5. The enabling environment for civil society organisations in Finland

The general provisions for the registration and operations of associations are regulated in the Finnish Associations Act (Ministry of Justice, 1989, most recent amendments in 2020[1]). Freedom of association may be limited in line with the law (see Chapter 3).1

Civil society organisations and public officials alike noted that the Associations Act was outdated from the moment it came into force in 1989, as it did not take the diversity of associations and their activities into account.2 The Finnish Associations Act has since been amended several times over the last three decades, most recently in 2017 and 2020. In 2017, Section 47 was amended to stipulate that everyone has the right to receive information, extracts and certificates from the register of associations and the documents belonging to it (Ministry of Justice, 1989, most recent amendments in 2020[1]). Sections 48 and 52 on the basic declaration of the notification of registration of an association and the notification of a change to an association were also modified (Ministry of Justice, 1989, most recent amendments in 2020[1]). Another recent amendment focused on Section 11 and the proper maintenance of membership records as per the European Union’s General Data Protection Regulation (GDPR) and the Data Protection Act in 2020.

As of 2021, the act is undergoing a significant reform led by the Ministry of Justice. The reform focuses on two main tasks: 1) review the existing legislation to identify problematic provisions and identify where modernisation is required; and 2) determine what changes are necessary to facilitate a lighter approach to civic participation through associations, in light of societal changes and the inability of smaller associations to bear a heavy bureaucratic burden.3 The reform process will identify the minimum amount of information that the tax law department needs from civil society organisations (CSOs) to decrease their regulatory burden. Several concrete issues were under discussion as of late 2020, including: the need for simplified processes for remote participation and decision making; authorising associations to appoint a chief executive officer, allowing mergers of associations where desired, moving towards more “modern” ways of participating in associations, reducing the bureaucratic burden for smaller associations, and exploring whether the establishment of a new legal status may be possible for small associations.4

As part of the process, it is expected that regulation regarding remote participation and the use of digital connections in associations’ meetings will be brought up to date.5 The deadline for this work, led by a working group of experts and associations and a steering group with wider representation from ministries, political parties, lobbyist groups, workers and business representatives, is the end of 2021. There is less of a consensus on making the current legislation fit-for-purpose within the wider steering group than within the working group, including because of competing, entrenched interests. The ministry’s aim is to move away from the past where the traditional powerbrokers in Finnish society – such as political parties and trade unions – were able to dominate, towards a more open, transparent and analytical discussion-based system. This is with a view to responding to the evolving needs of Finnish associations, where all parties have an equal say. It is of great importance that this discussion runs its course. In January 2021, it is expected that a resulting report will be opened for a public consultation for several months with a view to developing a government proposal on reforms by the end of 2021 or early 2022.6

The Act on Discretionary Government Transfers lays down the regulations and processes that apply to granting discretionary government transfers to CSOs through public funding, including through the Veikkaus gaming system (see below) (Ministry of Finance, 2001[2]). Section 1 of the act outlines the following:

(1) This Act lays down the grounds and procedures that apply to granting discretionary government transfers. For the purposes of this Act, discretionary government transfers mean funding granted in the form of aid for an activity or project.

(2) This Act applies to discretionary government transfers granted from appropriations in the state budget or from extra-budgetary state funds. This Act also applies when authorisation is granted in the state budget to make agreements on or commit to discretionary government transfers (Ministry of Finance, 2001[2])

According to the act, a grant is only available for the purpose for which it was allocated. The recipient of a state grant must also comply with the conditions and restrictions set out in the state grant decision for the project or activity being assisted. When supervising the use and payment of a state grant, the state aid authority that awarded the grant has the right to carry out audits of the beneficiary’s activities and finances (Ministry of Finance, 2001[2]).

The Lotteries Act grants Veikkaus the exclusive right to provide gambling services in Finland (Chapter 3, Section 11), stipulating that its profits should be used for the promotion of sports and physical education, science, art, and youth work (53%); the support of health and social well-being (43%); and the promotion of horse breeding and equestrian sports (4%). The objectives of the Act are to ensure legal protection for citizens participating in non-profit lotteries; to prevent misuse and crime related to lotteries; as well as to avoid and reduce the economic, social and health-related harm resulting from participation in lotteries (Ministry of the Interior, 2001, amendments up to 2019[3]). The funds are channelled through three ministries to beneficiary organisations (Ministry of the Interior, 2001, amendments up to 2019[3]). Chapter 4, Section 21 states that a maximum of 20% of the proceeds for each purpose of use may be left undistributed every year, but that the amount must be distributed within five years at most (Ministry of the Interior, 2001, amendments up to 2019[3]).

The Lotteries Act provides for both money lotteries and non-money lotteries, meaning a “lottery in which items, or vouchers or coupons exchangeable for items or services, can be won in a draw or in a comparable manner based on chance” (Chapter 1, Section 3a). These non-money lotteries can include guessing games, bingo games, and other non-money prize machines. Significantly, a lottery in this sense can be organised by any registered association for fundraising purposes provided the association has a non-profit purpose and has been granted a license by the relevant authority (Chapter 2, Section 6).

In January 2020, the Ministry of the Interior launched a project to reform the Lotteries Act. Its principal aim was to examine and determine the kind of amendments needed, in particular regarding ways to improve the prevention and reduction of harm caused by gambling (Ministry of the Interior, 2020[4]). The project also intends to strengthen the exclusive right system, which ensures that only the current Veikkaus company can market gambling (Government of Finland, 2019[5]). The reform project, which is underway, will report on new safeguarding measures, such as the expansion of the compulsory identification of players and regulations on the location of slot machines, on marketing of gambling games, and on the collection and use of game and player data, which are used to study negative impacts (Ministry of the Interior, 2020[4]). Following a round of consultations with external stakeholders, the proposed reforms are being amended and will be sent to the Finnish Parliament in September 2021.7

A new Money Collection Act was introduced in 2020 to streamline the process of fundraising through money collection in order to allow civil society organisations to operate more effectively (Ministry of the Interior, 2020[6]). The objective of the former Money Collection Act was also focused on facilitating the organisation of money collections to fund non-profit activities while preventing any fraudulent or dishonest collections (Ministry of the Interior, 2006[7]). However, the former Act was viewed by many CSOs as being heavy in its regulation and excessively bureaucratic.8 In several instances, the police took legal action against organisations deemed to have started their operations before they formally received a fundraising license. Organisations were then unable to reapply for a license or to fundraise during the legal process, which can take several months, if not years.9 Additionally, organisations were banned from soliciting money without a permit (Section 11). The former act garnered worldwide attention for this reason on several occasions, most notably in 2014 when the National Police Board claimed that the fundraising message appearing on the top of Wikipedia pages could be defined as illegal fundraising and thus punishable by criminal law (National Police Board, 2014[8]).

The new Money Collection Act was developed in close co-operation with interest groups (Ministry of the Interior, 2020[6]). The Ministry of the Interior conducted a series of related consultations, involving civil society organisations, activists and other interest groups in both physical workshops and by digital means, including a survey and an online consultation process (Foreigner, 2019[9]). Previously, CSOs needed to apply for a permit to collect funds, which involved sending a one- to two-year fundraising plan to the police for approval. This plan needed to include details on how they intended to appeal for funds and the channels they would use to collect money. The licences granted under the old Money Collection Act were also fixed term. As of 1 March 2020, this is no longer the case, as permits are now valid for an indefinite period (European Fundraising Association, 2020[10]). For a fundraising licence to be granted, the fundraising organiser is still required to be a not-for-profit entity and the fundraising must be for non-profit purposes only. However, the new law makes it easier to organise small-scale civic appeals, subject to notification. Each year, the licence holder must notify the National Police Board with information on the funds raised and the use of such funds and submit an annual plan of upcoming events for fundraising (Foreigner, 2019[9]). One-off small-scale fundraising only requires the organisers – which can now be both registered and unregistered organisations – to notify a police department, making it significantly lighter than the previous procedure.10 Furthermore, there is no requirement for such fundraising to involve a not-for-profit entity or to be for public interest purposes.11 The maximum amount that can be raised by small-scale fundraising is set at EUR 10 000 within a fixed period of three months, up to twice a year (Ministry of the Interior, 2020[6]) but organisations may also apply for a longer permit if needed.12

Civil society organisations play a particularly important role in Finnish society in facilitating direct contact between the public and the government. Finland has long been a leader on the strong democratic participation of civil society and the government actively consults and involves CSOs in public decision making at all levels and branches of government (see Chapter 6). These organisations represent various communities and interests and allow citizens to express their opinions on the issues that affect them. CSOs also enable a wide range of groups to share their inputs and experiences with public officials and participate in decision making. Engagement in community activities and volunteering has been historically common and is still notably high in Finland, where most of the population are committed members of not one, but several associations. A survey undertaken by the social advocacy organisation Citizen Forum found that approximately 40% of Finns had volunteered in 2018 (Government of Finland, 2020[11]). Studies show that organised forms of volunteering and civic activities began to emerge in Finland in the 19th century and have been closely connected with the development of the Finnish society ever since (European Commission, 2010[12]). Over the decades, civic space and the role of civil society in Finland have undergone several evolutions and Finnish organisations are currently in transition once again, with new models of participation, emerging technological platforms and tools, and increasingly complex societal issues to address in the contemporary era.

