Draft bill
May 2004

Plan of action for the implementation of the Concept for the Development of the Estonian Civil Society for 2004-2006

Introduction

The Concept for the Development of the Estonian Civil Society (approved by the Eston ian
Parliament, December 2002) specifies the mutually complementary roles of the public
authority and citizen initiative and the principles of co-operation for shaping and
implementing public policies and building up a civil society in Estonia. The general aim of
the document is to express common understanding of the public authority and the non-profit
sector about cooperation as social partners in order to build up a civil society and a social
economy in Estonia with the active participation of its citizen s.

The plan of action for the implementation of the Concept for the Development of the
Estonian Civil Society (below: Concept) for 2004-2006 summarizes the work done so far by
a joint commission of the government of the Republic of Estonia and the repres entatives of
the citizens’ associations and it sets forth the most important actions for the implementation
of the Concept which are feasible and promote activities supporting future choices for
developing this field.

1. Background

The plan of action draft ed to implement the Concept is based on the analysis of the current
situation mapped by the joint commission of the government of the Republic of Estonia and
the representatives of the citizens’ associations (below: Commission) and on the proposals
submitt ed to the Commission for the improvement and development of the situation in
Estonia.

Both the representatives of the public authority as well as of the citizens’ associations found
in their working groups that in order to create a conducive atmosphere for solving the
problems and promoting citizen initiative it is crucial to adopt a comprehensive approach to
the field – the assessment of the effectiveness of the existing and established structures as
well as the analysis of different possibilities, their advantages and disadvantages in making
further choices. Only then is it possible to put forward concrete proposals for introducing
changes to develop legislative space, funding schemes and supporting networks, which
promote citizen initiative.

The plan o f action for 2004-2006 contains activities which are concerned with the analysis of
the existing legislative framework and the established practices, a more detailed examination
of the problems, the identification of interests, the dissemination of informa tion to the public,
the framing of the proposals and the initiation of various pilot projects. While drafting the
plan of action, the area -specific problems emphasized by the members of the Commission,
the proposals submitted by the working groups as well as the existing possibilities of the
organizations implementing the activities were taken into account.

The priorities dealt with by the working groups were 1) legislation regulating citizen
initiative , 2) involvement of citizens and citizens’ associations in the decision-making
processes , 3) financing of citizens’ associations , 4) statistics , 5) civic education and 6) public
awareness .

1.1. Legislation
The domains most often discussed, which were related to the legislation regulating the
activity of th e citizens’ associations and the problems pointed out in the corresponding
working group, were connected with the funding schemes of the citizens’ associations and the
established forms of citizen initiative. The most important laws regulating the different forms
of citizen initiative in Estonia are the Non -Profit Associations Act (NPAA) and the
Foundations Act (FA). In addition, there is the Law of Obligations Act, which, in Article
580, Section 1, establishes that, in contract of partnership, two or more persons (partners)
undertake to act to achieve a mutual objective and to help to achieve the objective in the
manner established by the contract, above all by making contributions.

The representatives of the self -initiated citizens’ associations are of t he opinion that their
treatment on the same basis as, for example, the associations of business organizations is not
justified. It was pointed out that the non-profit organizations and foundations created by the
public sector cannot be treated as civic ini tiative organizations and their activity does not
need support or promotion. The experts Merusk, Olle and Saaremets (2004) think that if, in
view of the public interest, the public authority will have to – for some reason and on some
basis – delimit the ex isting non-profit organizations, for example, with the aim of funding the
activity of these organizations, it will achieve this by applying corresponding criteria to the
existing forms of non-profit organizations. The experts think that the introduction of the
concept of the citizens’ association into legislation would not solve the real problems, rather,
it might damage the principle of legislative clarity.

The citizens’ associations have also referred to a problem that partnerships do not exist as
indep endent legal entities. It has not been specified which of their activities cannot be
implemented because of the existing partnership regulation and why some other form is not
chosen for implementing their activities. The issue of the necessity of regulating voluntary
activity has been raised. The reason for this is that there have been attempts to solve arising
problems on the basis of single cases, but this does not make it possible to solve all the
problems connected with organizing voluntary work in the uniform manner. The
representatives of organizations involving volunteers in their activities are not satisfied that
the term “volunteer” lacks the definition and content which is clarified by legal norms and
protected by law.

