Financial sustainability of civil society organizations is one of the most important components for the development of the civil society sector. In most countries, the biggest financial support for the CSOs comes from foreign donors, and as a result of this, the development of the sector is directly dependent from this support. With the decrease of funds from foreign donors, the sustainability and further development of the civil society sector is put at risk. Therefore, the governments of countries should not only be those that guarantee basic citizen/civil society organizations rights, they should also offer financial support for civil society organizations.

Bearing in mind the specifics of the civil sector, state fiscal policies should also have a special treatment for this sector. All CSO income that comes from donations – be that from international donors, private companies, membership fees etc. – should be exempted from tax. Fiscal benefits for businesses are also necessary to encourage potential private donors for the civil society. In democratic countries, civil society is considered to be an important party in drafting and implementing state policies. Consequently, the development of this sector is seen as a strategic goal of the state. In this manner, the Governments reach decisions to establish various financial mechanisms that have a goal of developing the civil sector. ‘Public funds for the development of civil society’ is the most frequently used name for these types of mechanisms. Public funds are a state mechanism which must have transparent procedures with criteria previously agreed to by all the parties – Government, civil society and other relevant parties.