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By law, non-governmental organizations (NGOs) in Ethiopia are severely restricted in their activities towards policy development. In this study we explore to what extent these restrictions have affected NGOs in Natural Resource Management in the Oromia regional state of Ethiopia. We quantitatively analyzed 106 semi-structured questionnaires, in order to assess 1) the general characteristics of these NGO, 2) the role of NGOs in natural resource management, 3) the factors that constrain their activities, especially in relation to the proclamation, and 4) the cooperation between NGOs as well as other stakeholders. Results indicate that NGOs are mainly involved in policy implementation, including afforestation, forest management, and soil and water conservation. We find that a more active role in agenda setting and policy formulation is hampered by the 2009 proclamation, which explicitly restricts the role of Ethiopian Residence Charities/Societies (ERCS) and Foreign Charities (FC). Consistently, NGOs, as well as their donors, often avoid involvement in policy development, in fear of potential collusion with the government. In addition, NGOs listed legal and administrative barriers, poor networking and cooperation among NGOs, lack of capacity, lack of information, and a lack of clear role on policy issues as constraints for influencing policies for natural resource management. The extent to which these factors affect NGOs is dependent on their type and the source of their funding.