MCIC Presents Direct State Funding to CSOs – Basic Overview

The Macedonian Center for International Cooperation (MCIC) issued a policy document, titled “Direct State Funding to CSOs – Basic Overview”. The aim of the document is to contribute to the improvement of data availability and to review the practices of direct budget financing of civil society organizations (CSOs) in Macedonia.

State funding is one of the key elements of the government’s approach aimed at strengthening the partnership with CSOs by supporting their development. Furthermore, it is a significant source for the sustainability of CSOs in European countries, whereby sustainability is a prerequisite for ensuring democratic and economic prosperity. In Macedonia, state funding for CSOs through direct budget support is existing, nonetheless, in order to assess for why it is not a significant source for CSOs sustainability and why reforms are necessary, one must examine the availability and transparency of the data, the policies for support and the implementation of the process of direct budget funding to CSOs through the key state bodies in practice.

Some of the findings from the analysis of data availability are as follows:

• Confusion and vagueness of the budget item 463-Transfers to non-governmental organizations;
• The amount of funds is not sufficient and appropriate to the needs of CSOs;
• The funds generated from games of chance and entertainment games are the main source of income, and are assigned to previously known CSOs;
• Inadequate duration and type of financial support for CSOs;
• Disrespect of the Code, i.e. state administration bodies do not follow the principles of best practices for providing financial support; and
• Lack of quality and publicly available data on the spending of state funds through budget item 463 – Transfers to CSOs.

More so, the European Commission Annual Reports on Macedonia regularly emphasize the importance of state funding for sustainability of CSOs and from 2008 until today, they highlight the dominant dependency of CSOs on foreign donations and the recommendation that it is necessary to reform the existing system of state funding.

The document itself consists of three parts. The first part emphasizes the importance of financial support for CSOs by the state; the second section examines the legal framework and the current model of distribution of direct appropriations from the state to CSOs; and the final section analyzes the direct budget funding for CSOs provided only through item 463 – Transfers to CSOs, through which every year is predicted to allocate budget funds to CSOs. The analysis does not cover other types of assistance that should be provided by the state to CSOS, as funds earmarked for CSOs at the local level, decentralized EU funds, tax incentives, encouraging philanthropy and volunteerism, etc.

The document is a continuation of MCIC efforts to contribute to the sustainability of CSOS as a key element in building rooted and vibrant civil society that actively influences public policies. MCIC is one of the several organizations that promote and monitor the issue of state funding for CSOs in the last 20 years.

The policy document is part of the activities implemented within the project ” Balkan Civil Society Acquis – Strengthening the potential and capacities of CSOs for advocacy and lobbying”, funded by the European Commission and implemented by BCSDN and its members in partnership with the European Center for Not-for-Profit law (ECNL) and the European Network of National Civil Society Associations (ENNA).

The document is available in Macedonian language only and it is available for download here.