The idea of a partnership m eans, above all, that it is not necessary to create a legal person
governed by private law for implementing all the activities, however, the representatives of
citizens’ associations have pointed to the problems related to the financing of their
organizati ons, the division of responsibility for a supported activity and the controlling of the
outcomes that are encountered in practice. In the area of probation supervision and in
arranging victim support a legalized possibility to use volunteers and its exact regulation has
justified itself, but there is a lack of uniform understanding of the need and scope to regulate
cross -domain voluntary activity keeping in view that the overregulation of volunteer activity
may change the content of the activity in public interest based on altruist goals.

Although the introduction of additional regulations may not always be useful, it is necessary,
in view of the signals about the problems emerging in citizen initiative practice to analyze
more thoroughly the background of and the reasons for the drawbacks and to find possible
solutions for the removal of hindrances to citizen initiative activity, either by drawing
proposals for the amendment/improvement of the existing legal framework or by conducting
a comprehensive publicity campaign in order to introduce the existing legal regulations and
the possibilities of how to use them more widely.

1.2. Involvement
Despite the wider recognition of the principles of interest group involvement, there is a lack
of uniform principles appli cable to involvement processes by different institutions and a more
detailed overview of the existing practice of involvement, which, in its turn, makes the
decision-making process as a whole less transparent. One of the problems is the uneven and
inadequa te knowledge of the need and of various methods of involvement that the institutions
and officials of the public sector have; for this reason they are not able to use the existing
possibilities for the shaping of the processes.

In view of the abovementioned drawbacks two projects on involvement have been initiated:
an Estonian-Danish joint project “The strengthening of co-operation between the Estonian
public sector and the organizations representing the entrepreneurs” commissioned by the
Ministry of Economic Affairs and Communications, whose coordinator on the Estonian side
is the Estonian Association of Non-profit Organizations and Foundations, and the Praxis
Center for Policy Studies is carrying out a project on “Involvement and consultation in the
deci sion-making process – research, analysis and recommendations”. The results of these
projects are an important input into establishing the general principles of citizen and citizens’
associations involvement in order to promote cooperation between different national sectors
and governmental institutions for the establishing of good involvement customs and
practices.

An important element in establishing the involvement schemes is the cooperation between
the representative and umbrella organizations of the non-profit sector and the representatives
of the governmental sector. The role of the umbrella organizations is their capacity to involve
more citizens and interest groups in the process, deliver professional and area -specific
competent opinions. To promote cooperation in the field of consultation with representative
and umbrella organizations as important channels of information it is necessary to set down
the criteria of umbrella organizations and specify the schemes of representing interests. At
the same time the principle that each organization has the right to represent their interests
independently must be borne in mind.

Over the past years several internet -based portals supporting participatory democracy and
promoting involvement in decision-making processes have been opened, which, however, do
not often fulfill their basic task because of the lack of awareness and skills of the citizens:
they have little knowledge of the legislative process as a whole and the different possibilities
of involvement; th e habit of writing relevant proposals and commentaries and their
submitting is not yet developed. Thus the proposals in the interactive portals, if they are not
moderated, are often inapplicable. The result is that the interaction facilities function more as
information channels and not as consultation channels. To guarantee the effectiveness of the
involvement process, above all, keeping in view the principles of consultation, it is important
to start from the evaluation of the objectives of the existing l egislative fora (Themis, TOM,

etc.), the possibilities they offer, applicability, real outcomes and practices in order to get an
overview of the situation, develop the internet-based facilities for participating in the
legislative process, simplify involve ment process for the citizens and citizens’ associations.

1.3. Financing
The funds for the citizens’ associations activity are made up from membership dues, from
public sector appropriations through contracts for grants, target financing or rendering
services, from project grants financed by local and international foundations, from the
revenues received from the sale of the products/services or from the donations of private
persons and businesses. The indirect sources are the tax allowances and non -monetary aid.
An important resource for the associations is the time and work contributed by their members
and volunteers.

Although the membership dues are one of the most important sources of income for the
associations, they are mostly symbolic, as they do not cov er all the necessary operating costs
and they do not allow the organization to develop or expand its activity. In order to create
conditions for active civic involvement in social life, it is important to consider the
possibilities of supporting citizen initiative directly or indirectly from the state budget funds.

