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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?
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