Overall, EFA welcomes the proposal:

• For its contribution towards a Europe that affords organised civil society its full rightful place
• As a necessary text for recognising the place of the nonprofit model in Europe
• As a text that removes barriers to cross-border activities

EFA states that we ‘recognise the contribution of the proposal for a directive, in that it reaffirms the essential nature of the freedom of association for democracy to function properly’, and welcomes that the proposed directive ‘ensures the effective exercise of freedoms of association as recognised by the founding texts of the European Union, and gives full scope to the non-profit economic model promoted by associations for the benefit of citizens and territories’.

EFA also points to some areas to watch regarding the proposed directive’s content.

These include the proposed directive’s statement that only citizens of the European Union or those legally resident in the European Union may be members of the executive body of a cross-border association (Article 7). EFA notes that this restriction seems excessive in relation to the spirit of the proposed directive, which aims to facilitate the operation of associations, and particularly international associations whose membership is often multinational.

EFA’s response highlights too that the proposal places associations on the same level as ‘classic’ economic entities such as commercial organisations. The central role of volunteers at associations means, it states, that the directive must therefore be accompanied by a corresponding amendment to the GBER that takes account of the specific nature of the operation of associations and their economic model.

This will be essential for avoiding any potential claims that European cross-border associations are undermining competition by using free labour. Such an amendment will need to include a framework for exemption from State aid rules for nonprofit structures acting in the public interest, and protect the contribution that volunteers make to public-interest activities.

Read EFA’s response in full here.

Picture by Anthony Beck on Pexels

The proposal will next be presented to the European Parliament and the Council for approval, and once adopted, Member States will have two years to transpose the Directive into national law.

It is aimed at improving the Internal Market’s functioning by removing legal and administrative barriers for nonprofit associations that operate (or wish to) in more than one Member State. Currently, when nonprofit associations engage in activities in a Member State different to the one they are established in, they often need to register again or even form a new legal entity in that Member State.

The new rules are expected to reduce their administrative costs and enable more nonprofits to take part in cross-border activities. They include establishing in each Member State a new legal form of nonprofit associations specifically designed for cross-border purposes (the ECBA), next to existing national legal forms. This form will be automatically recognised across the Union once an ECBA is registered in one Member State, through an ‘ECBA certificate’.

The decision is being hailed as a breakthrough by Sergey Lagodinsky MEP, Greens/EFA rapporteur and Vice Chair of the Legal Affairs Committee. It follows Lagodinsky’s report on ‘A statute for European cross-border associations and non-profit organisations’, which was adopted by the European Parliament with an overwhelming majority in February 2022.

Last October also saw EFA run a webinar with a focus on the proposal, which was attended by fundraisers from around Europe, and saw Lagodinsky give an overview of the proposed statute.

Speaking in response to this week’s news, Lagodinsky commented:

“[The] proposal is a breakthrough for all those who are fighting to support democracy across European borders, and a first step towards protecting civil society as a whole throughout the Union. Democracy does not end at a country’s border. Civil society organisations are at the heart of every democracy. Making them strong and truly European is a safeguard for our European future.

“Right now there are 24 different regulatory regimes applicable to civil society organisations in the EU. This legal patchwork creates hurdles for cross-border civil engagement and ultimately restricts civic space.

“Ensuring legal protection is crucial today with civil society under attack in many EU countries. Restricting activities, discriminating against individual members and limiting access to funding are ways of pressuring NGOs. This EU-wide legal status will strengthen civil society organisations bringing together people from more than one member state.

“The Commission has taken a decisive step for strengthening civil society today building on the ideas of the European Parliament. We are willing to take that ambition forward, now the Council will also need to live up to those expectations.”

Simona Biancu, chair of EFA’s Public Affairs Working Group, commented:

“Although there are many more steps ahead, the adoption of the proposal by the EU Commission is a crucial move towards the recognition of the complex European philanthropic space and achieving the support that’s needed to advance it.”

Read more on this in the October edition of Fundraising Europe – out 4 October. 

