Increasing the Transparency of the Funding of Non-Governmental Organisations (EE0046)

Description of the current situation or problem resolved through the commitment The shadow report of NENO on the financing of non-governmental organisations highlighted that the financing practices are more transparent and organised than before the adoption of the instruction material. However, a systematic change in compliance with financing principles has not been achieved. There is no precise and continuous overview of the funds directed towards non-governmental organisations from the state budget and their volumes. Main aim To make the use of public funds more transparent and help decisionmakers/donors better direct resources in a balanced and efficient manner. To bring the practices of financing non-governmental organisations into compliance with the instruction materials of financing non-governmental organisations from the state budget and principles of good financing. To make the use of public funds more transparent and make the contribution of non-governmental organisations into the developments of fields more efficient. To disclose the data of financing non-governmental organisations. Short description of the commitment (max 140 characters) In order to increase the transparency of financing non-governmental organisations, it is necessary, on the one hand, to harmonise the financing practice, and on the other hand, to disclose the data describing financing. In order to harmonise the practice of financing non-governmental organisations, a knowledge-based analysis methodology shall be prepared for evaluating compliance with the principles of financing and the first analysis shall be carried out. (Ministry of the Interior is responsible) In order to disclose financing data, making inquiries from the central financial accounting software in respect of funds allocated to non-governmental organisations through state authorities and sending information to NENO for analysis preparation shall be continued. In addition, similar data are aggregated from intermediaries of the support, whose respective data are not on the central system. The aggregate analysis made by NENO is disclosed in the application of the public funds (Ministry of Finance is responsible)

Commitment 8: Increasing the transparency of the funding of non-governmental organizations

Commitment Text:

In order to increase the transparency of financing non-governmental organizations, it is necessary, on the one hand, to harmonize the financing practice, and on the other hand, to disclose the data describing financing.

In order to harmonize the practice of financing non-governmental organizations, a knowledge-based analysis methodology shall be prepared for evaluating compliance with the principles of financing and the first analysis shall be carried out. (Ministry of the Interior is responsible)

In order to disclose financing data, making inquiries from the central financial accounting software in respect of funds allocated to non-governmental organizations through state authorities and sending information to NENO for analysis preparation shall be continued. In addition, similar data are aggregated from intermediaries of the support, whose respective data are not on the central system. The aggregate analysis made by NENO is disclosed in the application of the public funds (Ministry of Finance is responsible).

Milestones:

Analysis activities of the financing principles of non-governmental organizations (Ministry of the Interior is responsible):

8.1.1. Developing the methodology of the analysis of the financing principles of non-governmental organizations.

8.1.2. The first analysis that evaluates the financing practices as well as changes in the dynamics of financing has been carried out on the basis of the methodology and the recommendations have been implemented.

Gathering, analyzing and disclosing data describing the financing of non-governmental organizations (Ministry of Finance is responsible):

8.2.1. Overview of funds transferred through state authorities in 2015 has been sent to NENO

8.2.2. NENO analyses and prepares an overview

8.2.3. Aggregating 2015 data through intermediaries of support and sending to NENO

8.2.4. NENO prepares an aggregate analysis

8.2.5. Introducing the analysis and disclosing it in the application of public funds

8.2.6. Overview of funds transferred through state authorities in 2016 has been sent to NENO

8.2.7. Aggregating 2016 data through intermediaries of support and sending to NENO

Responsible Institutions: Ministry of the Interior (analysis), Ministry of Finance (data provision)

Supporting Institutions: Ministry of Finance, Ministry of the Interior, National Foundation of Civil Society, Network of Estonian Nonprofit Organizations (NENO)

Start Date: 1 July 2016           

End Date: 30 June 2018

Commitment Aim

This commitment aimed to increase the transparency of public financing of NGOs by developing a methodology for analyzing NGO financing. It also called for gathering, analyzing, and disclosing data on NGO financing from the public budget in an online application. In the long term, the disclosure of funding data will help harmonize funding practices across public sector organizations and increase their compliance with the national principles and guidelines for civil society funding.

Status

Midterm: Limited

During the first year of the action plan, the Ministry of the Interior held meetings to develop the methodology for the analysis of the public funding data and commissioned an analysis of financing practices from the Center for Applied Social Sciences at the University of Tartu. The Ministry of Finance gave the Network of Estonian Nonprofit Organizations (NENO) and the Center for Applied Social Sciences the data about public funds allocated to NGOs in 2015 and 2016. However, due to problems with data quality and compatibility, data cleaning for the aggregate analysis was difficult, delaying implementation of all milestones related to data analysis and publication. The next steps for the remaining action plan period included the completion of the analysis of funding practices, the analysis of funding data, and the publication of the data in the existing online application Riigiraha https://riigiraha.fin.ee, which the Ministry of Finance manages.

