Obstacles to NGO participation in operational programs – is there progress in overcoming them?
Civil society organizations are almost completely absent from the use of European Union funds through national (operational) programs. Two key obstacles determine the lack of NGO projects – the lack of advances if the lead beneficiary is a civil society organization and the application of a de minimis regime for all activities, regardless of whether they relate to non-economic activities. These obstacles exist only in Bulgaria and were not introduced by the European Commission, but are the result of national decisions. NGOs have been advocating for their removal for years. In recent months, there have been positive developments on some of them. Political turbulence can threaten the little that has been achieved, but it can also expand it by leading to the finding of sustainable solutions. What is happening and what can be done?
In our previous analysis “After the first competitions for competitive selection of projects in the current programming period: what hinders the participation of NGOs?” we indicated the main obstacles to the participation of NGOs in the use of funds from the European Social Fund through the Education Programme and the Human Resources Development Programme. These obstacles are primarily related to the lack of an advance if the lead beneficiary is a non-budgetary enterprise, since the Ministry of Finance and the Managing Authorities stopped recognizing a “Promissory Note” as a guarantee for securing the advance provided (a practice that was widely used in the previous programming period and led to wider participation of NGOs). Thus, it turned out that if the lead beneficiary is a municipality, school or other budget enterprise, the Managing Authority provides an advance, and if it is an NGO, a bank guarantee or insurance is required. An elementary calculation shows that civil society organizations should have very large resources to implement European projects. For example, if they submit a project for 250,000 euros (in partnership with schools and municipalities), they will not receive an advance of 50,000 euros (20%, which is the usual practice of operational programs), but the schools will expect this advance from the lead organization. It is logical that NGOs stopped submitting their own projects, and participate only as partners of municipalities and schools in order to receive an advance in this way. The end result is that entire operations were implemented at a low cost or failed. An example in this regard is the operation “Desegregation and Prevention of Secondary Segregation” under the Education Program – it is implemented with half the budget allocated, implementing projects of schools and municipalities, but there was not a single NGO that applied for it (see a brief analysis of the operation at https://amalipe.bg/desegregacia). The lack of advance funding for NGO projects is a difficulty that hinders all civil society organizations, regardless of where they work, who they work with, and what their annual budget is. As we indicated above, this obstacle appeared during the current programming period (at the very end of 2022).
Another obstacle, especially for larger organizations,
is that all projects apply a state aid regime /de minimis/. Its characteristic is that it requires that every economic entity that carries out economic activities receive no more than 300,000 euros in funding from the state and the EU over three years. The European Commission formulates this requirement as “any aid granted by a Member State or through Member State resources, in any form whatsoever, which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods […], insofar as it affects trade between Member States”. This requirement applies to economic activities for which there is an economic market and the EC is careful not to distort market logic, especially in trade between Member States. It is easy to understand that NGO projects, especially those related to the integration of Roma and other vulnerable groups, are very far from such a threat – there is no market for these activities, they do not distort market logic and do not threaten trade between Member States. This is also the reason why de minimis is not applied to projects of civil society organizations for the integration of vulnerable groups in any other EU country. Bulgaria became a “pioneer” in the negative sense already in the previous programming period. OPHRD started the application of de minimis from the very beginning of the period, and OPNOIR (the predecessor of the Education Program) joined in the middle of the period. As a result, several OPNOIR operations failed, as active NGOs had already exhausted the “limit” of de minimis and could not apply. This obstacle applies mostly to larger organizations that have experience and implement activities under different programs.
Advocacy and positive development
Civil society organizations have been advocating against these obstacles for years. The Amalipe Center, the Bulgarian National Centre for the Development of Civil Society, the Civil Society Development Council and a number of others are actively involved in it. At the end of October 2025, the organizations held a special meeting with the Deputy Prime Minister for European Funds Tomislav Donchev, the Central Coordination Unit and the heads of the HRD and PO. At the meeting, the participants agreed to find specific solutions to both obstacles. In the following weeks, it became clear that the Ministry of Finance and the governing bodies were unwilling to take a greater risk in providing advances to NGOs, and especially in not applying de minimis. The fact that the risk is not great was repeatedly argued by various organizations that play the role of intermediate bodies for EC, EEA and Bulgarian-Swiss Cooperation Programs. For example, the Open Society Institute provides advances of 40% + 40% to organizations that have been approved for projects under the CERV Program, and none of them has fallen into a situation that prevents the implementation of the projects and threatens the advances. The experience of the Bulgarian Fund for Women (BFW), which provides an advance of 90%, is similar.
An acceptable solution was outlined by the Education Program’s proposal to introduce a payment regime based on achieved results, in which the first payments would be provided upon achieving results that do not require the investment of financial resources – for example, developing an action plan, signing agreements with all contractors and suppliers, etc.