The existing financing of the citizens’ associations from state budget funds is in practice
domain-oriented and there is a lack of uniform principles and rules of procedure for applying
for funding, allocating funds and later accountability. Although the domain specificities do
not allow complete similarity, the lack of uniform general principles leads to
misunderstanding, decreases comprehensibility and confidence in the decisions that have
been taken, and in the transparency of the financial decisions. Inefficient is the assessment of
the effectiveness of the activities financed from the state budget, for which there are no
uniform criteria. (The financing of the citizens’ associations from the state budget in 1998-
2001, Ministry of the Internal Affairs, 2001:
https://www.sisemin.gov.ee/atp/failid/Kodanikeyhenduste_riiklik_rahastamine.rtf)
. In order to
g uarantee transparency, to control the achievement of the objectives and to assess the
effectiveness uniform rules of procedure, which take into account the domain specificities,
must be laid down.

In restructuring the systems of financing, the rules and t he procedures it is critical to have the
review of the existing financing schemes supporting the development of civil society, the
analysis of needs and possibilities. The representatives of the associations have pointed out
that the established traditions of financing from state budget funds and, for example, the
Gambling Tax Act, have put some areas and their organizations into an advantageous
position. The existing Gambling Tax Act establishes fixed rules for the distribution of sums
according to the areas, less attention has been paid to the description of the decision- making
process, which, in the opinion of the representatives of the associations, is not considered to
be sufficiently transparent, creating dissatisfaction and distrust towards the decisi ons taken by
the Council. It is essential that the distribution of funds should be flexible and take into
account the emerging needs and changes in the society.

The financing of the execution of public tasks by citizens’ associations, the search for suita ble
schemes and agreement about uniform principles is a cross -domain need and for this
cooperation between different ministries as well as regular cooperation of the public sector
with the representatives of the citizens’ associations should be strengthene d. Although

financing is mostly area- and activity -based, cooperation between the ministries for the
achievement of related objectives in financing citizens’ associations has not been sufficiently
developed. The aim of the analysis of financing schemes has been to find the best solutions to
guarantee the purposefulness and the maximum effectivenes of financing, but also to
economize on administrative costs.

Over the years some organizations have become important partners for the ministry
coordinating a spe cific domain. For an effective partnership it is necessary to establish
possible mutual contributions, rights and obligations. It is not to be forgotten that
consultation and the collection of different opinions often require additional resources
(temporal , human, monetary, etc.) from both sides, which must be taken into account in
cooperation. The expenses related to the representation of the interests and opinions of the
organization cannot be covered by single project -based grants.

The first steps to de velop taxation policy which promotes citizen initiative and makes charity
possible have been taken – on the basis of Article 11 of Income Tax Act the list of nonprofit
associations and foundations has been approved by the government of the Republic of
Esto nia, the inclusion of an association in this list means, for example, that it is exempt from
fringe benefit, that the donated sum is deducted in a certain amount from the taxable income
of a self -employed person, etc. In addition, the associations included in the list have various
reliefs from customs duty.

It is necessary to study the awareness of the population about the possibilities created with
income tax incentives and their use of these possibilities, to analyze how taxation policy
affects citizen i nitiative, evaluate the effectiveness of chosen solutions, describe the
advantages and potential problems. For example, volunteer activity might involve some
expenses, which, as fringe benefits, are taxable within the framework of the existing
legislation, thus restricting the involvement of volunteers in the activities of the associations.
The experience and example of other countries are not directly applicable within the Estonian
system of taxation; however, the applied solutions deserve review and compa rison, in order
to create a vision of possible changes in the taxation system concerning Estonian associations
and their donations.

In the existing Estonian legislation the concepts of public interest and private interest are not
clearly defined. The dif ferentiation between organizations which act in public interests and
the non-profit organizations and foundations that act in private interests (in the interests of
their members) is important in order to promote the establishment and development of
organi zations of citizen initiative, which act in public interest and support domains in which
they operate. It is also important that the principle of uniform treatment will not be violated
by those who have organized through citizen initiative but have risen i nto prominence by
satisfying their private interests. The public interest is defined to a certain degree in Article
11 of the Income Tax Act, however, the conditions under which associations are listed as
benefiting from income tax incentives, which this A rticle establishes, do not differentiate
sufficiently between organizations acting in public interests and those acting in private
interests.

At the initiative of the representatives of the citizens’ associations a bill to amend Article 11
of the Income Tax Act has been drawn, which specifies the concept, obligations and rights of
an organization acting in public interests and the method of the inclusion in the list of

associations benefiting from tax incentives. It is necessary to promote cooperation in order to
find a suitable and comprehensive solution to the application of the principles set out in the
bill.

