1. David Moore European Center for Not-for-Profit Law
Improving the Legal Environment for Civil Society: Sustainability Challenges
David Moore
European Center for Not-for-Profit Law

2. Stages of Civil Society Development
Carving out “Circles of Freedom”
Right to exist as non-governmental organization
Defining Identity
Basic legal framework for NGO organizational forms
Developing Capacity
Public benefit status + fiscal benefits, accountability standards
CSO transparency and improved public image
Promoting Sustainability
Tax benefits, direct government funding
Donor Incentives, volunteering
Economic activity
Improved quality & impact
NGO/government cooperation
Public participation, public policy engagement

3. Areas of Regulatory Concern
Level 1
Basic Legal Framework
Establishment, registration, basic activities
Governance and basic accountability
Level 2
Public Benefit Status and Fiscal Privileges
Certification process
Corresponding benefits and accountability
Level 3
Financial Sustainability
Tax benefits, direct government funding
Donor Incentives, volunteering
Economic activity
Level 4
Improved Quality and Impact
- Policy documents for cooperation
- Institutional mechanisms for cooperation
- Framework for policy dialogue

4. The Sustainability Challenge
Why Important?
NGOs: Ability to fulfill missions over long term
State: Meeting community needs more effectively
Context: NGO Revenue Sources
Legal Tools to Support Sustainability

5. NGO Sector Revenue Sources Source: John Hopkins Comparative Nonprofit Sector Project

6. NGO Sector Revenue Sources (With inclusion of volunteering) Source: John Hopkins Comparative Nonprofit Sector Project

7. Revenue Sources Country Fees/Dues Government Philanthropy
Germany
France UK
Japan US
Poland
Developed
Developing
Johns Hopkins Comparative Nonprofit Sector Project

8. Legal Tools to Support Sustainability
Public Benefit Status
Framework for Financing
Economic Activity / Investment Income
Private Donations / Volunteerism
Tax Exemptions / Direct Funding
Cooperation Framework
Policy documents
Institutional mechanisms

9. Public Benefit Status Definition of “public benefit”
Application / certification criteria
Appropriate decision-maker
Fiscal benefits
Accountability standards

10. Legal Framework for Financing
Self-Generated Income
Economic Activities
Investment Income
Philanthropy / Private Giving
Donor Incentives
Volunteerism
Government Funding
Indirect Subsidy = Tax Exemptions
Direct Funding = Subsidies, Grants, Contracts
Innovative Mechanisms

11. Economic Activities
Defined = Regularly pursued sale of goods or services
Can NGOs engage directly in economic activities? Generally YES
Taxation of income from economic activities?
Various tax approaches

12. Government Support Indirect Support: Tax Exemptions Direct Support:
Budget Subsidies
Grants
Contracts
Primary Challenge = Transparency

13. Innovative Approaches
Use of Underutilized Government Property
Privatization Proceeds
“Per Capita” Fees and Vouchers
Lottery Proceeds
Government-established foundations and funds
Percentage Philanthropy

14. Cooperation Framework
Policy Documents of Cooperation
UK Compacts
Estonian Concept
Croatian Program for Cooperation
Hungarian Government Strategy
Institutional Mechanisms for Cooperation
Parliament, Government, Ministries
Hungarian National Civil Fund
Croatian National Foundation for Civil Society Development