Public Funding for NGOs  and Participation in Decision-making
 
 
Public Funding for NGOs and Participation in Decision-making

CHARTER 1: PUBLIC FUNDING FOR NGOs

    • Is there a special government program providing grants to NGOs?

Direct allocations to NGOs from the State Budget of the Republic of Armenia is envisaged in the Law on State Budget and mainly, Law of the Republic of Armenia "On State Budget of Year 2009 of the Republic of Armenia". Article 7 of the Law establishes a budget line for "Political parties, Non-governmental Organizations and the Trade Unions". Thus, de jure the Law establishes commitment of the Government to provide budget allocations to entities, including the NGOs. However, in spite of this stipulation, de facto there is the situation that the political parties, rather than the NGOs or the trade unions are the ones actually benefiting from the state budget allocations envisaged in the given State Budget line of the Law "On State Budget of Year 2009". The same stipulation in the budget line is provided also in the draft Law 'On State Budget of Year 2010 of the Republic of Armenia". This shows that the Armenian Government establishes the stipulation for the NGOs to get funds from the Government aimed at implementation of programs in different priority areas for the certain period of time. In the given regard, Article 8 of the State Budget Law stipulates in its section on "Other Expenses" a budget line on donations to public (non-governmental) organizations. Thus, in the given regard it can be stated that although donations are stipulated for Non-governmental Organizations by the State Budget Law of the Republic of Armenia, however the Armenian Government lacks a persistent government program providing grants to NGOs on a consistent manner.

    • Are there organizations that receive direct state subsidies because they are important or represent the interests of certain groups?

There are a number of cases in Armenia that NGOs received grants directly from the Government. The main reason for receiving direct state funding is because these NGOs provide important services to the society. For example since 2007 a portion of funding necessary for the realization of "Mission Armenia" NGO activities has been provided directly by the Armenian Government Medium-Term Expenditures program. The activity of "Mission Armenia" NGO is focused on providing a comprehensive set of community-based services in 22 cities all over Armenia.
More information on direct funding and government outsourcing can be found in "Mission Armenia" NGO website.

    • Are there examples of local authorities providing funds to NGOs for certain activities?

A number of local communities in Armenia (13 communities so far) have, upon the efforts and proposal of NGOs, adopted a Social Partnership Charter. On the basis of such Charter the respective local municipality donates from its local budget grants to the locally operating NGO for the latter to implement certain activities in the social sector. According to the Law of the Republic of Armenia on "On Local Self-Governance", Community leaders in Armenia are empowered with their own authorities and those delegated by the State. Their own authorities are in their turn divided into mandatory and voluntary authorities. The Social Partnership fall within the framework of the voluntary authorities of the Community Leaders and so they enter into social partnership with local NGOs through exercising such authorities within the voluntary powers vested on them .
According to the legislative requirements, any project proposal falling within the framework of the Social Partnership Charter is being incorporated in the Agenda of the Community Council and is being voted and selected for funding by the Council.
Thus, the local NGOs are able to get some grants from the local authorities on the basis of the Social Partnership Charter subject to approval by the given Community Council. On the basis of the decision rendered by the Community Council the local community goes ahead with stipulating a budget line in the given community budget for providing certain amount of grants to NGOs. As an alternative, such expenses are fixed under the "Other Expenses" line of the local Community budget. 
The practice of adopting the Social Partnership Charter by the local communities has been initiated by the Professionals for Civil Society NGO (PFCS) in Armenia. Being a pioneer in the given field, PFCS directed huge efforts and succeeded in having the Social Partnership Charter adopted by the thirteen local communities so far in Armenia.

    • Are there cases when the state/local authorities hire an NGO to provide certain services or perform a certain task e.g. prepare a legislative analysis or provide food to old people?
  • The local self-governing bodies also provided grants to the NGO, through entering into cost-sharing agreements.

