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Exploring the Current State of Civic Space and Identifying its Need for a Favorable Legal Environment

CONCORTIUM

FULL REPORT
STUDY
CIVIL SOCIETY

EXPLORING THE CURRENT STATE OF CIVIC SPACE AND IDENTIFYING ITS NEED FOR A
FAVORABLE LEGAL ENVIRONMENT STUDY
1

CONTENT
CONTENT ………………………….. ………………………….. ………………………….. ……………….. 1
LIST OF TABLES ………………………….. ………………………….. ………………………….. ………. 2
LIST OF FIGURES ………………………….. ………………………….. ………………………….. ……. 2
LIST OF GRAPHS ………………………….. ………………………….. ………………………….. …….. 3
ACRONYMS AND ABBREVIATIONS ………………………….. ………………………….. …………. 6
FOREWORD ………………………….. ………………………….. ………………………….. ……………. 7
CHAPTER 1. TYPES AND ORIENTATION OF NGOs ………………………….. …………………. 8
1.1. Types and forms of NGOs ………………………….. ………………………….. …………………. 9
1.1.1. Regulation concerning types and forms of NGOs ………………………….. …………… 9
1.1.2. Forms and number of NGOs ………………………….. ………………………….. ………. 12
1.2. Fields and scope of NGO activities ………………………….. ………………………….. …….. 14
1.2.1. Operational challenges ………………………….. ………………………….. ……………… 18
CHAPTER 2. CAPACITY OF NON -GOVERNMENTAL ORGANIZATIONS ………………….. 21
2.1. Founders and board of directors ………………………….. ………………………….. ………. 22
2.1.1. Membership ………………………….. ………………………….. ………………………….. . 25
2.1.2. NGO executive staffing and volunteers ………………………….. ……………………… 26
2.2. NGO financing and taxes ………………………….. ………………………….. ………………… 29
2.2. 1. Expenditures and assets of NGO ………………………….. ………………………….. …. 29
2.2.2. NGO Income and Financing ………………………….. ………………………….. ……….. 31
2.2.3. NGO Contingency Funds ………………………….. ………………………….. …………… 33
2.2. 4. Taxes and tax exemption for NGOs ………………………….. ………………………….. 35
2.3. NGO reportING ………………………….. ………………………….. ………………………….. … 37
2.4. NGO cooperation AND Partnerships ………………………….. ………………………….. …… 38
CHAPTER 3. IMPACT OF NGO ………………………….. ………………………….. ………………. 45
CHAPTER 4. CIVIC SPACE ………………………….. ………………………….. ……………………. 54
4.1. Assessment of THE FULFILLMENT of basic civil rights and freedoms ………………….. 55
4.2. Assessment of CSO rights and freedom ………………………….. ………………………….. 56
4.3. PUBLIC perceptionS OF nGOs ………………………….. ………………………….. …………. 64
SUMMARY ………………………….. ………………………….. ………………………….. …………….. 68
LIST OF REFERENCE ………………………….. ………………………….. ………………………….. . 73
APPENDIX ………………………….. ………………………….. ………………………….. ……………. 77
Research scope and methodology ………………………….. ………………………….. ……………… 78
Research subject and terminology ………………………….. ………………………….. ……………… 78
Data collection ………………………….. ………………………….. ………………………….. ………….. 78
Quantitative resea rch methodology ………………………….. ………………………….. …………. 79
Qualitative research methodology ………………………….. ………………………….. …………… 80
Research outcome table ………………………….. ………………………….. ………………………….. 83

EXPLORING THE CURRENT STATE OF CIVIC SPACE AND IDENTIFYING ITS NEED FOR A
FAVORABLE LEGAL ENVIRONMENT STUDY
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LIST OF TABLES
Table 1. Definitions of the NGO ………………………….. ………………………….. ………………………….. .. 9
Table 2. Number of NGOs, by economic sector activities ………………………….. ……………………. 15
Table 3. Types of activities, by administrative levels ………………………….. ………………………….. . 17
Table 4. NGO expenses, by location and by percentage ………………………….. …………………….. 31
Table 5. Income sources, by location and percentage ………………………….. ………………………… 32
Table 6. Income sources, by organizational type and percentage ………………………….. …………. 33
Table 7. Availability of a contingency fund, by operational type and by percentage ……………… 34
Table 8. Average amount of taxes paid in 2019, by organizational type, MNT …………………….. 36
Table 9. Average amount of taxes paid in 2019, by location, MNT ………………………….. ………… 36
Table 10. Average amount of social security payments in 2019, by organizational type, MNT .. 36
Table 11. Types of taxes subject to deduction and exemption, by location, MNT …………………. 36
Table 12. Types and average amount of taxes subject to deduction and exemption, by
organizational type, MNT ………………………….. ………………………….. ………………………….. ………. 36
Table 13. NGO cooperation and partnerships, by percentage ………………………….. ………………. 38
Table 14. Average rating of government support and assistance, ( on a scale of 1 -5)……………. 41
Table 15. NGO target groups, by activity type (Multiple choice response) ………………………….. . 46
Table 16. Impact, by location ………………………….. ………………………….. ………………………….. …. 47
Table 17. NGO assessment of the fulfillment of basic civil rights and freedoms …………………… 55
Table 18. Rights and freedoms of CSOs, by type ………………………….. ………………………….. ….. 56
Table 19. Types of challenges in regards to the righ t of association and establish an organization,
by target group and percentage ………………………….. ………………………….. ………………………….. 61
Table 20. Impact of age, gender, education and emp loyment on the evaluation of the benefits of
NGO activities in society and citizens ………………………….. ………………………….. ………………….. 64
Table 21. Role of non -governmental organization in society, by percentage ……………………….. 67
Table 22. Research subjects and terminology ………………………….. ………………………….. ………. 78
Table 23. Sample estimation ………………………….. ………………………….. ………………………….. ….. 79
Table 24. Sample distribution and coverage ………………………….. ………………………….. …………. 79
Table 25. Agenda, Discussion ………………………….. ………………………….. ………………………….. .. 95
Table 26. NGO mapping ………………………….. ………………………….. ………………………….. ……….. 95
Table 27. Operational mapping ………………………….. ………………………….. ………………………….. . 95
Table 28. Stakeholder mapping ………………………….. ………………………….. ………………………….. 96
Table 29. Impact assessment ………………………….. ………………………….. ………………………….. … 96
Table 30. Source ………………………….. ………………………….. ………………………….. …………………. 96
Table 31. Governance ………………………….. ………………………….. ………………………….. ………….. 97
Table 32. Favorable and safe space/ Civil space ………………………….. ………………………….. …… 97
Table 33. NGO mapping ………………………….. ………………………….. ………………………….. ……….. 97
Table 34. Operational mapping ………………………….. ………………………….. ………………………….. . 98
Table 35. Stakeholder mapping ………………………….. ………………………….. ………………………….. 98
Table 36. Impact assessment ………………………….. ………………………….. ………………………….. … 98
Table 37. Source ………………………….. ………………………….. ………………………….. …………………. 98
Table 38. Governance ………………………….. ………………………….. ………………………….. ………….. 98
Table 39. Favorable, safe civil space ………………………….. ………………………….. …………………… 99

LIST OF FIGURES
Figure 1.Recipients of NGO reports ………………………….. ………………………….. …………………….. 37
Figure 2. Substance of references to the”non -governmental organization” in normative
documents in the Integrated Legal Information System, by percentage ………………………….. …. 39
Figure 3. Research methodology ………………………….. ………………………….. ………………………… 78
Figure 4. Model diagram using search keyword for a qualitative research ………………………….. 81
Figure 5. Software usage, quantitative research ………………………….. ………………………….. ……. 81

EXPLORING THE CURRENT STATE OF CIVIC SPACE AND IDENTIFYING ITS NEED FOR A
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LIST OF GRAPHS
Graph 1. Number of registered NGOs ………………………….. ………………………….. ………………….. 12
Graph 2. Share of NGOs, enterprises and budgetary organizations ………………………….. ………. 12
Graph 3. Organizations by type of services, types of registration and percentage ……………….. 13
Graph 4. Areas of NGO activities (according to COPNI 2019) ………………………….. ……………… 16
Graph 5. Challenges, by percentage ………………………….. ………………………….. ……………………. 18
Graph 6. Operational challenges, by location ………………………….. ………………………….. ………… 18
Graph 7. Operational challenges, by organizational type ………………………….. …………………….. 19
Graph 8. Founder and executive office, by percentage ………………………….. ……………………….. 22
Graph 9. Number of board members ………………………….. ………………………….. …………………… 23
Graph 10. Board composition, by gender ………………………….. ………………………….. ……………… 23
Graph 11. Age structure of board members, by percentage ………………………….. …………………. 23
Graph 12. Frequency of board meetings, by percentage ………………………….. …………………….. 24
Graph 13. Approved rules and regulations, by percentage ………………………….. ………………….. 24
Graph 14. Auditing, by t ypes ………………………….. ………………………….. ………………………….. ….. 25
Graph 15. Age structure of NGO members, by percentage ………………………….. ………………….. 25
Graph 16. Executive staff members, by employment type ………………………….. …………………… 26
Graph 17. Financial officers, by employment type ………………………….. ………………………….. ….. 26
Graph 18. Temporary and contract staff, by type ………………………….. ………………………….. …… 26
Graph 19. Volunteers, by employment type ………………………….. ………………………….. ………….. 27
Graph 20. Level of independence of NGO activities from political, religious and economic groups
………………………….. ………………………….. ………………………….. ………………………….. …………….. 27
Graph 21. Appropriateness of the presence of government officials on the Governing Board, by
percentage ………………………….. ………………………….. ………………………….. ………………………….. 28
Graph 22. Unofficial costs of NGO participation in projects or public procurement , by percentage
………………………….. ………………………….. ………………………….. ………………………….. …………….. 28
Graph 23. Office types, by l ocation and percentage ………………………….. ………………………….. .. 29
Graph 24. Average amount of income, expenditure and fixed assets for the last three years, by
location and by percentage ………………………….. ………………………….. ………………………….. ……. 30
Graph 25. Income and expenditure in the last three years, by membership type and percentage
………………………….. ………………………….. ………………………….. ………………………….. …………….. 30
Graph 26. NGO expenses, by percentage ………………………….. ………………………….. ……………. 31
Graph 27. Types of expenditure for the last three years, by membership and percentage …….. 31
Graph 28. Sour ce of income, by percentage ………………………….. ………………………….. …………. 32
Graph 29. Contingency Funds, by location and number ………………………….. ………………………. 34
Graph 30. Availability of a contingency fund, by organizational type and percentage ……………. 34
Graph 31. Total amount of taxes paid in 2019, by location, MNT ………………………….. ………….. 35
Graph 32. Financial statements for the last three years, by location and percentage …………… 37
Graph 33. Reasons for not submitting X report to government agencies, by percentage ………. 37
Graph 34. Financial statements for the last three years, by percentage ………………………….. …. 38
Graph 35. Challenges in cooperation, by percentage ………………………….. ………………………….. 42
Graph 36. Challenges in cooperation, by operational type ………………………….. …………………… 43
Graph 37. Measures to overcome the challenges in cooperation ………………………….. ………….. 44
Graph 38. Reasons for inaction, by percentage ………………………….. ………………………….. …….. 44
Graph 39. Reasons for inaction, by location and percentage ………………………….. ……………….. 44
Graph 40. CSO operational areas aimed at target groups, by percentage ………………………….. 46
Graph 41. Number of amendments incorporated into and approved by local and national policy
documents and leg islative acts, by operational area ………………………….. ………………………….. . 47
Graph 42. Number of people involved in NGO activities and services, by operational ………….. 48
Graph 43. Cases filed on behalf of public interest, by operational area ………………………….. ….. 48
Graph 44. Number of surveys conducted, by operational area ………………………….. ……………… 48
Graph 45. Number of printed books, brochures and manuals, by operational area ………………. 49
Graph 46. As an environmental organization, territory, river, biological and animal species
covered under operation, by operational area ………………………….. ………………………….. ……….. 49

