BRUSSELS — The European Union (EU) allocates billions of euros to nongovernmental organizations (NGOs) annually, yet it does so without adequate monitoring of how these funds are utilized or whether they are being directed to legitimate NGOs.
This alarming conclusion emerges from a critical report by the European Court of Auditors (ECA), which is poised to exacerbate the ongoing political debate regarding the accountability of nonprofits in their utilization of EU grant money.
Describing the process as “opaque” and “hazy,” the report highlights a significant lack of transparency in the EU’s funding mechanisms for NGOs, advocating for reform in the provision, monitoring, and disclosure of grants.
Laima Andrikienė, the ECA member responsible for the report and a former lawmaker with the center-right European People’s Party (EPP), stated, “The picture of EU funding for NGOs remains hazy, as information on EU funding — including lobbying — is neither reliable nor transparent.”
This criticism equips conservative lawmakers in the European Parliament with a powerful argument to reform how EU funds are distributed to NGOs, emphasizing the need for accountability and transparency, a sentiment echoed in the ECA’s findings.
The report raises critical questions regarding lobbying: Are NGOs using public funds to sway EU policymaking? If so, is this alignment with EU values? The ECA’s findings suggest a concerning lack of curiosity and transparency on the part of the European Commission in addressing these issues.
The Commission “did not clearly disclose the information it held on NGO advocacy activities financed by EU grants,” according to the ECA.
Despite the report’s overall critical stance, it recognized some progress since the ECA’s previous assessment in 2018. Notably, the Commission has issued guidance stating that EU funding should not be used for lobbying. Nevertheless, the system remains “too opaque,” Andrikienė emphasized. “Improvements are absolutely necessary. We cannot continue this business as usual.”
Critically, the ECA found no evidence suggesting that NGOs misused EU funds contrary to EU law or values in their advocacy or lobbying efforts. However, they cautioned that the lack of transparency heightens the risk of such occurrences, as noted during a press briefing on Monday.
Recently, the Commission acknowledged that in “some cases,” work programs submitted by NGOs included specific advocacy actions and inappropriate lobbying activities.
Challenging Times for NGOs
The timing of the report is particularly challenging for the nonprofit sector. In Europe, criticisms of NGOs from Members of the European Parliament (MEPs) are escalating, especially regarding their use of EU funds for lobbying activities.
MEPs from the EPP have accused the European Commission of having funded NGOs explicitly to lobby in favor of the European Green Deal within EU institutions, including other Commission departments — a claim the Commission seemed to recognize last week.
Meanwhile, early negotiations surrounding the EU’s upcoming long-term budget indicate a potential reduction or elimination of dedicated programs for environmental and climate action, as EU priorities shift toward defense, trade, and competitiveness.
At the international level, funding avenues are diminishing following former United States President Donald Trump’s decision to freeze the $27 billion-a-year USAID foreign development program.
Green MEP Daniel Freund expressed concerns that the ECA’s report could be “exploited by certain political factions” to further criticize NGOs.
“When you read the headline… it might create the impression that it is the NGOs’ fault, whereas this is a widespread issue concerning the beneficiaries of EU funding,” Freund remarked.
In contrast, NGOs have welcomed the findings of the report.
“The bottom line is that there is no scandal. There is only a clear need to enhance transparency,” stated Patrizia Heidegger, policy director at the European Environmental Bureau, one of the largest environmental NGOs in Brussels.
Key Insights from the Report
The ECA examined EU funding awarded to 90 NGOs from 2021 to 2023, totaling €7.4 billion.
This included funds from various EU programs such as Horizon Europe, the European Social Fund Plus, the Asylum, Migration and Integration Fund, the Erasmus+ youth program, as well as the LIFE program financing green initiatives.
While the Commission does verify that NGOs meet basic transparency standards, it fails to “proactively check compliance with EU values,” which, according to Andrikienė, exposes the EU to reputational risks.
The ECA found a lack of a reliable overview of EU funding granted to NGOs and noted instances where organizations misrepresented themselves as NGOs.
“We were quite shocked to discover that one large research institute was classified as an NGO, despite having a governing body comprised solely of government representatives,” Andrikienė commented.
Furthermore, the report indicated that critical aspects of an NGO’s status, such as government affiliations and whether it serves its members’ commercial interests, were not adequately verified.
The Commission also failed to “clearly disclose” to the public the information it possessed regarding NGOs’ advocacy activities funded through EU grants, prompting auditors to call for greater transparency due to the “sensitive nature” of this information.
The ECA has recommended that the Commission establish clearer definitions of what constitutes an NGO, demand more regular updates regarding grant expenditures, and enhance oversight to ensure NGOs operate in accordance with EU values.
The Commission has responded by committing to implement the auditors’ recommendations and adopt measures that “minimize administrative burden and are proportionate.”
