Individuals and businesses have more and more resources and willingness to tackle the most pressing social and environmental challenges. Companies are starting to operate in a responsible and sustainable manner, motivated by increasingly conscious employees, investors, and consumers. As many as 49% of Bulgarians are already willing to pay more for products and services offered by socially responsible brands.
Understanding what stands in the way to a greater social engagement of business and individuals, what barriers do they face, including tax and legal aspects, and what are the potential incentives that could positively impact their engagement and overcoming these barriers is in the best interest of us all.
It is our hope that the barriers and recommendations, prepared in collaboration with organizations that are shaping the Bulgarian social impact ecosystem, will be helpful in establishing priorities and directing further action.
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Consultations’ Participants
America for Bulgaria Foundation
Bulgarian Business Leaders Forum
Bulgarian center for not-for-profit law
Bulgarian Chamber of Commerce and Industry
Bulgarian Private Equity & Venture Capital Association
Bulgarian Small and Medium Enterprises Promotion Agency
Confederation of Employers and Industrialists in Bulgaria
Dokova & Dokov for Future Foundation
Federation of Social NGOs in Bulgaria
Hewlett-Packard Global Delivery Bulgaria Center- HPE Gives Platform
Republic of Bulgaria, Ministry of Labour and Social Policy
Sofia University, Faculty of Economics and Business Administration
COUNTRY PROFILE
Bulgaria, a relatively new member of the EU (since 2007), is taking steps to address a variety of social challenges and has launched a number of initiatives in recent years to build social engagement. As a result, the appetite for social impact is growing, but many barriers continue to hinder development. Bulgaria also faces a number of social challenges, including a population decline. In the last 10 years, Bulgaria’s population has decreased by over 10%. It is also a country with a low GDP and GDP per capita, which fuels the migration pressure and encourages young people to seek work outside the country (or move to big cities). Given the above and other challenges, fostering social responsibility and addressing the difficulties in the cooperation of different stakeholder groups is extremely important.
To read more, download the reportLEGAL & TAX
Barriers & Recommendations
Recommendation: Modifying the mechanism or introducing other types of incentives (e.g. preferential treatment in tenders) should be considered. Simplifying documentation requirements and expanding the list of recognized beneficiaries would reduce administrative burden and encourage support for a broader range of causes and organizations.
To read more, download the reportRecommendation: It is necessary to raise awareness about the concept of social enterprises and change a mindset among different stakeholders to perceive them in a broader perspective. It is important to understand what social enterprises need to grow to move on to promote valuable benefits for them.
To read more, download the reportRecommendation: Clear guidelines and examples should be offered to help non-profits understand the types of economic activities that can be considered complementary to their mission. This will help organizations navigate the requirements and ensure compliance with the law while expanding their revenue-generating potential.
To read more, download the reportRecommendation: To avoid misinterpretation, it is important to develop clear guidelines that define the circumstances under which pro bono services are exempt from VAT. These guidelines should outline specific criteria that establish a clear connection between the services provided and the company’s activity or objectives.
To read more, download the report“SOFT” ACTIONS
Barriers & Recommendations
Recommendation: There is a need for a horizontal approach to social issues and a mutual strategy. It would be beneficial to have a dedicated body or person responsible for it across ministries. The government established a separate department in the Ministry of Labor and Social Policy for an exchange of knowledge among different stakeholders. They already have some knowledge, but should be more pro-active.
To read more, download the reportRecommendation: More cooperation between sectors, as well as supporting programs are needed. Actions supporting infrastructure organizations are necessary. It is worth strengthening cooperation with organizations from developed countries in order to exchange knowledge and experience.
To read more, download the reportRecommendation: To foster collaboration, dialogue between different stakeholders should be encouraged. More flexibility, openness and understanding is needed. The return of international donors to Bulgaria would make it possible to operate on a more stable and long-term basis. Support in the field of EU funds is necessary at the level of creating applications and reporting.
To read more, download the reportRecommendation: It is necessary to develop terminology and standards that are clear and unambiguous for all groups. Impact measurement tools should be tested and implemented in cooperation with different stakeholders. It is necessary to standardize non-financial reporting, develop skills and exchange knowledge in this area.
To read more, download the reportRecommendation: Currently, programs offering financial support and capacity building support are targeting different groups. Both forms of support should be offered to a given target group. There is a need for capacity-building programs for leaders to educate them in fundraising, marketing, and applying for advanced public funds and resources. It is also important to build the competence of the public administration in supporting social impact and developing impactful programs.
To read more, download the reportRecommendation: More transparency in reporting and measuring impact can help build awareness and credibility around social sector. Increasing this awareness will certainly have a direct impact on increasing donor engagement.
To read more, download the reportRecommendation: A set of simple, understandable guidelines for investors and good practices are necessary. A shift in mindset around social impact providers is important. Opening up to a more businesslike approach in day-to-day activity of impact providers is needed and can be effectively combined with achieving social goals. It is worth considering support from the public administration to reduce investment risk (e.g. tax incentives).
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