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


  1. Is there a special government program providing grants to NGOs?


There are various ways in which the civil society organizations can both receive public funds and be involved in the process of decision making. One of these is a state-initiated program of financing projects of public interest carried out by not-for-profit legal entities. This project is governed by law 350/2005 regarding the distribution of public grants, for nonprofit activities of general interest . According to this law, “any natural or legal person with a not-for-profit activity which is an association or foundation legally constituted” or a legally recognized religious cult is eligible for receiving public grants . In order to obtain such grants, the entities mentioned above must submit eligible projects, of not-for-profit nature to the financing public institutions within the designated time and following the legal procedure of the competition. This law states that “any public authority, as defined by the Constitution, including the judicial authority as well as any public institution of general, regional or local interest which is principal credit coordinator” may carry on a program which offers such public grants. Each institution can organize one annual program with a single selection session or with multiple sessions. State authorities involved in this process have the duty to take a series of steps in order to endure the transparency and fairness of the contest as well as the equal treatment of all candidates.
The standards to be met by the competing projects as well as the criteria of evaluation are mentioned in the law. The procedure for evaluating the projects submitted during this selection process is the same as the one used in the evaluation of public procurement contests. It is described in Government Ordinance no. 60/2001 with the subsequent modifications brought by law no.212/2002. According to article 51 of this ordinance, the evaluation will be performed by a commission constituted by the public authority, which shall contain at least five members with relevant professional instruction and experience and uncontested moral standing. Any persons which are either related to, own shares or other constitutive parts of, or have been employed in the past three years by any of the competing organizations are excluded from membership in such commission. 
Since 2007, the Chamber of Deputies has initiated a grant program on the basis of this law, called “Partnership with the civil society” . Within the declaration regarding the initiation of this contest, the institution described this new mechanism of involving NGOs in the process of decision making. Officials enthusiastically referred to it as an “innovative instrument in the process of elaboration and continuous improvement of legislative projects/ drafts” by the consultation with and approval of the civil society.
Another strategy for directing funds towards the civil society adopted by the Romanian government, following the model of other countries in Eastern and Central Europe is the adoption of a “2% law". Article 84, paragraph 2 of the fiscal code allows all tax payers to direct up to 2% of the annual income tax owed to the state, “towards a non-for-profit legal entity which has been established and functions in accordance with the law” Yet, the extent to which this means of directing funds towards NGOs is used by taxpayers is still limited in Romania. According to a study performed by the Foundation for the Development of the Civil Society, “in 2005-2006 the sum directed by individual taxpayers to not-for profit entities, under the 2% provision of the fiscal Code was approximately 5.3 million euros”. Moreover, the amount of taxpayers who have applied for this procedure is only about 8.6%. As the researchers conclude, the Romanian culture for supporting the civil society is not yet developed.
Aside from the direct support offered by the state through grants or legal facilities such as the 2% provision, offered to taxpayers to support a not-for-profit entry, public authorities also have the obligation to support NGOs through non-monetary aid. Ordinance No. 26 of 2000 on associations and foundations requires local public administration authorities to support legally constituted not-for-profit entities, by “providing them as much as possible with spaces for headquarters…with grounds for building contractions necessary for the development of their activities” . The law also specifies that priority lists for the “appropriating the immovables stipulated” above shall be drawn by local administrative authorities upon request from NGOs. Yet, the working “inasmuch is possible” leaves sufficient space for administrative discretion, therefore the extent to which this provision is supporting not-for –profit entities is still subject to investigation.
Moreover, the state also supports NGOs by indirect means, such as exempting these entities from the payment of profit tax and other taxes. According to article 15, paragraph 2 of the Fiscal Code, “Non-profit organizations, trade unions and owners associations are exempt from the payment of profit tax”, derived from incomes such as “dues and registration fees of members; contributions in cash or in kind by members and supporters; [other] registration fees incomes obtained from sports visas, fees and penalties or from participation in sports competitions and demonstrations; donations, money or goods received through sponsorship; dividends, interest and incomes realized from the sale-assignment of participation titles, obtained from the investment of exempt incomes; incomes for which the tax on shows is payable; resources obtained from public funds or from non-reimbursable financing; incomes realized from occasional activities: fund-raising events with an admission fee, festivals, raffles, conferences, used for social or professional purposes, according to their organization statute; exceptional incomes resulting from the transfer of tangible assets owned by non-profit organizations, other than assets that are or have been used in an economic activity; incomes obtained from advertising and publicity, realized by non-profit organizations of public utility, according to the law of organization and operation, in the field of culture, scientific research, education, sport, health, as well as by chambers of commerce and industry, trade unions and owners associations” Furthermore, these entities are also not required to pay  “profit tax for incomes realized from economic activities that do not exceed the equivalent in [the national currency] of 15,000 Euro for a fiscal year, but not more than 10 percent of the total incomes exempt from the payment of profit tax”.