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Graph 47 . Other activities that changed, by operational area ………………………….. ……………….. 49
Graph 48. Incorporation of amendments into legislative acts, policy and prog rams, by location
and percentage ………………………….. ………………………….. ………………………….. ……………………. 50
Graph 49. Operational areas, other ………………………….. ………………………….. ……………………… 50
Graph 50. Incorporation of amendments into legislation, policy or programs, by percentage …. 51
Graph 51. Changes brought into public service delivery, by percentage ………………………….. … 51
Graph 52. Changes introduced in the transparency, accountability and fight against corruption in
government agencies, by percentage ………………………….. ………………………….. ………………….. 52
Graph 53. Changes in the citizen or public participation, by percentage ………………………….. … 52
Graph 54. Changes in the regularity of the individual, environment and flora and fauna, by
percentage ………………………….. ………………………….. ………………………….. ………………………….. 52
Graph 55. Impactful and gratifying examples of the organization, by percentage …………………. 53
Graph 56. Protection of rights of marginalized groups, by location and percentage ……………… 56
Graph 57. Use of Law on Information Transparency and Right to Information, by location and by
percentage ………………………….. ………………………….. ………………………….. ………………………….. 57
Graph 58. Reasons for the inaccessibility to inf ormation, by location and number ……………….. 57
Graph 59. Reasons for the inaccessibility to information, by organizational type and percentage
………………………….. ………………………….. ………………………….. ………………………….. …………….. 58
Graph 60. Challenges your organization or employee faces when criticizing government
decisions, actions, laws and policies, by percentage ………………………….. ………………………….. . 58
Graph 61. Any restrictions on expressing an opinion on the Internet, by percentage …………… 58
Graph 62. Challenges associated with using media for work, by organizational type and number
………………………….. ………………………….. ………………………….. ………………………….. …………….. 59
Graph 63. Challenges associated with using media for work, by location ………………………….. .. 59
Graph 64. Challenges associated with using media for work, by number ………………………….. .. 60
Graph 65. Obstruction to the right of association and establish an organization, by percentage
………………………….. ………………………….. ………………………….. ………………………….. …………….. 60
Graph 66. Types of challenges in regards to the right of association and establish an organization,
by location and by percentage ………………………….. ………………………….. ………………………….. .. 61
Graph 67. Announcement of public action, by percentage ………………………….. …………………… 62
Graph 68. Challenges in regards to the prote ction of rule of law or human rights, by percentage
………………………….. ………………………….. ………………………….. ………………………….. …………….. 62
Graph 69. Challenges in regards to the protection of rule of law or human righ ts, by percentage
………………………….. ………………………….. ………………………….. ………………………….. …………….. 63
Graph 70. Government pressure, by percentage ………………………….. ………………………….. …… 63
Graph 71. Judicial proceeding, by percentage ………………………….. ………………………….. ………. 63
Graph 72. Issue resolved following a judicial proceeding, by percentage ………………………….. .. 64
Graph 73. Citizen perception toward reasons fo r NGO establishment ………………………….. …… 65
Graph 74. Reasons citizens establish NGO, by gender ………………………….. ………………………. 65
Graph 75. Reasons citizens establish NGO, by age ………………………….. ………………………….. . 65
Graph 76. NGO activities, perceived by the citizens ………………………….. ………………………….. . 66
Graph 77. NGO funding, perceived by the participants ………………………….. ……………………….. 66
Graph 78. Capacity to influence the government on social issues, by percentage ……………….. 66
Graph 79. Capacity to influence the government on social issues, by percentage ……………….. 67

EXPLORING THE CURRENT STATE OF CIVIC SPACE AND IDENTIFYING ITS NEED FOR A
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“EXPLORING THE CURRENT STATE OF CIVI C SPACE AND IDENTIFYING ITS
NEED FOR A FAVORABLE LEGAL ENVIRONMENT”
RESEARCH TEAM

Partner organizations:
1. National Statistics Office
2. SICA LLC
3. Civil Society Consortium (alphabetically):
– Achilles Mongolia International
– Amnesty International of Mongolia
– Center for Human Rights and Development
– Democracy Education Center (DEMO)
– “Education For for All!” National Coalition
– MONFEMNET National Network
– Mongolian Women’s Labor Su pport Association
– Open Society Forum
– Transparency International Mongolia
– Ts.Batsugar, Civil Society Analyst
– B.Bolorsaikhan, Human Rights Analyst
– D.Sukhjargalmaa, Gender Analyst

Research Team Consulting G.Undral, Director of Democracy Education Center (DEMO)

Authors

O.Saranchuluun Researcher, School of Public Health, MNUMS,
Executive Director of Achilles Mongolia International

Ts.Batsugar Researcher and Team member

Quantitative Research team

G.Erdene Team leader , Deputy Director of “SICA” LLC

S.Darkhankhishig Senior researcher , Manager of Research Department,
“SICA” LLC

T.Tumenchimeg Researcher, Senior Manager of Research Department,
“SICA” LLC

E.Nyamdavaa Data quality manager, Senior Manager of Data Collection
and Processing section, “SICA” LLC

B.Turtsetseg Data quality manager, Manager of Data Collection and
Processing section, “SICA” LLC

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ACRONYMS AND ABBREVIATION S
AA O Association of Apartment Owner s
CIT Corporate income tax
COPNI Classification of the Purposes of Non -Profit Institutions
FGD Focus Group Discussion
GASR General Authority for State Registration
ISIC International Standard Industrial Classification
LNPLE Law on No t-for -Profit Legal Entit y
LSRLE Law on State Registration of Legal Entities
MNT Mongolian tugrik
N.E.C Not Elsewhere Classified
NGO Non -Governmental Organization
PIT Personal income tax
SCO Civil Society Organization
VAT Value added tax

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FOREWORD
Since the enactment of the Law on Non -Governmental Organizations (NGOs) in Mongolia in
1997, NGOs have played an invaluable role in increasing citizen participation, monitoring
government activities , and ensuring human rights. Since the adoption of the law, the number of
active NGOs has increased and civil society is evolving in terms of its structure, activities, areas
with outreach in the capital city and aimags
To promote a better regulatory frame work for NGOs and a favorable environment for the
development of civil society, the Consortium , represents Mongolia’s civil society, has organized
a round of discussions on the draft Law on No t-for -Profit Legal Entit y (LNPLE) involving civil
society organi zations (CSO) between June 2019 and June 2020; and has been working to update
a draft “Government and Civil Society Partnership Strategy of Mongolia” as well as to develop
and advocate its own version of the draft LNPLE.
In this context, a pressing need arose to present a realistic picture of the strength, scope and
diversity of Mongolia’s civil society , to identify institutional and operational characteristics and
developmental challenges of the NGOs as well as to clarify the overall situa tion of the sector. To
this end, a study “Exploring the Current State of Civi c Space and Its Need for a Favorable Legal
Environment” was initiated by the Civil Society Consortium and made possible with kind support
from Mongolia’s Open Society Forum and the regional Asian Forum for Human Rights and
Development (Forum -Asia) .
This study thus sought to map out NGO activities and stakeholder p artnerships as well as to
appraise the effectiveness of NGO performance and the current state of civic space in Mongolia
apart from its main obj ective of provid ing factual and analytical information for advocacy work
aimed at promoting the betterment of the legal and operational environment s for civil -society
organizations .
For this study, quantitative data were collected from a sample of 683 active NGOs, and further
enriched with qualit ative data derived from focus group discussions and individual in terviews with
stakeholders, including NGOs and representatives of government, bilateral and multilateral
organizations as well as the media. Furthermore, an extensive desk review of the related research
literature and legal and policy documents was underta ken to consolidate and validate the
information reflecting multi -stakeholder positions.
Although thematic stud ies on democracy, civil society and NGO activities ha ve been conducted
in the past, in-depth research into the citizens’ rights to association and expression as well as
sector -wide analysis of CSO activities, their institutional and operational specifics , and
contribution to development are still lacking . It is expected that this study will fill this gap and serve
as a basal document that provides useful information for the improvement of the legal
environment for NGOs and evidence for the government to determine policies concerning
Mongolia’s civil society.

Civil Society Consortium

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CHAPTER 1. TYPES AND ORIENTATION OF NGOs

EXPLORING THE CURRENT STATE OF CIVIC SPACE AND IDENTIFYING ITS NEED FOR A
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1.1. TYPES AND FORMS OF NGO s
1.1.1. Regulation concerning types and forms of NGO s
Nature, purpose, and principles of operation of an independent organization established by
citizens within the framework of the right to freedom of association and expression have been
relatively well recognized in Mongolian law and social practice. However, different term inologies
related to the civil society sector, organizations and legal entities operating in the sector, and their
specific nature have been applied in the practice as w ell as legal environment.
Article 16.10 of the Constitution of Mongolia states that “The right to freedom of association in
political parties or other voluntary organizations on the basis of social and personal interests and
opinion.” Hence, the Law on Gov ernment of Mongolia employed the term “public organization”.
The 1997 Law on NGOs used the term in a general manner , while the Civil Code classified it as
no t-for -profit for legal entity purposes.
In addition, the Law on the National Human Rights Commission of Mongolia and the Law on
Development Policy, Planning and its Management continue to use the term civil society.
Moreover, in line with the practical application of international organizations, the term CSO is also
popular. For example, the Law on Promotion of Youth Development adheres to the term youth
CSO.
Table 1. Definitions of the NGO
Legal term Definition of the NGO Category
Law on Non –
Governmental
Organization
(Parliament, 1997)
… applicable to all non -governmental
organizations except political parties, trade
unions, and churches and monasteries.
… an organization which is indepen of from the
state, self -governing, not -for -profit and
established voluntarily by citizens or by legal
persons other than State bodies (that exercise
legislative, executive and judicial powers)
based on their individual or social interests
and opinions.
• publi c-benefit non –
governmental
organization
• mutual -benefit non –
governmental
organization
Civil code
Non -profit fit legal entity shall be established
in the form of association, founda ,tion or
cooperative.
…Association shall be a legal entity
established based on voluntary amalgamation
of several persons with common specific
goals and membership.
… Foundation shall be a le entity itiy without
membership, established by one or more
founders by raising fund s to attain publicly
beneficial common goals.
… Cooperative shall be a legal person,
established jointly a on voluntary basis by
several persons to carry out activities aimed at
satisfying common economic and social
needs of its members, based on assets with
corporate governance and control over joint
assets.
• Association
• Foundation
• Cooperative
On the integrated legal database system, t he term non -governmental organization has been
incorporated into 55 laws, 27 resolutions , orders and regulations that are in force (Integrated Legal
Information System, 2020) .

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… Monasteries and churches, participating in
the civil legal relations, shall observe
provisions of the law pertaining to the legal
status of foundations.
Law on Legal Status of
the Apartment Owner
Association (AOA) and
Communal Property of f
Public Dedicated
Apartment
“Apartment Owner Association” is an
association without the rights of a legal entity
but mandatory membership and its purposes
are to exercise the right to jointly own the
common property of a public apartment
building (hereinafter referred to as “apartment
building”); ensure normal operations of the
apartment building; protect the rights and
interests of apartment owners and be in
charge of the ownership, use and protection of
the jointly -owned properties of the apartment
building
• Association
Immovable Property Tax
Law Immovable property taxpayer
• NGO,
• Foundation,
• Religious
organization
• Cooperative
Value Added Tax Law Exempt from VAT • Non -governmental
organization
By applying different concepts, the regulation concerning the types and forms of NGOs creates
legal inconsistencies.
For example:
• The new Civil Code, adopted in 2002, defines not -for -profit legal entities as “association,
foundation and cooperative” while Article 36.6 of the Civil Code stipulates that “churches
and monasteries” shall abide by the Civil Code’s clause on foundations when engaging in
civil law relations. Furthermore , Articles 36.3 and 36.5 of the Civil Code stipulate that “the
legal status of associations and foundations shall be determined by law” and “other
relations pertaining t o cooperatives shall be regulated by law”. However, there is currently
no law governing the legal status of associatio ns and foundations and the sector is
regulated by the Law on NGOs.
• The concept of NGOs is regulated by the 1997 Law on Non -Governmental Organizations
which does not use the term “association”, while the term “foundation” was introduced in to
the law in 2002 in connection with the revision of the Civil Code.
• To ensure conformity of laws with the revised Civil Code , Chapter 7 on “Special provisions
related to foundations” was added to the “Law on NGOs”. This insertion created a legal
paradox whereby an in stitutional form prescribed by the overriding Civil Code came under
the institutional form of the Non -Governmental Organization which is non -existent in the
Civil Code. To address this oddity, the acronym NGO has been added to the registered
proper names of the organizations, turning the “ Women Lawyers’ Association ” into the
“Women Lawyers’ Association, NGO ” and the “Young Leader Foundation ” into the” Young
Leader Foundation, NGO ”. (Study on the Needs and Rationale of Revision of the Law on
NGO s, 2017)
• Arti cle 4.1.1 of the Law on State Registration of Legal Entities (LSRLE, 201 8) states that
“a legal entity refers to an organizational unit possessing characteristics specified in Article
25 .1 of the Civil Code”. Article 7 of the LSRLE identifies 10 types of legal entities for state
registration. However, this contradicts the five types of legal entities that are provided for