End of Term: Complete

Despite the initial delays, the commitment was fully implemented by the end of the action plan, although some changes were made to the initial work plan due to unforeseen circumstances. Namely, due to problems with data quality and errors and gaps in data, NENO made the decision not to publish the analysis of the 2015 funding data online. According to the government’s self-assessment report and Alari Rammo (NENO), data on 2016 were of a much higher quality thanks to the government’s change of its accounting software in 2016.^{[Note 61: Alari Rammo (Network of Estonian Nonprofit Organizations), Interview by IRM researcher on 6 November 2018;]} The results of the analysis of the 2016 data were thus published online as planned. In parallel, the study on the government’s NGO funding practices was published in September 2017.^{[Note 62: Kiisel, M., Veskimäe, M., Rammo, A., Lees, K. (2017) “Valitsuse rahastamispõhimõtete hindamine.“ Accessible at https://www.siseministeerium.ee/sites/default/files/elfinder/article_files/rake_loppraport_0.pdf ]} According to Alari Rammo (NENO), the study’s one unexpected side effect was the decision to build a separate online application for publishing and visualizing the NGO financing data instead of integrating the data into the existing Riigiraha application. The data have thus been made available on the website http://mtyraha.heakodanik.ee to anyone interested.

Did It Open Government?

Access to Information: Marginal

The commitment aimed to increase the transparency of public funding of NGOs by aggregating and disclosing funding data in an online application. According to NENO’s 2016 shadow report on NGO funding,^{[Note 63: See the report here: https://heakodanik.ee/sites/default/files/files/variraport.pdf ]} Estonian NGOs received between 60 and 100 million euros annually from public funds based on 2013–2015 data. The report found these funds are often allocated through unclear funding criteria and project selection procedures. For many years, civil society organizations have also criticized the Parliament’s habit of allocating several million euros to civil society and community initiatives and local or regional infrastructure projects through the state budget without any predefined funding criteria or public competition.^{[Note 64: For more information, see NENO’s website: https://heakodanik.ee/katuseraha/ (in Estonian), Chapter 4 of the Fundamental Rights Agency’s report “Standing and operational space of non-governmental organisations (NGOs) in contributing to respecting and promoting fundamental rights in EU Member States” (2017) http://fra.europa.eu/sites/default/files/fra_uploads/estonia-civil-space_en.pdf, and the Estonian Public Broadcasting’s article “Party protection money: storm in a teacup or embarrassing anachronism?” (13 December 2018): https://news.err.ee/884642/party-protection-money-storm-in-a-teacup-or-embarrassing-anachronism ]} The collection and public release of funding data were seen as enabling a more effective monitoring of the disbursement of public funds and as helping shed light on the government’s practices of allocating public funds to the non-governmental sector. In the long term, the aim was to build on this information to work on aligning actual funding practices with the existing guidelines and principles of public funding for civil society. As a result of the activity, information about public sector funding to NGOs that was previously fragmented and not easily accessible to the general public has been disclosed online in one place, clearly improving public access to information. However, because the online application (http://mtyraha.heakodanik.ee) currently only contains data for the year 2016 and has not been actively promoted among potential user groups,^{[Note 65: Alari Rammo (Network of Estonian Nonprofit Organizations), Interview by IRM researcher on 6 November 2018; Marten Lauri (Ministry of the Interior), interview by IRM researcher on 19 November 2018]} its actual use remains extremely limited. Its effect on access to information can therefore only be considered to be marginal.

The commitment also lacked a clear mechanism whereby the publication of data could foster an actual change in funding practices. According to Alari Rammo (NENO), quantitative data about funding have helped identify certain problems, such as duplication and ineffective use of funds, but are not sufficient to explain the source of major problems in funding practices. The latter would also require regular document analysis involving the funding rules and conditions that individual public sector organizations have set up along with interviews with the officials responsible for managing grants and funding programs. Such activities, however, were not in the scope of the commitment. That said, according to interviewed stakeholders, the work of aggregating, cleaning, and analyzing the data has helped pinpoint problems with data quality and availability. In the future, such an overview can be used to suggest improvements to the way data about NGO financing are stored and published by public sector organizations. Although easy public access to financing information is not sufficient to ensure the funds are allocated and used in a more transparent manner in the future, such access does constitute an important building block for promoting accountability on both sides.

Carried Forward?

This commitment has not been carried forward to Estonia’s fourth action plan. However, the activity will continue as part of a strategic cooperation agreement between NENO and the Ministry of the Interior at least for the timeframe of their existing agreement (until 2020). According to the agreement, the application will be updated annually with new data and will incorporate funding data from local governments and data on service contracts with NGOs and so on. According to interviews with both parties, the work on updating the application with 2017 data has already started. The Ministry of the Interior and NENO signed a contract on 20 December 2018 to follow up with this project.^{[Note 66: The IRM received this information from the Government Office during the pre-publication review period. The comment was received by email on 25 February 2019.]}