Another important step taken by the PO was the exemption from de minimis of Community-Led Local Development projects (LAG projects in rural areas). The arguments for this exemption were related to the nature of the projects themselves, which concern entirely local activities on the territory of the respective LAG, which cannot threaten trade between EU Member States. Unfortunately, this argument does not yet apply to the other territorial approach – Integrated Territorial Investments (ITI), although it applies to them to the same extent. Non-economic activities have not been excluded as such. However, it is promising that the Managing Authority of the PO is committed to the exclusion of an entire operation from de minimis, and the Ministry of Finance has agreed to this.
Positive developments were achieved within the mandate of the caretaker government of Andrey Gyurov. Responding to a query from the Civil Society Development Council, the caretaker Finance Minister Georgi Klisurski defined as non-economic a wide range of activities that his predecessors considered economic – activities for carrying out civil monitoring, public control and analysis of the implementation of public policies; analytical, consultative and advocacy activities in the public interest, including the formulation of applications for improving the regulatory and institutional environment, etc. The letter to the Civil Society Development Council from Minister Klisurski was sent on one of the last days of the caretaker government, but it is an official document and can serve as the basis for subsequent exemption from de minimis of these activities under all programs.
What can be done in the coming months?
The positive developments described do not have the character of sustainably overcoming the obstacles to the participation of civil society organizations in investments with EU funds. As we have indicated above, the two main obstacles are at the national level and are not found in other EU countries. Their sustainable overcoming is entirely within the powers of Bulgarian politicians. What can they do?
- De minimis exemption for all CLLD and ITI territorial approaches: both territorial approaches are likely to be widely used in the next programming period, although they still face many difficulties in Bulgaria. The fact that the EAPO managed to “exempt” a CLLD operation from de minimis gives hope that this can be repeated for other CLLD operations, as well as for ITI. Incidentally, the argument that CLLD projects are entirely local and do not threaten trade between EU Member States can also be applied to a wide range of projects in the so-called “national operations”. For example, the “desegregation” operation also finances in practice local projects that certainly do not threaten trade at European level – what threat are the desegregation activities in schools in village X and town Y to European trade?
- The exemption from de minimis of the activities specified in the letter of the acting Minister of Finance G. Klisurski also provides numerous heuristic opportunities. If these activities are exempted in all subsequent operations, especially when expanding this list, this will provide a chance for the real exemption from state aid of all non-economic activities. The threat would be for the next ministers of finance to ignore the indicated letter, to return to the old practice “it is safest for everything to be de minimis”. Paradoxically, in Bulgaria a good plumber is considered to be the one who, in case of a leak in an apartment, turns off the water to the entire block – that way there is no leak, nothing, there is no water anywhere…
- Providing advances for projects to civil society organizations is a key necessity! A working option is to recognize a “promissory note” as a legitimate way to provide an advance. This practice was borrowed from Israel (it has nothing to do with the war in Gaza or Lebanon), and is also used in many other countries. The risk of its implementation is minimal, while its benefits are enormous – the real participation of the civil sector and more successful investments through EU funds. A fallback option is the solution proposed by the EAPO – the provision of payments for achieved results, the first of which are for logistical activities that do not require the withdrawal of financial resources from the beneficiary.
- If the previous decisions fail, the EC could approach with an unconventional solution – a certain resource from the operational programs to be directed to an NGO operator/intermediate unit, which would organize the subsequent competitions and take on the risk of providing an advance and exemption from de minimis. In fact, this decision is not so unusual. In the past few years, after the EC became convinced that too little resource from the SERV program (citizenship, equality, rights and values) reaches smaller organizations, it introduced the practice of engaging NGO operators. So far, in Bulgaria, the Open Society Institute, the Bulgarian Foundation for Women, and the World Foundation for Civil Society have been engaged as such. The practice of the competitions they organized shows that hundreds of organizations applied for them (HRD and PO do not have such success), they implemented their activities, there was no loss of advances, etc.
The ESF+ regulations allow for an intermediary body to be not only a state institution but also an NGO. This could be a workable solution if Bulgarian institutions do not show the necessary flexibility and political courage.
The participation of civil society organizations in the implementation of operational programs is a guarantee for the effectiveness of these investments. We all have an interest in European funds being used not only for highways, “hard activities” and for awakening corrupt practices, but also for better education, social protection and reaching all citizens, including the most vulnerable. All over the world, as well as in Bulgaria, working NGOs have proven their effectiveness in implementing activities from which the state has abdicated. Of course, not all organizations do this successfully, corruption is also present in them. But providing an opportunity for NGO participation is a key prerequisite that goes hand in hand with mechanisms to guarantee the effectiveness of this participation.
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