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in Article s 33 to 38 of the Civil Code. ( need to improve the legal framework for non -profit
legal entities, 2018)
Researchers have found that the Civil Code and the Law on State Registration of Legal Entities
define the types and forms of non -profit legal entities differently and that the State Registration
Office of Legal Entities has doubled the number of these types and forms in practice. (Need to
improve the legal framework for non -profit legal entities, 2018). In other words, it practice s the
regist ration of NGO forms that are non -existent in the above -mentioned regulations.
The views voiced by the participants in the grou p discussions on legal classification and unclarity
of the definition of “ legal entity ”, could be summarized as identifying the following grounds for
improvement:
• The disorderly state of the current registration system creates a large number of “phantom”
as well as deviant NGOs.
• Information concerning the property ownership of NGOs is vague. This opaqueness is
aggravated by the lack of information at the General Authority for State Registration
(GASR) on the origin of the prop erty, and the regis tration of the Executive Director instead
of the real owner by the banks . Disputes arise because the source of funds and assets is
not duly recorded.
Representatives of NGOs, on the other hand, believe that the 1997 Law on the NGO defines the
types and for ms in a broad sense, which allows the to NGOs develop independently by
implementing their organizational forms and structures and governance systems. They also argue
that the effort to improve the legal framework for NGOs involves a narrow definition of th e not -for –
profit legal entit y and strict legalization the of entity’s organization al and management systems
will inhibit the development of civil society and the nonprofit sector as such .
They also mentioned that such restrictions and hindrances are already being experienced by
NGOs with certain organizational specifics 1 of their own . NGO representatives pointed out that
the 1997 Law on the NGO does not excessively specify the rights, responsibilities, relationshi ps
and types of NGOs, which has served the NGOs well by creating a fertile ground for their free
development based on social development trends, needs and international experience.

The practical experience of the organizations involved in the survey as well as other research and
data readily confirm that NGOs have highly varying organizational forms and associated internal
governance and management systems, operational fields , and areas.

Reminding that several previous attempts to revise the Law on NGOs sought to address the
above -mentioned taxonomic inconsistencies by further legaliz ing the terms “association” and
“foundation” , the representatives of the NGO community emphasized that these efforts still fall

1 For instance, network, forum or society
Quote 1
-… A law should not impose the form of a foundation, center, association, etc. , on an organization.
Our organization has begun to fulfill an oversight function and is involved in research and non -judicial
grievance mechanisms. Therefore, since the development of the organization must be free, it is not
possible to call our organization a center, foundation , or association in any case. – B., a participant in
the NGO FGD .

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short of fully capturing the current diversity of Mongolia’s civil society. (Analytical Report on the
draft Law on No t-for -Profit Legal Entit y, 2019)
1.1.2. Forms and number of NGOs
As of 2020, there are 24,276 registered NGOs in Mongolia, of which 10 ,806 are active. (National
Statistical Office, Business Register Database, 2020)
Graph 1. Number of registered NGOs

Since 2013, the number of registered NGOs and inactive NGOs has been growing rapidly. The
share of NGOs in the total number of registered entities has nearly doubled from 5.7% in 1998 to
9.7% in 2020 (National Statistics Office, 20 20) .
Graph 2. Share of NGO s, enterprise s and budgetary organizations

74.1
82.8
84.9
85.5
85.6
20.2
10.5
6.1
3.7
4.6
5.7
6.7
9
10.8
9.7
1998
2006
2011
2016
2020
Enterprises
Budgetary organizations
NGOs
Total – Non -Governmental Organization
Operational – Non -Governmental Organization
Inactive – Non -Governmental Organization
Suspended – Non -Governmental Organization
Completely ceased – Non -Governmental Organization
Unavailable, etc – Non -Governmental Organization
30 thousand

25 thousand

20 thousand

15 thousand

10 thousand

5 thousand

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As of the fourth quarter of 2020, 59.9% of the operating NGOs are based in the capital city.
(National Statistical Office, Business Register Database, 2020) After Ulaanbaatar, Darkhan -Uul,
Orkhon, Dornod and Khovd aimags have the largest number of register ed NGOs.
According to the GASR, as of 2019, there are 22,074 NGOs, 1,598 foundations, 1,453 trade
unions, 543 religious organizations, 585 education and training institutions , and 1,062 media
organizations. (GASR, 2020)
• First, there are discrepancies in the NGO numbers provided by the GASR and the NSO.
The GASR registers NGOs and associations under the same category.
• In addition, registration is still taking place in forms that do not exist in the Civil Code, such
as educ ational and training institutions. Plus, these types of organizations could be
classified as for -profit or non -profit; but in regard to the form, they do not fall into the
category of either a company or an NGO. (GASR, 2020)

In line with the GASR Chairma n’s Order A/420 of 2018 , state registration and indexation cover ed
a broad range of organizations clustered into six groups such as associations (e.g. public – and
mutual -benefit NGOs, trade union federations and committee s, educational and training
institutions , media organizations including newspapers , magazines, radio , and television ), legal
entities under public law (e.g. the Mongolian Bar Association ), domestic humanitarian
organization s (e.g. Mongolian Red Cross Society) , reli gious organ izations , foundation s and
political part ies (GASR, 2020). Concerning this, apart from the NGOs and trade unions, a large
number of entities such as educational and training institutions or media organizations inclu sive
of privately owned businesses are registered in the form of not -for -profit associations , as they are
stipulated in the Civil Code .
According to the above -mentioned GASR registration index, 22,074 is a number inclusive of both
types of NGOs, public -beneft and mutual -benefit. However, the latest statistics are not available
as the GASR statistics do not differentiate between these two c ategories. Nevertheless, as of
June 2018, a total of 17,634 CSOs were officially registered with the GASR, of which 15,241 were
“public -beneft” and 2,393 “mutual -benefit”. In other words, public -benefit NGOs constituted 86.4%
of all registered NGOs. (GASR, 2020)
As for the organizations involved in this survey, 17.9% of the m stated that they are mutual -benefit,
55.6% are public -benefit and 26.5% are public -mutual -benefit. This matches the GASR ’s break –
down data .
Graph 3. Organizations by type of service s, type s of registration and percentage

91.0%
71.0%
85.0%
1.0%
3.0%
27%
5.0%
1.0%
7.0%
Public-benefit
Mutual benefit
Public-mutual benefit
NGOs, Associations Foundations Trade unions Religious Organizations

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While the Civil Code defines a foundation as a non -membership organization and an association
as a membership organization, t he existence of mutual -benefi t foundation s and solely public –
benefit association s, clearly indicates that there is a need to improve the registration system. On
the other hand, it also shows that the legal classification of NGO s by type and form do es not fully
reflect the purposes and orientations of these organizations .
For example, as the revised LSRLE be came effective in 2018 , the previously registered NGOs
were categorized as associations, with non -membership NGOs also bundled together in this
ca tegory in the process . According to the survey results, of the organizations registered as
NGOs /associations, 36.0% offer membership to individuals, 16.8% offer corporate membership
and the remaining 47.2% have no membership , meanwhile , nine of the 18 foundations surveyed
offered membership to individuals or corporates.
During the Focus Group Discussions (FGD), NGO representatives shared a view that the lack of
knowledge and professionalism among registration officials resulted in the registr ation being
conducted as a matter of a habitual practice rather than a faithful abidance by the law and
regulation .
However, both the survey results and the GASR statistics show that the NGOs form – in thei r
pursuit of the public benefit — a tangible social capital that solidly contributes to the promotion
of societal well -being .

1.2. FIELDS AND SCOPE OF NGO ACTIVITIES
To give a full portrait of the civil society sector, it is necessary to accurately define the fields and
scope of NGO activities .
This would be of importance in clarifying the following issues :
• A claim can be heard that there is a tendency to run for -profit operations under the N GO
guise and thus avoid paying taxes. For example, educational institutions, hospitals , and
media organizations have been criticized for getting register ed as NGOs and doing
business in this status for tax evasion purposes.

• Mapping the current operations of NGOs is crucial in identifying the fields and types of
public benefit activities. Properly defining the activities that serve public good will make s
tax exemptions, deductions , and other tax benefits as well as associated regulatory
measures more effective and realistic.

• Yet another issue extensively raised within the operational scope of NGOs is that of
economic or, as called otherwise, business activities. By determining the current level s of
NGO business activities and the capacity and resource s for further growth , we will be able
to accurately gauge the impact of the p roposed legislation on the sustainable development
of NGO s.
Unfortunately, the data and other necessary inputs for a complete NGO activit y mapping to
address the aforementioned issues are still highly limited.
The NSO ’s Business Register Database classifies and registers the NGO operations in
accordance with the International Standard Industrial Classification (ISIC).

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Table 2. Number of NGOs , by economic sector activities
№ Sector 2020 -IV
1 Agriculture, forestry, fishery, hunting 125
2 Mining and quarrying 0
3 Manufacturing 8
4 Electricity, gas, steam and air condition supply 0
5 Water supply; sewerage, waste management and remediation activities 0
6 Construction 0
7 Wholesale and retail trade; repair of motor vehicles and motorcycles 0
8 Transportation and storage 0
9 Accommodation and food service activities 0
10 Information and communication 114
11 Financial and insurance activities 1
12 Real estate activities 4
13 Professional, scientific and technical activities 202
14 Administrative and support service activities 71
15 Public administration and comp ulsory social protection 0
16 Education 1,089
17 Human health and social work activities 202
18 Arts, entertainment and recreation 463
19 Other service activities 8,249
According to the above -mentioned classification, more than 80 % of NGOs are included in the
group Other Service activities are further subdivided into the following:
• Activities of membership -based organizations,
• Repair and maintenance of computers, household goods , and personal items,
• Other personal services
Of these, NGOs ar e entered in the first sub -group . This classification of 80 % of NGOs a s
membership -based organizations is in disagreement with reality as the survey results show that
only 56.1% of all NGOs have a membership.
The next most common economic sector activity is education. A total of 10.3% of all NGOs are
active in this sector. (NSO, Business Register Database, 2020) In terms of numbers, the most
common areas of activities are:
• Activities of other membership -based organizations = 6,590 NGOs
• Trade union activities = 1,089 NGOs
• Education activities other than primary, secondary , and tertiary education = 874 NGOs
• Business, employer , and professional membership activities = 550 NGOs
• Sports activities = 362 NGOs.
Another systematization method for NGO activities is the United Nations Classification of the
Purposes of Non -Profit Institutions Serving Households (COPNI). In our study, we applied this
classification to describe NGO activities.