1.4. Statistics
In order to guarantee the transparency of the activity of nonprofit organizations and
foundations certain legislative regulations have been established in the Nonprofit
Associations Act, in the Foundations Act as well as in special acts: the nonprofit
organizations and foundations are entered into the registers of nonprofit organizations and
foundations, which are kept by the registry de partments of county and city courts about the
nonprofit organizations and foundations in their jurisdiction. The entries in the register are
public and each person has the right to get acquainted with the index and the public file and
make copies of a docu ment in the index of the register or the public file. The existing official
data available in the register of the nonprofit organizations and foundations as well as in the
statistical register of economic units do not make it possible to get a full overvie w of the
activity of Estonian citizens’ associations or of the number of active organizations. There are
no data about partnerships, the data do not reflect the number of persons working for
nonprofit organizations or foundations and other data related to volunteerism. As a number of
different definitions are used to describe the sector (the broadest being the legal definition),
the number of active organizations in the overviews about the sector is different. The
opinions as to the suitability of using the classifications of the domains of Estonian economic
activity for describing the nonprofit sector differ.

A further objective of the activities in the field of statistics might be the creation of a data
bank for the nonprofit sector or a special statisti cal register of citizens’ associations, which
would comprise all the organizations (nonprofit organizations, foundations, partnerships) and
would enable to classify the data in various ways. In the current public economy account kept
by the Statistical Off ice the nonprofit organizations and foundations “dissolve” between the
different institutional sectors and the information collected about them does not take into
account the specific features of the nonprofit sector. Facilities should be developed in orde r
to consolidate the data of the existing sources of information (Statistical Office, Tax Office,
ministries, domain -specific umbrella organizations).

To examine the current situation of citizen initiative and the attitudes of the population new
studies for data collection should be initiated and questions concerning the activity of
citizens’ associations should be included in regularly conducted population surveys (for
example, the questions about volunteerism in the household surveys, the questions
conc erning employment in the nonprofit sector in the employment surveys, etc.) Above all,
the strengthening of cooperation of corresponding institutions is needed in order to consider
possible solutions to solve the emerging problems.

1.5. The teaching of civics
The problem in the teaching of civics is an overemphasis on the teaching of the prescribed
topics and issues through factual knowledge and as centered around “pure knowledge”. In
view of the principal idea of the subject it is necessary to shape it so that it would prepare
students for life under the conditions of developing democracy and civil society and would
teach them how to cope with everyday life as a citizen. The syllabus of social science – the
areas that are dealt with, the number of classroom hours and the teaching materials that are
used – should be reviewed. The students think that the historical dimension, an overview of

the field of economy and the differentiation between entrepreneurship and the so-called
social economy should be included in the syllabus. The methods of active learning offer
several possibilities, as, instead of dealing out factual knowledge they focus more on the
development of social skills (communication and debating skills) and everyday skills (the
search and processing of information, presentation, cooperation, analysis and decision-
making skills). The use of active learning methods is not encouraged because of the scarcity
of classroom hours and the large number of topics in the syllabus, but also because of the
uneven quality of teaching skills and uneven knowledge of different possibilities. Although
the work in the classroom depends largely on a particular teacher, clearer guidelines or
instructions should be incorporated either into the syllabus or into some other document as
long as the teachers are not prepared to find new methods for dealing with the topics
independently.

An important contribution to the acquisition of everyday skills is the practical experience
obtained by the students. For example, young people e asily adopt the ideas of volunteerism,
but for perceiving volunteerism as a value young people should have competent direction and
supervision as well as the idea, the possibilities and the needs of volunteerism should be
explained to them. For presenting the topics and conducting classes outside the classroom,
the existing networks should be made us of and cooperation between different structures and
schools (school -youth center/hobby center- local government) should be promoted. The
experience of other co untries shows that those who have encountered the idea of
volunteerism at an early age and have gained positive experience, get involved in helping
others and in volunteer work later as well, be it social work, environment protection or some
other area.

N otwithstanding an urgent need for continuing education for teachers, the use of existing
possibilities is very uneven and as the system of continuing education as a whole is market –
oriented, the social science area is very often neglected by the teachers and school leaders
when selecting courses and participating in them. In order to emphasize the need to integrate
civic values into different syllabi and classes and to introduce the possibilities to do this, the
school leaders should be given special attent ion.

As the subject of civics, the methods used to teach the subject, the teaching materials and
modes of teaching change quickly in practice, it is necessary to observe, analyze and assess
the process of the acquisition of knowledge and skills by the students, which is not possible
only within the framework of level tests and examination papers. A good opportunity
presents itself when the methods applied in the 1999 international research on the teaching of
civics will be used for conducting a repeat surv ey. A special analysis should be made of the
command of different social science topics by the civics teachers in both Estonian- language
and Russian- language schools.

