Bulgaria NGO Sector

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Introduction

Since the fall of the communist regime in 1989, the non-governmental organization (NGO) sector has played a significant role in the process of democratization in Bulgaria. During the initial stages of the transition period, the NGO sector was considered to be an important vehicle for political, economic and social reform and building civil society . A major step forward was the adoption of the Law on Non-Profit Legal Entities in 2001 . It governs the establishment, functioning and legal status of NGOs in Bulgaria. Since 1989, a wide range of non-profit organizations have been registered in Bulgaria. There are two types of legal persons organizations with non-profit purposes: associations and foundations. They are strongly dependant dependent on funding from foreign institutions.

Historical background of the non-profit movement in Bulgaria

The history of the third sector in Bulgaria is relatively short. Its genesis dates back prior to 1989 but its serious development starts after the fall of the communist regime in 1989 . One of the most significant and immediate consequences of these political changes was the emancipation of the civil society from the state . 

In contrast to the socialist political system where the state was the sole provider of social welfare services and the communist party the only institution dictating the political agenda, in a functioning democracy the NGOs have to enhance political participation and help the political elite in defining a rational public agenda .

Around a quarter (26%) of NGOs have started functioning at the beginning of the transition period: 1990-1994. The largest proportion of organizations (41%) were registered between 1995 and 1999. Twenty-eight percent of the organizations are extremely young, with an experience of up to five years (2000-2005) .

Types and number of organizations in the non-profit sector

The Non-Profit Legal Entities Act (NPLEA) created, 2001, recognizes two main types of non-profit legal entities: associations and foundations. Article 2 of NPLEA gives a definition about their activities: the non-profit legal entities shall freely determine their objectives and may determine their status as organizations pursuing activities for public or private benefit. According to Article 19 of NPLEA, associations are organizations that are established by three or more persons united for pursuing non-profit activities. The associations defined for pursuing activities for public profit are established by at least 7 able-bodied natural persons or 3 legal entities.

Under Article 33 of NPLEA, foundations are established in the lifetime or in the event of death by unilateral deed of establishment granting without compensation property for attainment of non-profit objective. According to the official statistics of the National Information Institute, 22,366 non-profit organizations were registered in Bulgaria as of November 2005. Out of that number,From them 18,305 are associations and only 4,010 are foundations . Furthermore, the new NGO law introduces one of the most modern international legal principles on NGO status by defining two categories of organizations – public benefit organizations (PBOs) and mutual benefit organizations (MBOs). PBOs are organizations whose activities fall within one of the public benefit categories specified in the law. Only PBOs are entitled to benefits from the State . Under Article 4 of NPLEA, the State may assist and encourage the non-profit legal entities for the purposes of pursuing activities for public benefit through tax, credit-interest, customs and other financial and economic preferences, as well as with financing under terms and procedure set forth in the relevant special laws.

Another specific feature of the Bulgarian NGO sector is the wider range of activities performed by individual NGOs. A typical Bulgarian NGO “specializes” in more than one field. With the exception of sports, tourism, fishing and hunting organizations, which due to the specifics of their field are involved only in one field of activity, the rest of the Bulgarian NGOs are involved in two or more fields.

There are also 51 affiliates of foreign legal non-profit entities . According to Article 38 (2) of NPLEA, foreign non-profit legal entities may pursue activities for public benefit through their branches in Bulgaria in compliance with NPLEA.


Legal Issues and Regulations on the Formation and Operation of Non-profits

The freedom of association is guaranteed by article 44 of the Bulgarian Constitution. Further, the 2001 NGO law clearly defines the registration and operation of NGOs in Bulgaria. Under Article 6 (1)) associations and foundations are subject to registration in the register of non-profit legal entities within the jurisdiction of the district court by domicile of the legal entity. According to Article 45 (1) of NPLEA, the non-profit legal entities pursuing activities for the public benefit have to submit application for registration in a special Central Register with the Ministry of Justice. Article 45 (2) describes what kind the types of documents should be attached tothat are required with the application :

  1. Transcripts of the court decisions for registration;
  2. List of the persons who are members of the managing bodies;
  3. Certificate for tax registration;
  4. Declaration for existence of the circumstances under Articles 38 - 41, as well as for payable taxes, charges, custom duties and other public amounts receivable;
  5. The rules and procedure for pursuing activities for public benefit.