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Graph 4. Areas of NGO activities (acco rding to COPNI 2019)

According to this system , 25.5% of NGOs are engaged in “Services Not Elsewhere Classified
(N.E.C ), which shows that these two above -mentioned classifications do not fully reflect the
diversity of NGO activities.
However, in contrast to the ISIC, the COPNI system provide s an opportunity to determine the
scope of NGO activities in a relative ly more accurate manner. The COPNI data show that the
0.3%
0.3%
0.4%
0.4%
0.6%
0.9%
0.9%
1.3%
1.5%
2.0%
2.2%
2.8%
3.2%
3.7%
3.7%
4.8%
5.6%
5.6%
5.6%
6.1%
8.2%
14.5%
25.5%
Hospital services
Political parties
Education not definable by level
Tertiary education
Secondary education
R&D Health
Pre-primary and primary education
Public health services
Vocational training
R&D Education
Other health services
Services of labor organization
R&D Environmental Protection
R&D Social protection
R&D Services n.e.c
Housing
Recreational and sporting services
Cultural services
Religion
Environmental protection services
Social protection services
Other educational services
Services n.e.c

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most common field of activity is “Other educational services”. This is in line with the statistics of
the Business Register Database. Nevertheless, the COPNI highlights the NGO activism in the
areas of social protection services, environmental protection, religion , and cultural activities , thus
giving a picture more detailed than the Business Register Database.
According to the survey results and the Business Register Database entries, there are very few
schools of all levels , hospitals , and media organizations . This renders the widespread criticism
that these organizations operate in the form of NGOs to avoid taxes groundless ly. Although there
may be such cases, they do not define the nature of the NGO sector .
When running activities in the above -mentioned sectors and fields, the NGOs operate at the
following levels forms.
Table 3. Type s of activit ies, by administrative levels
№ Operational type International National Aimag,
capital city
Soum,
district
Khoroo,
bagh Other
1 Training 81.1% 73.4% 75.6% 55.8% 26.5% 50.0%
2 Research 45.3% 53.6% 47.0% 20.4% 8.8% 37.5%
3 Consulting 47.2% 60.9% 57.2% 41.6% 20.6% 50.0%
4 Advocacy 28.3% 41.7% 41.7% 38.1% 23.5% 50.0%
5 Strategic litigation 3.8% 7.8% 13.1% 8.0% 2.9% 25.0%
6 Aid and care services 28.3% 26.0% 47.7% 40.7% 73.5% 75.0%
7 Information services 58.5% 55.7% 38.5% 30.1% 35.3% 62.5%
8 Public information
and communication 18.9% 29.7% 24.4% 18.6% 2.9% 50.0%
9
Monitoring of
government acti vities
and services
9.4% 12.5% 7.8% 7.1% – 12.5%
10 Central and local
budget monitoring 1.9% 4.7% 4.6% 1.8% – –
11 Other 1.9% – 1.8% 0.9% – –
Organizations operating on the national, aimag and capital city levels are relatively more involved
in training, research, consulting, advocacy and information activities. NGOs working at the bagh,
khoroo, soum , and district levels often provide care and related training, counseling and
information services. However, at any level, there are very few NGOs that engage in public
service monitoring, budget control, strategic litigation , and public information and communication .
In terms of business activities, only 30 .7% of the surveyed NGOs were engaged in income
generation . For example :
• The scope of business activity of NGOs operating at the international, national, aimag and
capital levels is twice that of the NGOs working in soum s, district s, bag hs and khoroo s.
Ove rall, as the operational level of an NGO increases, so does its business activity . This
could be attributed to the insufficien t capacity and resources of local (grassroot) NGOs.

• Public -benefit NGOs are more likely to engage in economic activities . For exa mple, 38.2%
of public -benefit NGOs, 25.4% of public -mutual -benefit NGOs , and 15.6% of mutual –
benefit NGOs undertake income -earning business activities.

• As for orientation, 52.6% of NGOs who run cultural activities and 43.4% of those
engaged in “other educational services ” are leading in terms of business activities.
Unfortunately, there is a lack of information on what these business activities are and what
percentage of the revenue is ge nerated by the se business es .

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Some organizations that took part in the FGD mentioned examples of merchandising as a
business activity.
1.2.1. Operational challenges
93.6% of the surveyed NGOs have not changed their originally registered institutional type and/or
activity orientations .
However, operations of 18.0% of the surveyed NGOs have experienced disruption . For example,
77.2% had 1 -2 cases and the remaining 22.8% experienced three or more cases of such
disruption . Most of the se operational bottlenecks or 91.9% of the cases lasted for more than 3
months . As for the causes ,67.5% of the stoppages resulted from funding issues and 35.0% was
due to other issues.
This indicates that the NGO operations are hampered by many factors starting from fina ncial and
human resource problems. In order of priority, these would be the lack of financial support,
followed by insufficient government support, bureaucra tic red -tape and injustice as well as weak
public participation .
Graph 5. Challenges, by percentage

The indications are that while organizations working at the sub -national level experience
difficulties related to the lack of financial support, institution al capacity, and poor citizen
participation , those based in Ulaanbaatar come face to face with insufficient government support ,
bureaucra tic attitudes , corruption and bias .
Graph 6. Operational challenges, by location

0.02%
11.0%
12.7%
24.3%
49.8%
67.8%
Other
No challenges
Weak capacity of NGOs
Poor citizen and public participation
Insufficient government support; bureaucracy,
corruption, injustice
Lack of financial support
70.1%
47.5%
25.4% 16.4% 10.7%
67.0%
50.6%
23.9%
11.5% 13.4%
Lack of financial
support
Insufficient
government
support;
bureaucracy,
corruption, injustice
Poor citizen and
public participation
Weak capacity of
NGOs
Other
Rural area Ulaanbaatar city

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In addition, financial hardships and insufficient government support are often more pressing
issues for public -benefit and public -mutual -benefit organizations.
Graph 7. Operational challenges, by organizational type

Similar studies in the past have revealed several reasons for operational disruptions of NGOs,
including:
• While adequate in terms of financial and other resources, the organizations lacked
technical support for capacity and knowledge building, (Zavkhan aim ag, NGO, Focus
FGD) (Gender Center for Sustainable Development, 2005)
• Various big and small tax issues (“Baasanjav Consulting” LLC, 2017)
• (insufficient) Support with numerous layers of limitations, phases and criteria (“Baasanjav
Consulting” LLC, 2017)
• Absence of a policy on incentives and tax benefits for individuals, companies and
organizations, which donate to the NGOs, shrinks the domestic support base , thereby
undermining the very conditions for strengthening the sense of social responsibility and
ensuring the continuity of support to public benefit activities. (“Baasanjav Consulting” LLC,
2017)
Alongside the above, the NGO capacity and human resources issues are of critical importance .
According to a baseline survey conducted under the “Mainstreaming Social Accountability in
Mongolia ” project in 2016, the majority of NGOs suffer from weak institu tional capacity. Thus,
35.0% of NGOs ha ve only one , 31.0% ha ve from two to three and only 7.0% ha ve ten or more
full -time employees (Baseline survey of Mainstreaming Social Accountability in Mongolia project,
IRIM, 2016). The NSO’s Business Register Database also reports that 90.4% of the active 10,806
NGOs have one to nine employees.
In addition to the aforeme ntioned causes of disruptions in NGO activities, the focus group
discussion participants noted other difficulties in running the ir operation s, including the following :
• NGOs are required to have special licenses for certain types of operation s, for example in
the fields of education, training, child care ( kindergarten s), and child protection. Due to the
ambigu ous regulatory framework , NGOs have to overcome hurdles such as renew their
registration to obtain licenses or even re-establishing a se parate, independent NGO.

70.8%
52.4%
25.5%
8.9% 13.4%
1.1%
56.6%
38.5% 24.6% 17.2% 9.0%
4.1%
69.1%
51.9%
21.5% 11.0% 13.8%
1.7%
Lack of financial
support
Insufficient
government
support;
bureaucracy,
corruption,
injustice
Poor citizen and
public
participation
No challenges Weak capacity
of NGOs
Other
Public-benefit Mutual-benefit Public-mutual benefit

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• Instances of government restrictions and pressure we re mentioned by NGOs . For
example, such pressure is experienced by NGOs that conduct monitoring and evaluation
of government acti vities and budget execution , or those that receive financing from the
state budget ; and some NGO activities are subjected to inspection s by the General
Intelligence Agency or NGOs are denied permi ts or licenses .
• In accordance with the law, there is also a tendency to restrict the operational scope of
NGOs by applying various criteria. Therefore, representatives of some NGOs mentioned
the need for specific legislation that stipulates and protect s the rights and freedoms to
engage in activities of significant importance.

Quote 2
-… “We operate in the fields of policy research, evaluation , and advocacy as well as training. There
have been problems in connection with this. For a professional association to run a training program ,
permission must be regularly obtained from the Center for Health Development. Two years ago, a
special training index was required to get this permit. The state registration certificate indicates that
the organization is registered in the field of building the knowledge and skills of health sector
professionals and supporting the development of evidence -based policie s and programs. Going
through the fuss of getting a separate training index is an additional problem. ” – FGD with NGO
representatives, participant B5

Quote 3
“NGOs functions have been categorized as advocacy work, citizen oversight, monitoring and
evaluation of government activities as well as provi sion of services in areas of limited government
outreach . Now we need to pay more attention to th ese issue s and improve their regu lation …
There are legal provisions planned for greater control of NGO activities. But the fact is that our work
has already been long monitored and regulated by the Law on Administrative Proceedings . For
instance, when we file a public interest lawsuit , we are required to submit a large number of
materials such as annual operational reports of the last three years; and our operations are reviewed
if they comply with the organization’s line of business as indicated under the state registration . …
When NGOs were started to be e stablished in the 1990s and regulated by the Law on NGO s, they
— due to the social and economic situation of the country, — were mainly engaged in providing
services and introduc ing new solutions and models as well as new legislation or concepts. Now the
country’s development needs seem to call for a greater citizen oversight and evaluation of
government workings, a better -balanced state power, tracking of public procurement, inde pendent
monitoring of corruption levels , and assessment of policy implementation. This focus shift should
be duly reflected in the law. FGD with NGO representatives, participant B9

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CHAPTER 2. CAPACITY OF NON -GOVERNMENTAL ORGANIZATIONS

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2.1. FOU NDERS AND BOARD OF DIRECTORS
The management of a non -governmental organization may have a board of five or more
members, including founder s. If it is a foundation, it is required to have a supervisory board. In
most cases, individuals form an NGO voluntarily . As summarized by the study carried out by the
Gender Center for Sustainable Development in 2005, the founder and board of directors are a
platform for citizens to work together for common goals and interests in the social, political and
economic spheres governed by law, formal and informal rules. (Gender Center for Sustainable
Development, 2005)
About 90 % of the surveyed organizations have individuals working as founders and executives,
while the rest work for a specific organization.
Graph 8. Founder and executive office, by percentage

Qualitative research has shown that, in the case of newly established or not fully stabili zed small
NGOs, it is a common practice for the founders and board members to take on the functions of
administrative management.
The main reason for this is that t hese NGOs have limited financial resources and hence this
practice of merging the organization’s governance and executive management functions is the
main way of having their administrative expenses in check .
In 2005, the Center for Democracy Education looked at the structure of NGO Governing Board
memberships and found that government had a representation of 22%, the business sector of
16.0%, school and university teachers of 7.0 percent , international organizations of 7.0 percent ,
0.3%
1.2%
1.2%
1.2%
2.3%
2.2%
6.1%
5.6%
87.4%
1.2%
1.5%
1.5%
1.6%
2.0%
2.8%
6.3%
7.9%
91.8%
Other
Foreigner, stateless person
International organization
State special official
State political official
Public administration official
Organization
Public service official
Individual
Executive office Founder

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members of political parties of 5.0 percent and parliament members of 3.0 percent . (Democracy
Education Center, 2005) .
Meanwhile , the results of this study show that th e representation of the aforementioned groups
ma kes up less than 15 % in the composition of the Board s at the surveyed NGOs, which , i n
addition, demonstrate equal gender ratios.
Graph 9. Number of board members
As shown in the graph, 70.4% or
481 of the surveyed organizations
have 1 -5 board member s, 23.4%
or 160 organizations have 6 -10
board members, 4.1% or 2 8
organizations have 11 -15 board
members and the rest have
Boards of more than 16 persons .
By gender, women make up 49.2% of the board members in organizations with one to five -person
boards, 46.6% in organizations with six to ten board members, 43.3% in organizations with 11 –
15 board members, 63.5% in organizations with 16 -20 members , 58.5% in organizations with 21 –
25 board members and 44.0% in organizations with more than 26 bo ard members.
Graph 10 . Board composition , by gender

The 2005 study by the Center for Democracy Education also assessed the sizes of NGO
Governing Boards, and reported that 47.0% of NGOs had five members, 22.0% had nine
members and 17.0% had seven members. The remaining over 10 percent had more than 11
members. (Democracy Education Center, 2005) . This suggests that the average number of board
members in 2020 has decreased as compared to 2005
In terms of age composition , 59.0% of board members is the 35 -54 age bracket .
Graph 11 . Age structure of board members, by percentage

49.2%
46.6%
43.3%
63.5%
58.5%
44.0%
50.8%
53.4%
56.7%
36.5%
41.5%
56.0%
1-5 board members
6-10 board members
11-15 board members
16-20 board members
21-25 board members
more than 26
Female Male
2.3%
16.7%
29.5% 29.1%
22.4%
up to 24 25-34 ages 35-44 ages 45-54 ages Above 55
70.4%
23.4%
1-5 board members
6-10 board members
11-15 board members
16-20 board members
21-25 board members
more than 26

