CSO Financial Sustainability in Bulgaria Luben Panov Bulgarian

CSO Financial Sustainability in Bulgaria Luben Panov Bulgarian Center for Not-for-Profit Law

BG CSO Sector • • Officially registered – more than 25 000 Public Benefit – more than 4500 Active – somewhere between 2000 and 4500 Income – varies somewhere between 50 and 250 mln. euros per year

The International Perspective • Sources of funding: ü 34 % - from the state (26 %); ü 12 % - donation (31 %); ü 53 % - from fees (42 %). • 1, 3 trillion USD is the GDP of the CSO sector; • If it were a separate country - № 7 in the world – before Italy, Spain, Canada and Russia.

Sources of Income Distribution of income by source % of income International donors Economic activity 40% 17% Membership fee Subsidy from the state budget Donations from companies Bulgarian non-governmental organizations 11% 8% 8% Donations from individuals Charitable events Subsidy from the local budget 6% 3% 2% 6%

Current Situation • • Traditional foreign donors are moving out; EU Funds are not targeting CSOs per se; Lack of local Bulgarian donors; Government grants for CSOs – less than 500 000 euro in 2007; • Social contracting is developing slowly; • Philanthropy still not a real source for most CSOs.

CSO Dialogue with Government • No regular dialogue on CSO sector development; • Government has no clear strategy how/whether to deal with CSO problems; • No representative structures of CSOs; • Because of shrinking funding CSOs are: – partners or opponents; – project or mission based.

Possibilities? • Economic activity – no tax incentives for CSOs because of bad image; • Increase of budget grants and clear rules for their spending; • Development of CSO contracting – social area, healthcare, education, culture; • Creation of local donors; • Innovative mechanisms – 1% mechanism, state foundation to support CSOs; • Philanthropy – incentives are not everything but are a sign of support.

How to create local donors? • Building local endowments – where will the money come from? • Supportive measures for passive investments e. g. no tax on bank interests or on dividends; • Can the state devote funds for creation of a special fund/foundation; • Restitution of foundation property – a myth?

How can donors help? • Support/assist a real dialogue with the government on CSO development; • Support the creation of sustainable mechanisms for CSO financing; • Help keep the CSO legal issues on the agenda of governments; • Make sure CSO legal reform is on their agendas as long as needed.

Thank you for your attention! Information and contacts at: www. bcnl. org