3 Important Regulatory Principles that All Nonprofits Should Know - Part IMay 11, 2023
If you are a nonprofit that receives government funding either through grants and/or contracts, you should be monitoring changes in regulation that impact your work on a regular basis. However, many nonprofit professionals don’t understand how regulations work, what they do versus legislation, and how the interpretation of the legislation can completely enhance, distort, or hamper the original intent of the law.
This is the first of a two-part series. This week we will focus on the following:
- The relationship between bureaucracies, legislation, and regulation;
- The purpose of regulation; and
- The components that are not included in regulation.
Next week, we will look at:
- How to identify good regulation and effective regulation; and
- How to influence the regulatory process.
Bureaucracies, Legislation, and Regulation
Bureaucracies are the institutions that are charged with operationalizing legislation through regulation. The language, parameters, definitions, and tools outlined in this phase can either further or hamper the original intent of the law as well as the reach of the executive branch. The authority to promulgate regulations can only come from the accompanying statutes. Without accompanying regulations to legislation, bureaucratic institutions would have to go to the legislature to obtain approval on day-to-day practices, which would result in stagnation.
The Purpose of Regulation
Regulations create a working framework for implementing statutes. They typically address areas in which statute is silent:
- Performance standards and objectives,
- Outcomes, and
- Implementation approach.
It is very common for statutory language to be general and broad. This provides public administrators with the necessary leeway needed to decide how mandates will be carried out based on resources, culture, and expertise. When structured ethically and appropriately, regulation should establish a uniform, objective, and fair process for implementation that is not driven by political influences. This latter objective is, of course, very challenging.
Regulations provide a set of broad instructions for various industries that expand upon legislative and legal mandates by operationalizing them. As part of this process, regulations usually intend to achieve at least one of the following goals:
- Prevent or correct a problem;
- Provide guidance on operationalizing the law and the corresponding logistics;
- Explain the consequences of not following the law;
- Create a framework of rights;
- Outline processes; and
- Correct market or planning failures.
Correspondingly, regulatory language achieves the following:
- Defines the decision-making bodies for monitoring, implementation, and the extent of their authority;
- Defines the roles, responsibilities, and duties of the involved parties;
- Provides definitions for ambiguous terms;
- Create definitions for ambiguous terms or expands further on definitions provided in the original statute;
- Outlines programmatic and implementation parameters;
- Outlines what due process looks like by ideally creating a fair, accessible, and open process where there is a consistent application of the law, remedies, and appeals;
- Spells out exceptions;
- Describes the tools government will utilize for disseminating funding, monitoring, implementation, enforcement, etc.; and
- Stipulates the consequences for non-compliance in the form of penalties or sanctions (e.g., loss of privileges, fees, sanctions, loss of freedom, legal action, etc.).
Not Covered by Regulation
It is important to note that regulations are not all-encompassing. The daily operational details are usually specified in other documents such as:
- Implementation protocols,
- Reporting forms,
- Evaluation tools, and
- Individual program objectives
It is important to note that these tools and their parameters also merit scrutiny because they do impact the logistical realities of implementation and, by extension, the longevity of a policy objective.
Next time, we will focus on how to identify good regulation and effective regulation. We will also describe how to influence the regulatory process. As a bonus, we will provide a downloadable Advocacy Framework.
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