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Most organizations ha ve regularized the work of the Boards , with 37.3% of them having Board
meetings quarterly and 32.9% annually while 87.9% of the Board s present their action plans and
financial statements to General ( all –members ) Meetings. However, 11.6% said that the ir Board s
were completely dormant .
Graph 12 . Frequency of board meetings, by percentage

Small er NGOs with few employees (1 -5 employees) that operate in local area s are more likely to
have the ir Governing Board s meet once a year or less than that or not at all while it is common
for NGOs with 9 or more employees to have Board meetings twice or more times a year.
The results show that the majority of the surveyed NGO s ha ve management and employee ethics
code s, financial rules and internal regulations , while 17.8% do not have approved rules.
Graph 13 . Approved rules and regulations, by percentage

Of the surveyed NGOs, 78.8% responded that they manage to remain free of the influence and
pressure on the part of political, religious and economic groups.
8.9%
37.3% 32.9%
9.2% 11.6%
Every month Every season Every year Once every two
years
No activities, no
meetings
0.8%
0.8%
2.7%
4%
6%
7%
8%
11%
13%
16%
17.8%
19.4%
42.3%
43.5%
Other
Rules and regulations of collective agreement
NGO rules and regulations
Ensuring gender and diversity
Prevention of corruption and conflict of interest
Working with the public and media
Risk management
Child protection policy
Safety, health
Human resources policy and procedure
Rules and regulations
Organizational charter and internal rules
Financial rules
Management and employee ethics code

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Furthermore, 27.1% of organizations have undertaken internal audits and 29.0% invited external
audit s (by auditing and financial institutions).
Graph 14 . Auditing, by types

2.1.1. Membership
The number of NGO members has increased in comparison to the previous surveys , with 47.6%
of the participant organizations having individual or corporate memberships or both . In total, their
membership counts approximately 27.0 thousand legal entities and 84.0 thousand individuals. A
similar survey of 2005 established that half of its sam ple of 555 organizations had not more than
50 members, 25.0% had 50 -100 members and about 2% had more than 100 members.
(Democracy Education Center, 2005) .
As for the age structure of NGO members in organizations with individual membership, the graph
below reveals an even representation of people of all age groups.
Graph 15 . Age structure of NGO members, by percentage

Mutual -benefit NGOs were not included in the qualitative study. In this sense, it can be said that
all NGOs which participated in the FGD s could be considered as public -benefit organizations or
as ones primarily involved in community services.

Organizations are having parallel activities oriented at member s. Although some of these NGOs
do have a membership, this membership, as mentioned earlier, oftentimes has nothing to do with
the organization’s decision -making and other management systems and is only limited to
participation in specific activities and access to services.

27.1%
29.0%
72.9%
71.0%
Internal audit
External audit
10.4%
17.7% 19.0% 19.4% 18.5% 14.9%
up to 15 15-24 ages 25-34 ages 35-44 ages 45-54 ages Above 55
Quote 4
-…Our organization is quite confusing when it comes to its type or form . Since it has members, it
seems to be a mutual -benefit NGO ; if we look at the operations, it seems to be a public -beneft… that
might be fighting for the rights or something. It is un clear which category or type we ar e affiliated
with, an association or a union. The term CSO is stipulated in the Youth Development Law , while the
State policy on the private sector stipulates the NGO as a private enterprise, and the categories such
as associat ions and foundations are quite a mess …
FGD with NGO representative s, Participant B9

Quote 5
-… Members are a part of our development program, they pay the membership fee for the year and
are invited to participate in activities organized by our organization. About 17 members are annually
recruited for the purpose of expanding… engaging them in our activities …
FGD with NGO representative s, Participant B1

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2.1.2. NGO executive staffing and volunteers
As noted earlier, it is a common practice with the surveyed NGOs to merge governance and
executive management systems . In addition to the top -level management, an NGO has an
average of 5 .7 employees (minimum one , maximum 35 employees). 70.4% of all NGOs have five
or fewer than five workers, which is less than the average. Furthermore, 92.8% have one to nine
employees, which is in line with the statistics of Business Register Database (90. 4%).
The following graph displays the number of executive staff of the surveyed NGOs, divided into
full -time and part -time employees.
Graph 16 . Executive staff members, by employment type

The following graph shows the financial officers of an organization as full -time and part -time
employees.
Graph 17 . Financial officers , by employment type

68.3% or majority of surveyed organizations with full -time and contract staff have one to four
employees.
Graph 18 . Temporary and contract staff , by type

The graph below shows NGO volunteers classified as full -time and part -time.
45.2%
15.1% 9.2% 5.5% 10.0% 2.6% 2.1% 10.2%
62.5%
8.5% 6.7% 3.5% 9.4% 1.5% 0.9% 7.0%
1 executive
staff member
2 executive
staff
members
3 executive
staff
members
4 executive
staff
members
5 executive
staff
members
6 executive
staff
members
7 executive
staff
members
more than 8
executive
staff
members
Full-time Part-time
84.8%
9.2% 1.6% 2.2% 1.1% 0.5% 0.5%
90.9%
3.8% 1.1% 1.6% 1.1% 0.5% 1.1%
1 financial
officer
2 financial
officers
3 financial
officers
4 financial
officers
5 financial
officers
6 financial
officers
more than 7
Full-time Part-time
22.8% 25.4%
9.6% 10.5% 7.0% 2.6% 2.6%
19.3%
31.3%
17.5% 13.3% 9.0% 9.0% 2.4% 1.2%
16.3%
1 employee 2
employees
3
employees
4
employees
5
employees
6
employees
7
employees
more than 8
employees
Full-time Part-time

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Graph 19 . Volunteers, by employment type

The fact that 75% of all NGOs have up to 10 volunteers and 25% have more than 10 volunteers
indicates that NGOs are highly supportive of volunteers and volunteerism.

Graph 20 . Level of independence of NGO activities from polit ical, religious and economic groups
21.2% or 1/5 of the surveyed
organizations think that the activities
of non -governmental organizations
can not be independent from political,
religious and economic groups.
90.0% of the se NGOs work in
Ulaanbaatar and 10.0% in rural areas ,
with activities no n-attributable to
“other educational services ” or of the
“not elsewhere classified” type
prevailing in their operations.
9.3%
8.6%
10.7%
6.4%
15.7%
4.3%
5.0%
5.7%
1.4%
7.1%
25.7%
5.3%
11.7%
8.6%
9.4%
12.8%
3.0%
3.0%
4.1%
2.6%
9.8%
29.7%
1 volunteer
2 volunteers
3 volunteers
4 volunteers
5 volunteers
6 volunteers
7 volunteers
8 volunteers
9 volunteers
10 volunteers
more than 11 volunteers
Part-time Full-time
Quote 6
-… In 2020, 19,694 volunteers of the Network of Mongolian Volunteer Organizations performed
1,418,582 hours of work , contributing an equivalent of MNT 3.4 billion to the Mongolian economy.
Unfortunately, in 2020, volunteering is down by approximately 30 percent from 2019 due to the
pandemic. – Quantitative research data
78.8%
21.2%
Yes
No

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Graph 21 . Appropriateness of the presence of governmen t officials on the Governing Board , by percentage

A quarter or 26.4% of the surveyed
organizations consider that it is right
to have a high -ranking government
official on the Board. 68.3% of these
organizations operate in Ulaanbaatar
and 31.7% in rural areas.

Most of the organizations that find it appropriate to include politic ians in their Board s, are active
in field s of training, counseling, information and care services.
Graph 22 . Unofficial cost s of NGO participation in projects or public procurement , by percentage
Furthermore , 14.8% or 1/7 of the
organizations admit that to take part
in the project or public procurement
opportunities , payments not
sanctioned by law s or regulations
have to be incurred up on solicitation
by agencies or officials. Of these
organizations, 67.3% operate in
Ulaanbaatar , and the remaining
32.7% in rural areas.
Organizations engaged in other activities, other educational services , and environmental
protection services have higher informal spending. This indicates that there is a need to
strengthen fairness and show support in NGO governance area.
FGDs highlighted different governance and management practices. Following the FGD, bel ow –
mentioned key issues were observed :
• Except for larger associations and international organizations, the Board is the highest
governing body. Some organizations offer membership which can only be exercised
through participati on in training and other acti vities or access to services and is not a
means of involve ment in the organization’s internal management.
• The management structure of small, foreign -funded NGOs is unclear. In the majority of
cases, the executive management is under the control or superv ision by the founder; or
the founder itself runs the executive management. Naturally, it depends on whether the
founder is an individual or a legal entity.
• For small er or newly established NGOs, the boundary between governance ( the board )
and management ( the executive ) is vague ly understood and it is quite common that the
board itself is the executive management.
• Only large, stable and national level NGOs have internal controls and internal audit
systems and structure. Although there is a lot o f experience with external audits, the
auditing requirements vary from organization to organization. Some undertake audit s
along with international rules, some in keeping with their own governance criteria and
26.4%
73.6%
Yes
No
14.8%
85.2%
Yes
No

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internal regulations , others ad here to public accountability standards and still others and
some under specific legal regulations.
2.2. NGO FINANCING AND TAXES
2.2.1. Expenditures and assets of NGO
88.4% of the surveyed organizations do not have offices in their ownership and use spaces rent ed
from or provided for free by private or public entities.
The graph below shows the types of offices used by non -governmental organizations. 80.5% of
NGOs in UB and 78.7% in rural areas do not own their office s and work from either rented or free
priva te and public spaces while approximately on e fifth of NGO in both capital city and rural areas
do not have office accommodations at all.
Graph 23 . Office type s, by location and percentage

The number of NGOs with equity increased from 29.0% in 1996 to 52.0% in 2000. For example,
the Mongolian Red Cross Society, Mongolian National Chamber of Commerce and Industry, Zorig
Foundation, Mongolian National Olympic Committee and Mongolian Press Institute have fix ed
assets of more than MNT 60.0 million, while the majority or 55.8% of NGOs have fixed assets of
up to MNT 5.0 million.
In terms of capital structure, organizations with fixed assets in excess of MNT 40.0 million have
their own office s and other fixed assets, whereas the rest have only office furniture and some
equipment. It is estimated that just about 10 percent of the registered NGOs have offices in their
ownership . (Consulting and Business Center, Academy of Management 2000)
The ave rage worth of income, expenditure and fixed assets of most organizations for the last 3
years ranges between MNT 0-50 million . The graph below shows that the organizations operating
in Ulaanbaatar have higher incomes and expenditures than rural organizatio ns.

19.5% 21.3% 23.4%
10.8% 15.2%
33.1%
23.0%
11.9%
18.9% 22.9%
Ulaanbaatar city Rural area
Own office Rent
Uses public office free of charge Uses private office free of charge
No office
Quote 7
-… From 2019, the GASR, bank s and other financial institutions are focusing on the regist ration of
the beneficial owner. In the case of an NGO, it is registered either without a source of funds or with a
0 MNT worth of assets because the law does not have specific provisions . As a result, there are
cases of property disputes brought to the court.
Stakeholder FGD, 2020.

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Graph 24 . Average amount of income, expenditure and fixed assets for the last three years, by location and by
percentage

The average income and expenditure for the last three years are shown for the mutual -benefit
organizations. In terms of average annual expenditure, 90.0% of individual membership
organizations spend up to MNT 50 million a year , 3.3% of them spend from MNT 51 to 100 million
and the remaining spend more than MNT 101 million. As in the case of legal entity membership
organizations , 76.3% of them have average annual expenditure of MNT 0 -50 million, 14.9% have
MNT 51 -100 million and the rest have more than MNT 101 million. As seen from this, legal entity
membership organizations have higher income and expenditure than the individual membership
organizations.
Concerning average annual income, 89.2% of individual membership organizations earn MNT 0-
50 million a year , 4.1% of them make MNT 51 -100 million and 6.7% collect more than MNT 101
million. Meanwhile, 75.4% of corporate membership organizations have an average annual
income of 0 -50 million MNT, 14.9 % earn MNT 51 -100 million and 9.7% make more than MNT
101 million.
Graph 25 . Income and expenditure in the last three years, by membership type and percentage

80.8%
82.0%
91.1%
92.1%
93.2%
94.4%
9.1%
8.5%
4.0%
4.5%
3.4%
1.7%
Average annual income
Average annual expenditure
Fixed asset
Average annual income
Average annual expenditure
Fixed asset
Ulaanbaatar city
Rural area
0-50 million 51-100 million 101-200 million 201-500 million more than 501 million
89.2%
90.0%
75.4%
76.3%
4.1%
3.3%
14.9%
14.9%
Average annual income
Average annual expenditure
Average annual income
Average annual expenditure
Individuals
Legal entity
0-50 million 51-100 million 101-200 million 201-500 miliion more than 501 million

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Graph 26 . NGO expenses, by percentage

The average administrative cost
of the surveyed organizations is
8.6 percent; and the cost of
raising funds is 5.3 percent,
which is lower than the
international average (10 -15%).

