poletto, the coordinator of the legislative technical taskforce of Italy’s Forum Terzo Settore. What are the main aspects in the Italian law?

Key aspects in the Italian law

• Defining the third sector as not-for-profit. Besides recognizing that it doesn’t distribute profits, not even indirectly, it is also recognized as a matter of general interest, operating in sectors with such consideration. Not only social, but also cultural, for the inclusion of least favoured people into the labour market, charitable, training and education.
• Creating a single national registry for the third sector. Third sector organisations will be registered and, based on their specificities, they will be registered as: volunteering organisations, associations for social promotion, philanthropic organisations, social networks and enterprises, which social cooperatives are a part of.
• Creating the National Council for the third sector, which will act as an advisory body to the Ministry of labour and social policies, which includes many third sector representatives, besides the institutions. “A large proportion of its members are appointed directly by the most significant third-sector representatives, that is, by us”, Poletto highlights.
• Relationship with public bodies. "Public administrations, when exercising their roles of planning and organising interventions and services at a territorial level in activity sectors (with a general interest) must ensure an active involvement of the third sector through different means of co-programming and co-planning and accreditation".
• Creating a fund of around 40 million to support activities with a general interest of volunteering organisations, associations for social promotion and foundations.
• Increasing the possibilities for those donating to third-sector organisations to benefit from tax cuts and the stabilization of the five per mille rule, meaning that each citizen can choose a third-sector organisation and donate 0.5% of their taxes to them.

Main challenges and lessons from the law

Poletto alerts that “the law has not yet been fully implemented, because the legislative decree foresees the adoption of many rules, and they haven’t all been enacted”. “I’m not pleased with the fiscal part, because it is overly complicated”, the coordinator adds.

Three years after the law was drafted, there is no agreement yet as to how it should be interpreted. “Unfortunately, there’s the idea there’s a price involved, a payment, it should always be considered a commercial transaction, while my understanding is that what contributes to the possibility of providing services with a general interest by organisations that don’t distribute utilities cannot be considered as any commercial transaction, Poletto adds.

“In Italy there’s so much bureaucracy involved, and this has a big impact on organisations. We hope this law will bring some simplification, but for now this isn’t the case”, the coordinator warns.

Each new regulation that is enacted can lead to complications that don’t simplify the law, but from the Italian taskforce we are working so this won’t happen. “I think the third sector requires simple rules, collaboration and not rules that subordinate them to the public administrations, to contribute to do good to the people and society, which our organisations are an expression of and a tool”, Poletto concludes.