Civil society in Finland has traditionally been referred to as the third sector, which includes associations, organisations and foundations formed and run by citizens, and which operate alongside the public and private sectors. The Finnish Advisory Board on Civil Society Policy (KANE) notes that the third sector in Finland is characterised by “the public interest, non-profit, independence, community, solidarity, ethics, volunteering and initiative” (KANE, 2017[13]). Its 2017-2021 Action Plan also recognises that a functioning and active civil society promotes and complements democracy and increases the social capital of those involved (see Box 5.1). The third sector in Finland has historically comprised formal registered associations with a clear mandate and purpose and the country has an impressive number of these associations considering its population of only 5.5 million (Table 5.1). However, it is notable that many of these associations are categorised as leisure, cultural, or sports organisations rather than issue-based civil society organisations that are more directly applicable to civic space (Figure 5.1).

As previously discussed, the pledges of the Programme of Prime Minister Sanna Marin’s Government 2019 on policy reforms emphasise the move towards a new kind of interaction and a need for the development of ways to engage a broader group of stakeholders in reforming Finnish society (Government of Finland, 2019[5]). This refers to involving people much more frequently in public sector activities while searching for and testing new and improved ways of engaging, interacting and consulting with stakeholders. The government of Finland acknowledges and appreciates the work of CSOs and undertakes many initiatives to highlight the significance of their role in society.

KANE also has the explicit aim of promoting co-operation and collaboration between civil society and public authorities (Box 5.1). In the current COVID-19 context, the government has recognised that CSOs are representing and assisting those who are at risk of being excluded and those that government services cannot always reach. An expert group on strengthening well-being and equality during and after the COVID-19 crisis appointed by the Ministry of Social Affairs and Health was launched with this purpose. The findings of the report noted that during the crisis, organisations and other civil society actors have responded rapidly to support those hit the worst by the crisis, thus building social bonds and trust in their communities (Ministry of Social Affairs and Health, 2020[15]). The group stressed that civil society organisations can speak on behalf of marginalised communities who often remain silent in their struggles and in this regard, can strengthen democratic opportunities to influence as well as participate in public decision making (Ministry of Social Affairs and Health, 2020[15]).

The government has reacted quickly to some of the significant issues CSOs were facing during the early days of the epidemic to offer them the flexibility needed to continue their work.13 For example, the Finnish parliament enacted temporary legislation relating to exceptions to the statutory requirements outlined in the Associations Act for the annual meetings of associations. According to the temporary act, the executive committee of an association can allow remote participation in an association meeting. This allowed CSOs to continue to gather, even if such an arrangement is not allowed in the rules and the association has not, for example, approved voting and elections rules as is usually necessitated by the law.14

In 2020, KANE conducted a survey on the role and involvement of CSOs in public decision-making processes as well as their perception of changes in the operating environment for civil society over recent years (Ministry of Justice, 2020[17]). Based on the 211 responses received, participants expressed approval of many of the positive changes that have occurred that improve the ability of CSOs to influence policy. The survey also found that general societal attitudes towards organisations have improved over the last two to three years. In addition, it is clear that organisations feel they are given ample opportunities to participate and perceive themselves as having a relatively good level of input. Nonetheless, according to respondents, obtaining grants and public funding has generally become more difficult and the number of grants available is declining to an increasing extent (Ministry of Justice, 2020[17]). Regarding general changes to the role and status of CSOs, respondents were asked: “In your organisation, have there been any changes in general attitudes towards the social role and status of organisations in the last 2-3 years?”. Of the respondents who observed such changes, 36% considered them to be undesirable. As many as 43% of respondents who observed changes responded that they were both unwanted and undesirable (Figure 5.2).

In recent years, the strong organisational and bureaucratic foundation of civil society in Finland, which relies on registered associations, is giving way to more spontaneous forms of activity and movements (Harju, 2020[18]). These new informal networks, groups and co-operatives have increased in number and comprise what is referred to in Finland as the “fourth sector”, in contrast to the more formalised third sector. The fourth sector is defined by its focus on the individual as well as a wider sense of community. It is a new way of delineating an area of society that operates outside or between institutions, on a network-like and collaborative basis. It is often emergent and project-based as well as self organising and autonomous (Demos Helsinki, 2020[19]). These groups usually consist of either self organised communities which make use of the Internet, social media and digitisation to gain interest with the primary aim of achieving concrete collaboration for self-directed goals; or are substantial networks whose activities are characterised by the principles of transparency, co-creation and sharing, and in which citizens have a significant role. The networks are often grassroots or bottom-up initiatives that can move with more agility and flexibility than registered associations. They can vary from being short-lived with a specific aim, which, once achieved, renders the network redundant, to being long-lasting with a range of planned projects, which may lead to the network becoming more formal in time (Demos Helsinki, 2020[19]).

The fourth sector is very diverse and its needs and aspirations relative to the public sector often vary to those of traditional associations. Their modus operandi is also different from those of traditional organisations, for example in terms of the organisational hierarchy, areas and scope of activity, and available resources. These factors indicate that their ability to fulfil their objectives can be limited by government regulation in ways that the third sector is not. While not all civic activities need support from government authorities, for some, a connection with the public administration is a vital precondition for their activities, for example, for obtaining permits, gaining access to meeting spaces, or gathering information about available public resources (Demos Helsinki, 2020[19]).

Furthermore, a fourth sector activist interviewed for this Civic Space Scan encouraged public sector institutions at the national and local level to seek more opportunities to cooperate with informal community organisations who know their locality and how to best support local citizens on a range of issues, as an alternative to “doing everything by themselves”15. One such good practice exists in Helsinki, where a “city captain” is designated as the local initiative liaison and supports the work of the fourth sector.16 However, interviewees mentioned that city officials can sometimes have a limited understanding of how these organisations operate and the resources they need.17 Hence, the central government and cities and municipalities could introduce upskilling, capacity-building and training on the fourth sector and potentially assign an office or official with the objective of identifying possible areas of co-operation with the fourth sector. In some cases, these officials and those assigned to this office could also be public officials with background in or knowledge of civil society and activism. The central government could also cooperate with municipalities to identify ways to support fourth sector activists in working with the government to facilitate activities that are in the public interest. This endeavour could include a focus on providing the resources that these informal networks need, whether financial or material, e.g. meeting spaces. Lastly, as the fourth sector can play an important role in improving the access, coverage, quality and efficiency of public services in partnership with public officials, there is a need to also prioritise and strengthen their ability to influence policy in general (Clayton, Oakley and Taylor, 2000[20]).

Both traditional organisations and informal fourth sector organisations and networks face challenges in their operational environment. A particular challenge raised by interviewees was the lack of knowledge among public officials as to the diverse roles of civil society organisations.18 In this regard, the 2017 OECD Recommendation of the Council on Open Government outlines the importance of open government literacy, which refers to the combination of awareness, knowledge, and skills that public officials require to engage successfully with stakeholders in open government strategies and initiatives (OECD, 2017[21]). A report by Demos Helsinki on the future of civil society in Finland notes that the issue of skills and knowledge among public officials has become more prevalent (Demos Helsinki, 2020[19]). Furthermore, surveys undertaken jointly by the Finnish Federation for Social Affairs and Health (SOSTE), KANE, the Olympic Committee and others show that in 2018, a new phenomenon was that almost 1 in 6 organisations (15% of 122 respondents) perceived that the public authority granting the funding did not understand the role or nature of the organisations. In 2016, very few organisations reported having this issue (Demos Helsinki, 2020[19]). Several participants during the fact-finding mission also explained that in general, only public officials with a role directly linked to CSO engagement or participation were aware of the vast repertoire of individuals and organisations that can be classified as “civil society” and their distinct activities. There was general agreement that more training could be extended to those with duties related to CSO interaction and more information could be provided to public officials in any position. In particular, public officials could benefit from skill-building in the area of improving partnerships with civil society for the successful co-production of public services and their delivery (OECD, 2011[22]). Lastly, the government could commit to building more anticipatory learning to identify emerging changes and challenges in the civil society landscape. Adopting arising practices around anticipatory innovation governance (AIG) could enable public officials to take more innovative approaches to this complex and fast-paced environment, which is influenced by a wide range of stakeholders (OECD, 2020[23]).

