A Government Commission is allocating a total of EUR 3.4 million from the national lottery and games of chance. 75% of the proceeds of the national lottery are the principal source of government funding to CSOs. The Commission supports projects in the fields of social protection and humanitarian activities, needs of disabled people, sport development, non‐institutional education and education of children and youth, culture and technical culture, contribution to fight against drugs and all types of addiction. 75% of the 3.4 millions are dedicated by Governmental Decree for the Use of CSOs, with each a minimum of 60% costs covered for each project supported. Demand for this funding source far outstrips supply and in 2009, 264 projects out of total of 800 applications were supported.
The application procedures applied by the Commission are not transparent and funding criteria are poorly developed and are an inadequate means of assessing project quality and viability. As the Commission awards grants without the signing of a formal contract with the beneficiary, and as no evaluation and reporting mechanism is in place, the system is open to abuse. CSO monitoring of the Commission’s work, undertaken by the Centre for Civic Education, has revealed serious violations of the formal procedures for grant allocations by members of the Commission. In addition, the Commission usually only provides partial‐funding, so many CSOs find they are unable to complete their projects.
A separate, Parliamentary Commission, established under the Law on CSOs, also disburses EUR 350,000 annually from the separate budget line – transfers to NGOs, political parties and associations – in small grants of between EUR 500 to EUR 10,000 for projects in an expanded range of areas which formally included “human rights, development of civil society, European integration; the reduction of poverty and unemployment; environment and health protection; culture, and educational projects promoting multiculturalism and the multi‐religious character of Montenegro, as well as those dealing with cooperation with the Diaspora”. In 2009, the Parliamentary Commission financed a total of 206 projects, with an average grant size of EUR 1,700. In practice most CSOs which apply receive some funding, with the result that many under‐capacitated or even inactive CSOs are supported.
Further to the Commissions, limited grant schemes are administered by selected government ministries. The Ministry of Culture, Sports and Media has an annual fund for CSOs of EUR 40,000, and in 2008 it opened an additional fund for CSO projects dealing with youth which disbursed a further EUR 95,000. The Ministry responsible for Environmental Protection gives out some EUR 70,000 for CSO projects annually.
The Public Procurement Law allows for any legal entity, including an NGO, to compete for government contracts and procurements at both local and national levels. In practice CSOs do not make significant use of the opportunities for competing for public service and procurement contracts. One reason for this is that CSOs are generally only qualified to provide services and products in the field of education, training, research and publications. In most cases, services in these fields are contracted directly, as their value is less than the EUR 10,000 or the threshold above which public procurement tendering becomes a legal requirement.
Each municipality has local committee for financing of CSOs. In 2008, the total amount budgeted by the 21 local governments for CSOs was EUR 834,000, of which EUR 811,000 were disbursed. Project funding amounting to between a few hundred and a few thousand Euros, is awarded without the application of any programme of application criteria. In practice, local government funds are disbursed in a similar way to those of the parliamentary Commission; most CSOs which apply receive some funding, and there is an absence of monitoring mechanisms for ensuring the integrity of the awards process and the proper use of the funds.
In order to change this bad practice, Centre for Development of Non-Governmental Organization prepared, in 2009, the model on Decision on financing NGO projects, on local level. This decision anticipates that supported project must be funded by 80% of required budget. This will decrease number of supported projects, and increase quality of those that get amounts for implementation. For the moment, this decision is adopted in one municipality in Montenegro.