The Legislation of the Republic of Armenia does not entitle the NGOs to carry out entrepreneurial activities or provide services. Mainly, the Civil Code of the Republic of Armenia establishes restrictions for the NGOs to directly provide services or perform entrepreneurial activities. Article 51 of the Civil Code establishes the types of legal persons and provides in its clause 1 the following definition of types of legal persons: "Organizations pursuing the extraction of profit as the basic purpose of their activity (commercial organizations) or those not having the extraction of profit as such a purpose and not distributing profit received among their participants (non-commercial organizations) may be legal persons". Clause 4 of the same Article of the Civil Code further stipulates: "Non-commercial organizations may conduct entrepreneurial activity only in the cases when this serves the attainment of the purposes for which they are created and corresponds to these purposes. For conducting of entrepreneurial activity, noncommercial organizations have the right to create business companies or to participate in them". In correspondence with this the Law "On Public Organizations" does not allow public organizations to carry out direct entrepreneurial activity but only through establishing a separate commercial entity.
The Civil Code defines entrepreneurial activity as: "Entrepreneurial activity is independent activity by a person conducted at its own risk pursuing as a basic purpose the extraction of profit from  the use of property, sale of goods, doing work or rendering services" .  
Thus, it follows from the legislative stipulations of the Republic of Armenia that Public Organizations are de jure not entitled to provide certain services, because of the fact that provision of services is regarded as entrepreneurial activity, which contradicts the principles of activities of the Public Organizations, as well as the letter and spirit of the legislative stipulations. De facto there are many cases when the Government or the local authorities outsource services to the NGOs, however such an outsourcing is performed not on the basis of pursuing any compensation or profit from the part of an NGO, but rather on the basis of a social partnership agreement entered into between the Government or the local authority and the given NGO.
An example for outsourcing services to NGOs is the "Mission Armenia" NGO case. The NGO was founded in 1988 and since then has established about 50 units that provide a comprehensive set of community-based services in 22 cities all over Armenia. The services are provided through the community-based social-healthcare model, which has traditional social work at its base. In 2008 Ministry of Labour and Social Issues of Armenia granted a license to "Mission Armenia" NGO for social service provision. "Mission Armenia" NGO implements its activities through cooperation with the Government of the Republic of Armenia, Local Self-Government bodies and other local and international organizations.
There is another interesting case with "Bridge of Hope" NGO. The NGO was established in 1996 to help children and youth with disabilities and their parents to overcome their isolation and to help them integrate into community life on an equal basis with others. While "Bridge of Hope" NGO has long been a mainstreaming placement for children and youth with disabilities, today the focus is on inclusion. The programs are directed to create equal opportunities and improve the conditions for children with disabilities so that they can achieve their own goals free from physical and attitudinal barriers. Thus, taking into consideration the area of activities of the "Bridge of Hope" NGO and their long standing experience in the mentioned field, the Ministry of Labour and Social Affairs of the Republic of Armenia outsources the child centers' services to the "Bridge of Hope" NGO for the latter to go on delivering of those services to the children centers.
There are other examples of other NGOs providing services to the Government through the other ministries of Armenia.

    • Can NGOs take part in public procurement procedures and get contracts?

The procurement process in Armenia is regulated by the Law of the Republic of Armenia "On Procurements". The Law "On Procurements" does not explicitly ban the NGOs to take part in the procurement process. However, Article 2 of the Law provides the main concepts used in the Law, by defining "Procurement" as "purchase of all types of goods, works and services compensated by the customer. In terms of this law, rent and lease are also considered purchase of services".
NGOs are not entitled to perform compensated activities. According to the Armenian legislation such activities qualify as economic activities, thus falling short of the principles of activity of NGOs.
In addition, Article 3 of the Law "On Procurements" establishes the purpose and scope of the law and establishes in its Article 2 that "the scope of this Law extends to the procurements in the territory of the Republic of Armenia performed on the basis of compensation by the procuring entity".
Thus, this provision of the Law comes to reinforce the principle of compensation lying behind the practice of procurements and the legislative restrictions for the NGOs to engage in such compensated business.
Finally, the Law "On Procurements", mainly Article 5 of the Law, which establishes criteria for qualification of the supplier or the contractor, provides in its clauses 1 and 2 in pertinent part: "1. To participate in the procurement process, at any stage of procurement process the bidder must meet the criteria stipulated in the invitation.
2. The bidder:
a) must have the right required to fulfill obligations envisaged under the procurement
contrac".
This stipulation comes to reinforce the point that NGOs, according to the legislation that is currently in force in Armenia, do not have "the right required to fulfill obligations envisaged under the procurement contract", thus not qualifying for entering into a procurement contract, given the requirements of the Law "On Procurements". This is due to their lacking legislative grounds to engage in compensated activities.
Thus, it should be concluded that the NGOs are not entitled to participate in procurement procedures and get contracts due to lacking legislative capacity to engage in compensated activities. 

    • Are state funds provided in a decentralized way (e.g. each ministry gives grants in its own area or there is one institution giving grants in different areas)?

The Law of the Republic of Armenia "On Public Organizations" enables NGOs to engage in social, healthcare, educational, pedagogical, cultural, sport and other relevant social programs implemented by the State or the Local Self-Government Bodies. This stipulation of the legislation entitles the NGOs to fully implement or participate in implementation of the above state or local programs. Such an implementation or participation entails that the NGOs may enter into contractual or mutual agreements with the state or local authorities. Grants for the implementation of certain programs are allocated to NGOs by the respective ministry responsible for the area of activities or the local authorities to the local NGOs for carrying out or participating in implementation of certain activities.
Again "Mission Armenia" NGO case can be pointed as an example. The NGO provides social services to elderly population and the Government of Armenia, in the person of the Ministry of Labour and Social Issues of the Republic of Armenia, has a special line item in the budget, which is being subsidized to "Mission Armenia" NGO for the provision of social services to elderly .
There are also a number of other examples of government or local authorities outsourcing to NGOs. Currently in Armenia the social partnership is put on a good footing and it works well.
Within the framework of USAID-funded Social Protection Systems Strengthening (SPSS) Project, huge efforts were directed aimed at developing competitive outsourcing from the government to NGOs both on the state and the local level. On local level SPSS Project was successful to have the Alaverdi, Artik and Nor Nork communities co-fund jointly with SPSS the community social services, which were outsourced to the NGOs. The outsourcing was carried out on a competitive basis.
There are other cases of the partnership and outsourcing on the local level in Armenia.
Thus, it shall be stated that grants are allocated to NGOs by the state and local authorities in a decentralized manner. Armenia does not have a centralized NGO Fund or a similar structure to handle the process of grant making to NGOs in a centralized manner. And thus each ministry or local authority is in charge of providing grants to NGOs in the areas or sectors for which they bear responsibility.

