2.2.1. Public Funding Availability
The legislation contains certain provisions for state support for institutional development, project support and co-financing of EU funded projects, usually targeting segments or sub-sectors of civil society. A few legal documents provide the basis for the decentralized mechanism for the distribution of public funds to CSO that exists with major shortcomings. Key laws and bylaws are LAF, Law on Execution of Budget, Law on Games of Chance and Entertainment Games, Decision on the distribution of income from games of chance and entertainment games Criteria for distribution of income from games of chance and entertainment games, Code of Good Practice for Financial Support of Associations and Foundations. Other laws also regulate some aspects of state support in different areas such as sports, culture, health and so on.
The legal framework regarding public funding for CSOs was not substantially improved throughout the year. The measures related to the comprehensive public funding reform provided in the new Strategy are expected by the first trimester of 2020. During the year, high-level efforts were dedicated to the issue of state funding at a CSO organized conference, where the then-Prime minister Zaev confirmed strongly the willingness of the Government to improve the existing model.
The budget allocation mechanism for CSOs is decentralized. The main budget expenditure linefor CSOs,which is 463 – Transfers to Non-Governmental Organizations (NGOs), continues to cause confusion since the greatest budget allocation from that line goes topolitical parties and sports clubs. The confusion arises due to a lack of public access to the amount of funds allocated per sub-items in the budget (or final account) published by the Ministry of Finance. In addition, other budget linesare used to allocate funds by different state institutions such as 464 – Different transfers.
0 – 20 Fully disabling environment20 – 40 Disabling environment
40 – 60 Partially enabling environment60 – 80 Enabling environment
80 – 100 Fully enabling environment
The 2019 budget funding on the central level, was allocated through nine different state institutions (without the Ministry of Defense as in 2018). Those were: General Secretariat of the Government, Ministry of Economy, Ministry of Agriculture, Ministry of Health (MH), Ministry of Labour and Social Policy, Ministry of Culture (MC), Ministry of Environment and Spatial planning (MESP), Agency for Youth and Sports and Fund for Innovations.
The strategic approach in granting budget funds to the associations and foundations is a legal obligation of the state institutions as per: Law on Budget, LAF, Law on Games of Chance and Entertaining Games, Code, Decision on the Criteria and Procedures for Distribution of the Funds for Financing the Program Activities of the Associations and Foundations from the Budget. Different institutions prepare numerous strategic documents which consider public funding for CSOs: Program for financing the program activities of associations and foundations, Strategic Plan of the Ministry of Labour and Social Policy (2020-2022), the National Strategy for the development of culture, Strategic Plan of the Ministry of Health, Open data strategy, Strategic Plan of the Ministry of Education and Science, Strategic Plan of the Agency for Youth and Sports, National Strategy on Women Entrepreneurship, and many others.
The procedures prescribed for CSO participation in all phases of the public funding cycle have shortcomings. Namely, the Code stipulates clear procedures concerning applying and implementation of projects by CSOs, but it does not on consultations over funding priorities, nor participation in the selection of projects, monitoring and evaluation.
According to the survey, 25% of CSOs agree that they take part in the process of setting up priorities
for state funding, 65.5% of CSOs disagree.
State funding is still almost a non-recognizable source of income for CSOs and only available for a limited number of organizations. The lack of available funding is a serious challenge for CSOs. Within, the budget item 463-Transfer to NGOs, according to the data provided by state institutions a total amount of 512 million MKD (approx. 8.3 million EUR) were planned as financial support for NGOs. This amount differs from the one published within the country budget, according to which the planned amount is 726 million MKD (approx. 11.8 million EUR). The average planned amount per CSOs totals to 180,432 MKD (approx. 2.922 EUR). Furthermore, the share of public funding in the total sectoral income is 15.98 % (including municipalities); and 11.23 % (only the funding on central level) for 2018. The Government mostly provides annual project support for the CSOs, however, there are certain forms of support which can be considered as a mix between institutional and project support, such as the funding of 17% allocated via the Ministry of Labour and Social Policy (MLSP), and 22% via the Agency for Youth and Sports (AYS) (of the total amount available for CSOs for 2018). There are also co-financing examples distributed through the Ministry of Economy, the Ministry of Culture and the Ministry of Local Self-government, but the amounts are not clearly presented. The biggest share of state funding for CSOs is allocated throughthe MLSP and the AYS. According to the latest available data, Government funding although increased by 5% in 2018 compared to 2017, it was cut by 13% in 2019, compared to 2018.
Chart 8. Please select the type of state support your organization has received from the national or local government agencies:
The survey provides evidence of a shortage of available public funding. Fifty-six 56 (34%) CSOs have received project support, three CSOs received an institutional grant, and fifteen CSOs received EU co-financing. Furthermore, a third of the CSOs (29.8%) agree, and 56% CSOs disagree on whether the state funding is sufficient and commensurate to the needs of CSOs.