The breakdown of NGO expenditure is shown by operational location. The results demonstrate
that operating costs (program expenses) are predominant and especially, for l ocal organizations,
70.6% of total expenditures fall under this category.
Table 4. NGO expenses, by location and by percentage
Rural area Ulaanbaatar cuty
Program expenses 70.6% 65.7%
Salary 16.4% 20.1%
Administrative costs 8.3% 8.7%
Expenses associated with fundraising 4.6% 5.5%
Total 100.0% 100.0%

The following graph goves the break -down of e xpenditures of mutual -benefit organizations over
the last 3 years.
Graph 27 . Types of expenditure for the last three years, by membership and percentage

In the case of corporate membership organizations, staff cost s are higher than those of individual
membership organizations. In the meantime, operational and fundraising costs are higher for
individual membership organizations.
2.2.2. NGO Income and Financing
NGOs generate most of their income from membership fees, donations from individuals and
enterprises as well as business revenue and external project financing.
67.0%
17.8% 9.4% 5.8%
61.4%
24.7% 9.4% 4.6%
Program expenses Salary Administrative costs Expenses associated
with fundraising
Individuals Legal entity
Quote 8
Projects and programs implemented by NGOs do not support administrative and salary costs.
Although the government sets criteria, due diligence and audit are carried out, a lack of capacity
building costs has led to the disruption of many NGOs. Stakeholder FGD , 2020

67.0%
19.1%
8.6%
5.3% Program expenses
Salary
Administrative costs
Expenses associated with
fundraising

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Graph 28 . Source of income, by percentage
Revenues from business activities associated with the implementation of the orgganization’s
stated mission are higher for Ulaanbaatar NGOs than local NGOs. As for local NGOs , they are
more likely to generate revenue from foreign project financing.
Table 5. Income s ource s, by location and percentage
№ Source of income Ulaanbaatar city Rural area
1 Membership fees and donations 39.3% 39.5%
2 Donations from individuals and enterprises 32.8% 34.5%
3 Revenue from business activities related to the organization’s
mission 36.0% 15.8%
4 Loan s 1.4% 1.1%
5 Endowment 1.8% 0.6%
6 Proceeds from the state budget for project implementation 6.1% 6.8%
7 Project financing (external) 18.6% 22.6%
8 Public p rocurement contracts 5.1% 3.4%
9 Other (please describe) 11.7% 5.6%
In the case of a mutual -benefit NGO, income generation from membership fees and donations
prevails. Meanwhile, public -benefit or public -mutual -benefit organizations have more income
generated from individual and corporate donation s as well as business proceeds than mutual –
benefit organizations.
0.6%
0.4%
0.4%
0.7%
0.7%
0.7%
1.3%
1.5%
1.5%
2.2%
2.8%
4.7%
6.3%
19.6%
30.7%
33.2%
39.4%
Other
Mining rehabilitation
Other NGOs
Residents
Local budget
Project financing (domestic)
Loan assets
Inheritance
No source of income
Income from training activities
Private asset
Procurement of goods, work or service with the
state and local funds (tender)
Proceeds from the state budget
Project financing
Business revenue associated with the
implementation of Charter objectives
Donations from individuals and enterprises
Membership fees and donations

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Table 6. Income s ources, b y organizational type and percentage
№ Sources of income Public
benefit
Mutual
benefit
Public -mutual
benefit
1 Membership fees and donations 20.0% 84.4% 49.7%
2 Donations from individuals and enterprises 36.6% 22.1% 33.7%
3 Revenue from b usiness activities related to the
organization’s mission 38.2% 15.6% 25.4%
4 Loan s 1.6% 0.8% 1.1%
5 Endowment 2.1% 0.0% 1.1%
6 Proceeds from the state budget 7.4% 1.6% 7.2%
7 Project financing (external) 25.0% 6.6% 17.1%
8 Public p rocurement contracts 4.7% 2.5% 6.1%
9 Other (please describe) 11.6% 9.0% 7.7%
Although quantitative research cites member donations and fees together with individual and
corporate donations as popular sources of income, FGD s reveal that the most common sources
of financing for NGOs are international grants and project fund s provided by multi – and bilateral
donors.
The meeting with representatives of ten public -benefit NGOs that were included in the survey
sample, revealed that only 5.0 -10.0% of their program financing is provided by the government
(in the case of public services outsourcing contracts) and 90.0 -100.0% comes from international
sources. (“B aasanjav Consulting” LLC, 2017)
According to a 2000 survey, the ratio of domestic and external resources of NGOs was 6.7 :93.3 ;
that is, most of the NGO funds came from external sources. (Consulting and Business Center,
Academy of Management, 2000)
In 2005, 59.5% of the NGO funding came from foreign donors, 27.9% from its own operating
income and 12.6% from donations and aid. (Democracy Education Center , 2005)
For NGOs, d onations constitute an important source of income. A study conducted in 2017 not ed
that the motivation to donat e is curbed by the lack of tax benefits for contributors . The i mposition
of the property tax on the real estate in NGO ownership has a negative impact on their interest in
acquiring offices of their own. (“Baasanjav Consulting” LLC, 2017)
Depending on the nature of the organization, it is also common for some NGOs to receive
government funding in the form of public services outsourcing contracts or public procurement
contracts.
In addition, some NGOs are making effective use of not so common sources of financing such as
crowdfunding, certain business activities and fundraising auctions.
Donations from business corporations and private citizens t end to flow more to arts and culture,
humanitarian and social service organizations. This corporate and individual giving is lacking for
watchdog organizations monitoring government activities and public interest organizations.
2.2.3. NGO Contingency Fund s
“No p rojects means no contingency funds” has been the answer of 4/5 of the organizations
participating the survey. Contingency planning is practice d by 20.4% of the participants which
helps them accumulate reserves to cope with financial hardships in the absence of projects. Thus,
4.8% of NGOs have contingency fund s to go on for up to one month; 7.2% will do so for up six
months; 2.3% will survive from six months to one year and 1.3% will hold on for more than a year .

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However, 84.3% of organizations have no contingency reserves to stay afloat should project
opportunities become un available.
Graph 29 . Contingency Fund s, by location and number

Following results indicate that public -benefit organizations have insufficient financial risk
mitigation policies. In comparison with mutual -benefit organizations, their contingency reserves
are relatively low.
Graph 30 . Avail abili ty of a contingency fund, by organizational type and percentage

More than 64.0% of the surveyed NGOs reported that they did not have any contingency fund s
in case they have not got any projects. However, 5.6% -5.7% of advertising and information
service providers expressed that they could operate continuously for up to one month, while 7.2%
-12.0% of the remaining organizations said that they could operate continuously for one to six
months.
Table 7. Avail ability of a contingency fund, by operational type and by percentage
№ Operational
type
Contingency
fund
availab ility –
1 month
Contingency
fund
availability –
1-6 months
Contingency
fund
availability –
6 months to 1
year
Contingency
fund
availability –
More than 1
year
Contingency
fund
unavailable
1 Training 4.9% 8.4% 2.5% 0.8% 83.3%
2 Research 3.1% 8.3% 3.1% 0.3% 85.1%
3 Consulting 4.4% 6.9% 2.8% 0.8% 85.1%
4 Advocacy 4.5% 8.2% 3.0% 0.7% 83.6%
5 Strategic litigation 9.1% 9.1% 1.5% 0.0% 80.3%
6 Aid and care
services 6.5% 7.2% 2.5% 2.2% 81.6%
7 Information
services 5.7% 4.7% 1.7% 0.3% 87.6%
433
19 37 11 6
143
14 12 5 3
Contingency fund unavailable Contingency fund available -will survive 1 month
Contingency fundavailable- will survive 1-6 months
Contingency fundavailable – will survive6 months to 1 year
Contingency fundavailable- More than 1 year
Ulaanbaatar city Rural area
12.4% 15.6% 17.7% 1.3% 0.8% 1.7%
86.3% 83.6% 80.7%
Public benefit Mutual benefit Public-mutual benefit
Contingency fund available -will survive 1 year
Contingency fund available- More than 1 year
Contingency fund unavailable

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8
Public
information and
communication
5.6% 4.3% 3.1% 1.9% 85.2%
9
Monitoring of
government
activities and
services
6.7% 10.0% 10.0% 0.0% 73.3%
10
Central and local
budget
monitoring
8.0% 12.0% 16.0% 0.0% 64.0%
11 Other 0.0% 0.0% 0.0% 0.0% 100.0%
Participants have spoken of the following challenges to the financial sustainability of NGOs:
• The biggest and most common pressure comes from social insurance premium s and
associated fines. NGO’s human resource s are formed by a small number of full -time
employees and part -time, temporary and short -term contract employees as well as
volunteers . Annual increase s of social insurance premium rate s and employer’s social
insurance contributions are the most difficult issues for NGOs.
• Real estate taxes are also levied on buil dings of public benefit or charitable purposes
such as shelters.
• Customs duties are also a problem for some organizations. Receiving international aid
goods and products designated to support NGO missions turns into additional expenses
for cash strapped o rganizations.
• Lack of tax benefits and other incentives for charitable giving has been strongly criticized
by NGOs which raise funds from public and corporate donations .
2.2.4. Tax es and tax exemption for NGOs
While in 2002 -2004, NGOs paid MNT 2,851.5 in taxes to the state budget (Democracy Education
Center, 2005) , by 2019 the sum increased to make up MNT 13,718,791. According to the 2019
data , all registered NGOs paid MNT 13,718,791 in taxes and MNT 52,801,059 in social insurance
premiums 2.
In 2019, 10.2% of the surveyed NGOs paid 108,970,000 MNT in corporate income tax es (CIT)
and 23.6% paid 446,670,000 MNT in personal income tax es (PIT). Property and land use taxes
amounted to MNT 91,908,000 for 2.5% of the NGOs .
Gr aph 31 . Total amount of taxes paid in 2019, by location, MNT

2 Official data, Ministry of Finance
74,695,000
423,350,000
90.245,000 34,275,000 23,320,000 1,663,000
Corporate income tax Personal income tax Other
Ulaanbaatar city Rural area

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In 2019, the average amount of taxes paid by the surveyed NGOs was MNT 160,000 in corporate
income taxes , 654,000 MNT in personal income taxes and MNT 5,406,000 in other taxes per
organization . The average amount of taxes paid by a public -mutual -benefit organization is high er
than that of the others .
Table 8. Average amount of tax es paid in 2019, by organizational type, MNT
№ Types of taxes Public
benefit
Mutual
benefit Public -mutual benefit
1 Corporate income tax 154 ,000 93 ,000 215 ,000
2 Personal income tax 666 ,000 449 ,000 766 ,000
3 Other 846 ,000 9,475 ,000 11 ,174 ,000
The table below shows t he average amount of taxes paid by an Ulaanbaatar NGO and a local
NGO.
Table 9. Average amount of taxes paid in 2019, by location, MNT
№ Types of t axes Rural area Ulaanbaatar city
1 Corporate income tax 194,000 148,000
2 Personal income tax 132,000 837,000
3 Other 238,000 9,025,000

In 2019, 23.0% of the surveyed NGOs paid social insurance premium s. For a single organization,
an average of MNT 986,000 worth of social insurance premium was paid, of which the employer
contributed MNT 455,000. The table below gives a breakdown of social insurance premium s paid
by different types of NGOs .
Table 10 . Average amount of social security p ayments in 2019, by organizational type, MNT
№ Social security Public benefit Mutual benefit Public -mutual benefit
1 Total amount of social
insurance premium 785 ,000 804 ,000 1,530 ,000
2 Amount paid by the employer 401 ,000 343 ,000 643 ,000

