[Regulated NPO ④] Heesook Lee: "Reexamine the 'Act on the Collection of Donations', a Legacy of Pro-Japanese Regulations"

The State Monitors and Judges Civil Public-Interest Activities
Tight Restrictions Are Inappropriate When Fundraising Should Be Encouraged
Growth of the Third Sector Is Essential for Stable Social Development

Hee-Sook Lee, Standing Attorney at Dongcheon Foundation

"The root of the Act on the Collection and Use of Donations lies in regulations established by pro-Japanese collaborator Yi Wan-yong, aimed at restricting movements that resisted the Japanese, such as the national education movement. We must fundamentally reexamine whether this law should still exist today."

Heesook Lee, Standing Attorney at Dongcheon Foundation, stated this in a recent interview with The Asia Business Daily, pointing out, "The law on the collection of donations reflects the perspective of a pro-Japanese state power that sought to control the self-strengthening and independence movements of the Korean people."

The Act on the Collection and Use of Donations requires advance registration with the Ministry of the Interior and Safety or local governments when collecting more than 10 million won from the general public, and stipulates that the government regulates fundraising methods and usage procedures. Although it is ostensibly promoted as 'fostering a sound culture of donation,' there is considerable criticism on the ground that 'the state monitors all private-sector activities in the public interest and judges them by administrative standards.'

Attorney Lee, while researching the origins of the law, confirmed that the 'Regulations on the Control of Donation Collections,' enacted in 1909, was the precursor to the current law. There are also historical records of independence activist Jeon Hongpyo, who was caught collecting donations for the funeral of his student Choi Soobong—executed for resisting Japanese rule—and sentenced to prison under this regulation. She said, "Even after the country regained independence, the regulations continued; today, the permit system has changed to a registration system, but the basic framework remains largely unchanged." She emphasized, "We must switch from regulation-centered laws to laws that actively support fundraising, leaving only minimal requirements for collections."

She filed an administrative lawsuit challenging the Ministry of Gender Equality and Family (then the Ministry of Gender Equality)—along with Pacific Law LLC—over its refusal to approve the establishment of a nonprofit, and requested a constitutional review of Article 32 of the Civil Act, which mandates a 'permit system' for such organizations. The Seoul Administrative Court referred the case to the Constitutional Court, citing grounds such as: △ the absence of explicit legal standards for permits, △ the potential violation of the freedom of association, and △ discrimination against nonprofit organizations compared to for-profit corporations. She said, "Although it will take time before the Constitutional Court's ruling, legal and academic circles believe there is a high likelihood that the court will find the provision unconstitutional."

She further noted that the permit system imposes significant restrictions on the operations of nonprofit organizations. For instance, even if the general meeting approves changes to the articles of incorporation and applies for permission, if the competent authority raises an issue with any clause, permission may be denied and the general meeting must be reconvened. There are also numerous cases where attempts to expand an organization's business purpose are blocked with the reasoning that 'the new activities do not fall under the jurisdiction of the supervising authority,' thus hindering a wide range of cross-sectoral initiatives.

She characterized nonprofit and public-interest organizations as "not merely charity groups, but vital components of civil society and crucial pillars of our social fabric." She asserted that it is time to shift away from regulation-centered laws and systems, and that in addition to government and business, the third sector—nonprofit and public-interest entities—must grow in a balanced manner for society to achieve stable development. "As artificial intelligence (AI) continues to spread, future challenges such as job losses and increased life expectancy will make it essential to activate civil communities, which will be critical for improving quality of life in old age and strengthening our social safety net," she said.

In closing, Attorney Lee stressed, "If approval requirements remain excessively strict simply because management is difficult, it could ultimately stifle civil society. The government should abandon the notion that it must oversee every organization, and should instead allow people to freely establish associations as is done overseas, managing only those organizations that receive benefits such as tax breaks."

Meanwhile, the Dongcheon Foundation is a public-interest foundation established by Pacific Law LLC in 2009, and has since been carrying out the firm's public-interest activities in a professional and systematic manner. For 11 years, Attorney Lee has provided legal support for marginalized groups, such as North Korean defectors and children, and has continued to advocate for the improvement of regulations on nonprofit organizations.

This content was produced with the assistance of AI translation services.