After the coming into force of the Ethiopian charity and society proclamation in 2009, the role ofrncivil society organizations to the contribution of development has significantly diminished.rnHence, it has become one of the core agendas of the government during the recent reformrnprogram undergone. To alleviate the problem government has repealed the law and replaces itrnwith a civil society proclamation. The purpose of this study is to assess comparatively how therncurrent civil society law addresses the drawback of the charity and society proclamationrnparticularly to the root cause of financial sustainability and democratization taking a case ofrnselected civil society organizations found in Addis Ababa. Even though there are a lot ofrnresearches conducted on the topic, none or few have been conducted a study identifying therndetrimental provisions in the charity and society proclamations how the civil societyrnproclamation deals with the problem. To this end, the researcher employed a mixed descriptivernmethod of research design by collecting primary data from forty-two leaders and founders ofrnselected civil society organizations in Addis Ababa using a close-ended questionnaire byrnapplying the snowball non-probability sampling technique. Moreover, the researcher alsorninterviewed officials in charge of enacting the new law and officials from implementing bureausrnusing semi-structured interview questions by applying a quota sampling method. The collectedrndata has been analyzed qualitatively and quantitatively using statements, tables, figures, andrnpercentages. The result shows that the charity and society proclamation threaten the financialrnsustainability of civil society organization by putting restrictions on raising not more than 90%rnof fund from a foreign source and accepting funds from an anonymous source, the administrativernhurdle to engage in income-generating activities from a local source, and enlisting project basedrnactivities in administrative costs. However, the civil society proclamation resolved the problemrnby lifting the restriction, allowing without condition to engage in income generation activities,rnand emplace project related cost in program cost from administrative cost. Moreover, therncharity and civil society proclamation limit the freedom of association of these organizations andrnrestrict their contribution to good government, democracy, and human rights by draining theirrnfinancial means and by limiting foreign organizations to engage in advocacy and policy issues.rnHowever, the current law resolved the problem by lifting the restriction of financial sources andrnallowing free entry. For the success of the civil society law the civil society organization are dutyrnbound to implement the fund they get for the intended purpose while donors to ensure thernsustainability of the project and government to emplace proper regulatory mechanism.