Corporate Giving and Strategic Partnerships Between Business and Civil Society Organisations Luben Panov Bulgarian Center for Not-for-Profit Law

Give a picture of corporate giving in Bulgaria Present the legislation related to corporate giving Outline the benefits and obstacles for NGO-business cooperation Present some Bulgarian partnerships

Giving as a Source of Funding Comparative Nonprofit Sector Project, 2004 – 12 % philanthropy (31 % with volunteers) Sectors with funding predominantly from philanthropy – environment, civic/advocacy, culture and social services research in BG – 6 % of NGO income is from corporate donations

Donations in Bulgaria (2008) Total by companies – around 30 million EUR To NGOs – around 5,4 million EUR (18 %) Total by individuals – around 1,2 million EUR To NGOs – around EUR (56 %)

Donations in Bulgaria (cont.) organizations 1220 organizations 1515 organizations EUR EUR EUR

Public Benefit Status Legal entity status in courts Public benefit status – with Ministry of Justice The NGO receives benefits but is subject to more reporting Annual reports submitted for activities and funding (published in Internet)

Taxation of Donations in BG Taxation at the source – 10 % deduction for donations to certain categories (5 % for individuals) Donation as transfer of property – local tax on donations (between 3.3 and 6.6 %) Donation as income for the NGO – free from income tax Applicable to EU PBOs as well

Issues with Donations Hidden advertisement in electronic media No regulation of corporate volunteering VAT charged on SMS donations Lobbying by NGOs receiving corporate donations

Reasons for Partnership Corporate social responsibility – a recent trend Creates a better company image among employees and clients Traditional NGO donors moving out of Bulgaria

Benefits NGOs can support businesses to design and implement their CSR programs Businesses can help NGOs with support for social initiatives (policy, financial, etc.) Businesses can give NGOs useful skills (e.g. teach them how to do business)

Obstacles Businesses and NGOs speak different languages (short term vs. strategic) Image of NGOs Lack of traditions Lack of information about good NGO causes Lack of knowledge how to support efficiently

Partnership in Practice Bulgarian Donors’ Forum Founded in 2004 with 15 members – only grant-making organizations Now 42 members out of which 22 corporate members Helping NGOs and businesses speak the same language, promoting good practices, transferring know-how

Some Examples Cause-related marketing – Dimitar Berbatov and Danone (2 % of the price of yoghurt for sports playgrounds) Payroll giving – BCAF collects around EUR annually Promotion of a cause – Globul and WWF – cleaning of natural parks

Some Examples Donor Message Service (DMS) – in April 2006 almost DMS (more than the whole 2009) Matching individual donations – association of employees in banks Corporate volunteering – BCAF and AmCham organize twice a year a volunteer day

Contacts: Bulgarian Center for Not-for- Profit Law (BCNL) Luben Panov