Finland is making significant efforts in this regard, with one key initiative being the recent Civil Society Academy Day as outlined in is 2019-2023 OGP Action Plan (Open Government Partnership, 2019[24]). The Civil Society Academy Day was co-organised by the central government and CSOs. All public officials were invited to take part, in particular those for whom engaging with CSOs is not a frequent component of their duties. The objective of the initiative was to equip public officials with more knowledge and to build their competencies regarding the work of CSOs through interactions with those involved. It also gave government officials the opportunity to develop new civil society contacts relevant to their areas of work. The event contributed to the goals of the government programme and the specific objective on boosting civil society awareness in the government (Open Government Partnership, 2019[24]). To enhance the knowledge and skills of public officials, the government could commit to hosting a Civil Society Academy Day annually and to complementing the initiative by organising cross-government conferences, forums and debates on the changing makeup and roles of CSOs. Additionally, it could carry out internal communication campaigns through different channels so that public officials know how to best support CSOs in their activities.

KANE’s work (Box 5.1) attempts to tackle the aforementioned challenges by serving as a forum for both CSOs and public officials from ministries to interact, discuss issues and propose solutions. KANE currently has 19 members, many of whom are ministry counterparts, while the CSOs are well-established players in their respective domains. According to the updated Government Decree on the Board, the authorities represented include the Ministry for Foreign Affairs, the Ministry of Justice, the Ministry of Education and Culture, the Ministry of the Interior, the Ministry of Social Affairs and Health, the Ministry of Finance, the Ministry of the Environment, and the Ministry of the Economic Affairs and Employment19. As regards to civil society, KANE includes “key sports and sports organisations, child and youth organisations, cultural and cultural organisations, social and health organisations, environmental and resident organisations, human rights and equality organisations, minority and immigrant organisations, and entrepreneur organisations, each of which is represented by one representative”. In addition, all members have deputy members and the CSO members’ deputies represent different organisations than themselves in order to increase diversity in the Board. The Advisory Board also includes a representative of informal civic activity, a representative of research on civil society and a representative of the Association of Finnish Local and Regional Authorities (Ministry of Justice, 2012[25]). The wide participation of associations in KANE’s work could be strengthened by investing in various forms of interaction and, for example, by using digital tools for online discussions, consultations and voting on outcomes. KANE could also reduce existing limitations on membership to make it more inclusive and representative of the evolving CSO landscape in Finland. The government could broaden the board’s membership and ensure it engages a greater number of small and medium CSOs, and those that have a watchdog and/or advocacy role. Lastly, KANE could also do more outreach work specifically among non-traditional actors, such as fourth sector activists, to gain insight into how the government can best support the operational environment for their activities.

This section provides an overview of the ways in which the state funds CSOs, with a focus on funding using Veikkaus proceeds as well as all public funding through the ministries and at the municipal level. The section then elaborates on several of the most common challenges in the enabling environment for CSOs in relation to the opportunities available for, and the limitations on, funding and fundraising in Finland. It also includes reflections on the impact of CSOs’ heavy dependency on public funding on their autonomy.

Significant amounts of funding from the Veikkaus gaming system are allocated to civil society organisations and leisure activities in Finland each year through government ministries, and as such it is a significant funder of civic space initiatives. The proceeds of this system are channelled to beneficiaries through three ministries, specifically: the Ministry for Agriculture and Forestry, the Ministry for Education and Culture, and the Ministry for Social and Health Affairs (Ministry of Finance, 2001[2]). The current Veikkaus company began operating in 2017, as a result of the reform of the Finnish gaming system and the merger of the previous three operators, Fintoto, Finland’s Slot Machine Association (RAY) and Veikkaus, into a single gaming company owned by the state.20 The purpose of the exclusive right given to Veikkaus for gambling (Ministry of the Interior, 2001, amendments up to 2019[3]) is to restrict competition between these services and to limit the total supply of games by limiting the number of game providers. In accordance with EU legislation, the most significant reason for the Finnish exclusivity system is to reduce and prevent the harms caused by gambling (including problem gambling, money laundering, exploitation, fraud and tax evasion) (Finnish Competition and Consumer Authority, 2019[26]).

In 2019 alone, Veikkaus distributed EUR 1 009 million of its proceeds to the state budget to be allocated to beneficiaries by the three ministries.21 Most of the funds are directed towards supporting leisure and community-based activities as well as health and social welfare activities. In this regard, the Ministry of Education and Culture funds youth work from the proceeds of gaming activities and budget funding. In addition to CSOs, the Ministry for Education and Culture also uses the company’s profits to give grants to municipalities, state institutions, individuals (including athletes and artists) and private companies.22 Furthermore, 9% of the proceeds of the Veikkaus system for the promotion of these activities are allocated to youth sector organisations, with the aim of strengthening the preconditions for civic activities among the youth.23 The immense amounts of revenue generated from the Veikkaus system funds provide the greatest amount of overall state aid for the sports and youth sector.24 For arts and culture, the funds provide about half of the overall state aid and for science, one-fourth of all state aid (mostly for universities) comes from the company’s proceeds.25

The distribution of Veikkaus’ total revenue in 2019 as outlined in its Annual and Corporate Social Responsibility Report (Veikkaus Oy, 2019[27]) is shown in Table 5.2.

The distribution of funding to each ministry for the last three years and the estimate of the total amount for 2020 is illustrated in Figure 5.3. In 2020, the Ministry for Education and Culture allocated EUR 568.1 million, while the Ministry for Social and Health Affairs distributed EUR 380 million. EUR 40.1 million was directed towards the equine industry and equestrian sports by the Ministry for Agriculture and Forestry.

One of the public bodies distributing the largest amount of public funding across the whole government is the Funding Centre for Social Welfare and Health Organisations (STEA). STEA operates as the granting body in connection with the Ministry of Social Affairs and Health and distributes funds on its behalf (Ministry of Health and Social Affairs, 2020[28]). CSOs can apply for grants from STEA to fund their work promoting health and social welfare to receive Veikkaus funds. Every year, STEA processes some 2 500 funding applications. Non-profit organisations and foundations must be registered to receive STEA funding. Non-profit limited companies and co-operatives are also eligible. These organisations can receive grants for general or targeted activities, development projects, introductory projects, and other projects with a defined purpose (Ministry of Health and Social Affairs, 2020[28]). An Assessment and Grant Division has also been functioning under the Ministry of Social Affairs and Health since 2017, with the task of evaluating and approving the allocation of funds based on the grant proposals prepared by STEA26. In addition, STEA commissions evaluations, for example, on the effectiveness of the overall grant system (STEA, 2020[29]).

Veikkaus is a monopoly burdened with an interesting dilemma: it primarily aims to prevent the harmful effects of its gambling operations, yet providing a good yield for worthwhile causes has become an important by product of its operations (Paajanen, 2019[30]). There has been recent debate in Finland as to whether the Veikkaus system of providing public funding for the third sector should be maintained, a subject on which CSOs have different opinions. For example, the Central Union for Child Welfare’s position is that Finland should defend the current funding system for culture, sports, science, and the social welfare and health sectors.27 However, other organisations such as the National Olympic Committee are calling for a new system, which is not connected to the gambling industry.28 Furthermore, the system has faced controversy over the company’s mission and corporate social responsibility, particularly the decentralised slot machines that are located in the hallways of stores and kiosks. Finns currently gamble more than any other nationality in Europe, spending an average of EUR 320 a year per person. They spend the largest sums of money on slot machines, which carry an elevated risk of gambling addiction and associated problems (Finnish Competition and Consumer Authority, 2019[26]). A Finnish Institute for Health and Welfare 2020 Report on Gambling revealed that 2.5% of those who gambled accounted for one-half (50%) of the total gambling expenditure in 2019 (Finnish Institute for Health and Welfare, 2020[31]).

To prevent the harmful effects of gambling, the Veikkaus’ Board of Directors has undertaken several initiatives. In 2020, the Board implemented a number of changes to improve its operating environment and promote responsible gaming. Consequently, the number of slot machines located at retail outlets such as service stations, stores, and restaurants was reduced from 18 500 to 10 500 (Veikkaus Oy, 2021[32]). Since January 2021, these slot machines have been subject to compulsory authentication which authorises retail outlets to set age controls and at the same time also allows players to set self-exclusion limits on their gaming for a fixed period of time (Veikkaus Oy, 2021[32]). Veikkaus has also established an Ethical Advisory Board and relaunched the early intervention programme to prevent gambling problems among its own employees (Veikkaus Oy, 2019[27]). These new social responsibility measures followed criticism of the company’s advertising and marketing strategy (iGaming Business, 2019[33]). Additionally, the company co-operates with the gambling helpline Peluuri and offers players a chance to be contacted and discuss their gambling problems or those of their families and friends with a professional. In 2019, Peluuri received 860 contact requests through the Veikkaus service (Veikkaus Oy, 2019[27]). However, a recent Bilendi Oy survey discovered that 34% of its 1 000 respondents found the company’s efforts to decrease the incidence of problem gambling and mitigate its effects to be inadequate (Simmons, 2019[34]).

