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Funding Gaps and "Money Laundering"

In times of increased criminalization and depleting funding sources, the financial burden on NGOs is immense. More and more NGOs urgently call for donations to prevent closure. A recently published report by the Greek Anti-Money Laundering Agency aiming to portray non-profit organizations as criminal organizations only contributes to the mounting pressure.



The financial reality of NGOs in the midst of crackdown and intimidation


Over the past weeks, news articles have been circulating in Greek media with headlines reading “How NGO managers siphon off funds” and “NGO file: the Money Laundering Authority opens the "abscess". Behind these headlines lies a report by the Greek Anti-Money Laundering Agency which investigates the supposed involvement of NGOs in money laundering activities. “100 NGOs, including some with a particularly active presence in assisting migrant populations seeking asylum in Greece, have allegedly been put under the microscope of the Independent Authority". That NGOs are under close surveillance of public agencies in Greece is no news, however accusations of money laundering are somewhat of a new twist and utterly unfounded. Money Laundering is a serious offense, describing the concealment of the origins of illegally obtained money. Such accusations thus suggest that humanitarian NGOs active in Greece are engaging in criminal activities or that their humanitarian work constitutes a crime in itself. While legally unsubstantiated, this goes a long with anti-immigrant narratives which have also formed the basis of judicial persecutions of humanitarian workers, like Sean Binder and Sarah Mardini.


The 16-page report entitled “The Abusive Exploitation of Nonprofit Organizations” presents the apparent “methodologies for laundering the funds obtained from the illegal activity”, ranging from purchasing real estate to managers or beneficiaries of the NGO using the income of the organizations to cover their living expenses, as well as the costs of maintaining their homes. he The apparent “illegal activity” from which NGO funds were supposedly obtained is not specified. Since it was published in May 2023, the report has been picked up by a few Greek media outlets and it might best be taken with a pinch of salt. Not least because much of the disclosed information is vague enough to incite a great degree of confusion. Besides the lack of detail about the violations and “crimes” these NGOs have supposedly committed to obtain funds, there is no indication whether the 100 NGOs mentioned were officially notified of being under investigation nor how NGOs could find out if they are.


How serious the report is and what consequences it might carry remains to be seen. What we do know is that the named investigation inserts itself in a long line of practices both through general policies and targeted cases contributing to a systematic crackdown on NGOs working with people on the move.


Increased intimidation of NGOs


In recent years, NGOs and human rights defenders have been increasingly targeted, intimidated, and criminalized through increasing surveillance, judicial harassment, smear campaigns, and public defamation. As documented by the Observatory for the Protection of Human Rights Defenders and FIDH, “the Greek investigative authorities [often leak alleged criminal investigations] initiated against migrants’ rights defenders to the media, creating a climate of fear and a chilling effect among all rights defenders. In several cases, the human rights defenders have not been informed nor summoned to testify.”


The financial investigation described above fits well into the line of practices that seek to undermine the work of NGOs and denigrate their reputation. Yet, accusations against NGOs claiming that they are seeking to profit from their work with people on the move, are far from the precarious reality of NGOs' finances.


The reality of NGO finances


Over the past two years, “urgent calls for donations” and “save us from closure” posts have become more and more frequent. NGOs particularly in mainland Greece are under immense financial pressure with many at serious risk of closure.


Indeed, avenues for renewed funding have become scarce. Most commonly, NGOs source funding from private donors, grants, companies and occasionally from partner organizations on the ground. Rarely EU or government funding. The dependency on donations or subsidies, which means a regular high workload in addition to the daily work, creates a situation that makes long-term financial and thus also existential planning difficult or almost impossible.


EU Funds for Asylum and Migration are directed through national governments towards NGOs. Yet, as the Civic Space Report 2023 affirms, the Greek government has yet to include CSOs in the implementation of these funds.


