Civil society organizations in Armenia are as diverse as the populations they aim to support. Yet they all have one thing in common: the need to be financially sustainable.

In March 2024, as part of the USAID-funded Civil Society in Action program, Counterpart hosted an event on financial stability for civil society organizations. The event brought together an array of stakeholders and project partners, including representatives from the Ministry of Finance, the Ministry of Justice, and the Ministry of Education, Science, Culture and Sports, as well as think tanks, foundations, international organizations, and local and regional NGOs.

The participating organizations work to improve the lives of Armenians across a range of sectors including participatory governance, human rights protection, disability issues, and youth affairs. Each of the partners are working to ensure that the voices of vulnerable populations are heard by the government and relevant decisions makers. The Armavir Development Center, for instance, implements a project focused on improving participatory budgeting mechanisms, while the Armenian UN Association is establishing youth councils within local self-government bodies. With Counterpart’s support, the Association advocates for legislative changes at the national level concerning youth councils, developing the participatory capacities of young people, and fostering dialogue between local government bodies and youth councils.

Participants ready to start the Open Space event

The aim of the event was to provide a balanced assessment of the challenges and opportunities for enhancing financial stability. Through open dialogue and group activities, participants identified key financial stability issues. Three topics emerged as priority areas for future study and action:

1. Diversification of financial resources for civil society: This includes advocating for the adoption of the “1% law,” which would allow individuals to donate 1% of their personal income tax to nonprofit organizations without any financial loss to themselves.
2. Revision of the default grant treatment by the State Revenue Committee: This involves addressing the issue of grants being classified as “supply,” which makes it easier for organizations to exceed the threshold of 115 million Armenia dram (roughly $300) in annual sales turnover, thereby becoming liable for VAT.
3. Improved mechanisms for establishing CSO-public-private partnerships: This focuses on enhancing the public image of civil society to foster better partnerships with the public and private sectors.

Counterpart will provide its local partners with grants to further address these critical issues. Through research, study, and action, the grants will serve to ensure that civil society can work collaboratively with diverse stakeholders to carry out advocacy, generate evidence, and provide policy feedback loops. By consolidating efforts and leveraging resources, these organizations are better positioned to advocate for their needs and the needs of their constituents in the future.