The Finnish Competition and Consumer Authority has remarked that direct beneficiaries of funds raised through Veikkaus’ operations can sometimes have an indirect influence on policymaking regarding gambling matters, as some CSOs receiving funding are represented on the Gambling Advisory Board (Finnish Competition and Consumer Authority, 2019[26]). (iGaming Business, 2019[35]). The Authority warns that this may encourage some organisations to work in a way that maximises the funds they receive, rather than to minimise and prevent harms related to gambling (Finnish Competition and Consumer Authority, 2019[26]). It should nevertheless be stressed that the Advisory Board is primarily a forum for exchanges of information as well as consultation.29 It is not a regulatory or supervisory body and does not make decisions concerning regulation. In parallel, offering positions on the Board to key beneficiaries may constitute a conflict of interest, which could be an obstacle to truly impartial decision-making on the Veikkaus system. Hence, the European Court of Justice has also emphasised the importance of regulatory oversight in identifying potential conflicts of interest in Finland, given the fact that public bodies and CSOs are often simultaneously working to both increase gaming revenues and reduce gambling opportunities (Ministry of the Interior, 2019[36]). The government could review whether these issues pose an obstacle to unbiased policymaking on gambling revenues and consider the potential benefits of reducing these risks by directing gambling revenues to the state budget.

In the early 2000s, the National Audit Office (NAO) audited the former lottery and betting company Veikkaus as well as the operations of the Slot Machine Association. While the results are not directly applicable to the modern-day company, the process illustrated the benefits of external auditing and oversight. At the time, NAO auditors found that the external control by the Ministry of the Interior was “non-existent” and stated, for example, that there were insufficient resources to carry out such controls (Paajanen, 2019[37]). Following the audit, additional provisions on control were incorporated into the Lotteries Act.30 Today, Veikkaus funds exist outside of the standard parliamentary budget and are not subject to inspection by the NAO. This is because in the case of state-owned enterprises, the NAO tends to audit the state’s ownership of the company in question, instead of the company’s day-to-day operations. Thus, the status of Veikkaus as a company affects its ability to be audited by the NAO (Paajanen, 2019[37]). However, other options could achieve similar results in uncovering areas for improvement in the system and opportunities for reform. The Ministry of Education or the Ministry of Finance could undertake a system-audit or evaluation, for example, and use this information to steer Veikkaus. This would also promote openness and transparency and highlight ways to make the system more effective by assessing the distribution and use of resources as well as their current oversight. Furthermore, the NAO could also decide to audit the new system as an external auditor, independent from the executive, as is done for other companies with sufficient stakes in public funding.

A significant issue with the current system is that Veikkaus funding is granted on a yearly basis, thus annual money flows are not guaranteed to CSOs. This fragmented and short-cycle approach hinders long-term planning for the organisations relying on these financial resources.31 The COVID-19 crisis has further highlighted the weakness of this system. Due to the pandemic, the overall receipts from gambling activities have plummeted, mainly because gaming machines in public spaces were closed for several months.32 Consequently, the government is considering the compensation of these losses in the 2021 state budget. The current budget proposal for 2021, which was discussed in the parliament in autumn 2020, includes a provision to compensate the Veikkaus losses with reference to the level of receipts of 2019, meaning up to EUR 349 million.33 This challenge has raised calls amongst CSOs for a need for a long-term solution to solve the issue of funding34 should other health, social or economic crises arise that threaten proceeds yet again in the future. In this regard, the government could consider ways to establish a system which provides longer term funding to CSOs. They could introduce a way for ministries to retain a greater percentage of Veikkaus funding each year without the need to distribute all proceeds to all beneficiaries annually. This could provide a safety net for beneficiaries against potential shocks to the financial system. Furthermore, each year, vast sums of money are channeled through the ministries to CSOs with no overarching strategy or clearly outlined objectives for the funding. The government could consider taking a comprehensive strategic approach to all or a portion of the funding with specific aims that benefit society. It could also establish an all-encompassing evaluation system to boost understanding of the way funding is being used, whether the intended targets are being achieved, and the overall impact of the Veikkaus funds.

During the COVID-19 crisis and given the resulting decrease in revenue for Veikkaus, a broad-based working group was established to explore future options for the system. Their report, released in February 2021, proposes four potential solutions (Liikanen et al., 2021[38]). The first suggestion involves maintaining the current system wherein funding remains aligned with the level of gambling proceeds in any given year. The second solution would involve a one-off transfer to a universal budget so that expenditures would be covered through ordinary budget procedures. The third option is a significant overhaul of the entire system, which would begin in 2024 following significant preparation (Liikanen et al., 2021[38]). This would involve systematically transferring the Veikkaus revenue to the universal budget and subjecting expenditures to spending limits. Lastly, the fourth proposal would involve a partial reform, whereby some of the current beneficiaries would receive funding from the Veikkaus proceeds and some would receive funding through the state budget (Liikanen et al., 2021[38]). Given that each course of action raises unique challenges, the government should commit to taking this opportunity to consider the options outlined in the report with a long-term view and decide which solution would lead to a fairer and more effective and sustainable model of Veikkaus funding that would protect CSOs from abrupt changes caused by political cycles or other crises.

In some ways, the Veikkaus system is also hindered by a circular use of funds. Many of the most vulnerable societal groups are participating in gaming and a sizeable portion of the proceeds subsequently go to organisations that help these same demographics with issues such as addiction and gambling.35 To identify similar issues and assess the overall impact of this funding, the government could improve internal systems to ensure that the funding to CSOs is targeted as strategically as possible. In this regard, the government could create a centralised application process and recording system for CSOs receiving Veikkaus funding and consider establishing a portal to enhance transparency and quality standards across the three ministries distributing the funds. This would allow government officials to identify which CSOs and sectors are receiving funding and evaluate the effectiveness of their work (see next subsection for ongoing efforts).

In addition to the substantial amounts of funding available through Veikkaus, public funding from Finnish ministries outside of the system is also readily available for CSOs. For example, the Ministry of the Environment also grants discretionary government grants for environmental associations’ work and their budget was EUR 2.23 million in 2020.36 Public funding from Finnish ministries is normally granted either annually or is divided into programme support, which covers four years, and project-based support, which covers two years, as is the case in the Ministry for Foreign Affairs.37 Still, ministries do not publish data on funding of organisations in a co-ordinated and centralised manner across the entire public administration. For this report, the Ministry of Finance was unable to provide a holistic overview of public funding to CSOs from the national budget and a breakdown by ministry to the OECD. Thus, overall figures relating to public support for civil society as a whole are not included in this chapter.

It is important to note that the government is in the process of making ongoing improvements to the state system of funding (Government of Finland, 2020[11]). State grant activities were the subject of various evaluations from 2015 to 2018. Based on these, the government recognised that there is a great need for the development of the state grant system. The complexity and cross-administrative nature of public funding calls for closer cross-sectoral co-operation in the targeting of state aid (Government of Finland, 2020[11]). There are state aid activities in all branches of government, but the activities are decentralised and siloed. The grant processes and the related operating models are partly unjustifiably different from each other and the development of state aid activities would benefit both applicants and grantors. In spring 2019, the Ministry of Finance set up a five-year development project to develop the state grant activities. The aim is to increase the effectiveness of state grant operations by enhancing the transparency and openness of grant operations. The ministry also aims to make the application process for grants simpler and promote co-operation between the awarding public authorities (Government of Finland, 2020[11]).

Firstly, a key area of concern outlined by CSOs is the lack of a centralised system for applying for public funding across the government and ministries. This means that in practice, different ministries have their own guidelines for applying for, using and reporting on grants. In addition, grant applications, forms and other materials can differ and are also interpreted differently across ministries. Likewise, the content of the forms and the processes may also change completely and unpredictably, even year-on-year.38 All of these issues unnecessarily complicate the activities of associations and consume time that could otherwise be spent on their core activities. The situation also threatens to weaken the ability of smaller associations to operate if they do not have enough skilled staff to handle the bureaucracy (Demos Helsinki, 2020[19]). This disadvantages many of the smaller organisations that do not have the capacity nor the time to apply across ministries with varying application forms, methods of applying, and established deadlines.

Furthermore, a recent Demos report also notes that there is often little to no justification for allocation decisions (Demos Helsinki, 2020[19]). Ideally, associations should have the opportunity to learn from the application process through some form of feedback following the resource and time-intensive application process (Demos Helsinki, 2020[19]). Furthermore, because there is no transparent and holistic overview of public funding to civil society from the government, it is more difficult for CSOs to assess which kinds of organisations and activities receive the most public funding, which would allow them to learn from their modes of operation. The aforementioned project at the Ministry of Finance aims to offer tools to make this system more compact39 and will also openly show how many organisations are applying for funding and what percentage receive this funding.40 In addition to these efforts, the system could be made more transparent by creating mechanisms for public officials to provide even informal feedback to CSOs so that they can learn from the process and improve for subsequent rounds.

