Organization and internal governance of CSOs
Internal governance of civil society organizations means principles, systems, rules, mechanisms and practices based on which an organization is run. Good governance means that principles and practices of internal governance provide a system of internal control which ensures that the leaders of the organization use the resources and their authority in an effective and accountable manner based on common values of the organization.
Although there are differences depending on the type of organization, some of the basic principles of internal governance are: the existence of a clear mission and of activities within that mission, the existence of internal structures with separate and clear responsibilities, division between governing bodies and management, regular financial management, transparency and accountability to stakeholders, work and conduct standards of ethics, etc.
CSOs internal governance in Kosovo is based on external legal and contractual obligations, and on internal principles. External obligations mainly include legal requests for registered CSOs in relation to formal internal structures and reporting obligations for various categories of organizations, whereas internal principles include systems of functioning based on values, statute, regulation, codes of conduct etc. Majority of legal obligations stem from the new Law on Freedom of Association in NGOs. Contractual obligations stem usually from the very moment support is given to the organization through funds or other assets, for which the organization using those is obliged to use them in accordance with contractual obligations. Internal principles are mainly determined through internal documents of those respective organizations and mainly come from governing bodies, members, supporters, partner organizations etc.
Most civil society organizations are registered as NGOs. Regarding the legal forms that determine the manner of organization and internal governance of the NGOs, these are divided into associations and foundations.
Associations are membership organizations, whereas foundations are established to manage an asset or fund, and as such have no members.
The highest governing body of an association is the Assembly of Members, which needs to meet at least once a year. All the members of the CSO (or in cases when the association is a network of a number of organizations, through a single member for each member organization) are represented in the Assembly of Members.
The highest governing body of a foundation is the Board of Directors, which must meet at least once a year. The Board of Directors is appointed by the founder of the foundation (only its first composition), whereas the members of the Board are elected by the Board itself.
After registering as an NGO, the form of organization cannot be changed.
Based on international principles of NGO functioning as well as the Law on Freedom of Association in NGOs, CSOs may undertake economic activities for the purpose of supporting its not-for-profit activities and under conditions that the income received through economic activities is to be used to achieve the mission and goals of the organization. Income from economic activities may, in no form or manner, be distributed to the leader or any member of the organization, with the exception of payment for the work done. Depending on the type of the organizations, in international practices there are set limitations on economic activities.
CSOs, depending on the type and level of organization, have different reporting obligations. As a rule, all CSOs must report regularly to the highest governing body of the organization. Reporting to state institutions is done only for fiscal/administrative aspects, any time a CSO is registered as a legal entity (NGO) and undertakes administrative activities or carries out payments and pays taxes. Only organizations holding a Public Beneficiary Status must report on yearly basis to the Department for Registration and Liaison with NGOs relating to their activities and finances. CSOs, at the time that they receive funds from a donor, are obliged to report to the donor on the manner and regularity of using those funds. The level of reporting to the donor differs depending on the rules of each donor.
Beyond obligatory reporting, CSOs may voluntarily expand the groups to which they report to, for the purpose of increasing public support for the work of the CSO and strengthening its activities.
Finally, each NGO is obliged to hand in a statement to the DRLNGO which confirms that its basic records have not changed, or to inform about changes to those records. If this statement is not handed in for 2 years running, the NGO will be deregistered, after a notice by the DRLNGO 60 days before the deadline. Also, in case of changes to the Statute of the NGO, all NGOs are obliged to present these changes to the DRLNGO.