Only 3.4% of the surveyed NGOs enjoyed tax benefits, exemptions and incentives between 2015 –
2019. Of these organizations, the PIT averaged 1,426,000 MNT, CIT averaged 1,000,000 MNT
and activity -dependent taxes averaged 667,000 MNT.
Table 11 . Types of taxes subject to deduction and exemption, by location, MNT
№ Types of taxes subject to benefit and exemption Ulaanbaatar city Rural area
1 Personal income tax 339 ,000 1,921 ,000
2 Other contributions (religion, people with disability ) – 667 ,000
3 Corporate income tax 500 ,000 1,167 ,000
PIT and CIT benefits have been greater for p ublic -mutual -benefit organizations.
Table 12. Types and average amount of taxes subject to deduction and exemption, by organizational type, MNT
№ Types of taxes Public
benefit
Mutual
benefit Public -mutual benefit
1 Personal income tax 1,229,000 1,213,000 1,880,000
2 Other contributions (religion, people with
disability ) 600,000 800,000 –
3 Corporate income tax 500,000 – 2,500,000

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2.3. NGO REPORT ING
NGOs prepare a number of activity and financial reports for their own Boards and government
agencies as required by their charters and the law , making these reports also available for the
general public. Where NGOs conclude public services outsourcing and procurement contracts as
well as project delivery contracts, they prepare and submit additional reports to the government
and domestic and international donors . NGOs provide annual activity reports to the GASR;
however, lack of any feedback and follow -up action on the part of the GASR has resulted in less
reporting by NGOs.
Figure 1.Recipients of NGO report s

In the last three years, 88.9% of the surveyed organizations have reported to government
agencies and 11.1% have not prepared a report. Of the total reporting organizations, 52.6%
submitted detailed reports and 36.3% submitted X reports.
Graph 32 . Financial statements for the last three years, by location and percentage

Organizations that did not sbmit their activity reports or financial statements were those that had
no funding, were inactive or unaware of the need to file X report s.
Graph 33 . Reasons for not submitting X report to government agencies, by percentage

Report
Government
organizations
GASR Ministry of
Finance
Social
Insurance
General
Office
General
Department
of Taxation
Other
Donors Board of
Directors Public
53.1% 50.8%
36.0% 37.3%
10.9% 11.9%
Ulaanbaatar city Rural area
Detailed report X report No report
53.9%
27.6%
5.3% 13.2%
No funding No operation Had no realized that X
report was to be
prepared
Other

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NGOs submit their financial statements to government agencies, board, members and donors.
Graph 34 . Financial statements for the last three years, by percentage

In the course of stakeholder interviews, respondents not only emphasized the importance of
reporting for assessing quality and stability of NGO operations but they also pointed out that the
current regulations are burdensome with their discrepancies in the reporting procedure , criteria
and t ypes of reports expected from NGOs. See Appendix 4 for details.

Researchers have raised this issue before. The law requires that an NGO , irrespective of its
public – or mutual -benefit status , must report on its activities. Once the reports are prepared, i t is
not a problem to pass the m on to the relevant authorities, ye t it is nearly impossible for every
NGO to have a website to place the reports on and run it regularly , which eventually leads to a
lack of transparency. It c ould be considered a form of government support if a recipient
government agency takes action to r esolve the issue of public availability of NGO reports .
(“Baasanjav Consulting” LLC, 2017)
2.4. NGO COOPERATION AND PARTNERSHIPS
Table 13 . NGO c ooperation and partnerships , by percentage
№ Types of organizations Advocacy Providing
services
Undertake
joint actions
Report to the
organization
1 Government 20.9% 13.5% 57.7% 15.4%
2 International 7.0% 6.3% 32.5% 5.6%
3 Investment, sponsor 5.6% 8.9% 24.0% 7.9%
4 Private sector 9.8% 13.6% 47.6% 4.8%
5 NGO, volunteers 13.5% 9.7% 58.1% 4.5%
6 Press 11.9% 4.4% 41.9% 3.5%
7 Universities and research
institutes 6.7% 5.4% 36.0% 2.6%

81.1% 100.0%
0.0%
54.0%
26.2% 23.7% 32.9%
21.4%
19.7% 29.2%
13.7% 18.4% 1.1% 0.4%
48.7%
10.0% 2.4% 3.9%
Detailed report X report No report
Government agencies Board of Directors
Members Donors and Sponsors
Other .Public (digital or other format)
Qu ote 10
…Government organizations which receive reports do not review them ; integrated reporting and a
system that promotes the importance of reporting are non -existent. It is 4 types of official reports that
an NGO is required to submit — to the Social In surance General Office, to the GASR, to the Tax
Administration and the Ministry of Finance ! If it ha s done any contractual work , a contract work report
will be due, in addition…
Stakeholder FGD , 2020

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There are 55 laws and 27 government resolutions , programs and regulations that include the
word “non -governmental organization” in the Integrated Legal Information System . Furthermore,
the Law on the Government also defines NGO as “non -governmental public organizations”. In
particular, Article 28 on Government Relations with Non -Governmental (Public) Organizations
states: the Government shal l cooperate with public organizations in taking necessary measures
to support their proposals and initiatives for the development of the country, strengthening the
state and social institutions, and assisting in the implementation of state policies and laws.
A search was undertaken w ith the use of a qualitative research program to establish the
substance of the concept of “cooperation” revealed that there are 12 legal provisions and 54
normative documents mentioning cooperation in the aforementioned outsourcing of certain
government functions on a contractual basis. Process elem ents of cooperation are referred to in
1 legal provision and 21 clauses in various directives and other regulations . Furthermore, there
are 43 legal provisions and 2 resolutions establishing links between activities and NGO
participation . It can be conclud ed that outsourcing of government functions under contracts
prevails as a form of cooperation between governmental and non -governmental organizations.
With this exception, m ost of the provisions in legal normative acts set forth NGO roles and
responsibilities as those of public outreach , public education and awareness building . (Integrated
Legal Information System) .
Figure 2. Substance of references to the”non -governmental organization” in normative documents in the
Integrated Legal Information System , by percentage

2.5
54.1
5.7
1.3
9
21
6.4
43.8
16.6
12
5.2
9.9
4.1
4.7
1.6
2.1
Roles and respomsibilities of an NGO
Cooperate with an NGO
Sign a contract with an NGO
NGO has … rights
Legal difinition of an NGO
Finance and tax
Public outreach
NGO criteria
NGO Accountability
Government will support the NGO
Mongolian legislation Government resolutions, ministerial orders and regulations
Quote 11
-… Cooperation between NGOs and government organizations need to be developed in the following
areas first, participation in policy formulation ; second, outsourcing of government functions; third, NGO
economic activities through partnerships with government, citizens and enterprises; fourth, participation
in public procurement. — Stakeholder FGD, 2020.

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Further discussions with NGO representatives revealed that the level s of cooperation between
the government and civil society, civil society and private sector as well as civil society and
internaitonal organization s var y from sector to sector.
The Mongolian Red Cross Society and some larger national associations work clos ely with
relevant government agencies at all levels . As for other CSOs and their government counterparts,
although they come into frequent contact on a wide range of issues such as sectoral development
policy, regulatory frameworks, program monitoring and evaluation and joint implementation of
activities , the two sides have a long way to go to achieve the state of interdependence
characteristic of stable cooperation. Smaller organizations focusing on volunteerism and
charitable activities have been observe d as tending to operate at a distance from government
agencies.
NGOs point out that that attitudes and treatment are the challenges commonly encountered in
their work with government agencies of different levels .

Although government -civil society cooperation is expanding, the atmosphere of mistrust and
exclusion persists .

Despite challenges in the relations between the state and civil society organizations, NGOs state
that effective forms and good practices of co llab oration are on the increase , rooted in the values
of of a long -term and stable cooperation.

Quote 13
-… Cooperat ion with government agencies means power imbalance in a relationship . In other words,
they literally take and treat you as “non -governmental ”. Government agencies and ministries are very
closed and bureaucratic. For example, the State Secretary of one Ministry said, “NGOs should
operate at no cost, and you should not have any operating costs because you are volunteers.”
Stakeholder FGD , 2020

Quote 14
-… It is quite common for government agencies to look down on non -governmental organizations as
ones not doing real work. “Why you NGOs send in useless paper s and monitor abstract things, why
wouldn’t you do something tangible, it’s no use cooperat ing with NGOs that don’t do real work…” are
the frequently heard words displaying the attitudes of government organizations. — Stakeholder FGD ,
2020

Quote 15
-… There are open platforms such as Human Rights Forum , a network of human rights NGO Forum.
I believe it is not a legal entit y under the law of our country. The reason why th is platforms is
nonetheless recognized is that our platform sends reports to the United Nations on issues regarding
the implementation of human rights in Mongolia. Upon investigation, the United Nations submit s
recommendations from Geneva to Mongolia. At first, they we re not taken into account at all, and the
government responded only appearance -wise, under pressure. But now recommendations are
accepted. We provide a dvice where government fails to act ; we are recognized and joint work has
become possible. Generally, the y are reluctant. They would accept only if unavoidable …” —
Stakeholder FGD , 2020

Quote 12
-… There are no established systems of evaluation and validation of technical and other capacity of
NGOs for contracting them for work in this or other field. I n order to cooperate, international and
government organizations collect information based on their own criteria and do the selection based
on the review of the NGO’s management structure , executive team and length of operation . —
Stakeholder FGD, 2020.

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Representatives of NGOs have also mentioned good examples of effective cooperation in the
education sector. It was observed that the capacity and openness of NGOs were crucial in making
such good experience possible .
The areas of culture and child protection are also providing examples of effective cooperation
with private sector, international organizations and the public.
Government support to civil societ y organizations , as assessed by the participant ing NGOs , was
rated for all its forms mostly as “Poor ” or “Moderate ”. When the ratings were weighted against the
total number of the participants, the ir average values all placed below the “Moderate ”, that is, 3.00
in numerical expression .
Ulaanbaatar and local NGOs have rated differently.
Table 14 . Average rating of government support and assistance, (on a scale of 1 -5)
Support and assistance provided by
the Government
Percentage of total sample Average
rating of all
participants
Extremely
poor Poor Medium Good Very
good
1 Legal environment 17.3% 29.4% 40.3% 10.5% 2.5% 2.52
2 Financing 32.9% 40.3% 18.9% 7.3% 0.6% 2.02
3 Tax benefit and exemption 23.3% 38.1% 23.4% 12.2% 3.1% 2.34
4 Communication and attitude 14.9% 29.0% 35.1% 18.4% 2.5% 2.65
5 Participation in government
decision -making process 20.1% 35.9% 31.6% 10.7% 1.8% 2.38
6 Activity r eporting and information
sharing 17.1% 32.1% 31.5% 17.3% 2.0% 2.38
NGOs have rated overnment support to NGO activities in the fields of research, monitoring of
government workings and services as well as oversight of state and local budget execution as
“Poor”.
Outsourcing of certain public services is viewed as an area of cooperation, with emphasis laid on
the need to ensure transparency and integrity by announcing the sectors and agencies subject to
outsourcing and establishing a selection system of clear -cut criteria and process es with good
linkage to NGO report ing and tax obligations in line with best international ipractices . (FGD –
Stakeholders, 2020)

Participants highlighted a need in government assistance in promoting international networking
and cooperation of Mongolian NGOs by taking action to create a favorable legal framework where,
in particular, system s such as Citizens’ Council s that used to exist in every ministry could play an
important role . (FGD – Stakeholders, 2020)

Quote 16
-…Systems are still lacking that guarantee continuity after the change of government. Liasion with
NGOs suffers when officers in charge are often replaced… — Stakeholder FGD , 2020
– …NGOs have a desire to work with the government. They do have the necessary capacity but not
the opportunity to show their strength or even engage in information shar ing . For example, we send
our reports to 4 different agencies but nothing comes out of this… — Stakeholder FGD , 2020

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The barriers to cooperation , as experienced by the participating organizations , are shown in the
table below follows. The most common issues in working with other legal entities are a lack of
access to information , non -transparency and bureaucra tic red -tape . About 10 percent of the
respondents said that they have no problems in their relations with other organizations. As for
local organizations , they find the lack of transparency and the insufficiency o f human resources
and financial capacity to be the main challenges in establishing and maintaining successful
cooperation.
Graph 35 . Challenges in cooperation, by percentage

In terms of organizational type, public -benefit organizations encounter greater difficulties in
establishing understanding and collaborative relations than mutual -benefit organizations in most
respects.
11.3%
12.4%
15.8%
22.0%
37.9%
29.4%
28.2%
40.1%
35.0%
39.0%
14.0%
23.5%
22.7%
33.4%
22.3%
36.8%
40.9%
41.9%
52.2%
54.5%
Other
Corruption
Lack of tax benefits and exemptions
Communication culture
Insufficient human resources, financial resources
and capacity,
Difference in understanding
Discrimination and unequal treatment
Lack of transparency
Bureacracy
Inaccessibility of information
Ulaanbaatar city Rural area
Quote 17
-… In a related study, “63.0% of NGOs rated the cooperation between government and non –
governmental organizations as Moderate, 34.0% as Insufficient and 3.0% or 1 organization as Good ”
(State Building Experts Council , 2020) .