  1. Are there organizations that receive direct state subsidies because they are important or represent the interests of certain groups (e.g. the Red Cross or Union of Blind)?

In Romania, certain not-for-profit organizations enjoy a special status and receive direct state subsidies and other types of support because they are considered to be “of public utility”. Such an organization is the National Society of the Red Cross in Romania (NSRCR), which has been granted the previously mentioned status by law No. 139 of 1995.  According to article 8 of this law, the NSRCR, in its capacity of public utility, “has the right to request the cooperation with all the state authorities and the latter have the duty to comply”. Furthermore, this organization has free accesses to the media in view of making its goals and activities public, and will receive annual funds from the state budget, as membership fee to the International Federation of Red Cross and Red Crescent Societies, as well as other fees including those necessary for supporting the activity of the Red Cross in Romania.
According to article 39 of the up-to-date Ordinance no. 26/2000, any legally constituted Not-for-profit entity may acquire the “public utility status” upon filing a request to this end, which is to be reviewed by the Government. The application must be submitted to the General Secretariat of the Government. In order to qualify for applying for this status, associations and foundations must meet all the following conditions upon submitting the request: 1) pursuing an activity which is considered to be of general or community interest; 2) to have been established for at least three years, and have achieved at least part of its envisioned goals; 3) to present a report of the development of its prior activities related to its aims, together with the financial aspects of its existence for the past three years, and 4) to have the same level of endowment for each year, at least equal to the initial endowment. There are certain circumstances, described in the law, in which some of the requirements can be waived.
The legal provisions also specify a period in which the General Secretariat of the Government must forward the request to the competent ministry or central authority, which is of 15 days.  Specific guidelines for resolving a conflict of interest, in the case that such a situation may arise, are established by this law. There is also a legal period in which the competent authority must review the request, which is of 60 days, in which the institution must either advise the government for recognition if the legal requirements are met, or send the petitioner, in no more than 30 days, a letter motivating the decision for denial or this status. The Government must take a final decision on the matter, which is 90 days after the submission of the request, and in the event of rejecting the petition the authority where the request has been registered will inform the foundation or association about the decision in no longer than 120 days from the initial submission of the request and documents.
Upon receiving the “public utility” status, the association or foundation in question will enjoy certain rights and accept certain duties, according to the law. Public utility organizations have: 1) “the right to be conceded and to use for free public goods”; and 2) the right to mention its public utility status in all legal documents that it creates. Such organizations have the obligation to: 1“maintain at least the level of activity and performance that determined the recognition”; 2) communicate, to the competent administrative authority any changes in the constitutive documents and annual activity reports as well as balance sheets, within the first three months of the year; and 3) to publish parts of the annual activity reports as well as balance sheets in the media. As a general rule, the “public utility” status is granted for an indefinite time but the law specifies certain situations in which it can be withdrawn, if the organization fails to fulfill its obligations or the conditions necessary for the request of such status.
With regard to the public financing of Public Utility Organization, certain legislative changes have led to the end of the non-competitive allocation of subventions for this category of NGOs. Article41 paragraph b) regarding the rights of PBOs and respectively “the right to access state budget and local budget resources, in accordance with its activity (of general interest or local communities’ interest” has been abrogated. The main reasons for this change, listed in the Government report, were: 1) that this may have led to the allocation of public funds only for PBOs; 2) “on the list of PBOs [at the moment when this decision was taken] there were many controversial names, because their assumed relations with the political party in power till January 2005”, and 3) given that the law on political parties allowed the former to receive funds from NGOs, it was presumed that this situation could lead to “the establishment of sham NGOs whose sole purpose is to absorb funds for political activity”
Another category of NGOs which enjoy a privileged status and receive funds from the state budget are those protecting the interest of, and promoting the integration of national minorities. According to the provisions of the law on the state budget for the year 2009, “not-for profit organization belonging to the national minority groups” as well as “inter-ethnical projects and programs for the promotion of tolerance” will be financed by the state. The expenses covered by the state in relation to the stated organizations and projects include those related to: employment, printing and publishing, the organization of conferences and symposiums, and investment in the infrastructure related to accomplishing the main purpose. The total amount funds provided for this matter in the 2009 budget law is 73.880 lei (aprox. 17000 Euro) out of which 70.000 lei for organizations and the rest of 3.880 for programs.

