Comparative analysis of systems of state funding for

CSOs

Goran Forbici

6 countries

• Croatia• Estonia• Hungary• Scotland• Serbia• Slovenia 

6 segments• Quantitative overview• Types of resources • Distribution channels • Legal framework• Specific instruments for higher sustainability and

efficiency of public funding

 

Quantitative overview (2014)

• Croatia: 52.000 NGOs, 223m € = 34% of overall budget, national level: 40 %

• Estonia: 31.000 NGOs, 147m €• Hungary: 64.000 NGOs, 554m € = 31%• Scotland (2013): 45.000 NGOs, 18.000 registered,

2,16bln € = 34%, national level: 50%)• Serbia (2013): 23.000 NGOs, national level: 50m € = 20

% of overall budget• Slovenia: 25.000 NGOs, 291m € = 38%, national level:

65%

Types of resources

• State budget – usually by far the largest resource on national level (Slovenia 85%, Serbia 85%, Croatia 45%)

• Lottery & gambling funds (Serbia: 40% of income to charities, UK: 28% of income = 70 % of all profit, Estonia: entire gambling tax (10-18 %))

• Other taxes and excise duties (e.g. Estonia: 3,5% of Alcohol excise duty to the Cultural Endowment)

• Percentage system: Slovenia: 0,5%, Hungary: 1%,

Distribution channels

- essentially decentralized system in all countries (ministries & other independent budget users: agencies, public funds etc.)

- Scotland & Estonia: increasingly delegating the distribution of funds from ministries to specialized “implementing agencies” (Scotland: 12 Non-Departemental bodies (Creative Scotland, Sportsscotland etc.) + 2 national lottery funds (The Big Lottery fund, Heritage Lottery fund)

Big Lottery Fund

- lottery arm- non-lottery arm (Big fund)

Example: In 2013 Big fund run a 20m ₤ programme on behalf of Scottish government to support voluntary organisations to deliver national strategic objectives related to young people and children

Legal frameworkNo uniform rule:• Slovenia: Public Finance Act + Rules on the procedures

of implementing the budget of the Republic of Slovenia, but also some sectoral legislation and regulations (e.g. in culture, sports, youth)

• Hungary: Non-profit Act & Law on Transparecy of Public Funding (general framework, however no universal set of rules with detailed procedural provisions)

• Estonia: scattered around different regulation for specific areas. From 2012 (non-binding) governmental Guidelines for funding CSOs from public budget.

Legal framework• Scotland: no single regulation or policy due to highly

decentralized system• Serbia: governmental Regulation on the means for

fostering programs in the public interest implemented by associations + Guide for transparent financing of CSOs from the local self-government budget

• Croatia: Regulation on criteria, standards and procedures of financing and contracting of projects of general interest implemented by associations (2015, replacing the previous Code of good practice …) + Manual for Implementation of the Regulation on the Criteria, Standards and Procedures for Financing and Contracting Programmes and Projects of Public Benefit Interest Implemented by Associations

Legal framework• However: although no single rule, as examples of

Slovenia, Estonia and Croatia show the trends go towards standardisation and unification

Regulation of strategic approach to public funding

= how the wider policy context and existing policy strategies are used in the processes of public funding

Mandatory & recommended: - Croatia (Regulation: “priorities for public financing must

be defined based on strategies, national programmes and other strategic documents at the national or local level.

- Estonia (Guidelines: “funding from the state budget has to be in accordance with the public interest, which is defined in national strategies”)

Specific instruments for higher sustainability and efficiency of public

funding & CSOs • Operational grants• Prepayments• Multiannual grants• In-kind financing with voluntary work• Co-financing of EU-funded projects

Operational grants

Known in mayority of anallysed countries:• Hungary: via National Civil Fund (60% of all resources

which total 16m EUR)• Estonia: via National Foundation for Civil Society (2008)

– 2,48m EUR• Croatia: via National Fundation for Civil Society

Development (2016-18: 1,7m EUR; 75 organisations)

Slovenia & Scotland: more of an exception. Scotland: The Thrd Sector Early intervention Fund. Slovenia: FIHO

Prepayments

Rather usual practice except in Hungary.

Slovenia: up to 30% (150 days to spend, then next instalment)

Estonia: operational grants usually 100 % prepayments, project funding up to 90%

Croatia: 5 models of payments, 4 include prepayments

Multiannual grants

• Slovenia: Majority of ministries for funding of established programmes or larger projects

• Estonia: Ministry of Foreign Affairs, Ministry of Interior• Scotland: commonplace, Big Lottery Fund grants up to 5

years, the Heritage Lottery up to 10 years• Serbia: 7% of projects are multiannual.• Croatia: regulated by the Regulation, 3 % of grants in

practice in 2014

Co-financing of EU-funded projects

Croatia: Office for Cooperation: calls for co-financing of projects of CSOs

co-funded 450 EU funded since 2011

Slovenia: (only) Ministry for Culture, Agency for Youth and Ministry for Foregn Affairs

 

In-kind co-financing with voluntary work

Slovenia: defined by law for all registered voluntary organisations, possible for all CSOs

Recognised value of voluntary work is defined by a special Regulation:

• 13 EUR for organisational work• 10 EUR for substantive (expert) work• 6 EUR for other volunteer work