The Law on Non-Governmental Organizations prescribes that CSOs can acquire financial resources from membership fees, voluntary contributions, gifts, donations, bequests, interest on deposits, dividends, rents, income from business activities and in any other way that is not contrary to the law. The Law allows organizations to receive foreign donations (EU funds, embassies, foundations, etc.), as well as donations from individuals and companies. CSOs are also allowed to participate in public tenders for financing of their projects from state and local authorities and to raise funds from other legal persons such as commercial companies.
Non-governmental organizations, as all other legal entities, are obliged to register themselves at the regional tax authority. They are, according to Law on Non-governmental organizations allowed to participate in economic activities. In order to do so, they must register in the Central Register of Business Entities. CSO can generate income of up to 4.000 EUR. Exception from this rule is if income of organization is bigger than 4000 EUR, but it does not exceed more than 20% of total annual income from previous year.
The number of CSOs in Montenegro that exercise economic activities is 334. During 2019, eight new organizations were registered for economic activities. 21.1% of the surveyed organizations reported they exercise economic activity. Out of these organizations, 60% reported they did not have any obstacles in engaging in economic activities, 10% reported complicated rules on reporting and control, and 20% reported comprehensive administrative requests in order to engage in economic activities towards CSOs (for instance, licensing).
Concerning the funding base, there are many different actors that provide funds for CSOs, and many organisations are considered very dependent of external funding. The largest donor remains to be the European Union. Based on answers from the online questionnaire, 39.5% of organizations received funds from the EU. Out of that number, 64% responded the EU funding represents 50% or more of total yearly budget of their organization. In addition, 29.1% responded they receive other foreign funds (from embassies, foreign foundations, etc.).
0 – 20 Fully disabling environment20 – 40 Disabling environment
40 – 60 Partially enabling environment60 – 80 Enabling environment
80 – 100 Fully enabling environment
35% of these organizations reported these funds are 50% or more of total yearly budget of the organization. When it comes to restrictions when receiving foreign funds, 12% of organizations responded they had to register within the state in order to receive funds, while 24% of organizations stated that procedures for obtaining VAT are complicated. Central Bank of Montenegro stated that they do not possess information that any organization was forbidden from receiving foreign funds.
One quarter, 25%, of organizations that participated in online questionnaire reported they receive donations from private sources (corporations, individuals, etc.). However, these donations represent very small part of CSOs’ annual budget, as there are no incentives for individuals or companies to donate to organizations. None of these organizations stated they had any difficulties to access funding from these sources.