The financial crisis has also had a detrimental affect on the state of giving in Hungary. Non profit organizations have been noting a general sense of apathy within civil society and a drop in the level of donations.
The 1% law enacted in 1997, is a highly important tool for mobilizing citizens and has proved a growing source of funding for non profit organizations. The law allows taxpayers to transfer 1% of their previous year’s personal income tax to an eligible non profit organization of their choice. The law was envisaged in order to “enable taxpayers…to contribute to the third sector, and to exercise their choice as to what activities they wish to support, without any loss to their income (12). According to estimates, it has the potential to unlock at least one-quarter of a billion Euros for Hungarian charities (12).
The Non profit Information and Training Centre (NIOK) was created in an effort to encourage citizens to take part in the 1% scheme and actively support the non profit sector. NIOK runs a free information helpline and conducts information campaigns to raise awareness and make sure everyone knows about the 1% law and knows how to take advantage of it. NIOK has also created a database including information about the various organizations eligible to receive 1% donations.
In 2008, the amount generated from 1% donations reached about 35,000 Euros. Associations and foundations received 60.9% of the donations and those working in areas such as child protection, cancer patient support and animal protection received the most support (4).
Unfortunately, only about half of taxpayers actually designate their 1% deduction. Civil society leaders like Barbara Eros from DemNet have the impression that “it is not really fostering private donations…It was a huge step in a paternalized ex-socialist country, but I don’t think we should stop here” (1)
Corporate philanthropy is also an important source for the sector. In 2006, almost 165 million Euros were donated through corporate giving in Hungary (7).
