NGOs funded in “non-transparent” manner. Court of Auditors’ attack on European Commission

Brussels – According to a new ECA report, there is a lack of transparency in EU funding awarded to NGOs. The report argues that, although improvements have been observed, information on EU funding awarded to NGOs working in domestic policies remains inaccurate and incomplete. According to the study, the European Commission “has not adequately disclosed certain promotional activities (such as lobbying) funded by the EU, and checks are not actively carried out to ensure that funded NGOs respect the values of the Union, which is therefore exposed to a reputational risk.”

This further fuels the fire of those political forces that, particularly in the European Parliament, accuse NGOs, especially environmental ones, of practicing obscure lobbying.

Through NGOs and other civil society organisations, citizens can participate in the development of democratic EU policies through an ongoing dialogue, which must be transparent. In order to hold public decision-makers accountable for their actions, “citizens,” the Court says in a note, “need to know to whom and for what purpose funds are granted, as well as how they are used and whether the recipients of the funds respect the values of the EU.”

“Transparency is key to ensuring the credible participation of NGOs in EU policymaking,” said Laima Andrikienė, the Member of the Court responsible for the report. “However, although some progress has been observed since the last audit we conducted,” she continued, “the picture remains unclear, as information on funding to NGOs, including for lobbying activities, is neither reliable nor transparent.”

Between 2021 and 2023, NGOs were awarded €7.4 billion under the EU’s internal policies related to, for example, cohesion, research, migration, and the environment. Of this amount, €4.8 billion were granted by the Commission and €2.6 billion by member states. However, the auditors warn that these figures should be treated with caution, as there is no reliable overview of EU funds paid to NGOs. The information is published in a piecemeal fashion, which hampers transparency, prevents the determination of whether EU funds are overly concentrated on a limited number of NGOs, and limits the understanding of their role in EU policies.

Although the Commission has made progress in collecting information on the granted funds, according to the Court, “weaknesses remain in the manner in which it is disclosed. Moreover, member states “do not monitor or report on funding, and expected regulatory improvements will not require them to report on payments.”

In different EU countries, the definition of NGOs varies and is rarely enshrined in national legislation. In 2024, the EU defined them as organisations independent of government and non-profit. The Court argues that, although this is a step in the right direction, the definition alone cannot ensure that NGOs are properly classified in the EU’s financial transparency system. This is because entities self-certify as NGOs and the Commission does not verify important aspects of their status (e.g., whether a government exerts significant influence over their governing bodies or whether one of them pursues the commercial interests of its members). For example, a large research institute was classified as an NGO even though its governing body was composed exclusively of government representatives.

According to the Court, “the Commission did not clearly disclose the information it had regarding the promotional activities of NGOs funded through EU grants. Moreover, it was only during the Court’s audit that the Commission issued guidelines that grant agreements should not require recipients to engage in lobbying of EU institutions.” In addition, managers of EU funds do not proactively look for potential violations by NGOs. The report argues that there is also a lack of control over funding sources that can provide useful information about “who is behind” NGOs.

The audit report examines EU programs such as the European Social Fund Plus, Horizon Europe, AMIF and LIFE and assesses the situation in different member states. It follows the European Parliament’s call for greater transparency in EU funding, including to NGOs, in light of their important role in democratic policy-making.