BRUSSELS — The European Union is handing out billions of euros to nongovernmental organizations each year without properly monitoring how the money is spent — or whether it’s even going to genuine NGOs.
That’s the main finding in a damning report from the European Court of Auditors which is likely to intensify a fierce political fight over how nonprofits use EU grant money.
Using words like “opaque” and “hazy,” the report finds the EU’s entire process for funding NGOs lacks transparency and calls for reform in the way grants are provided, monitored and disclosed.
“The picture of EU funding for NGOs remains hazy, as information on EU funding — including lobbying — is neither reliable nor transparent,” said Laima Andrikienė, the ECA member in charge of the report, who is also a former lawmaker with the center-right European People’s Party (EPP).
The criticism will give ammunition to conservative lawmakers in the European Parliament who want to overhaul the way EU money is doled out to NGOs, claiming it lacks transparency and is often used to lobby EU institutions — criticisms echoed in the report.
Hanging over the report is the question of lobbying. Are NGOs using public money to influence EU policymaking? And if they are, is it being done in line with EU values? On these questions, the ECA found the European Commission lacked curiosity and transparency.
The Commission “did not clearly disclose the information it held on NGO advocacy activities that were financed by EU grants,” the ECA said.
Despite the overall critical tone, the report did find some improvements since the ECA’s last assessment in 2018. It also noted that since the period audited in the report, the Commission had issued guidance to NGOs that EU funding should not be used for lobbying. But overall the system was “too opaque,” the ECA’s Andrikienė said. “Improvements are absolutely necessary. We cannot continue this business as usual.”
Importantly, the ECA found no evidence of NGOs using EU funds in a way that breached EU law or EU values — including via advocacy or lobbying work paid for with EU money — but warned the risk of this happening was higher because of the lack of transparency, the agency said during a press briefing on Monday.
Last week the Commission admitted in a statement that in “some cases” work programs submitted by the NGOs “contained specific advocacy actions and undue lobbying activities.”
Bad time to be an NGO
The report could hardly come at a worse time for the nonprofit sector. In Europe, attacks on NGOs from MEPs are multiplying, particularly over their use of EU funds to pay for lobbying activities.
MEPs from the EPP allege the European Commission paid NGOs explicitly to lobby on its behalf to promote the European Green Deal in EU institutions, including other Commission departments — something the Commission seemed to admit last week.
Early negotiations over the EU’s next long-term budget, meanwhile, suggest dedicated programs for environmental and climate action could be reduced if not cut altogether, as the EU’s priorities switch from green issues to defense, trade and competitiveness.
And at the international level, funding sources are drying up after United States President Donald Trump decided to freeze the $27 billion-a-year USAID foreign development program.
Green MEP Daniel Freund told POLITICO that he feared ECA’s report could be “misused by some political forces” and fuel further attacks on NGOs.
“When you read the headline … it might create the impression that it is the fault of the NGOs … when this is a general problem of the beneficiaries of EU funding,” Freund said.
NGOs meanwhile welcomed the report.
“The bottom line is that there is no scandal. Only a clear need to strengthen transparency,” said Patrizia Heidegger, policy director at the European Environmental Bureau, one of Brussels’ largest environmental NGOs.
What the report said
The ECA looked at EU funding awarded to 90 NGOs over 2021-2023 and worth €7.4 billion in total.
It included funds received through the EU’s Horizon Europe research program, the European Social Fund Plus, the Asylum, Migration and Integration Fund, youth program Erasmus+, as well as the LIFE program that finances green projects.
It found the Commission does verify that NGOs fulfill basic transparency requirements, but fails to “proactively check compliance with EU values.” This exposes the EU to reputational risk, Andrikienė said.
The European auditors found “no reliable overview of EU funding granted to NGOs” and pointed to instances where organizations self-declared themselves to be NGOs when they were not.
“We were quite shocked to find that one large research institute was categorized as an NGO while its governing body was composed solely of government representatives,” Andrikienė told reporters.
The report found important aspects of an NGO’s status were not checked, such as government links and whether it was pursuing its members’ commercial interests.
The Commission also failed to “clearly disclose” to the public information it had about NGOs’ “advocacy activities” that were funded through EU grants, the auditors said, calling for additional transparency on this because of the “sensitive nature” of this information.
The ECA recommended the Commission provide clearer definitions of what counts as an NGO, demand more regular updates on how grant money is being spent, and strengthen checks that NGOs are acting in line with EU values.
The Commission replied that it will take on the auditors’ advice and adopt measures “which minimize administrative burden and are proportionate.”
Marianne Gros contributed to reporting.
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