European Center for Not -for -Profit Law
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Tel: +36 1 318 6923; Fax: +36 1 266 1479; www.ecnl.org

2007 © European Center for Not -for -Pro fit Law
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OVERVIEW OF STATE FUNDING SCHEMES FOR CIVIL SOCIETY
ORGANIZATIONS 

The following study provides an overview of government funding principles and criteria taking
examples from five different European countries : Croatia, England, France, Hungary, and Irel and .
The countries have been selected as examples of the four main European models of relationship
between government and civil society organizations ( CSOs )1: liberal, socio -democratic,
continental, and Mediterranean or Eastern European .2

The study desc ribes successively for each of the above -mentioned countries and institution : (1)
general principles of government funding, (2) overview of mechanism s and criteria of funding,
(3) extent to which such funding is allocated (operational costs/programmatic co sts) , (4) overall
amount of funding available for distribution, and (5) distribution from lottery proceeds .

I. GENERAL PRINCIPLES OF GOVERNMENT FUNDING

Funding is among the key element s of a supportive government approach towards strengthen ing
partnershi p with and supporting the growth of CSO s. Therefore, the issue of government funding
for CSOs is part of the effort s to conceptualize, rationalize, and organize the government -CSOs
relationship . Towards that end, a lmost all the countries studied in this p aper have designed a
compact, charter , cooperation agreement, or a strategy which outline the core principles of good
partnership between the state and the CSO s, in general, and its financial aspects in particular.
Those core values embedded in the coopera tion documents subsequently serve as a ground for
more specific and detailed pieces of regulation .
 Prepared by Katerina Hadzi -Miceva (Legal Advisor of ECNL) and Fabrice Suplisson (Consultant to
ECNL) f or the purposes of the project “Technical Assistance to the Civil Society Unit in the Government in
Macedonia”, implemented by the Macedonian Center for International Cooperation (Macedonia) and
COWI A/S (Denmark); funded by the European Agency for Reconst ruction. The countries and issues
discussed in this paper have been selected upon consultation with the project team.
1 For the purpose of this paper, the term “CSOs” will be used to refer to associations and foundations.
2 A description of the four mode ls is available on files with ECNL.

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Funding and Procurement: Compact Code of Good Practice in England 3

What we are trying to achieve:
3.2 A well managed application and tender process means that organizations best able t o achieve
the aims of a program will apply. Well managed processes mean that resources are focused on
delivering outcomes rather than on the application or tender process itself.

The benefits for the voluntary and community s ector
3.3 A well -managed application or tender process allows the voluntary and community sector to
access opportunities to deliver. If organizations have enough time to apply they will be able to
make a well -informed and considered application or tender. They will also benefit from not
having to spend disproportionate resources on application processes.

The benefits for Government
3.4 Government can know that the chosen organization is the one best able to achieve the
intended aims and that expenditure i s focused on achieving outcomes rather than the application
process.

European governments have adopted several principles that guide their financing schemes. Some
of those include 4:

 Transparency : the procedure is based on a clear application and assess ment procedures
which will provide maximum clarity and openness of the process, e.g., requirements to
publish the tender announcements in official and local media, establish clear and
objective criteria, give appropriate time for submission of the proposal , to publicize the
selection criteria and names of the selected applicants, to send copies of the
announcements and answer inquiries of potential applicants, etc.
3 For more information see:
https://www.thecompact.org.uk/module_images/Funding%20and%20Procurement%20Code%2005.pdf
4 For detailed description on the principles see: State Financing of NGOs, a paper developed by ECNL for
BCNL (on file with ECNL)

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 Equal treatment of applications : a set of pre -established objective criteria, which
ensure n on -discrimination and selection of the most successful applicant based on the
merit of their proposals.
 Free and fair competition : the information about the state funding possibilities is
advertised as wide as possible encourage s competition between the po tential applicants.
 Accountability : spending the allocated funds in a responsible way and with clear
reporting rules .

An overarching principle is that public funding should be considered a possibility and not a
right for the CSOs. This is important princ iple because it underlines a significant aspect of the
relationship, i.e., that CSOs are “independent” or “autonomous” from the government and
posses a certain level of self -financing capacity.