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Graph 36 . Challenges in cooperation, by operational ty pe

Challenges similar to the above had been listed in an another research report. (Democracy in
Mongolia: Socio -Political Study on the Current Situation of Civil Society, 2020) . For example :
– Lack of intersectoral cooperation;
– Instability of government organizations;
– Arbitrariness in decisions to continue or discontinue activities , arising from a one -time
impulse or an official’s attitude;
– The w ork and capacity of organizations of people with disabilities are not valued and the
tendency to have them do more for less pay constitutes a form of discrimination;
– The proclivity of government organizations to put forth unrealistic requirements and
deman d high results from imited budget s is often a factor that disheartens organizations
and citizens and damps their motivation to propose new ideas and initiatives ;
– Reports produced by g overnment organizations tend to prioritize numbers and contain
statistics that do not correspond to real ity ;
– Government agencies need to address the issue of improving cooperation and partnership
by recogniz ing the impossibility of doing all the work with their limited human resources
and by strengthening the contracting system for NGOs.
15.5%
18.8%
18.2%
26.0%
28.7%
34.8%
30.9%
36.5%
44.2%
45.3%
13.1%
13.9%
16.4%
23.8%
26.2%
29.5%
32.8%
32.8%
42.6%
52.5%
12.4%
23.7%
23.7%
27.4%
32.6%
36.6%
42.4%
46.6%
51.1%
52.4%
Other
Corruption
Lack of tax benefits and exemptions
Insufficient human resources, financial resources
and capacity
Communication culture
Difference in understanding
Discrimination and unequal treatment
Lack of transparency
Bureacracy
Inaccessibility of information
Public benefit Mutual benefit Public-mutual benefit

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Nine out of ten surveyed organizations confirm that they continously experience d some type of
challenge for cooperation, and about 60% of them solve their problems in the following manner.
Graph 37 . Measures to overcome the challenges in cooperation

About half of the organizations that responded “no measures were taken” (n = 231) said they
were not sure which action to take, while the rest said they felt beat , thought it was u seless, were
dispirit ed or wary of any potential pressure , lacked human and other resources .
Graph 38 . Reasons for inaction, by percentage

This indicator by location shows that the lack of human and other resources cited as a reason for
inaction is twice as high for local NGOs than those in Ulaanbaatar. In other words, in Ulaanbaatar,
there is a fierce competition between NGOs for scarce funding, and there is no denying that there
are other factors that could negativ ely affect their consolidation. Therefore, it is necessary to
investigate the NGO environment in more depth in the future.
Graph 39 . Reasons for inaction, by location and percentage

50.3%
33.9%
6.7% 4.6%
37.9%
2.3%
Submit a letter
or letter of
demand
Organize a
meeting for
lobbying
Organize
protests and
demonstrations
Take judicial
proceeding
No measures
were taken
Other
36.7%
43.8%
38.8%
10.7%
6.3%
3.8%
35.3%
28.1%
33.8%
13.3%
18.8%
13.8%
4.0%
3.1%
10.0%
Public benefit
Mutual benefit
Public-mutual benefit
Not sure which measures to take Wary of any pressure
Thought it was unnecessary, reluctant Understaffed and a lack of capacity
Other
31.6%
40.9%
10.5% 7.0%
34.2% 33.9%
22.4%
10.8%
1.3%
7.5%
Rural area Ulaanbaatar
Not sure which measures to take Wary of any pressure
Thought it was unnecessary, reluctant Understaffed and a lack of capacity
Other

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CHAPTER 3. IMPACT OF NGO

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Majority of surveyed CSOs work with citizens, public, youth, children, women and families.
The target groups of the surveyed organizations include COPNI’s ” Service s N.E.C ” category,
namely, protection of the rights of sector workers, sector development, oversight policies,
assistance to persons with disabilities and the elderly, human rights, citizen participation, women’s
rights, preservation of national heritage, and leg al advice.
Graph 40 . CSO operational areas aimed at target groups, by percentage

Most of the existing non -profit organizations focus on training, research, counseling, aid and care
services and advocacy for the well -being of the public, communities, youth, children, women and
families.
Table 15 . NGO target group s, by activity type (Multiple choice response )
№ Operational areas Citizen,
public Youth Children Women Family
1 Training 70.1% 83.6% 81.6% 82.1% 76.2%
2 Consulting 56.0% 63.8% 50.5% 68.7% 69.9%
3 Aid services 38.8% 48.4% 44.7% 55.3% 63.6%
4 Research 45.5% 47.9% 44.2% 57.0% 55.9%
5 Advocacy 42.4% 47.4% 38.9% 55.3% 52.4%
6 Information service s 44.2% 48.4% 37.9% 52.0% 51.7%
7 Public education and
communication
26.1% 26.8% 24.2% 29.6% 27.3%
8 Strategic litigation 10.5% 12.7% 7.9% 14.5% 18.2%
0.01%
2.0%
2.3%
4.2%
4.8%
5.3%
6.0%
6.9%
10.4%
15.7%
17.1%
17.4%
17.9%
20.9%
26.2%
27.8%
31.2%
72.5%
Other
Sexual and gender minorities
Migrants
Ethnic and cultural groups
Relevant sector, employees of the sector
Livestock, flora and fauna
Residents, members
Strictly protected areas
Herders
Single parents
People with disability
Citizens with low living standards
Elders
Family
Women
Children
Youth
Citizens, public

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9 Monitoring of government
actions and services
10.1% 10.8% 9.5% 16.2% 9.8%
10 State and local budget
monitoring 4.4% 6.1% 4.7% 7.8% 5.6%
11 Other 1.2% 1.4% 1.6% 1.1% 1.4%
The scope of the NGOpublic outreach activities over the past three years has been defined as
follows.
Table 16 . Impact, by location
№ Impact Ulaanbaatar Rural area
1 Number of people involved in NGO activities and services 554 ,878 229 ,852
2 Number of printed books, brochures and manuals 46 ,762 9,726
3 Number of surveys conducted 7,256 1,997
4 For environmental organization s, the territor ies , river s, plant and
animal species covered under operation 2,787 1,076
5 Cases filed on behalf of public interest 2,612 394
6 Number of amendments proposed and approved in local and
national policy and legal normative documents 402 175
7 Other 1,694 60

The number of beneficiaries of the activities and services of the surveyed organizations has
reached 784,730 in the last three years; and the number of books, brochures and manuals printed
by them has reached 56,524.
The graphs below show the outputs of the last three years according to TOP -8 operational areas.
Graph 41 . Number of amendments incorporated into and approved by local and national policy documents and
legislative acts, by operational area

14
23
37
40
44
48
85
221
Vocational training
R&D Environmental protection
R&D Education
R&D Social protection
Other education services
Social protection services
Environmental protection services
Services n.e.c

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Graph 42 . Number of people involved in NGO activities and services, by operational

Graph 43 . Cases filed on behalf of public interest, by operational area

Graph 44 . Number of surveys conducted, by operational area

28,813
28,943
55,097
55,325
64,196
74,691
77,785
279,423
Social protection services
Cultural services
R&D Social protection
R&D Education
Social protection services
R&D Services n.e.c
Other education services
Services n.e.c
1160 1078
206 159 115 72 60
Services n.e.c Social
protection
services
Cultural
services
Environmental
protection
services
Other
education
services
Housing Recreational
and sporting
services
150
154
431
500
501
624
2,510
3,656
Tertiary education
Cultural services
R&D Social protection
Housing
Other education services
Social protection services
R&D Health
Services n.e.c

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Graph 45 . Number of printed books, brochures and manuals, by operational area

Graph 46 . As an environmental organization, territory, river, biological and animal species covered under
operation, by operational area

Graph 47 . Other activities that change d, by operational area

1,534
2,329
2,646
3,323
8,128
9,631
12,567
14,734
R&D Services n.e.c
Public health services
Environmental protection services
Cultural services
Social protection services
Recreational and sporting services
Other education services
Services n.e.c
76
108
174
185
205
365
370
2,299
Recreational and sporting services
R&D Social protection
Religion
Services n.e.c
R&D Environmental protection
Cultural services
Other education services
Environmental protection services
9
10
36
53
71
95
243
1212
Other health services
Hospital services
Public health services
Education not definable by level
Cultural services
Environmental protection services
Social protection services
Services n.e.c

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Local organizations were more involved in terms of incorporating amendments into national or
local programs or having a new program approved .
Graph 48 . Incorporation of amendments into legislative acts, policy and programs, by location and percentage

Criteria for measur ing or determining the impact of NGOs are unclear, both legally and information
wise. During a stakeholder group discussion, several participants agreed that the impact of NGOs
on society was not transparent and measurable. Although they accomplish a lot, they do not have
a well -established reporting system and the government agencies do not give any incentive or
there is no evaluation mechanisms for submitted reports. Representatives of international
organizations, on the other hand, measure the impact of their partner NGOs by the results of
contracted projects and programs. (FGD – Stakeholders, 2020) .
Participants emphasized that the main purpose of a good impact evaluation system should be
directly connected, in a transparent manner, to tax benefits, incentives, government support,
funding and hierarchical assessment of good or poor.
In terms of community -based activities, the following graph shows other activities, such as
environmental protection, community -based training, counseling and awareness.
Graph 49 . Operational areas, other

4.0%
19.2%
4.3%
18.6%
5.1%
20.9%
3.4% 6.2%
35.0%
2.3%
16.9%
3.4%
19.2%
3.4%
Had a new
program
approved
Amendments
incorporated
into a
program
Had a new
law approved
Had
amendments
incorporated
into legal
provisions
Had new
documents
approved
Had
amendments
incorporated
into
documents
Other
Amendments incorporated
into national/local programs
Had amendments
incorporated into laws and
legal provisions
Had amendments
incorporated into policy
documents
Other
Ulaanbaatar city Rural area
548
439
292
183 183 110
Environmental
protection /Tree
planting, waste
collection/
Organize
trainings and
consultations
Public
awareness
Public health
activities
Other Provide support
and assistance

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46.9% of all organizations have an evaluation system for their activities, while the remaining
53.1% do not evaluate their operation.
Of the organizations that incorporated amendment into legislation, policies and programs, 27.8%
incorporated amendments into national/local programs, 25.2% into policy documents and 22.0%
into laws and legal provisions. Others includes incorporation of amendments into organization’s
internal rules or participation in government activities.
Graph 50 . Incorporation of amendments into legislation, policy or programs, by percentage

In terms of changes introduced into public service delivery, 30.5% have improved the scope and
access to services; 28.0% have improved the service delivery process and quality and 21.3%
have changed the service system.
Graph 51 . Changes brought into public service delivery, by percentage

Whereas in terms of making changes in transparency and accountability of government
organizations and contributing to the fight against corruption, 28.1% have improved
accountability, 25.5% have improved transparency and 8.6% have contributed to the fight against
corruption.

4.5%
23.3%
4.7%
20.5%
3.8%
18.2%
3.4%
Had a new
program
approved
Amendments
incorporated
into a
program
Had new
documents
approved
Had
amendments
incorporated
into
documents
Had a new
law approved
Had
amendments
incorporated
into legal
provisions
Other
Amendments incorporated
into national/local programs
Had amendments
incorporated into policy
documents
. Had amendments
incorporated into laws and
legal provisions
Other
6.3%
24.2%
7.8%
20.2%
1.8%
19.5%
2.0%
Stopped
covering new
population
group
Helped fully
reach the
population
New service
was
introduced
Old service
has been
partially
improved
Systematic
changes were
introduced
Changes in
some units or
sections
Other
Improved service scope and
accessibility
Improved service delivery
process and quali

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