The Swedish EU Presidency is approaching its final month of chairing the EU Council. With several crises, such as the security crisis in Ukraine, overshadowing the Brussels policy agenda, important files for EFA members remain in limbo as working parties at EU level were unable to make meaningful progress. As Sweden will soon be handing the reins to Spain – where do we stand?

AMLD

One file that did make it to the finish line (well, almost) is the package on Anti Money Laundering and Terrorist financing. The three core pieces of draft legislation within the AMLD package – the EU “Single Rulebook” regulation; the regulation establishing the European Anti Money Laundering Authority (AMLA); and the actual 6^th Anti-Money Laundering Directive – have been adopted by the European Parliament’s lead committees in March, followed by a mandate by the European Parliament’s plenary to enter into inter-institutional negotiations. Once the Parliament and the Council come to an agreement, the implementation phase can start.

e-Privacy

Far less progress was made on the e-Privacy file, which is of high relevance to EFA and its members as well. One of the core elements of this proposal is the regulation of digital and telephone outreach by organisations to citizens. Those organisations engaging in telephone outreach would be identifiable as such by a new telephone prefix, which in itself might not be a problem. However, telecom carriers might be given the option to offer blanket blocks of said numbers to their customer base. In other words, enabling customers to opt out of being called by numbers carrying this prefix. If such a rule is adopted, in practice that would mean that these prefix blocks would technically and effectively override the explicit consent to be contacted that NPOs have received from their donors and potential donors. This could have major implications. The rules are aimed at direct marketers but will also affect NPOs, as they too rely heavily on direct outreach by telephone and would fall within the scope of the proposed rules. The proposal has been in a deadlock at European Council level and there does not appear to be an appetite to push the matter up on the agenda – leaving potentially affected stakeholders in suspense.

Door drops

Regarding the file on unaddressed printed advertising, a.k.a. door drops, pressure from certain EU Member States on the EU has been mounting. These Member States advocate the introduction of an EU-wide opt-in scheme regarding unaddressed printed advertising. Needless to say that this proposal is making NPOs across Europe nervous, as they rely heavily on door-to-door advertising to raise awareness for their causes and to garner support and donors. Currently, most countries have opt-out schemes in place. Whilst people that do not wish to be approached are likely to take the necessary actions to opt-out of unaddressed advertising, NPOs fear that not many citizens would go out of their way to opt in to receive it, which would make the jobs of fundraisers more difficult and could mean a significant reduction in potential donors. So far, the EU has not taken any steps towards drafting an EU proposal on the matter, but it is important for the sector to actively educate the EU institutions as to the negative implications of such a measure.

Cross border activities of associations

On a more positive note, the European Parliament’s resolution on cross-border activities of associations was well received. The European Commission followed up with a public consultation and is now expected to table a proposal, possibly in the last quarter of 2023. The initiative seeks to ensure full single market freedoms for associations, simplifying their cross-EU activities and promoting their fundamental rights.

EFA will remain to be your eyes and ears in Brussels and we will notify you of any relevant developments at EU level.

Patrick Gibbels, Gibbels Public Affairs

About Patrick Gibbels

Patrick is EFA’s public affairs columnist in Brussels.

He is the director of Gibbels Public Affairs.

Follow Patrick @GPA_Brussels.

Read more from Patrick in our View from Brussels column here.

The European Council is the EU institution that defines the general political direction and priorities of the European Union. The Council is led by its Presidency, which is held by one of the 27 EU membership on a 6-month rotating schedule. This way, every European Member State gets a chance to push their national priorities by setting the EU policy agenda. Therefore, knowing the work programme of the current (and future) Presidency is an important part in EFA’s own EU agenda setting. On 1 January Sweden took over the EU Presidency. These are the priorities relevant for EFA.

The fundraising sector has historically been an attractive target for money launderers. EFA is aware of this and has been actively involved in the EU developments regarding Anti Money Laundering and terrorist financing. The Swedish Presidency will seek to continue the fight against international crime by advancing the efforts to tackle money laundering and the financing of terrorism. This will involve advancing the negotiations on establishing a new EU body in this area and on the ‘rulebook’.