CSOs remarked that they could use more information on the criteria that lead to successful applications.41 While criteria for public funding are clearly necessary to ensure the quality of the chosen organisations and a responsible use of public resources, practices differ substantially across ministries and some can be unnecessarily restrictive. One such example is that the Ministry of Economic Affairs and Employment only provides budget funds to CSOs that work on issues surrounding corporate social responsibility if they have members that represent registered companies.42 In addition, the criteria for granting funding often places an emphasis on the provision of welfare services, which leaves fewer opportunities for advocacy or watchdog CSOs, for instance. Some watchdog CSOs working on these issues find it to be an unfair conflict of interest, especially as there have been instances of corporations and chambers of commerce calling for boycotts of CSOs that are critical of their practices.43 In this regard, the government should review whether criteria for funding disproportionately caters to CSOs with more of a service provision role, making it difficult for watchdog organisations to apply.

Ministries could also learn from good practices from one another and other public bodies in this regard. As an illustration, STEA has a highly developed website which publishes the grants for each year with the amount of funding given and the corresponding body to which they were awarded (Funding Centre for Social Welfare and Health Organisations, 2020[39]). The Ministry of Education and Culture has a less extensive tool which also allows interested parties to access annual grantees (Ministry of Education and Culture, 2020[40]). The government could thus use these examples to consider the creation of an operating model that ensures a regular dialogue between civic actors and the funding counterparts, for instance on changes in the operating environment of civic activities, the future direction of state grants, available forms of support and funding, and information on reporting and evaluation.

Activists and CSOs are also calling for greater mobility among the decision-making personnel in ministries to prevent the same public officials taking decisions over several years.44 Grants from ministries tend to be most substantially concentrated towards a few large organisations whose activities are funded from year-to-year, as well as directed towards organisations based in large cities.45 There is a need for more internal mobility so that the same public officials are not responsible for the same funding decisions for years on end on highly politicised terrain. Grant decisions should have some form of external or independent review from other teams or public officials in another department in order to reduce the concentration of power in the hands of a small number of decision makers and to enhance transparency and accountability. It was also stressed that granting of public funding was often based on shared history, cosy relationships and “traditional” partners, which implies that important emerging interests and needs, for example grassroots movements on climate change and environmental issues, are sometimes under-represented.46 In general, more flexibility and movement within the entire public sector would allow for more cross-ministerial dissemination of good practices and expertise on a variety of policy areas.

As briefly acknowledged in relation to the Veikkaus proceeds, the wider system of public funding is also short term and sometimes volatile in Finland. A 2020 KANE report noted that both the number of grants and the amount of public funding available to the third sector have decreased at both the national and the municipal level in recent years, although the role and importance of the sector has steadily increased (Ministry of Justice, 2020[17]). Organisations are concerned about the deteriorating financial situation of the municipal government level in particular, which continues to make it more difficult to obtain grants (Ministry of Justice, 2020[17]). Anticipating the receipt of grants has therefore become more difficult due to short-term funding and many CSOs are suffering from this lack of stability. For both small and large organisations that are only eligible for two-year project funding, the brief time period for these grants leaves little time for strategic long-term planning. Additionally, the system of funding can be impacted by external shocks, for example the COVID-19-related Veikkaus cuts and the politicised cut of the Ministry for Foreign Affairs’ funding in 2015 (discussed below) as well as health and economic crises. There is a need for the government to develop a long-term solution to solve the issue of public funding for CSOs with a secure system that is less vulnerable to external shocks. In the same way, the government could create opportunities for and incentivise diverse kinds of funding (e.g. tax incentives for individual donors, corporations, philanthropic foundations) for CSOs to diversity their sources, reduce their dependence on public funding and strengthen their independence. In general, there is currently a discontinuity in learning on public funding and a lack of carry-over mentality due to political cycles. Thus, establishing a better system of ongoing strategic foresight planning for the future could be beneficial.

Finnish society benefits greatly from the numerous organisations across the country that are committed to improving citizens’ lives and their communities. While almost all of these work in the public interest, there is a need to keep stock of the activities of those receiving public funding. Currently, there is little to no formalised or systematic vetting across the government of organisations or their use of funds once they are registered and begin to receive regular public funding year-on-year, which has led to rare instances of organisations being forced to return money. For example, the Ministry of Education and Culture decided in June 2019 to cancel and reclaim a total of EUR 115 000 from the Finns Party Youth after it was informed of a series of racist posts on their social media. Its activities had been publicly financed since 2008, reaching an overall amount of EUR 731 000 over the past decade.47 In 2020, the Finns Party Youth reapplied for funding, but received 15% less than the previous year. The ministry noted that the funds granted to youth organisations are based on an assessment of their application and their planned activities for the coming year and considers their actions during the previous year, stating that: “The Finns Party Youth were assessed according to same criteria as everyone else”.48 This situation illustrates the need for ongoing oversight of organisations and their activities once they have been granted funding as well as some strategic direction as to what these funds aim to achieve for Finnish civil society and whether they are meeting these objectives. That said, the Ministry of Education and Culture does receive regular feedback from other CSOs and ordinary citizens on any concerns they may have regarding state-funded activities. However, there is currently no centralised monitoring system for these groups49. The government should ensure policy coherence at all levels of government by verifying and monitoring that the activities of CSOs receiving public funding are aligned with the fundamental values outlined in the Constitution and relevant legal and policy frameworks (e.g. through spot checks or by having an established feedback mechanism for the public to report concerns).

Given the substantial amount of public funding available to CSOs from the government, several ministries undertake monitoring and evaluation of beneficiaries and their activities. However, there is no systematic evaluation of public funding that applies across all ministries. Most tasks related to evaluation are undertaken by the individually responsible ministries, namely the Ministry of Justice, the Ministry of Education and Culture, and the Ministry of Social Affairs and Health. For example, the Ministry of Education and Culture monitors the effectiveness and appropriateness of the use of grants and the effects of state grants. A report on the use of the state grants must be submitted to the Ministry of Education and Culture by the deadline specified in the grant decision. Based on the Youth Act, the Ministry of Education and Culture nominates an Evaluation and Grant Committee for a four-year period. The committee makes an annual proposal to the ministry on the distribution of state subsidies from national youth organisations and national youth competence centres. Furthermore, at the request of the ministry, the committee conducts evaluations on the activities of the assisted organisations (Ministry of Education and Culture, 2020[41]). Regarding the Ministry of Social Affairs and Health, the applicants’ previous use of grants and the results, as well as their future plans, capacities and general eligibility are assessed by STEA on a yearly basis.50 Every year the recipients of grants also have to report on their use of funds in the previous year in a very detailed manner. In addition, STEA regularly carries out inspections of recipients’ activities.51 Similarly, the Ministry of the Environment oversees grants to environmental associations and is in charge of monitoring and evaluating this area while the Ministry for Foreign Affairs monitors the respective functions in the area of development policy.

As the current approach is siloed and has varying levels of quality, the government could commit to creating cross-ministerial guidelines on the monitoring and evaluation of public funding through ministries. It could also promote good practices from ministries with the most experience in performing these evaluations. As acknowledged above in relation to the Veikkaus system, the government could establish a systematic way of evaluating and assessing the funding of civic activities to ensure it is allocated in the most optimal ways. There is also a need to create quality standards and indicators at the national level for public funding applications to ensure that expertise and value-add are prioritised instead of historical or long-established relationships.

As aforementioned, registered associations are traditionally the most common embodiment of civil society in Finland and non-institutionalised civic activities have historically been rare. The structure of associations as outlined in the Associations Act is thus heavy and represents the “old world” to many CSOs, which means that many informal organisations or groups of activists often avoid registration, as it does not seem to align with their activities. The heavy financial reporting involved for those who do have the capacity is also a significant deterrent. Furthermore, CSOs report that too many resources are channelled towards procedures for applying to funds and reporting on their activities.52 It is clear that there is a need to establish bureaucracy-free regulation and practices concerning voluntary work and other activities of CSOs to the extent possible. Some related strategies for sectoral ministries were created in 2011, for example, in the Ministry of Education and Culture, but they need to be updated to take new informal organisations and ways of operating into account while outlining provisions to safeguard their autonomy.53 These smaller organisations often do not have the human or financial resources to complete the application process or the reporting necessary to ensure that they maintain their funding. The reporting requirements have also increased, which causes problems, especially for non-professional organisations. The government could thus ensure that ongoing discussions on reforms to the Associations Act result in a simplified and fairer administrative system, particularly for smaller associations. The reforms should reflect the need for regulations to consider different forms of organisations to ensure that smaller associations can flourish and contribute to Finnish society. As is intended, it should also adequately reflect the new digital era and adapt to and highlight the use of technology and remote participation in the future, while also prioritising the importance of in-person consultation to remain as inclusive as possible for all stakeholders.

