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SOURCES OF FUNDING FOR NGOs

SOURCES OF FUNDING FOR NGOs. Luben Panov Bulgarian Center for Not-for-Profit Law. Why is Funding Important?. It determines whether NGOs will have the resources to achieve their objectives It gives NGOs more independence in their activities

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SOURCES OF FUNDING FOR NGOs

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  1. SOURCES OF FUNDING FOR NGOs Luben PanovBulgarian Center for Not-for-Profit Law

  2. Why is Funding Important? • It determines whether NGOs will have the resources to achieve their objectives • It gives NGOs more independence in their activities • But very often donors can determine the agenda of NGOs • So it is important to have diversified funding both in terms of different sources but also different types of funding

  3. The Current Situation USAID Sustainability Index 2008: • With rare exceptions Financial Viability is the worst score for all countries; • Average score is 3.1 for Northern Tier, 4.6 for Southern tier and 5.2 for Eurasia • Among Black Sea countries the best score is 4.1 in Bulgaria, Romania and Ukraine. The worst score is 5.7 in Azerbaijan.

  4. Own income • Membership fees • Fees for services • Sale of products • Rent of property • Investment income • Endowment • Income from a separate business entity

  5. Philanthropy • Individual donations • Corporate donations • Contributions from private foundations • Volunteers

  6. Indirect State Support • Exemption from income tax for the nonprofit activity • Exemption from income tax for the business activity • Tax benefits for donors – companies and individuals • Free use of property • Benefits for volunteers • Exemption from customs duties, inheritance taxes, etc.

  7. Direct State Support • Budget subsidies • Budget grants • Contracting - for provision of services • Funding for international development (ODA) • Other mechanisms –1 % mechanism, lottery, vouchers Issue: Dependence of recipients from the state?

  8. Source of State Funding • Privatization • Special tax • State lottery • Fines • The general budget • Distributed by government, Parliament, a separate ministry, state fund, etc. Issue: For every NGOs or only public benefit?

  9. Contracting/Procurement • The state hires NGOs to provide certain services • It keeps its role in: • Funding; • Control of the spending • Control of the quality of the service. • Tender, negotiations or other • Contracting vs. Grants Issue: Should NGOs be treated preferentially in this process?

  10. Contacts: Bulgarian Center for Not-for-Profit Law (BCNL)www.bcnl.orgLuben Panovluben@bcnl.org

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