Specifically in Ireland, the underlying principle is that CS Os are considered as autonomous and
free to provide services that they believe that meet the community needs. There should not be an
expectation that all activities undertaken by the CSO s will be fund ed by the state. Essentially, the
Government will provi de support only for mutually agreed programs and when those programs
fall within the Government policies and objectives , or where other public interest criteria apply .
The form and level of financial support varies and depends on the particular needs, typ e of
services and circumstances that require such support. 5

Further , the “Funding and Procurement: Compact Code of Good Practice in England ”6 recognize s
the importance of planning for the available funding that will be distributed. It states that there
are competing demands for public spending and that there may be more organizations applying
than money available. Since public funding may terminate after a certain time there is a
responsibility for “plan ning in good time for different situations to redu ce any potential negative
impact on both beneficiaries and the organization if funding ends”. The French Government has
adopted the similar principle and therefore it introduced an annual plan of funding (see below).
5 For more details see: White Paper on a Framework for Supporting Voluntary Activity and for Developing
the Relationship betw een the State and the Community and Voluntary sector
(https://www.cnm.tcd.ie/PDF%20Files/Voluntary.pdf )
6 For more information:
https://www.thecompact.org.uk/module_images/Funding%20and%20Procurement%20Code%2005.pdf

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Another strong idea is that public fun ding should be goal oriented, i.e. it should be allocated on a
contractual basis upon clearly defined goals and priorities . Governments are therefore led to set –
up and communicate their funding priorities and inclined to better evaluate the use of public
money 7. For example, the above -mentioned English Funding and Procurement Code outlines that
among the key principles the need to “ focus on outcomes ” i.e., that t he achievement of outcomes
should be used as a key indicator of the success of funding.

Along w ith the goal -oriented public funding rises the need for multi -annual funding to ensure
sustainability of initiatives and projects with longer term goals . For example, the French
charter signed between the government and the nonprofit sector stresses that: “The associations
and the State favor relations based on goal -assorted contracts, on an extended period of time
given to conduct the project, on transparency of the obligations subscribed, on the evaluation of
the contribution to public interest to be bal anced with the means involved, especially in the case
where multi -annual funds are involved ”8.

At the end, it is work mentioning t he central requirement of the Financial Regulation of EU : the
principle for “Sound Financial Management ”. This principle is defined as: “ reference to the
principles of economy, efficiency and effectiveness , and compliance with those principles
checked by means of performance indicators established per activity and measurable in such a
way that results can be assessed. The insti tutions should carry out ex ante and ex post evaluation,
in accordance with the guidelines determined by the Commission. ”9

7 According to the Compact Code of Good Practice on Funding and Procurement in England, “It is
consistent with the Government’ s duty to achieve value for money”.
8 Charter on Reciprocal Commitments between the State and Associations, France, 1 July 2001.
9 Regulation 1605/2002 on the Financial Regulation Applicable to the General Budget of the European
Communities, 2002, para. 11

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II. OVERVIEW OF MECHANISM AND CRITERIA OF FUNDING

A. CROATIA

Until 2003, the Government Office for Associations 10 was the main actor that distributed public
funds to CSOs. It used to channel funds in all areas of work of CSOs, from human rights, to
education of youth, health, development of civil society, unemployment, etc. Independent
experts’ working groups were created to review and assess the projects and programs submitted
for public funding. Although Ministries had certain funds to support projects of CSOs, this was
not practiced widely. In 2003 the Government established the National Foundation for Civil
Society Development (“Nat ional Foundation”) with the basic purpose of promoting and
developing the civil society in Croatia . 11 The establishment of the National Foundation was seen
a critical step towards improving the system of public financing for NGOs . It aimed to mark a
shift from a highly centralized system, in which the Government Office for Associations played
the critical role, into a more de -centralized system. Specifically, the National Foundation
together with the existing Council for Civil Society D evelopment, are an integral part of a public
funding scheme which envisages an increased role from multiple stakeholders. Accordingly,
while the ministries remain responsible for the funding of and cooperation with CSOs within their
own jurisdiction, the Foundation focus es on supporting grass -roots initiatives and programs that
do not necessarily fall within the competence area of any particular ministry. In this way a more
equitable distribution of responsibility among government stakeholders was ensured. 12

To guarante e that grant -making decisions, whether made by the National Foundation, the
ministries, or the local governments, are made according to established standards of transparency,
10 The Governmental Office for Cooperation with NGOs was established in October 1998 by the Act of
Government of Republic Croatia. www.uzuvrh.hr
11 The National Foundation is currently financed from state budget funds provided in a separate position for
the NGO Office, from part of the income from games of chance and competitions and from the founding
capital, donations and other.
12 From Vision to Change: A New Model for Civil Society Development in Croatia, by Cvjetan a Plavsa –
Matic and Katerina Hadzi -Miceva, published in Social Economy and Law (SEAL), Winter 2003 -Spring
2004

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a “Code of Good Practice, Standards and Criteria for Providing Financial Assistan ce to Programs
and Projects of Associations” 13 was adopted by the Croatian Parliament in 2007 .