As previously reported, under the former Money Collection Act, CSOs faced heavy restrictions on their ability to fundraise in Finland. Some CSOs suggested that large well-established organisations benefitted from these restrictions as they dominated the market.54 As mentioned above, a positive step in the right direction has been the new amendment in the Money Collection Act, which allows smaller organisations and individuals to raise EUR 10 000 up to twice a year. However, one member of the fourth sector mentioned that there is not much awareness of this change and few are availing of the opportunity.55 The government could launch awareness-raising activities, including campaigns and information-sharing sessions, to ensure that news of the reform is well-disseminated and that organisations and activists know how to seek and apply for this funding, which is especially useful for smaller CSOs.

Historically, social movements and the state have enjoyed a close relationship, in which civil society and the state are perceived as partners rather than as social counterparts (Alapuro and Stenius, 2010[42]). While this provides a wide range of benefits to their relationship and ensures productive co-operation and a willingness to collaborate between actors on both sides, it can also pose questions regarding the autonomy of CSOs. This is significant, as KANE considers autonomy to be “a fundamental starting point for the role of NGOs in strengthening inclusion and democracy”. According to KANE, this means that “the activities of citizens and non-governmental organisations cannot be instrumentalised, and the demarcation between the private and public sectors remains clear” (Ministry of Justice, 2020[17]). Furthermore, several Finnish government and civil society interviewees during the OECD fact-finding mission noted that the country faces a challenge of well-established and historically important CSOs dominating the policy-making scene (Siisiäinen, 2015[43]). The think tank Libera argues that these organisations form a type of shadow or semi-public sector, which are more reminiscent of the public sector than civil society in terms of their governance and operating models, and they tend to have more influence over the policy-making process than small and medium-sized organisations (Libera, 2017[44]). The government of Finland is also aware of the impact of narrowing autonomy as one of the main challenges to civic space. Finland’s background report (Government of Finland, 2020[11]) to the OECD mentions the narrowing autonomy of civil society organisations. The government also noted its concern that civil society activity has shifted more to the fourth sector and to self-organising networks operating through social media and the possibility that the nature of CSOs as actors of social change may weaken as a result (Government of Finland, 2020[11]).

There has been a growing trend in Finland and globally over recent decades which sees governments relying on CSOs to deliver government-funded services (CIVICUS, 2011[45]). In many advanced economies, the government has become the major source of financial support to CSOs, turning them into key actors in the delivery of a wide range of public services. The COVID-19 pandemic in particular was instrumental in demonstrating the status of CSOs as vital stakeholders in addressing the health, social and economic crises with crucial knowledge and awareness of their communities’ needs as well as institutionalised processes for accessing citizens and vulnerable groups most in need of emergency relief, medical supplies and other forms of aid. In Finland, there were initial challenges in government support for CSOs that act as service providers and have business-like revenue during the COVID-19 crisis, as relief funds were primarily aimed at organisations with significantly decreased revenues56. While the government subsequently clarified the situation, it could have proved disastrous for many CSOs57. That said, in general, co-operation between the authorities and CSOs was described as exceptionally good in the midst of the crisis by the range of participants involved in the government’s “Finnish National Dialogues” project (see Chapter 6) (Erätauko, 2020[46]) and by SOSTE’s 2020 Social Barometer (SOSTE, 2020[47]). While this level of partnership can bring many benefits to the status of civil society, CIVICUS finds that for these organisations, “a gap between high levels of activity and medium levels of impact emerges” (CIVICUS, 2011[45]). CSOs often struggle to raise themselves from a service delivery role to an influential role in shaping policy, and this affects their role as a critical watchdog of the public sector (CIVICUS, 2011[45]). It is vital, for the COVID-19 recovery and beyond, that the government outlines clear processes for civil society involvement of both kinds58.

In Finland and worldwide, there is an ongoing and increasingly important debate among CSOs with reference as to whether this movement towards service provision is a positive or negative evolution. In the 2018 SOSTE CSO barometer, which received responses from 80 national organisations, 970 local organisations and 195 dissolved organisations, only 58% of the responding social and healthcare organisations felt that their autonomy was sufficient, compared to 80% in 2016 (SOSTE, 2018[48]). In one sense, there is concern that organisations are less autonomous and critical as they work on behalf of, or in partnership with, government. Even when they are not in service provision roles, there is a concern that their reliance on public funding means they are less able, or likely, to critique government policies and perform a watchdog role. Other organisations, and especially those in certain sectors – such as health and social welfare – would like to safeguard and enhance their role as partners of the government, especially as reforms to this system are ongoing. As an example, the Central Union for Child Welfare is concerned about protecting its areas of work from private sector actors who have less expertise.59 CSOs also worry that they cannot compete with cheaper private sector providers as the costs involved can often be a determining factor instead of quality standards and suitability.

Post COVID-19 crisis, the increased capacity of CSOs to reach citizens that governments sometimes have difficulty in adequately supporting may influence governments to procure the services of CSOs more often in the future and ultimately further solidify the status of these organisations as service providers and strategic government partners. The OECD report Together for Better Public Services: Partnering with Citizens and Civil Society specifically focuses on the innovative approach to service delivery based on partnerships with civil society, users, and wider citizens (OECD, 2011[22]). These approaches, which are also referred to as co-production, can offer “creative policy responses that enable governments to provide better public services in times of fiscal constraints” with efforts leading to “cost reductions, better quality of services and improved user satisfaction” (OECD, 2011[22]). They can also contribute to seamless government, which takes action to eliminate points of friction between governments and those they serve and can enable the government to re-orient and better adapt their services to match public needs. Collaboration and co-creation between government, civil society and citizens can then lead to improved operating models and services (OECD, 2020[49]). In this regard, the government could develop a holistic civil society strategy with tangible measures to engage with and support CSOs while protecting their autonomy. This should include a concrete approach to safeguarding the role of certain CSOs – especially those in the health and social welfare sector – as service providers as well as protecting the ability of CSOs to also influence policy and remain as critical and independent organisations.

In response to their instrumentalisation by the government as service providers, many associations have professionalised in order to be eligible for public funding. Through public funding, organisations are more clearly linked to public sector goals and requirements (Demos Helsinki, 2020[19]). The Demos report stressed that the main obstacle to autonomy outlined by CSOs was the donor’s policies, requirements and detailed intervention in the work of the organisations (Demos Helsinki, 2020[19]). Additionally, in order to receive public funding, CSOs are expected to outline their objectives, and show evidence that they are moving towards set goals, bringing about the desired change, and outline how targeted groups have benefited from their activities. Project-based funding also tends to direct CSOs towards performing certain activities or tasks rather than those that are more relevant to their mission and objectives. This has weakened the civil society character of organisations and, at the same time, their ability to operate flexibly and innovatively. As a result, CSOs are being co-opted to some extent by the state for its own purposes, sometimes damaging their autonomy and creativity because of their dependence on public funding. In the wake of the COVID-19 crisis, the autonomy of CSOs may now be under further duress, given that many of these organisations have necessitated more public support than before60.

Many small or voluntary organisations also currently feel some pressure to formalise due to the inability to get funding if they are not sufficiently “professional”. While professionalism is not a negative development in itself, it can mean that volunteer-based organisations and those in the fourth sector have trouble securing any governmental support.61 There is also a danger that professionalisation as well as the adoption of private or public sector characteristics will begin to replace the purpose of civil society as based on membership and member democracy (Demos Helsinki, 2020[19]). This issue was further exacerbated by the COVID-19 pandemic, as there is concern that some informal networks and connections have been permanently lost due to restrictions on physical assembly62. Professionalisation which leads to increased hierarchy in CSOs can affect their credibility by undermining the voice and individual influence of the citizens involved and can risk discouraging further participation in civil society. Relatedly, it seems that the consolidation and concentration of the organisational structure of CSOs is one of the goals of the state administration. According to some CSOs, the Ministry of Education and Culture constantly strives to encourage mergers of organisations, the elimination of duplication and the streamlining of operations for more efficiency (Demos Helsinki, 2020[19]). While more efficient operations are always welcome, there is a need to ensure the heterogeneity of civil society and that the individual mandate of each organisation remains intact.