The lack of EU and government support is hardly surprising. A 2020 law requiring NGOs to register with the Ministry of Asylum and Migration in order to continue operating, puts a significant hurdle and financial burden on NGOs. The extremely long and resource-intensive process is one that can only realistically be carried out by large institutionalized NGOs like the Red Cross. It involves obtaining an ISO certification, which costs several thousand euros and is normally issued to private businesses to validate adherence to global standards of quality assurance and manufacturing. During registration, organizations are also required to present audited accounts, which involves a substantial financial investment that few NGOs are able to commit to. Even those who have the financial ability (or take the financial risk) to obtain all needed documentation, have been rejected. With increased surveillance of NGOs in recent years and hopes of a successful registration close to zero, there is also little interest in sharing information with the government.


“We are all competing for the same grants”


Open calls for projects from human rights oriented foundations were the NGO's lifeline for a long time. Foundations such as Safe Passage or Choose Love made incredible contributions to a huge number of grassroots NGOs working to defend the rights of displaced people. These days, foundations have disclaimer messages on their websites, such as “Applications not possible until further notice” or “Open calls are closed early”.


With the Taliban Takeover in Afghanistan, the start of the War and Ukraine, and the recent Earthquake in Türkyie and Syria, other terrible crises have taken center stageUnderstandably, a lot of funding has been redirected to these areas. Therefore, foundations focusing on the EU external border countries and the Balkans are also rapidly depleting their funds. For the few open calls and grants that remain available to grassroots NGOs, there is a huge amount of competition.


“We are all applying to the same grants, as there are so few open calls available.” is a recurring sentence and a well known truth among NGOs in mainland Greece.

As a result, foundations are overwhelmed by the vast amount of applications and struggle to process them, forcing them to close calls early or make difficult choices on where to allocate funding. Those who are lucky enough to receive a grant face a new challenge: Grants are usually restricted or so-called “project-based funding”, meaning the money must be used to cover the cost for a specific project, such as dry food or material for NFI distribution, for a determined period of time. It cannot cover so-called “core funding” that includes salaries, rent, or electricity.


With little other option, NGOs increasingly rely on direct donations and crowdfunding - hence the frequent “urgent calls for funding”. However, since Covid, purchasing power has gone down significantly and supporters are less ready to commit to regular donations, especially as they are often former volunteers, students or early career professionals, with limited funds for their own.


In Constant crisis mode


The lack of available funding has significant effects NGOs’ sustainability, planning, and impact. As a result, they are trapped in a perpetual crisis mode, with uncertainty about how long the projects can be sustained. This is out of line with the general directions most NGOs are envisioning for the future. After almost 8 years of existence, humanitarian organizations have become aware of the need for consistency and sustainability of their projects, both for the people they are designed for as well as volunteers, coordinators, and board members. In better financial years , such as 2018 and 2019, many NGOs took steps to formalize their activities, improve working conditions for coordinators, and plan projects for the long term, seeing as the situation for people on the move was not looking to improve any time soon. However, the lack of funding has greatly impeded this development.


The consequences are significant, particularly as NGOs fill important gaps left by the Greek state. When projects are run on the basis of uncertainty for the future, NGOs must make tough choice, on where to cut costs, what groups to include in certain programming, and they are unable to promise that they will be able to pay the rent and provide services in the next month. To people relying on NGO support for basic needs like food, such uncertainty means immense psychological stress. Organizations in mainland Greece are relying on each other to keep projects alive with material donations and exchanges, but those can only go so far.


Besides the negative impact on projects, lack of core funding and the perpetual crisis mode affect the intrinsic functioning of NGOs. Stipends and salaries for coordinators remain extremely low, making it hard to make a living in the midst of high inflation in Greece. This obstructs recruitment processes, reinforces precarious working conditions and fosters exclusivity to certain privileged groups. Coordinators may be unable to afford to stay in their role for an extended period of time, again impacting the consistency and sustainability of certain projects. Low salaries, lack of office space and other benefits also impede NGOs efforts to localize, as they are hardly able to attract local staff. As a result, administrative operations often continue to be run by volunteers or founding members working from afar.


In the midst of an increasing crackdown, the financial situation of NGOs in mainland Greece is bleak. Intimidation, public defamation and accusations of criminal activities, such as money laundering, place NGOs in extremely difficult positions, making it harder and harder to access already limited funding. With government support for people on the move shrinking by the minute, the closure of NGOs would leave significant gaps in the reception system and may be detrimental to the protection of human rights.

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