The Code establish es the basic standards and principles for granting financial assistance from the
state budget to associations . It applies to all state authori ties and offices of the Government,
which support the implementation of programs and projects which are of special
general/public interest in Croatia.

Primarily the Code outlines several principles which should guide the financing processes. First,
the au thorities must set their priorities which they plan to support in the upcoming budgetary
year. Second, the tenders must contain clear conditions, criteria and procedure of granting
financial assistance (including priority fields for application, means of preventing possible
conflicts of interest and possibility of gaining more insight of the process). The applications must
be reviewed before a committee , composed of representatives of state administrative authorities,
scientific and specialized institutio ns as well as not -for -profit legal persons (associations,
foundations etc.). The tender must provide for at least 30 days deadline for the application. All
participants must receive a written response and if the application has been denied the response
should explain the reasons for denial. The results must be announced publicly, including types of
projects funded and amounts allocated. The authority must conclude written contracts with the
winning organization within 60 days. Finally, the winning associ ation must submit narrative
and financial reports .
In case the association spends the funding contrary to the agreed purposes the financial assistance
will be terminated and the state authority will request reimbursement of amounts already paid.

The Cod e outlines the following basic criteria for funding:

(1) Associations participating in tenders from the state budget for programs and projects of
particular general/public interest must :
– be registered with the Register of Associat ions of the Republic of Croatia;
– promote the values of the constitutional order of the Republic of Croatia ;
13 English and Croatian version available on: www.ecnl.org

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– perform activities must directed at the needs of the community and the preservation of
sustainable development.
(2) In the application for granting financial ass istance, the association must submit a report on its
proper financial dealings, a statement of non -punis hment of the responsible person within the
association and an excerpt from the Associations Register of the Republic of Croatia . It should
also attach other documents in accordance with the conditions set in the specific tender of the
providers of the financial assistance.
(3) The association may use the financial assistance granted from the state budget only for the
activities within the approved progra m or project.
(4) The association will not be entitled to financial assistance for activities which are already
being financed from the state budget under other specific regulations.

The Council for the Development of Civil Society, as a specialized advi sory body of the
Government of the Republic of Croatia, is responsible to monitor, analyze and evaluate the
finances g ranted by the providers of financial assistance from the state budged , to ensure they are
in accordance with the provisions of the Code. The state authorities must submit information on
the awarded grants to this Council and the Government Office for Cooperation with Associations.

FUNDING SCHEME OF THE NATIONAL FOUNDATION

The Foundation supports several types of programs related to its str ategic objectives 14:
 OUR CONTRIBUTION TO THE COMMUNITY – grants to civil initiatives in which
citizens are included by means of volunteer work, knowledge and/or material
contributions. The call for proposals is open for organizations whose basic purpose is not –
for -profit: associations, foundations, institutions, conducting social activities and units of
local self -government in which initiatives are started by the organization itself, the
institution, or interested group of citizens acting within that organi zation or institution.
 BETTER TOGETHER – grants for joint projects of associations or foundations in
cooperation with units of local and regional self -government or institutions for the
improvement of living conditions in the local community, the organizat ion and
14 Information from the Annual Report of the National Foundation for 2005.

