Sustainability Through Contracting and Grants

7/30/2019 Sustainability Through Contracting and Grants

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Sustainability through

grants and contractsEuropean Center for Not-for-Profit Law


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The State and the CSOs


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Issues

Who is responsible for the task (government

or not, and if yes, at which level)?

Who executes the tasks (government, its

institutions/agencies, a semi-independent

actor)?

Who finances the tasks (central budget, local

budget, private sources or a combination)?

What funding modalities are appropriate for

the financing the task?


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Responsibility of state

To define the state policies and ensuretheir implementation

In consultation with beneficiaries, target groups,

providers, citizens Determines what the government and local

government should do

In this processes it engages CSOs and supports

them financially but extent depends on

relevance of areas and tasks


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WHAT ARE GOVERNMENT TASKS


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Concept/Objectives

Essential tasks

Fulfill government

obligation in response to a

need education, health

Ensure continuous-longer

term provision of service,

with high quality, bestvalue for price

Desirable task

Respond to a need

Support the sector (CSOs)

Create harmonizedapproach in certain area

(standardization,

framework)


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Government services/tasks

Essential/fundamental

MUST be provided (legal

obligation)

State can provide directly

State can:

Outsource to outsider who

manages and collects income

(IT, electricity, gas)

Delegate whole service or partsof it (orphaned homes, health)

or some other function

(monitoring, training)

Desirable/additional

Not necessarily

government service

The state may provide it, orcontract it out, or support

it financially, or simply

create a framework for it

(homeless shelters)


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Examples

Essential

Education (kindergardens,primary, secondary)

For children w disabilities

Health facilities

Residential care forabandoned children

Social payments for

vulnerable groups

Orphaned homes

Unemployment programs

Monitoring

Desirable

Homeless shelters

Elderly care

Rent-a-bike

Help centers for children,or women of domestic

violence

Provision of meals

Reintegration of sociallyexcluded groups

Research, training


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State vs Private Providers

Essential service

State retains obligations

i.e., the task will remain govt

responsibility and has to be

completed

State can contract out but

retains:

Control of funding;

Control of the spending;

Control of the quality of the

service.

Desirable service

State does not have

obligation to undertake nor

to fund

State can decide to:

Incorporate in own policy

Create

framework/standards

Provide funding


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Who are the providers?


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Providers

Essential services

Various providers

CSOs may be specifically

targeted (e.g., bestcomplement service,)

CSOs may be only

providers

Netherlands SS, Bg intladoption

CSOs may be excluded

Bg - health

Desirable services

CSOs may be main target

or providers

Other providers could alsobe included


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Through what mechanism/funding?


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PURPOSE SUPPORTS MAIN FORMSImplementing,complementing

government policyProject implementation Grants, Subsidies

In-kind support

Support the

development of the

sectorSupport for CSOs

institutional developmentGrants, SubsidiesIn-kind Support

Purchasing services for

the governmentService provision Service contracts

Delivering government

tasksService provision Third party payments

Purpose drives form


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Grants

Implementation of certain policies orprojects which would be of general interest

Grant-making authority does not receive

anything in return directly No strict guidelines on how to implement

Easier to administer

Mainly shorter term


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Contracting services

Acquisition of goods or services at the best

possible value or cost.

CSO is providing a service that government is

obliged to provide by law: i.e. taking over

responsibility, or

CSO is providing additional, complementary,

alternative services;

The service may be provided under clear rules

Longer term


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Why does Govt contract out?

Limited human and material resources

Better quality of services

Focus on own priorities Increased accountablity


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Why CSOs should be contracted?

Innovative

Close to communities

More resources More flexible


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GRANTS PROCUREMENT ANDCONTRACTING

THIRD PARTY

PAYMENTSAim Implementation of

government policy

Providing services to

government

Providing a govt

service

Terms of

contract

Set by the government Set dominantly by

government

Set by law

Key selectionprinciple

Best ideas and projectplans

Highest quality at thelowest price

Fulfillment of legalrequirements

NGOs funded Several applicants One bidder Several licensees

Cost structure Project budget Fee based budget Budget according to

regulations

Indirect costs

related to

activities

Percentage of project

budget

May be fully covered in

fees

General overhead % set

by law


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Who distributes and who funds grants

or contracts out? Government

Ministry

Separate public entity Foundation, Fund

National vs local

Bulgaria: 90% funded by state but contracted onlocal level


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PF potDiasporadonations

Privatization

Centralbudget

Ministriesbudget

Lotteries

Matching %Legislation

Foreign Aid

Specific Tax

and Revenue(license,pollution)


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Who is eligible from CSOs?

How are CSOs defined in the legal system types of CSOs?

Public benefit and/or mutual benefit

organizations? Non registered CSOs?

Do CSOs compete with each other, or with

other sectors as well?


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Who benefits What is the impact

Profiling of the sector Advocacy organizations vs service providers

Independence

Institutionalization Croatia

Consider the effect to decide on the best form


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Legal regulation

Ensuring transparency and accountability Law/regulation or code on grant distribution or overall

contracting

Procurement law, Subject specific laws

Models Tender (open, solicited)

Negotiation (1 bidder, urgent, low cost)

Partnership agreement (shared burden of financing)

Voucher payment

Registration, licensing, accreditation


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Challenges To Be Addressed

Legal issues

Lack of framework

Transparency and accountability

Conflict of interest, politicized decision-making

Implementation mechanisms

Monitoring, control

Practical issues

Inconsistent practices in implementation

Dependency and independence (recipients)

Centralized models, diversity of systems

Effect of one mechanism over another

Capacity issues, professional standards

Attitudes and image


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The case of Georgia


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Mapping the situation in Georgia

1. Which areas are you engage in and what specific

services you provide?2. From these areas

which are the ones that are or not supported by the

government

through what funding mechanisms (supported or

appropriate)

3. What can we do to bring the service on

government list?

Sustainability Through Contracting and Grants

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