Improving sustainability of CSOs
ECNL supports sustainability of civil society in Moldova through enhancing local partners’ expertise and capacity to carry out legal reform and advocacy activities for enabling legal environment. We support ministries in developing laws and policies for civil society, facilitate efforts of local CSOs, provide mentorship for local lawyers and CSO experts. In 2016 ECNL contributed to the work of three joint working groups – on developing a new law on noncommercial organisations; supporting local advocacy in introducing the concept of social entrepreneurship and the 2% designation mechanism. Last, but not least ECNL ensures that Moldovan stakeholders follow and are involved in regional debates on a wide range of issues of CSO enabling environment, such as participation in decision-making, freedom of expression, and others.
To read more about our expertise in enabling environment reform please click here.
Moldova Partnerships for Sustainable Civil Society Program (MPSCS)
Moldova Partnership for Sustainable Civil Society Program is implemented by FHI 360 and ECNL with financial support of USAID in 2014-2018. The activities are a natural follow up on the emerging needs and recent engagement in Moldova, under the USAID supported Moldova Civil Society Strengthening Program (MCSSP) in 2009-2013.
Under MPSCS ECNL’s core activities support drafting and implementation of civil society legislation, empower local partners to carry on legal reform and advocacy activities, make available resources, information, and cutting-edge research, and promote the sharing of comparative expertise.
ECNL provides ongoing and comprehensive support in key areas:
- technical assistance in developing, monitoring and reporting implementation of strategic cooperation documents between the Government and CSOs;
- enhancing State Chancellery’s coordination function in implementing the CSO Strategy through sharing comparative materials and good practices on cooperation mechanisms and CSO legislation in Europe and providing expertise;
- support to establishing mechanisms for longer term sustainability of CSOs through, for example, developing the 2% designation mechanism and supporting its implementation, promoting fundraising and philanthropy, comparative expertise in possible modalities of public financing (grants, social contracting of CSOs);
- support to local experts on the issue of fiscal benefits for CSOs, e.g. benefits to enhance philanthropic giving;
- support to strengthening mechanisms of cooperation with CSOs (e.g. revisions to Parliament’s Concept on Cooperation with CSOs, improving coordination on government’s implementation of CSO Strategy) and transparency in decision-making processes.
“Percentage designation mechanism is a first step towards financial independence of NGOs”
quote from Liliana Palihovici, Vice-Speaker of the Moldovan Parliament
Financial sustainability is among the key challenges for the non-profit sector in Moldova, where close to 90% of funding for CSOs comes from external sources. While state funding is still sporadic, CSOs struggle to access sustainable domestic funding to ensure continuity of their work and services. Percentage designation mechanism is one of such supplementary sources of income: this indirect state support mechanism allows CSOs to mobilize domestic resources and diversify their income base. Specifically, it allows taxpayers to designate 2% of their paid income tax to a CSO or a religious organization implementing activities to the benefit of general public.
Since 2009, MPSCS has been supporting the development of the mechanism, e.g. ECNL legal experts provided technical and comparative expert assistance to local stakeholders from developing the concept of the mechanism through its final design, and until the actual promotion with CSOs and taxpayers of the adopted 2% mechanism. From the very beginning, MPSCS vested efforts in ensuring participatory manner of drafting by public authorities and CSOs, as well as building local capacity, knowledge and professional skills of local partners as well as in increasing the capacity of public officials to be proactively involved in the design of the system of this important source of financial sustainability.
As the result of this work, in July 2016 the final mechanism of 2% designation was adopted in Moldova, with the following implementing regulation.
After the adoption of the new mechanism, MPSCS continues its support to implementation. It published comparative case studies with practical examples from Hungary, Poland and Slovakia of how CSOs can promote the mechanism, ensure efficient outreach to taxpayers or spend designation income in a transparent and accountable way and presented them at the Highlight Workshop on Domestic Resource Mobilization in Chisinau. ECNL continues to collaborate with local CSOs on the promotion of this funding stream.
As of December 31, 2016, 413 CSOs registered as potential beneficiaries of the mechanism in the Ministry of Justice and the first results in raising funds will be available in Fall 2017.