FHI 360 Moldova

The 2% Law: a milestone towards civil society sustainability in Moldova

Civil society organizations (CSOs) are promoting active citizenship. The 2% designation can help CSOs to get closer to citizens and to become more sustainable”– Liliana Palihovici, Vice-Speaker of the Moldovan Parliament.

Due to the hard work of the Legal Resources Center in Moldova (LRCM), European Center for Not-for Profit Law (ECNL) as well as the National CSOs Council’s advocacy and assistance to the Parliament of Moldova, Ministry of Finance, State Tax Service and other authorities, the 2% designation mechanism, also called the 2% Law, has become reality in Moldova. Starting January 1, 2017, all Moldovan taxpayers, over 1 million people, can choose to designate 2% of their annual income tax to CSOs and religious organizations of their choice. In 2017, just the mechanism’s first year in operation, over 400 CSOs have registered with the Ministry of Justice as potential beneficiaries of the mechanism.

“I decided to help an organization by designating 2% of my income tax and I selected an organization that is active and assists children with special needs. I have been following this CSO for a long time and I am happy for the opportunity to designate 2% to them,” said Natalia Munteanu who was among the first Moldovans to share 2% of her income tax.

The campaign for the passage of this law was supported by Moldova Partnerships for Sustainable Civil Society (MPSCS), a project implemented by FHI 360 and ECNL and funded by the United States Agency for International Development (USAID), that works to promote innovative mechanisms for funding CSOs to ensure their longer-term sustainability. Financial sustainability is a key challenge for the non-profit sector in Moldova, where close to 85% of the funding for CSOs comes from international sources.

Currently, our financing comes exclusively from grants and monthly fees given by RISE [Association of Investigative Reporters and Editorial Security]members. Nevertheless, in the long term it is practically impossible to produce quality journalism and exist based exclusively on grants. Therefore, we try to diversify our funding sources…This helps us to do more and to be independent…Recently we have launched a video department and we need extra resources to conduct video investigations,” said Iurie Sanduta, Director of RISE Moldova.

Institutionalized avenues for domestic funding are some of the most essential ways to ensure the financial sustainability of CSOs. Although the percentage designation mechanism has already been used in several European countries such as Slovakia, Hungary and Romania as a model for CSOs to secure supplementary sources of income, the passage of the 2% Law makes Moldova the first country of the Newly Independent States of the former Soviet Union to use this type of income tax designation to bolster the sustainability of its civil society sector.

Per the State Tax Service, 19,806 Moldovans used the 2% mechanism in 2017 and shared an amount of MDL 4.23 million (approx. $220,000) with CSOs and religious organizations. MPSCS continues its support to the authorities and CSOs to implement the law and to inform a wider audience of citizens about how to use the mechanism. These activities will all be crucial to ensuring successful implementation of the mechanism in its first years of existence in Moldova.


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