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development of the local community, the development of local partnerships in
accordance with the Program of Cooperation between the Government of the Republic of
Croatia and the Non -Governmental Non -Profit Sector in Croatia and the development of
philanthropy and the culture of giving for local public benefit .
 DEMOCRATIZATION AND CIVIL SOCIETY DEVELOPMENT – grants to projects
contributing to the development of civil society, the development of volunteerism, the
improvement of democratic institutions in society and the rule of law, the application of
new technologies in civil society development, information and documenting
development of civil society in Croatia, public advocacy and projects for linking Croatian
associations dealing with European int egration. Only associations and foundations are
eligible to apply for the calls for proposals.
 INSTITUTIONAL SUPPORT – award of institutional support for organizational
development or stabilization for a period of three years, but only for those associatio ns
registered in Croatia. A grant is provided to help further the activities of the association
and for the performance of its primary activity.
The Foundation also co -finances participation in international gatherings and participation of
foreign experts in Croatia.
Importantly, the Foundation also supports multi -annual grants (2004 -2007), which are approved
within the program “ Democratization and Civil Society Development”, in the program area of
institutional support and stabilization of associations fo r the program related to the linking of
associations
The National Foundation distributes funds based on the “Ordinance on the Conditions and
Procedure for the Allocation of Funds used for the Fulfillment of the Foundation’s Purpose ”.15
The Foundation gives grants to potential applicants under the following general criteria :
 they have a registered activity in Croatia ;
 they are organizations, foundations or other legal persons whose basic purpose is not for
profit (civil society organizations), units of loca l self -government, and civil initiatives;
15 https://zaklada.civilnodrustvo.hr/eng/natjecaji_postupak_odobravanja.php

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 through their program and activity, they promote the values of the constitutional order of
the Republic of Croatia and implement activities aimed at satisfying the needs of the
community and at achieving sustainabl e development;
 the program/project/initiative that they submit in response to the Foundation’s tender is
assessed as significant for the developm ent of civil society in Croatia .
In addition, the tenders contain more specific criteria or other conditions fo r receiving the grants.
For example, the 2006 tenders for under the programs Our Contribution to the Community, Better
Together and Democratization and Civil Society Development contain the following specific
criteria :
 the quality of the initiative/project ;
 direct or indirect benefit for the community and its contribution to the development of
civil society ;
 organizational and human resources for the implementation of the initiative/project ;
 national/regional representation ;
 real balance between the costs a nd expected results ;
 cooperation with other associations/organizations/sectors ;
 innovation and sustainability of the initiative /project.
For the Institutional Support grants the following fields of activities were identified as priorities:
 promotion and protection of human rights, and development of democratic institutions of
the society and rule of law ;
 deinstitutionalized education for the development of democratic citizenship ;
 protection of the nature, environment and sustainable development ;
 youth ;
 de institutionalized culture, media, implementation of information -communication
technology in the development of civil society ;
 development of social enterprise in service provision in the fields of social welfare,
protection of health and family affairs.

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Th e Foundation publishes public tenders/calls for proposals for the allocation of grants to
users, and public calls for the expression of interest in cooperation at least once w year in the
public media, on the Foundation’s website, and at press conferences. The Foundation is obliged
to include the following information in the published tenders and calls:
 conditions of the tender ;
 the organizations and program that are eligible and those that are ineligible to apply for
the tender/call for the expression of interest ;
 the maximum amount of funds earmarked for grants ;
 the number of grants to be given in that tender/call for the expression of interest ;
 how to apply (including access to forms and instructions on how to apply) ;
 deadline for applications ;
 gra nt-assessment procedure ;
 procedure of concluding a contract on the allocated grant;
 way of using the funds ;
 method of reporting on the use of the approved grant.
The decision -making process is a three step process described in detail in the above mentio ned
Ordinance :
Step 1 – Verification that the formal requirements set in the tender have been met .
Step 2 – Quality assessment of the application by the Program Committee, which is a
collegial body of 5 experts 16.
Step 3 – Decision -making on grant approval taken by the Management Board of the
Foundation on the recommendations of the Program Committee. If the Board does not
agree on the approval of a grant by the Program Committee, the latter is asked to
reconsider the proposal. It can also be decided that t he procedure for allocating the grant
shall be repeated.
Importantly, the National Foundation has also developed evaluation grids for the tenders that
guide the CSOs but also the evaluators in the process of deciding on the grants.
16 The quality assessment is conducted with regard to the specific purpose of the program for which the
gra nt is claimed, i.e. “active citizenship and the local community” or “democratization ” for example.