Thus, the challenge for the government and civil society is to strike a balance between fostering autonomy and surviving financially by taking advantage of the extensive public funding that is available in Finland. As private and self-governing entities, CSOs can define the purpose, objectives and operating models for their activities. Yet, the amount of public funding available and the reliance of a broad range of organisations on this funding poses questions about the extent to which CSOs’ activities are directed by the government. It is clear that when public funds are distributed, their use must be directed to sensible targets and their responsible use must be monitored. However, in order to guarantee the autonomy of civil society, the government should consider whether donors could allocate a larger share of current funding to innovation, experimentation and development projects. In this regard, the government could also allocate and distribute a share of grants with more flexible regulations, allowing a certain proportion of funding to be distributed with more freedom for CSOs to develop activities independently in line with overarching goals.

The regional and municipal levels in Finland are also dedicated to providing support and funding to civil society. The six regional state administrative agencies (Regional State Administrative Agencies, 2020[50]) work in close collaboration with local authorities. The agencies’ mission is to “promote regional equality by carrying out executive, steering and supervisory tasks laid down in the law” (Regional State Administrative Agency, 2020[51]). To this end, they aim to strengthen the implementation of basic rights, access to essential public services, environmental sustainability and protection, and public safety to provide a high standard of living in the regions. Regional state administrative agencies grant funding to youth work, libraries and sport projects with over EUR 50 million annually. Funding is granted to civic space actors as well as to municipalities, corporations and other registered organisations (Regional State Administrative Agency, 2020[52]). In addition, Finnish municipalities have a strong mandate for self-government, which is based on local democracy and the desire to keep decision making close to the citizens affected. As a result, they are also active partners and financial supporters of the CSOs in various sectors in their respective local communities (Association of Finnish Municipalities, 2020[53]).

Therefore, at the local level, public bodies are well-placed to harness the knowledge of civil society to create better funding processes given their proximity, with benefits for both the public sector and the third sector. The joint formulation of grant applications between public officials and CSOs can offer one route to more effective public funding. As highlighted by The GovLab, the quality of a grant’s design can greatly determine the quality of applications received as well as the ultimate success of the projects that are funded (The GovLab, 2016[54]). In this sense, it is crucial to detect the most pressing challenges so that funding can then be directed to the most worthwhile projects, which have identified ways to combat them. In these initial stages, openness to outside input from key stakeholders has the potential to bring wider expertise – including on-the-ground knowledge and experience – when determining where and how to fund (The GovLab, 2016[54]). The municipal level is often where the most innovative approaches to public funding take place (Box 5.2). The government could encourage innovative forms of public funding at the national level taking good practices from the local level, such as the co-design of public grants in the City of Helsinki and the hybrid financing initiative in the City of Tampere.

Finland’s strong commitment to strengthening civil society extends to its support for CSOs through its development co-operation, illustrating a great degree of policy coherence in this area both within Finland and abroad. The Ministry for Foreign Affairs is in charge of development co-operation and CSO funding. It provides funding for both Finnish CSOs and international NGOs that contribute to the achievement of Finland’s development policy goals and to strengthening civil societies. The background report completed by Finland for this Civic Space Scan highlighted the central aim of the ministry in strengthening civil societies in developing countries and supporting developing countries’ own organisations to perform their basic duties related to the provision of services, advocacy work and communications (Government of Finland, 2020[11]). Significantly, a recent OECD report on support for CSOs shows that while some countries only fund CSOs who deliver the donor’s projects, Finland also funds CSOs to implement the CSOs’ own projects (OECD, 2020[57]). The most recent OECD data on development funding reveals that some of the most common causes supported by Finland are democratic participation and civil society, human rights, women’s rights, education, and promotion of development awareness.63 CSOs are key partners of the Ministry for Foreign Affairs. Fingo, an umbrella organisation of 300 CSOs in Finland working in the areas of development co-operation and global education, also works to influence policy making, strengthen the status of its member organisations and increase citizens’ understanding regarding the importance of global development (Fingo, 2020[58]).

The Ministry for Foreign Affairs’s Guidelines for Civil Society (Ministry for Foreign Affairs, 2017[59]) provide guidance for Finland’s efforts in strengthening civil societies in developing countries as part of its development policy and steer the work of the Ministry for Foreign Affairs and Finnish civil society actors towards achieving the goals of Finland’s development policy. The basic premise of the guidelines is that “independent, vibrant, pluralistic and polyphonic civil societies create the prerequisites for the peaceful participation of citizens in society and for the realisation of human rights” (Ministry for Foreign Affairs, 2017[59]). The guidelines also highlight the need to actively defend civic space globally. These guidelines are the basis for allocating programme-based funding and project funding, of which approximately 80% is programme-based.64 In terms of the application round, there has been increasing emphasis on the strengthening civil society aspect in the last two years.65 As outlined in the current government programme, Finland will also promote the realisation of their shared values with the European Union in relation to development co-operation. In this sense, they will demand that “the payment of subsidies to member states, such as structural fund payments, be tied to adherence to their fundamental values” (Government of Finland, 2019[5]).

The Ministry for Foreign Affairs has a specific way of looking at development co-operation funding and makes a distinction between development co-operation and the exclusive budget for official development assistance (ODA).66 The appropriations are divided into two categories, with the first being the exclusive ODA budget item administered by the ministry and the second being all other development co-operation. The ODA administered by the ministry includes, for example, bilateral development co-operation between Finland and its partner countries, Finnish support granted to UN agencies, international development banks, Finnish CSOs and humanitarian assistance abroad (Ministry for Foreign Affairs, 2021[60]). Development co-operation covers Finland's contribution to the European Union’s development co-operation budget, expenses related to the reception of refugees and other budget items that fall under the category of development assistance in various administrative sectors (Ministry for Foreign Affairs, 2021[60]). It also includes an estimate of investments considered to fall under development co-operation by Finnfund, which is a Finnish development financier, and an estimate of other development policy investments. The share of development funding for CSOs from ODA specifically is projected at 10.5% for 2021 (Figure 5.4).

In 2020, EUR 1 032 million was reserved for development co-operation appropriations under the state budget with the exclusive ODA budget item administered by the Ministry for Foreign Affairs set at EUR 675 million. CSO funding falls under the ODA budget item. This is significant, as while ODA has been increasing again in the recent years, the exclusive budget item for CSOs has not similarly increased as a percentage of total development co-operation (Figure 5.5). This is partly due to the trend of emphasising private sector collaboration and loan instruments, in addition to Finland’s share of the European Development Fund (European Commission) not being administered by the ministry.67

Civil society funding in 2020 was EUR 75 million and the current government budget proposal (which still needs approval from the parliament) for 2021 is EUR 79 million. It is still far from 2015 levels, when that support stood at EUR 114 million.68 This makes the amount 6.6% of overall ODA the lowest percentage in almost 20 years.69 While levels of ODA have increased year-on-year, the budget line specifically for CSO funding has been decreasing since 2015. However, it is important to note that the current government programme emphasises that funding for development co-operation projects aimed at CSOs will be stepped up (Government of Finland, 2019[5]). The government could reprioritise civil society financing in development co-operation to build up the capacity and autonomy of local partners and could dedicate additional human and financial resources to the CSO unit of the Ministry for Foreign Affairs.

Finland ranked surprisingly low in the 2020 Aid Transparency Index (Publish What You Fund, 2020[61]), which measures how well donors comply with the requirements of the International Aid Transparency Initiative (IATI) – of which Finland was a founding member. The Ministry for Foreign Affairs ranked 29th among the 47 donors in the index, which is published by Publish What You Fund (Publish What You Fund, 2020[61]). The findings illustrated that the timeliness, quality and coverage of the data published by the Ministry for Foreign Affairs have improved. Everyone can now access basic data, including project descriptions and information on funding, soon after project funding decisions are taken and budget information is also published comprehensively on the ministry’s website (Ministry for Foreign Affairs, 2020[62]). As a result, the quality of open data and information that can be used comparatively should also improve in the coming years. Publish What You Fund recommends that countries in the “fair” category, such as Finland, make transparency a key priority henceforth (Publish What You Fund, 2020[61]) and the Aid Transparency Index recommends that development co-operation donors invest in the publication of project results and impacts and raise awareness in partner countries about the data that are currently available. The latest OECD Development Co-operation review of Finland also mentions that there is scope to further improve some aspects of transparency in reporting (OECD, 2017[63]).

The ministry highlighted that the lack of performance data is not a question of political will, but rather of unsuitable and outdated information management systems that cannot make the vast amount of data as clear, accessible and user-friendly as is necessary.70 In addition, Fingo noted that it can be difficult to identify the public officials administering each project or programme. Much of the preparatory work behind funding decisions is done in Finnish embassies abroad, but no information is publicly available regarding ongoing funding negotiations and who is responsible for them.71 Although the ministry has great policy guidelines on promoting civil society through development co-operation, there is a need to establish better information management systems in order to collect and publish performance data. Making data and statistics available and more easily accessible through a centralised portal would allow support for civil society funding by the Ministry for Foreign Affairs to be evaluated systematically. The ministry could also follow the aforementioned good examples of the websites available from STEA and the Ministry of Education and Culture, which give additional information on public funding, annual grantees and related activities.