Another very positive development has been the creation of a Standing Committee on Civil Society issues in the Bulgarian Parliament. It has drawn up its own legislative program which encompasses everything related to NGO legislative matters . 

	To implement the new law, an electronic version and website of the Registry for PBOs was developed and became fully operational in 2002 with the help of the USAID-funded “Resource Center Foundation”.

Overall, the improvement in the legal environment for NGOs can be attributed to the continuous work of NGOs and parliamentarians. In, and in particular, the International Center for Not-for-Profit Law (ICNL), supported by USAID, and its affiliate partner organization the Bulgarian Center for Non-for-Profit Law (BCNL), which has established itself as the leading organization on NGO legal issues in Bulgaria since July 2001 .


Financial support for the Bulgarian NGOs

There is considerable foreign support for the development of the NGO sector in Bulgaria. Over three-quarters of the financial support for Bulgarian NGOs and other charitable and development activities comescome from foreign donors. These agencies are workingwork on a wide range of issues: education, health and health care, minority and human rights, child protection and child welfare, gender equality, participation of citizens in decision making processes, environmental protection, community development and local philanthropy development . For example, during the 1990s Bulgaria was the largest recipient of US democracy aid, followed by Poland, Bosnia-Herzegovina and Romania in fourth place . The support provided by foreign legal entities to Bulgarian NGOs is most often in cash grants. For nearly two-thirds of the organizations funded from by these sources, such funding represents from about seventy-six percent to one hundred percent of all incomes. The assistance in-kind (equipment, technical assistance, products, etc.) and the provision of services and assistance from experts are much less common in the activities of the foreign legal entities. Donation as one of the forms of support to the activities of the NGOs has deeply pervaded the structures of the third sector. In 2000, nearly one-third of these structures obtained such financial support.

Conclusion

Several long-standing problems continue to hinder the development of the NGO sector in Bulgaria, including dependence on international donor funding and limited possibilities for local fundraising. However, some important developments have taken place that promote NGO sustainability and growth of the NGO sector. The Law on Non-Profit Legal Entities in 2001 lays the foundation for further legislative changes that will guarantee the independence and sustainability of NGOs in Bulgaria . In addition, the 2004 Regular Report on Bulgaria’s progress towards European Union accession states that the rights to freedom of assembly and association are satisfactorily respected in Bulgaria and civil society continues to play an important role in public life.



External Links

References

  • Boyadjiev, Michail, 2002. Foundation Law in Bulgaria. Social Economy And Law Journal, European Foundation Centre
  • Bulgarian Center for Not-for-Profit Law, 2002. Non-Profit Organizations in Bulgaria
  • Bulgarian Center for Not-for-Profit Law, 2005. Survey of Nonprofit Governance Practices in Bulgaria
  • Carothers, Thomas, 1999. Aiding Democracy Abroad: the learning curve. Washington:

Carnegie Endowment for International Peace

  • European Commission, 2004. Regular Report on Bulgaria’s progress towards

Accession. Brussels

  • Gotchev, Atanas, 1998. Charity and Financial Practices for NGOs in Bulgaria, Sofia
  • Novak, Adam and Marinova, Boriana, 2005, Country Report Bulgaria as an emerging actor in international development cooperation, TRIALOG Developmnet NGOs in the enlarged EU
  • Palicarsky, Constantine, 2000. The New NGO Law in Bulgaria: A Major Step Forward. Social Economy And Law Journal. European Foundation Centre
  • USAID, Bureau for Europe and Eurasia, 2001. The NGO Sustainability Index For Central and Eastern Europe and Eurasia, Bulgaria
  • USAID, Bureau for Europe and Eurasia, 2002. The NGO Sustainability Index for Central and Eastern Europe and Eurasia, Bulgaria
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