The path to solve the problem

Description

The aim of the project “The path to solve the problem” is to represent the interests of NGOs by proposing to revise the norm provided for in the Law on State Social Insurance regarding the minimal amount of mandatory state social insurance payments and to include accepted revisions regarding NGO projects implementation into the 3rd clause of the Law – exceptions, thus respecting citizens society –rights of NGOs to participate and the specifics of their activities in projects, avoiding creating the situation, where a number of NGOs in the country artificially are pushed into tax debts and therefore being forced to cease operations.  Within the framework of the project, a study will be carried out, expert opinions and proposals for legislative changes will be prepared, which will be made public in the information campaign, as well as submitted to the Saeima and the Cabinet of Ministers in accordance with regulatory procedures. Latvian NGOs, officials of responsible institutions, Saeima deputies and officials will also be involved, regularly inviting to discussions, comments, thus establishing a dialogue with institutions and decision-makers, providing an opportunity to gain understanding about  the activities of NGOs and its specifics.

Summary of project results

The ACF Action project aimed to address the challenges posed by recent changes in the law regarding minimum state social insurance contributions. The new regulations created a significant financial burden for NGOs, particularly those involved in project work, as project budgets did not account for compensation related to the changes. Many employees worked part-time or across multiple projects, often failing to meet the minimum salary thresholds, which further complicated the issue. NGOs, especially those with staff working solely on projects, struggled to cover additional tax costs, as they are typically non-profit organizations without excess funds. The lack of clarity around exemptions, coupled with the failure of project administrators to recognize the issue, prevented NGOs from including the necessary costs in their project budgets, exacerbating the financial strain. All above mentioned aspects were not sufficiently considered when these amendments were adopted.

 

1. Research on the situation in NGOs. A research study was conducted to examine the situation of NGOs in Latvia, focusing on employment practices, types of employment, the scale of operations, and how employment decisions are influenced by projects or other organizational needs. The research involved a survey with measurement scales for responses, engaging various organizations from different regions. Additional data from the State Revenue Service (VID) were analyzed and compared with survey findings to provide a comprehensive view of the sector''s challenges. The study revealed that 80% of responding NGOs expressed concerns about the implications of mandatory minimum social insurance contributions, though many lacked clarity on how these changes would directly impact their operations. The findings were presented and refined through workshops and used to prepare a formal letter to lawmakers, advocating for solutions. However, the responses received offered no concrete resolutions, suggesting either a lack of understanding or reluctance to address the realities faced by the NGO sector.

2. Workshops on changes to the social insurance contribution system. The project utilized workshops as a key method to foster dialogue among experts, NGOs, and government representatives on changes to the social insurance contribution system (VSAOI). These workshops provided a collaborative platform to share information, identify challenges, analyse issues, and brainstorm solutions. By facilitating discussions with diverse participants, including sector representatives and officials, the workshops ensured an inclusive approach to addressing the reform''s potential impact while fostering open idea generation and solution evaluation. Over 10 workshops, participants examined various issues, ranging from project funding implications to localized challenges affecting specific groups, such as organizations for individuals with hearing impairments. Early sessions informed NGO representatives and identified key concerns, while later meetings presented research findings and gathered real-world experiences from impacted NGOs and cultural organizations. These efforts culminated in a formal resolution sent to government authorities and a comprehensive compilation of participant suggestions, ensuring that NGOs’ voices were represented in policy deliberations.

3. Participation in policy development and decision-making processes. To address the challenges posed by the new social insurance contribution system (VSAOI), a working group was established under the Ministry of Finance to propose regulatory improvements. NGOs actively participated by raising critical issues related to the sector''s projects and submitting detailed recommendations, including letters sent to various authorities. These letters, addressed to the Ministry of Finance, parliamentary deputies, the President, and other stakeholders, outlined key challenges and proposed solutions.

4. Communication campaign. Project promoter utilized a comprehensive approach to raise awareness about upcoming tax reforms and their implications for NGOs. The campaign combined traditional and digital media strategies, including press releases, expert opinion articles, TV and radio segments, and active engagement on social media platforms. Workshops and surveys fostered direct dialogue with NGO representatives, ensuring their voices were included in the broader discourse. A dedicated YouTube channel and podcasts further amplified these efforts, creating accessible resources for stakeholders. These diverse activities successfully engaged the public and highlighted the potential challenges posed by the new regulations.

• Influence on public and policy discussions. The communication campaign, alongside 10 workshops, played a crucial role in drawing attention to the challenges faced by NGOs under the proposed reforms. By presenting expert analyses, personal testimonies, and grassroots perspectives, the campaign sparked meaningful dialogue among stakeholders and policymakers. This helped identify key concerns and led to the formulation of actionable proposals, such as exempting ongoing projects from the reforms, which were shared with policymakers through formal resolutions and reports.
   
• Increased civic engagement. Through workshops, online events, and working group submissions, a growing number of citizens actively participated in decision-making processes, voicing their opinions, identifying legislative issues, and proposing solutions. This collective effort empowered NGOs and other affected groups to advocate for their needs and contributed to ongoing policy evaluation.
   
• Advocacy for NGO specifics and enhanced dialogue with policymakers. NGOs’ unique operational needs were highlighted, with proposed changes to legislation communicated to key government figures such as the President, Prime Minister, and Ministries. The project’s advocacy efforts continue post-project, ensuring that proposals are considered and influencing future policies.
   
• Policy document contribution. Citizens were involved in the preparation of a policy document, with their suggestions and identified issues incorporated into the final draft, ensuring their voices were heard in shaping the direction of future reforms.
   
• Short-term impact on NGO understanding. Small NGOs gained a deeper understanding of the importance of accounting and bookkeeping, recognizing that it involves much more than basic salary and tax payments, including a range of essential documentation required for compliance.