1.6. The support structure of citizen initiative and public awareness
The level of citizen in itiative and the sustainable development and professionalism of
citizens’ associations depend on many supporting factors such as information flow, the
existence of consultation and advisory services, opportunities for cooperation, financing,
leaders, etc. Unlike single associations, the networks and structural parts find it more difficult
to operate and maintain their sustainability if they are project -based. The state has established
the network of development centers in the counties, which also offers various services to
citizens’ associations, but there is too little information about the services offered by the

centers and the existing services package does not support or guarantee the promotion of
systematic cooperation and partnership arrangement in the field.

While the citizens’ associations are capable of finding resources for performing various
activities (write project applications, carry out projects), the activities, which are necessary
for the development of the organization itself, are not usua lly supported by funding. The
government of the Republic of Estonia has worked out a program of local self -initiative,
which is a substantial contribution to the citizen initiative at local level; however, there is a
need to develop a uniform state -supported concept/long -term program to enhance citizen
initiative and civic participation. In order to promote and develop citizen initiative support
structures it is necessary to agree on the measures which would support the existing networks
of citizen initiative and voluntary community activity and enhance the professionalism of
citizens’ associations by integrating the existing possibilities with necessary additional
possibilities.

In enhancing popular awareness and shaping attitudes and values, media has an essential role
to play, by now the possibility of disseminating civic knowledge – rights and obligations –
through media has been a resource which has little been use. It is essential to find
possibilities to cooperate with both public and independent cha nnels, to express under
different rubrics the possibilities for citizen involvement in the shaping of living
environment, to introduce the existing channels for participating in the decision-making
process, to disseminate information about activities initi ated to promote civil society and
their effectiveness, point out good examples about citizen participation and citizen activity.
An essential resource for enhancing public awareness is the modern infotechnological
facilities – several internet -based information resources have been established – it is possible
to give a better overview of the concepts and topics concerning citizen initiative.

The idea of launching the Civil Society Research and Development Center concerns the
establishment of a central org anization which deals with the research of the area and the
analysis of the developments and processes, while bringing together the experts, researchers
and teachers active in the field. The center would help to shape uniform programs, which
promote civil society, civic education and the third sector, as well as educational programs
and curricula (both for formal and informal education), on the one hand, having a practical
output in developing the educational system, on the other hand, conducting research a t
academic level. The idea of the establishment of the Civil Society Research and Development
Center is based on the current analysis of the area and on the fragmentation of the current
activities as well as on the need to improve the dissemination of info rmation and to promote
the cooperation of relevant organizations.

1.7. The promotion of cooperation between the government of the Republic of Estonia
and the representatives of citizens’ associations
Cooperation between the government of the Republic of Estoni a and the representatives of
citizens’ associations with the objective of identifying the area -specific problems concerning
civil society, of considering different solutions and drawing plans of action, of consulting and
exchanging information has acquired a systemic beginning with the establishment of a joint
commission. The members of the Commission have been convened following the principle of
representation; the actual work is done in the working groups. In order to implement the plan
of action drafted by the Commission it is essential that the representatives of relevant
institutions and organizations and experts should be involved in the work of the joint

commission, above all, through the working groups. As the areas that are dealt with are very
different, it is useful to make the actual work more working -group-based, while the
Commission would have an advisory role and the right to review the work done in the groups
and take the final decision, as well as the right to ask opinions and to arrange consultations
with those involved in a broader circle.

The work of the Commission so far has shown that it is also necessary to consider the
communication schemes for informing the public about the work of the Commission, for
disseminating information about t he topics under discussion, for broadening the circle of
those consulted and for enhancing the effectiveness of the consultation process. For a better
representation of the interests of the associations mechanisms should be found to guarantee
two -sided inf ormation flow within the organization represented concerning the application of
the Concept. To represent the opinions of the government of the Republic of Estonia it is
important to develop an approach to the drafting of action programs, which is based on the
common understanding of the needs and possibilities by the governmental sector.

2. Plan of action
In view of the area -specific problems described by the working groups, the readiness of the
organizations participating in the work of the Commission and their real possibilities, a plan
of action based on the priorities set out in the Concept uniting the domains and containing
eleven objectives was drafted for 2004-2006 (Appendix 1).