RECOMMENDATIONS FOR EU FUNDING OF NGOs

1. Spend proportional to citizens’ preferences

NGO’s with humanitarian, social, or environmental purposes, representing 25.7% of all non-governmental organisations directly funded by the EU, receive 64.7% of all EU grants while NGO’s promoting industry, civil society, or research and representing 19.0% of EU funded NGO’s receive only 9.7% of the money. In other words, NGO’s with mainly wealth-consuming missions (humanitarian, social, or environmental concerns) benefit five times as much as NGO’s with primarily wealth-creating aims. This imbalance should be corrected in a way that reflects the preferences of the citizens in EU Member States.  Reflecting citizens’ interests, the Commission should give only 10% rather than almost 60% of its grants to organisations devoted to humanitarian aid, development and social concerns.

2. Give just once in full, second time half, third time a third

The EU should make repeated application for grants less attractive by giving only half the original grant to second time applicants, a third to third time applicants, and a quarter to fourth time applicants, with a one year break thereafter. Doing so would inhibit organisations from making professional grant application a specialized part of their income activities.  Currently more than 40% of all EU funded NGO’s come back for seconds. 17.4% of organisations received funding twice, 12.8% for three years, 6% for four years and 3.9% for all five years. 

3. A lower maximum for grants

Meanwhile, the EU co-financing rate should be reduced from the standard 50-75% to 40% or less so that majority of funding would come from private sources. This way, the EU could save between 10-35% of the budget for directly funding NGO’s (€150 to 525 million). If an organisation is able to provide co-financing, it means that other donors consider the activity of the organisation worthwhile. The lower the co-financing rate from the EU, the greater the rate from third-parties, and the greater the sign that the activity of the organisation is efficient and needed. Moreover, the EU should co-finance only those projects where the rest of the funding is received from private (not public) sources and donations.

4. Opening contracts to all

The rules around grants should be made more similar to those governing procurement. Non-profit requirement in the implementation of grants is only superficially a good thing. Profit is a good driving force. It should be sufficient that, when responding to calls for proposals, organisations could propose the tangible goals they aim to achieve, describe how organisations are going to measure the achievement of the goals, how these goals would benefit EU citizens, and the price they ask for it. This way grants could be made more similar to procurement: an acquisition of a well-defined service for the lowest suggested price. In other words, the EU would contract to achieve its policy aims much as it contracts to acquire the goods and services it needs. The same results-driven process should apply to the reduction of poverty as it does to the delivery of other desirable outcomes. This would also allow funds related to the administration of grants and subsequent audits to be saved. In case the agreed aims are not achieved, the NGO’s would be required to return the funds they received. This would force NGO’s to be more responsible and their projects more accountable and effective.

5. Removing conflicts of interest

NGO’s, whose members, board members or associates are politicians or public officials (EU, national or regional) should not be eligible for EU funding, so that politicians and public officials could not use their decision-making powers to benefit the supporters of their own agenda.

6. Greater transparency

Only 20% of direct EU funding of NGO’s is transparent to citizens of EU member states, because managing the remaining 80% is left to the discretion of national or regional authorities. The managing authorities in the EU member states should publish information on all their beneficiaries using the same databases and methodology as the EU. At the moment it is almost impossible to assess all those databases in all EU Member States in a way that allows for proper analysis of the total EU funding of NGO’s. EU member states should be asked to provide comprehensive data of their NGO funding policy that is in line with the methodology used for FTS.

7. Restraining lobbying activities

The EU should restrain the lobbying activities of NGOs e.g. in the United Kingdom, charities in receipt of government grants will be banned from using taxpayer funds to engage in political lobbying. The objective is to make certain that taxpayer funds are spent on improving people's lives and good causes, rather than covering lobbying for new regulations or using taxpayers' moner to lobby for more government funding. The exact phrase taht will be inserted into all new and renewed grant agreement reads : " The follwong costs are not Eligible- Payments that support activity intended to influence oer attempt to influence Parliament, Government, or political parties, or attempting to influence the awarding or renewal of contracts and grants, or attempting to influence legislative or regulatory action."