C. Are there examples of local authorities providing funds to NGOs for certain activities?
The results of recent study performed on the financing of the not-for-profit sector in Romania show that “subventions are generally distributed through a centralized process but may also be allocated and distributed by individual ministries”. The study further specifies that the institutions which allocate subventions are often also responsible for the supervision of those funds. Yet, Law no. 307/ 2005 on public grants includes, among others, as eligible for offering public grants: “local budgets, foreign aid funds contracted by or guaranteed by the state or authorities of the local public administration as well as internal loans taken by the local public administration” Therefore, the legal framework necessary for NGOs to receive funding from local authorities, exists. Yet, the system which operates in Romania is mainly based on a central distribution of funds towards the civil society. 
According to a report released by the Romanian Government, containing data up to year 2006, “at the local level, there are some local or county councils providing funds for NGOs projects especially on social issues of the community (protection of aged people, child rights protection, disabled rights protection. The counties listed in the document were: Cluj, Covansa Brasov, Mures, Galati, Suceava, Zalau.
D. 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?
In Romania, one of the main services provided by associations and foundations, which is financed by the state is social assistance. Law 34/1998 was enacted to allow NGOs which provide social assistance services to receive state subsidies for the financing of such activities. The law mentions that both the central as well as local budgets may provide such funds. At the national level, subsidies are granted through Government decision following the suggestion of the Ministry of Labor, Social Solidarity and Family. The list of not-for-profit organizations which have received such subventions, as well as the amount of funds received is to be found in the Official Gazette of Romania. Overall, the contribution of the legally constituted organizations of the civil society in providing social assistance services is a significant one in the field. In 2008, 92 NGOs have received state subsidies from the central budget on the basis of this law, of a total or more than 2 million Euros. 

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

Article 3, paragraph c) of the law on regarding the procedure for awarding public procurement contracts, public works concession contracts and services concession contracts (Government Emergency Ordinance) defines: “candidate” asany economic operator that submits its application/candidature for a restricted or negotiated procedure or a competitive dialogue”. Also, paragraph e) states that “any economic operator which has presented a project within the design contest is deemed as “competitor” therefore eligible for being awarded a public procurement contract.By “economic operator” the law describesany supplier of products, provider of services or executor of works – natural or legal person, governed by public or private law, or a group of such persons which legally offers on the market products, services and/or the execution of works”. Therefore, any legal entity, including an association or foundation, is free to take part in the contest.

  1. 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)?

Yes, there is not one single ministry or agency responsible for providing grants or subsidies to associations and foundations.



