NGOs that operating in Azerbaijan merely relying on charitable donations and grants from various local and international donors. Unfortunately legislation in Azerbaijan do not provide any incentives and mechanisms to promote philanthropy. Tthere are no tax deductions for philanthropic activities for business companies.
Besides high taxation levels significantly decrease financial sustainability of local NGOs. This is one of the major difficulties that impede the development of civil society, because vulnerable financial performance of nonprofits could negatively influences citizens’ involvement in social activities. According to Law, NGOs and charitable organizations can engage in economic activities, but their income would be taxed as commercial organizations.
We believe that introduction of the concept of the Social Entrepreneurship will be very beneficial and would give new impulse to the development of financial sustainability of local NGO’s in 21st century. There are two important features that define social enterprise. First they have a social goal and second they merge social and commercial methods. Social Entrepreneurship will allow NGO’s to execute socially important projects and programs without dependence from external donors. For example, let assume that parents of disabled children who established a nonprofit organization want to produce specific clothes or accessories to generate any possible source of income. The business companies and ordinary public in the region where this nonprofit registered can buy their production. This project might not only bring additional funding to organization, but would also give the opportunity for NGO be financially independent.
Another example might be when initiative group which working with unprivileged youth groups can open the special courses to educate young people from vulnerable groups of population in manufacturing inexpensive office furniture. This will be real example of the social enterprise, because NGO can gain income from selling this furniture to various small and medium sized enterprises. Besides young people who will be working there will have more-less stable source of income and most importantly will be far away from potential anti-social behavior. In addition, for the generated income this nonprofit might fund other activities addressing problems of youth.
Social Entrepreneurship can benefit not only the organization itself but a whole society. These efforts would take off the burden from government agencies in providing social services to vulnerable groups of population, and will increase the efficiency of nonprofit organizations. The stronger are nonprofit organizations the stronger would be the Civil Society that consist of these organizations.
Community Foundation is another form to encourage philanthropy at the local level, since it obtains its assets from contributors in a particular urban or rural community. Community foundations are pooling local financial resources into endowment and usually addressing problems in health and human service programs which will contribute to the social and economic development of a particular community in a long-run.
There are some traditional forms of civil society within Azerbaijani culture which are very similar to contemporary community foundations. These are unions, elders’ councils which also gathered members of community and are non-organized structures of mutual support to carry out common social tasks and activities.