When it comes to freely seeking and securing financial resources from various domestic and foreign sources to support CSOs activities, legislation is in line with the standards. Law of Associations stipulates that the association may perform any activities which help achieve the goals set forth in its statute. The associations, endowments and foundations may directly perform both a business activity and another profit – making activity in accordance with the law regulating the classification of activities, under the certain conditions, mostly in line with standards.
Similar findings have been identified regarding freely receiving foreign funds, as well as from individuals, corporations and other sources. There are no limitations in regards to receiving assets from public or private foreign sources and there is no discrimination against the source of financing
Although the legislation regarding this standard is mostly in place, there are certain problems with practice. When it comes to engaging CSOs in economic activities, standards are partially met. According to the MM survey, 37% of organizations reported income from economic activities, while 21% experienced administrative obstacles (no further explanations) when engaging in economic activities in practice. The total number of registered associations at the end of 2019 is 33,463 and the number of foundations and endowments is 9,111. The number of registered associations with economic activities is 25, 8% of the total number of registered associations and 3, 5% from the total number of endowments and foundations.
According to the interviewed respondents from the Coalition for developing of solidarity economy, the lack of knowledge, human and other resources represent key barriers to development of business and achievement of a greater social impact for the most of CSOs establishing social enterprises. To allow social enterprises to do their business in the market more successful, be ready for investors and achieve greater impact in the community, they need to be provided with an access to education, structured support programs for different enterprise development phases and linkages with key stakeholders in the state which could facilitate their development.
This requires creation of strong, long-lasting and stable support programs in order to enable continuous development of this sector. Improving financing from public funds is also needed including the enhancing transparency of the existing public sector financial instruments and their openness towards different legal forms of business. Raising awareness among the sector representatives about contribution these enterprises can bring to social services, health care, education, culture, employment of different categories of population and innovation in addressing fundamental social problems. Besides the grants and co-funding, advocate other mechanisms like subsidies, tax reliefs, public procurement, etc.
Partially enabling environment has been detected during assessment of restrictions of receiving foreign funding as well as receiving funds from individuals, corporations and other sources. Slightly less than 50% MM survey respondents reported that they have income from foreign sources and less than 25% of them are dominantly financing themselves through foreign funding. Also, No CSOs receiving income from foreign sources reported facing any obstacles. 44% of MM surveyed CSOs reported that they have income from private sources and none of them are dominantly financing themselves through private funding. From the CSOs that reported that they have income from private sources no one responded that they faced any restrictions when receiving funding from private sources
However, ACT study data indicates shattering the myth of CSOs as organizations that are funded mostly by the international community – namely, only 15% of CSOs reported receiving funding from these sources (including 4% EU funding). EU funds are still a limited source of income for Serbian CSOs; nevertheless, CSOs involved in international cooperation (including European integration) are in the leading position (19%). These data also show that CSOs dealing with development and housing receive 52% of their funding from citizens and 23% from the business sector, which is, in both cases, the biggest share compared to other CSOs. According to the preliminary data obtained from the Catalyst Foundation, 279 organizations received donations from private sources (from citizens and companies) in 2019.
According to Brodoto Serbia Mapping of the alternative financial mechanisms, opportunities and obstacles in Serbia, bearing in mind the general situation regarding crowdfunding and the legislative framework, there are many challenges. Currently, crowdfunding campaigns are possible, but they can be extremely complicated from the point of view of procedures and administration. This demotivates both CSOs and the small and startups and entrepreneurs, especially in early business development, to use this alternative way of financing.