Similarly, EFA has been quite active on the upcoming ePrivacy Regulation, which is currently making its way through the EU decision-making procedure. As I have written before in Fundraising Europe, some of the proposed changes in the Regulation can have a substantial impact on the day-to-day business of fundraisers and other NPOs.  The Swedish Presidency will continue negotiations with the European Parliament on the ePrivacy Regulation.

The Swedish Presidency has also indicated that it will continue the work on the proposal for new VAT rules for the digital age. At the end of last year, the European Commission published a legislative proposal regarding VAT in the digital age – the “ViDA initiative – as part of its action plan for fair and simple taxation. This package aims to improve VAT efficiency and to minimise VAT fraud. This is done by modernising VAT reporting obligations and facilitating e-invoicing, extending the scope of the VAT rules for the platform economy and moving towards organizations having one single VAT registration in the EU. Given the cross-border nature of many fundraisers and NPOs, this is an initiative on EFA’s watch list.

Lastly, the EU has been moving forward on a proposal for a regulation on the transparency and targeting of political advertising. Because definitions in this proposal are considered to be a bit vague and “muddy” there is a risk that new rules might affect the work of NPOs as well. The Swedish Presidency has indicated that it will work to advance the EU’s work regarding the negotiations on the Regulation on the transparency and targeting of political advertising. EFA will monitor this file closely in order to signal any potential unintended consequences for fundraisers in their campaigning and outreach work.

EFA will keep you informed on any relevant developments regarding these files. On 1 July 2023, Spain will take over the EU Presidency from Sweden, at which time we will re-evaluate the police agenda.

About Patrick Gibbels

Patrick is EFA’s public affairs columnist in Brussels.

He is the director of Gibbels Public Affairs.

Follow Patrick @GPA_Brussels.

Read more from Patrick in our View from Brussels column here.

As the main representative of national associations and other nonprofits working to strengthen and develop fundraising across Europe, public affairs is a key aspect of EFA’s work. Members and Fundraising Europe readers already benefit from regular updates on relevant legal developments from Brussels through Patrick Gibbels, and from EFA’s What’s going on in Brussels webinar series.

EFA also regularly responds to consultations on members’ behalf, and collaborates with other Europe-wide sector bodies and organisations to ensure the sector’s position is known when changes are on the table. Most recently, EFA responded to a proposed statute for European cross-border associations and nonprofits, which it also ran a webinar on.

The new working group will support EFA’s board under the leadership of Simona Biancu, with members chosen for their skills and expertise in this area, and to ensure country representation across Europe.

The Public Affairs Working Group members are:

• Simona Biancu (chair) – EFA board member, & vice president of Italian fundraising association ASSIF
• Patrick Gibbels – Gibbels Public Affairs & EFA consultant in Brussels
• Yvette Kleekamp – Public Affairs Advisor at Dutch fundraising association Goede Doelen Nederland
• Larissa Probst – EFA board member, & managing director at German fundraising association Deutscher Fundraising Verband
• Pia Tornikovski – secretary general of Finnish fundraising association VaLa, & former EFA board member

The group’s objectives

• To develop networks related to fundraising, and nonprofits and European philanthropy in general, to generate greater interaction, sharing, and discussion that help to advance the profession and how it’s perceived more widely.
• Participation in other working groups, including inter-professional ones, focused on areas of interest to fundraisers, such as VAT, e-Privacy, and anti-money laundering. Representing the sector and ensuring its position is heard, the group will also offer proposals and working hypotheses that drive discussion and positive change.
• Building relationships with EU political and consultative bodies to raise awareness of issues relevant to the fundraising sector, propose actions aimed at consolidating and developing the culture of giving. Acting as a professional counterpart in all cases where European regulation has a negative impact on fundraising.
• Dissemination of knowledge and updates, sharing of actions and objectives with the European professional fundraising community to stimulate discussion and raise awareness for the building and consolidating of an authentically European space for the profession.

Commenting, Biancu said:

“As the European Fundraising Association, EFA has a unique role to play in representing the fundraising community on legal and regulatory matters at an EU level. Our Public Affairs Working Group will enable us to achieve this on a greater scale than before, benefitting not only our members, but fundraisers, and fundraising, throughout Europe.”

Picture by Endzeiter on Pexels