 

CHARTER 2: NGO PARTICIPATION IN DECISION-MAKING

  • Is there a state strategy for NGO-government relations?

According to the official statistics there are around 4,000 NGOs and foundations registered in the country. However, only some small percentage of the registered NGOs are active and pursuing their objective and activities in a consistent manner . Despite of this huge number of registered NGO, Armenia lacks an official state strategy adopted for NGO-government relations. Although there is a budget line established for grants to NGOs in the Law on the State Budget such relationships are not carried out on the basis of a state strategy. The relationships with the NGOs are carried out in a decentralized manner in the country. This mostly means that each ministry is creating and establishing relationships with the NGOs of its sector. The Law of the Republic of Armenia "On Public Organizations" and mainly Art. 5, clause 3 of the Law provides: "Organizations, on their own initiative or on the initiative of the state or the local self-governance bodies, may fully implement or participate in the social, healthcare, educational, pedagogical, cultural, sport and other socially significant programs and actions of the state or the local self-governance bodies by concluding written contracts or other agreements of mutual understanding".
This legislative stipulation means that each ministry is establishing relations with the NGOs, the activities of which fall in line with the area of activities and priorities of the given ministry.   
It is also a recently established practice of local authorities' establishing relations and carrying out joint projects or outsourcing activities of social nature to NGOs. Such activities are conducted on the basis of Social Partnership Agreement that the local authorities conclude with the local NGOs.

  • Is there a ministry or agency responsible for relations with NGOs?

There is no specific ministry or agency responsible for relations with NGOs in Armenia.

  • Is there a Parliamentary commission responsible for NGO issues?

There is no Parliamentary commission responsible for NGO issues in Armenia. However, in 2008 sixty Armenian NGOs initiated a collaborative network to work with the National Assembly of the Republic of Armenia.
Within the framework of such efforts a Memorandum of Understanding has been agreed upon and signed between the NGO network and the National Assembly. The Memorandum of Understanding addresses the NGO participation in discussions of draft acts and thus bringing their involvement in the decision-making processes in the National Assembly.

  • Can NGOs easily take part in debates in parliamentary committees?

The NGOs can easily take part in debates in the parliamentary committees in Armenia. As discussed in "Section c" above, there is a Memorandum of Understanding agreed upon and signed between the National Assembly and the cullaborative network of sixty NGOs in Armenia.
Moreover, the Board of the national cullaborative network of the NGOs has been established represented by the seven NGOs. Thus, according to the established procedure and practice, the Parliamentary Committees and the factions inform the NGOs through the NGO Board about the date and timing of any discussions they are planning to huld. The NGOs interested in the topic of discussion get registered and easily participate in any discussions of a draft act.
There are a number of NGOs actively and regularly participating in the discussion of draft acts in the Parliamentary Committees and the factions. Such NGOs later propose their recommendations and/or opinions regarding any draft act being considered at the Parliamentary Committees or factions. 

  • Are there joint bodies between the administration and NGOs for consultations on different issues?

Generally, joint bodies between the administration and NGOs are established for consultations of different issues. However, the practice shows that such bodies are mostly established on ad hoc basis for discussion/consideration of a draft legal act or for conducting of joint activities for the purposes of which they have been established.

  • Is there a legal act or other state document requiring the administration to consult with NGOs?

The law of the Republic of Armenia "On Legal Acts" addresses the issue requiring the administration to consult with NGOs. Mainly, Article 27.(1), clause 4 of the Law provides in pertinent part "the authority responsible for elaboration of the draft normative legal act, in addition to submitting it to the impact evaluators, shall organize public consultations on the draft to provide awareness among physical and legal entities about the draft normative legal act as well as seek opinions from them when making the necessary amendments to the draft normative legal act".
The relevant Article of the Law provides the legal foundation for Armenian NGOs, ordinary citizens and commercial entities to engage and bring their recommendations and proposals in the process of drafting of the legal acts. This legislative stipulation is crucial indeed for the NGOs to bring their participation in the decision-making process in the area of their interest. In addition, the Law sets a minimum of 15 days of consultation period for receiving feedback from the interested parties, including the NGOs.
Fullowing the letter and spirit of the mentioned legislative stipulation, there are also instructions issued by the Prime Minister of the Republic of Armenia requiring that each ministry should be obligated to organize discussions of any draft legal act before submitting such a draft act to the Armenian Government. In other words, it is an absulute requirement for the ministries to discuss a draft act and seek the opinion of the NGOs active in the given field before submitting it to the Government. 
This legislative stipulation is crucial indeed for the NGOs to bring their participation in the decision-making process in the area of their interest.

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