A. Is there a state strategy for NGO-government relations?
The general framework of the relation between NGOs and the state is described by chapter VIII of Ordinance 26/2000 on associations and foundations. With regard to the access of associations and foundations to public information and their involvement in the process of policy-making, articles 50-53 are of relevance. In principle, the ordinance states that public authorities have the duty to share with NGOs any public information. Furthermore, within state institutions such as “the Chamber of deputies, the Presidential Administration, the Government, the Ombudsman, the autonomous administrative units, ministries and other specialized bodies of the central  and local public administration” there are or will be created departments for the relation between the state and the civil society. According to the same article, the public authorities mentioned above shall consult with the civil society which have similar goals and focus as theirs in view of collaborating and involving them in the policy-making process. Last, but not least legally constituted NGOs may seek registration from ministries or other  state institutions, and the later must prepare a database with all entities which have requested this and which operate in the same area of activity as them. Conflicts of interests are also regulated by this section of the normative act.
B. Is there a ministry or agency responsible for relations with NGOs?
In 2005, the Government has decided to establish a College for Consulting with Associations and Foundations (Colegiului pentru Consultarea Asociatiilor si Fundatiilor). According to its constitutive law, the College is meant to facilitate the communication and cooperation between the associations and foundations on one side and the Government as well as the central administration, on the other side. It also aims to involve NGOs in the elaboration of governmental policies and in the process of decision-making in general.  This collegial body is not a legal entity and functions under the authority of the prime minister.  The main functions of this institution is to: inform the prime minister about the changes and developments within the civil society; suggest appropriate mechanisms for the inclusion of civil society in the decision-making process; to evaluate drafts of normative acts concerning the civil society; provide solutions for improving the fiscal regime stipulated by the law in the not-for-profit sector; and others.
The same normative act also describes the membership and procedure for selecting the members of this institution. According to article 3, the body has 40 members which should be part of the associative sphere. These members are nominated for a 4-years term, by a decision of the prime minister, following the consultation between ministries and the NGOs operating in their field.” The council must meet at least two times a year and its activity is coordinated by the prime minister. Depending on the topics addressed, other members of the civil society, government officials or independent experts may be invited to participate in the discussions.
In addition to this consultative body, all state central and local institutions have the legal obligation to nominate one or several persons in charge with maintaining the dialogue with the civil society, functioning as a liaison between the state authorities in question and the general public.
The compliance of the public institutions with this law widely varies from a case to another, the general trend being of (partially or totally) ignoring these provisions. Within the category of non-compliance there may be institutions which have delegated an employee or a department to collaborate with the civil society, but this person or department is not visible enough and does not appear on their internet website, and institutions which have simply ignored the provisions.
However there are also notable cases in which the representatives of certain public institutions, for the relation with the civil society could be easily found on their websites. An example of the application of this law is provided by the National Agency for Governmental Strategies (NAGS), which clearly indicates, within the “contact” section the representative for public relations and civil society. Another positive example is the case of the National Authority for Consumer’s Rights (Autoritatea Nationala Pentru Protectia Consumatorilor). This institution has dedicated a section of it website to “NGOs”. Here, the state agency includes legal guidance on how to establish an NGO/ consumer association and information on its partnership with the European Center for Romanian Consumers (Centrul European al Consumatorilor Romania).
The National Agency for Governmental Strategies is also responsible for the monitoring of the application of the law on free access to public information, which is yet another legal provision which can facilitate the involvement of NGOs in the process of decision making.  The NAGS has elaborated a study regarding the implementation of the previously mentioned law, in the year 2008 by state authorities.
The study has found that, the number of requests for public information formulated in 2008 is high, similarly to year 2007, and their main manner of transmission remains through verbal communication (55% of the total requests), followed by written requests on paper, and only modestly represented by electronic communication (11,7% 2008) . However, the evolution seems to point out towards a tendency in the increase in internet communication and a decrease in verbal requests. Regarding the reply of the public institutions, the number of requests which were not admitted is low (around 2.3% in 2008). Aside from requesting information from public institutions, a certain amount of public information is offered ex officio and can also be found at the headquarters of the institution and on its website. However, the study reveals that “the announcements posted at the headquarters of the public institution remains the most widely used means of communication” of such information, while the use of the institution’s website for this purpose remains relatively limited (about 50% for the central institutions, which is double than in the case of local administration). Therefore, while this law sets the path for the transparency in the process of public decision making process, the current evaluation of its implementation indicates that there are still a number of obstacles in the way of this reform.
C. Is there a legal requirement for ministries/parliament to publish draft laws on their websites and ask for comments from the public?
Yes. This topic is addressed by Law no. 52/2003 regarding the transparency in the process of decision-making of the public administration. According to this law public institutions have the obligation to publish all legislative proposals which are to be discussed, at least 30 days prior to the public debate concerning them. This announcement must be placed on the website if the institution, at its headquarters in a visible place and “transmitted through the central or local media”. Public information can also be requested by any interested person at the headquarters of the public institution. Institutions also have the duty to send the information regarding the legislative proposals to all persons who have requested this in writing. All interested persons can send suggestions, opinions and comments regarding such legislative proposals, within a designated period of time, which must be mentioned in the public announcement of the proposal. However, this period cannot be shorter than 10 days since the publishing of the announcement regarding the public discussion of the proposal. Another type of public information which must be disclosed by institutions is the minutes of public meetings and debates. Within the administrative units in which over 20% of the population belongs to a national minority, all public information will also be posted in the language of that minority. Last but not least, the access to public information is free and the law aims to secure the effective release of public information to the civil society but stating the legal terms in which state authorities must provide or deny providing the requested public information.
However, there are certain exceptions to the application of this law. One of them is encountered in the case of classified information and deliberation which are not considered to have a public character. Another case in which the civil society is not entitled to by the law to provide its contribution to the legislative proposals is the situation in which “due to exceptional circumstances” immediate decisions must be taken “in order to avoid severe acts. In this situation legislative proposals may be adopted through the “emergency procedure” stipulated by the law While such exceptions may have a valid justification, the extent to which their application by the state authorities, is necessary or is being abused is subject to further research. Certain ministries do publish the bills that they initiate on their website, such as the Ministry of Justice , the Ministry of Culture, Cults and National Heritage, and the Ministry of Labor, Family and Social Protection.

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