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Financial dependence of NGOs on external grants is 70-80%

The dependence of non-governmental organizations on external grants ranges between 70% and 80%, say civil society representatives gathered at the 2022 NGOs Forum. According to them, diversifying the financing portfolio is a must, and one way of achieving financial independence for NGOs is the 2% instrument, whereby individuals can transfer 2% of their income tax to an organization of their choice.

The Forum participants agree that financial sustainability of NGOs is key in increasing public trust in civil society.

“The financial sustainability of NGOs is a big challenge. Various studies show that financial dependence on external grants ranges from 70-80%, which is not sustainable in the long term. It is up to us, civil society organizations, to diversify this portfolio as much as possible to become more resilient. There is the 2% instrument that allows natural persons to financially support NGOs. In the case entities, we are talking about philanthropy and sponsorship. This means that an economic operator has the right to deduct up to 5% of the taxable income and donate this amount to a non-governmental organization”, said Ilie Chirtoacă of the Legal Resources Center.

Government representatives say that a regulation was recently approved under which civil society organizations can apply for state funding. All projects of public utility are eligible. Also, NGOs can strengthen their financial capacities by engaging in social entrepreneurship. Development partners support the potential of NGOs in the Republic of Moldova if they promote and develop social entrepreneurship.

“A social enterprise is a classic enterprise according to all business processes, but 90% of the profit it obtains must be reinvested in economic activity, it must create jobs for vulnerable categories, and if a social enterprise is liquidated, all assets must be taken over by another social enterprise. The mission of the social enterprise is to solve a community problem or to help a target group in the community to be employed in order to achieve social welfare. The Eastern European Foundation from 2018 to 2020 offered 15 grants for the creation and development of social enterprises”, said Ana Ciurac of the Eastern European Foundation,.

The 2022 NGOs Forum is organized by the NGO Council and the CONTACT Center, with the financial support of Sweden, the German Federal Ministry for Economic Cooperation and Development (BMZ) and GIZ, through the project “Strengthening civil society in the Eastern Partnership countries”.

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