PERCENTAGE PHILANTHROPY in Ukraine

1
PERCENTAGE PHILANTHROPY in Ukraine

• Phase II

2
Main Conclusions

• Percentage philanthropy is a local resource of
  funding for CSOs with multiple donor base
• Ukrainian CSOs are mostly funded by international
  aid
• The majority of CSOs have single source of
  funding

3
Main Conclusions

• Raising civil participation in public life
• Citizens participation in public affairs was 18
  even at the time of Orange revolution (DIF, 2005)
• Democratic Initiatives poll admits that public
  work is not popular among Ukrainians they prefer
  visiting friends (52,6), reading newspapers
  (58,3) to attending amateur clubs (1,6) and
  community work (3,9).

4
Main Conclusions

• Raising trust to and knowledge about CSOs among
  people and policy makers
• While more Ukrainians say that they have a more
  positive than negative impression of
  nongovernmental organizations or NGOs (29 vs.
  7), more than a quarter of Ukrainians (27) do
  not have an opinion on this question. The large
  number of Dont Knows reflects the fact that many
  Ukrainians are not aware of what NGOs are. (IFES,
  2005)
• Why citizens do not trust CSOs their
  irresponsibility, disbelief in their capacity and
  influence (Grassroots, 2003)

5
Main Conclusions

• Empowerment of citizens and distribution of power
  between government and civil society
• A majority of Ukrainians (73) say they have not
  made efforts to ensure their rights or interests
  as a citizen are respected, and roughly as many
  say the events that took place in November and
  December 2004 have made them more likely to make
  efforts in the future to ensure that their rights
  as a citizen are respected (25) as say the
  events have made them less likely (27). Only
  30 say that people like them can influence
  decisions made by the government.

6
Main Conclusions

• Growth of responsibility and social value of CSOs
  through competition for allocations
• Ukrainian NGOs generally take a minimalist
  approach to transparency and accountability
  (BoardSource, 2003)
• Double bookkeeping is common as a means of
  avoiding excessive Ukrainian taxation. (Freedom
  House, 2004)

7
Main Conclusions

• Percentage law is feasible in Ukraine due to the
  following
• It does not contradict with the current system of
  country governance, legislation and reforming
  procedures.
• There is a significant interest to the provision
  from the side of government and NGOs.
• The state is interested to assure the flow of
  funds to cultural, educational, health, social
  sector underfunded from the state budget
• Raising the competition among different providers
  of human/public services and their quality and
  innovativeness.
• It may raise the openness and transparency of the
  CSOs, as well as their independence from the
  state or donors (single source of funding)

8
Stages of Law formation

• Who can submit the draft law
• Peoples deputies
• President of Ukraine
• Cabinet of Ministers of Ukraine
• National Bank of Ukraine

9
Drafting the law

• Preparation of the law concept (structure of law
  and its enforcement)
• Drafting the text of a law
• Specialized expertize and discussion of the law
  among specialists
• Public discussions of law

10
Submitting the law for Parliament hearings

• Who should submit
• Review by the Presidium of Parliament
• Review by the main Parliament commissions and
  government
• Distribution among Peoples deputies
• Including the law to the Parliament session
  agenda
• Preparation to the first hearing

11
Passing through the Parliament

• Three rounds of hearing
• Every hearing accepted, returned for
  development, rejected (new circle)
• President of Ukraine should approve/reject the
  law

12
Political situation

• Constitutional reform since January 2006
• Parliamentary elections party system versus
  party/majoritarial , March 2006
• Main players Nasha Ukraina - Yushchenko, BUT
  Blok of Yulia Tymoshenko, Narodna Ukrainia
  party headed by current speaker of Parliament,
  Socialist Party
• Opposition Regions of Ukraine, Communist Party

13
Civil Society at the State agenda

• Orange revolution put civil society as a player
• Poor government knowledge about CS
• New Decree of the President of Ukraine on
  involvement of civil society into public policy
  formation

14
Percentage laws introducing Phase 1

• November, 2004 meeting with the experts from
  NIOK and ICNL by Ukrainian NGOs
• March 2005 meeting Hungarian government expert
  with NGOs, Ministry of Social Policy of Ukraine
• Issuing the materials on percentage laws in
  Ukrainian specialized publications

15
Phase II Documents preparing

• Translating the policy paper in Ukrainian to
  make it a background document for the future
  policy making
• Preparing the targeted policy briefs for
  different government agencies to advocate the
  percentage philanthropy among stakeholders and
  win political support
• Translating the percentage laws and enforcement
  documents (Hungary, Poland, Lithuania)

16
Phase II Next steps

• Lobbying strategy is needed
• Creation of percentage philanthropy coalition
• Winning political support and defending NGO
  interests
• Passing a percentage law

17
Phase II Do not forget

• Percentage laws are not a substitute to regular
  philanthropy
• 1 provision is currently feasible to lobby for
  social service, culture, education delivering
  NGOs
• Local authorities will support the initiative
• The group of committed leaders is needed for
  lobbying the law.
• Information campaign based on facts and
  justification of percentage philanthropy
  usefulness for Ukraine
• Educating tax authorities, other related agencies
  and taxpayers how to use the provision
• Technical procedure is to be the most feasible
  for taxpayers
• Administration of tax allocation will become the
  other burden for tax authorities
• Prevention measure to avoid conflict of interests
  and achieve transparency on funds usage both by
  NGOs and tax administration.