Parliament poised to debate landmark NGO Funding Act amid calls for sustainable local financing

As Uganda’s Parliament prepares to debate the proposed NGO Funding Act, a wave of support and cautious optimism is sweeping through civil society and political circles.

The bill, aimed at reducing the country’s heavy reliance on foreign aid, seeks to foster sustainable, locally driven funding for non-governmental organizations—ushering in what proponents describe as a new era of self-reliant civil society.

Currently, foreign donors finance up to 70% of NGO operations in Uganda, a statistic that has alarmed local leaders concerned about dependency and vulnerability to shifting international priorities.

The NGO Funding Act aims to reverse this trend by incentivizing domestic philanthropy, strengthening government support mechanisms, and creating a policy environment conducive to local investment in social development.

Call for Local Investment

Nyanzi Martin Luther, founder of Apex Digital Skills and a vocal advocate for the bill, has been at the forefront of the push for reform. He criticized the paradox of Ugandans funding public services through taxation while key development initiatives remain dependent on European Union and other foreign donors.

“We are tired of seeing European Union funding NGOs in Uganda yet we pay tax here,” Nyanzi declared in a recent address to civil society groups. “This bill is an opportunity to ensure our NGOs thrive on homegrown support, not handouts from abroad.”

Luther emphasized that Uganda must take ownership of its development narrative. “If we want sustainable change, it must come from us—funded by us, led by us.”

Balancing Sustainability with Independence

While many applaud the bill’s intent, concerns over potential government overreach have surfaced. Mathias Walukaga, a seasoned political figure and civil society ally, welcomed the push for local funding but cautioned against compromising NGO autonomy.

“Sustainability is vital, but NGOs must maintain the independence to innovate and serve their communities effectively,” Walukaga stressed. “We must ensure this law does not become a tool for excessive regulation or control that stifles the very spirit of civil society.”

He urged lawmakers to include safeguards that protect freedom of association and expression, warning that overregulation could undermine trust and deter local philanthropy.

A Foundation for ‘The New Uganda’

Echoing broader developmental ambitions, National Unity Platform (NUP) lawmaker Elias Nalukoola described the NGO Funding Act as foundational to Uganda’s future.

“This is what will be part of the new Uganda as we plan for the country,” Nalukoola said, framing the legislation as a cornerstone of a self-reliant, resilient society. “Strong, locally funded NGOs mean stronger communities, better accountability, and more responsive service delivery.”

Experts Push for Comprehensive Reform

The debate is not just political—it’s systemic. Dr. Grace Nakato, a leading development finance expert, argued that the legislation must be more than a funding mechanism; it must be embedded in broader structural reforms.

“Without tax incentives for donors, capacity building for NGOs, and public-private partnerships to promote domestic philanthropy, the act will fall short,” Nakato warned. “We need a holistic policy framework that addresses the root causes of funding instability.”

She recommended tax breaks for individual and corporate donors, investment in NGO financial literacy, and the creation of national community trust funds to channel local resources into social initiatives.

A Turning Point for Civil Society

With foreign funding increasingly unpredictable—due to geopolitical shifts, donor fatigue, and policy changes abroad—Uganda’s civil society stands at a crossroads. The NGO Funding Act could mark a transformative shift from aid dependency to homegrown resilience.

As Parliament gears up for debate, stakeholders agree on one point: the time for action is now. The outcome of this legislative process may not only redefine how NGOs operate in Uganda but also set a precedent for African-led development models across the continent.

The upcoming discussions promise to be pivotal, balancing the urgent need for financial sustainability with the enduring imperative of preserving civil society’s independence, innovation, and impact.