Similarly, to the wider system of public funding, support for civil society funding by the Ministry for Foreign Affairs is seldom evaluated. However, one significant process recently was an evaluation of the effectiveness of programme support among 22 Finnish CSOs. The evaluation was done in three parts in 2016-2017 (Ministry for Foreign Affairs, 2020[64]) and raised a number of challenges, one of them being that there were several issues with regard to the transparency of application outcomes. It also found that achieving policy objectives had suffered despite the focus on enhancing the capacity of local civil society due to the little information available on impact (Ministry for Foreign Affairs, 2020[64]). Moreover, Fingo noted that most information can be requested from the ministry, but it would be much more useful if it were proactively published online.72 In addition, the ministry does not have a portal that compiles all relevant information and statistics regarding development co-operation. CSOs mentioned that they usually need to search for attachments to a press release on the website or check if an implementing partner funded by Finland has published the project or programme document including the financial breakdown per donor. This is a work in progress at the ministry, which recently undertook an evaluation on knowledge management: How Do We Learn, Manage and Make Decisions in Finland’s Development Policy and Cooperation (Ministry for Foreign Affairs, 2019[65]). The Ministry for Foreign Affairs is using this evaluation to develop its “management of results-related information and knowledge in order to strengthen evidence-informed learning and decision making at all levels and in all channels of its development policy and cooperation” (Ministry for Foreign Affairs, 2019[65]). The Ministry for Foreign Affairs could commit to furthering its assessment of development co-operation activities to CSOs by committing to regular evaluations and impact assessments such as the most recent processes from 2016-2017.

The general challenge of the lack of human and financial resources in the CSO unit of the ministry was also mentioned in the evaluation with the recommendations calling for increased collaboration and co-ordination between CSOs receiving programme support and the ministry to identify ways of improving their outcomes. With adequate resources, the Ministry for Foreign Affairs could undertake more advocacy work on the state of civil society including planning, monitoring, evaluation and learning development, especially on the use of theory of change and in enhancing evaluation skills, identifying cross-cutting themes, and consistently adapting and improving the ministry guidelines on programme support.73 The Ministry for Foreign Affairs recently consulted CSOs and asked for their contributions towards an updated format for reporting on their activities which led to an improved system for both the ministry and CSOs. Similarly, the ministry published information and guidelines for civil society in English for the first time in the most recent application round, which had been requested by CSOs to ease their communication with international partners.74 There is thus significant commitment to improving existing processes and it is clear that the ministry is open and flexible regarding the development of instruments for additional engagement with civil society; however, it is sometimes difficult to advance progress in the aforementioned processes given the insufficient resources at its disposal.75 The government could thus consider allocating additional human and financial resources to the CSO unit of the ministry in particular to ensure its continued strengthening of civil society abroad, specifically. This would allow Finland to ensure they can fulfil the extensive and important commitments they have made to further expand their support for civil society abroad. For example, through engaging CSOs from their own country and from their partner countries when preparing partner country strategies or partnership frameworks, and through promoting an enabling environment for CSOs as an agenda item when discussing development co-operation with partner country governments (OECD, 2020[66]).

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Notes

← 1. The review of the legal frameworks section draws from and summarises the information provided in a background report prepared by the Library of Congress for the Civic Space Scan of Finland. See (Library of Congress, 2020[67]).

← 2. Interview, Ministry of Justice, 5 October 2020.

← 3. Interview, Ministry of Justice, 5 October 2020.

← 4. Interview, Ministry of Justice, 5 October 2020.

← 5. SOSTE, CSO submission, 31 August 2020.

← 6. Interview, Ministry of Justice, 5 October 2020.

← 7. Email, Ministry of Interior, 11 March 2021.

← 8. Interview, EFFI, 24 September 2020.

← 9. Interview, EFFI, 24 September 2020.

← 10. Email, Ministry of Interior, 11 March 2021.

← 11. Small-scale fundraising to support a business activity or to accumulate wealth for a legal person is prohibited under the Money Collection Act.

← 12. Email, Ministry of Interior, 11 March 2021.

← 13. Email, SOSTE, received 19 January 2021.

← 14. Email, SOSTE, received 19 January 2021.

← 15. Interview, fourth sector activist, 24 September 2020.

← 16. Interview, fourth sector activist, 24 September 2020.

← 17. Interview, fourth sector activist, 24 September 2020.

← 18. Interview, Ministry of Finance, 22 September 2020; interview, Advisory Board on Civil Society Policy, 24 September 2020.

← 19. Ministry of Justice, email received 12 March 2021.

← 20. The earlier competition between the three monopoly companies in the Finnish gambling market was seen as problematic from the point of view of EU legislation and the monopoly right of the Finnish gambling system due to excessive marketing, which was seen to encourage these activities to an unhealthy extent (Finnish Competition and Consumer Authority, 2019[26]). In the European Union, a gambling monopoly is permitted when it is the best solution for the member state, in addition to safeguarding public order, security and public health, in preventing the harm caused by gambling (Finnish Competition and Consumer Authority, 2019[26]). In addition, EU law requires the organisation of a gambling monopoly to be consistent, systematic, rigorous and effectively regulated, which must monitor the realisation of the legitimacy of the monopoly in a dynamic way (Finnish Competition and Consumer Authority, 2019[26]).

← 21. Email, National Audit Office, received 3 February 2021.

← 22. Email, SOSTE, received 9 March 2021.

← 23. Email, Ministry of Education, received 2 March 2021.

← 24. Email, National Audit Office, received 24 September 2020.

← 25. Email, National Audit Office, received 24 September 2020.

← 26. SOSTE, email received 9 March 2021.

← 27. Central Union for Child Welfare CSO submission, 31 August 2020.

← 28. Interview, Demos Helsinki, 6 October 2020.

← 29. Email, Ministry of Interior, 11 March 2021.

← 30. National Audit Office, email received 24 September 2020.

← 31. Interview, Ministry of Finance, 22 September 2020.

← 32. Interview, Ministry of Finance, 22 September 2020.

← 33. SOSTE, CSO submission, 31 August 2020.

← 34. SOSTE, CSO submission, 31 August 2020.

← 35. Interview, Ministry of Finance, 22 September 2020.

← 36. Email, Ministry of Environment, received 28 September 2020.

← 37. Email, Ministry of Finance, received 16 November 2020.

← 38. Interview, STEA, 25 September 2020.

← 39. Interview, STEA, 25 September 2020.

← 40. Interview, Ministry of Education and Culture, 29 September 2020.

← 41. Interview, Ministry of Education and Culture, 29 September 2020.

← 42. Interview, Fingo, 24 September 2020.

← 43. Interview, Fingo, 24 September 2020.

← 44. Interview, Chancellor of Justice, 30 September 2020.

← 45. Fingo, CSO submission, received 1 September 2020.

← 46. Interview, Chancellor of Justice, 30 September 2020.

← 47. Ministry of Education and Culture, email received 1 October 2020.

← 48. Ministry of Education and Culture, email received 1 October 2020.

← 49. Interview, Ministry of Education and Culture, 29 September 2020.

← 50. Email, SOSTE, received 9 March 2021.

← 51. Email, SOSTE, received 9 March 2021.

← 52. Email, SOSTE, received 9 March 2021.

← 53. Fingo, CSO submission, received 1 September 2020.

← 54. Interview, EFFI, 24 September 2020.

← 55. Interview, fourth sector activist, 24 September 2020.

← 56. Email, Demos Helsinki, received 23 January 2021.

← 57. Email, Demos Helsinki, received 23 January 2021.

← 58. Email, Demos Helsinki, received 23 January 2021.

← 59. Central Union for Child Welfare, CSO submission, 31 August 2020.

← 60. Email, Demos Helsinki, received 23 January 2021.

← 61. Fingo, CSO submission, received 1 September 2020.

← 62. Email, Demos Helsinki, received 23 January 2021.

← 63. Email, OECD Development Co-operation Directorate, received 28 July 2020.

← 64. Fingo, CSO submission, received 1 September 2020.

← 65. Fingo, CSO submission, received 1 September 2020.

← 66. Interview, Fingo, 24 September 2020.

← 67. Fingo, CSO submission, received 1 September 2020.

← 68. Fingo, CSO submission, received 1 September 2020.

← 69. Fingo, CSO submission, received 1 September 2020.

← 70. Interview, Ministry for Foreign Affairs, 22 September 2020.

← 71. Fingo CSO submission, received 1 September 2020.

← 72. Interview, Fingo, 24 September 2020.

← 73. Fingo CSO submission, received 1 September 2020.

← 74. Fingo CSO submission, received 1 September 2020.

← 75. Fingo CSO submission, received 1 September 2020.

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