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Every organization which has competed to obtain a grant may file an appeal to the Foundation’s
Management Board within 8 days from the receipt of the notice of the results of the tender if it
has noticed some omissions in the application of the determined assessment procedure con cerning
its application. The Man agement Board should reply within15 days of receipt of the appeal.
After the first year of its operation the National Foundation received harsh criticism over its
process of distribution of funds and especially the potential of conflict of interest that arises from
the fact that CSO representatives sit on the Management Board. Therefore, the Ordinance
contains special reference to conflict of interest policies which is a sincere attempt to ensure
transparent and fair process .
Article 9 : Protective Measures to Prevent Potential Conflict of Interest
“Potential conflict of interest arises if a member of the Management Board or member of any
other body of the Foundation decides on issues which relate to the legal person of whom h e or she
is a member, in whose management he or she participates, and in which he or she has assets. In
that case, the provisions of Article 11 paragraph 1 of the Act on the National Foundation for Civil
Society Development shall apply, so that the member of the Management Board or member of
any other body of the Foundation (Program Committee, Council for Strategic Investments in
Civil Society Development, etc.) cannot vote or decide in that case.
The procedure for disclosing or protecting from potential co nflict of interest is additionally
provided for in the Rules of Procedure for the Work of the Management Board and other bodies
of the Foundation.
The register of potential conflicts of interest for each member of the Management Board and
other bodies of t he Foundation is stored in the Foundation’s documentation. The register is not a
public document but upon request it may be presented for inspection to the representatives of
authorized bodies. ”

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B. ENGLAND

Most central government departments have funding programs to support initiatives of national
importance. All gr ant schemes are designed to fit the policy objectives and program outcomes of
each particular department. Central funding is also distributed through different associated
agencies or non -departm ental public bodies (e.g. , Arts Council, Countryside Agency and the
Learning and Skills Council ). In addition, departments also have developed direct funding
relationships with specific organizations whose work is close to their own interests (e.g., the
Ho me Office funds Victim Support ). Further, smaller grant schemes are available for local
organizations, and those are run by separate agencies , often CSOs and their networks, on the
behalf of the government department (e.g., the Faith Communities Capacity B uilding Fund was
administered by the Community Development Foundation ). Funding is also distributed
regionally , through regional development agencies or government offices for specific region
which are drawing their reso urces from the central budget and locally .

In addition, t he Government launched a portal to grants for CSOs
(www.governmentfunding.org.uk ) where information regarding public funding opportunities is
available. It also adopted the previo usly mentioned “Funding and Procurement: Compact Code
of Good Practice ” (hereinafter referred to as “the Code”) which provides an overview of
principles that should guide the funding process .

The Code applies mainly to all central Government Departments, and distinguishes three overall
objectives in its financial relationship with CSOs:

 Project funding – to pay for a particular project or service, usually through a contract or
grant ;
 Development funding – to invest in new capacity or new organizations to develop their
ability to contribute to public policy objectives, usually through a grant or loan ;
 Strategic funding – to organizations recognized to be of strategic importance and whose
work is considered to be significant, usually through a grant.

The pr inciples which guide all of these funding process es are:

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 Focus on outcomes – the achievement of outcomes should be used as a key indicator
of the success of funding ;
 Simplicity and proportionality – processes should be as simple as possible and in
proport ion to the amount of money involved;
 Consistency and co -ordination – funders and purchasers should endeavor to join -up
or standardize parts of the funding or procurement chain to minimize burdens on
organizations and ensure a focus on delivery ;
 Timeliness – allowing time for planning, decision -making and action so they have
real effect ;
 Transparency and accountability – allowing informed decisions about spending
priorities to be made and for both Government and the sector to learn from previous
work ;
 Discus sion and dialogue – which helps build trust and can identify and overcome
problems before they impact on the delivery of outcomes ;
 Empathy – understanding each other’s needs and requirements should help avoid
problems and help achieve outcomes.

The Code u nderlines the Government will to promote longer term planning arrangements that
often represent better value for money than one year agreements , as they provid e a greater
financial stability and reduc e the amount of time and effort wasted on applying for n ew funds or
renegotiating contracts. It provides for roll -forward multi -year agreements (the standard is three
year duration settlements ) for grants .

It is important to emphasize that the Government pledges to involve CSOs whenever possible in
program de sign , in order, among other reasons to ensure that the size of grants and contract
offered is small enough to secure a diverse supply base and allow small organization to compete.

The code stresses that the funding agreement should clearly state the terms of delivery , i.e.
what is to be delivered by the CSO and when. Those issues should be discussed and agreed upon
before the funding agreement is entered into.

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On the issue of payment terms the Code recommends that the payment by the Government should
be made in advance of expenditures so to achieve best value for money .

Public funding requires effective monitoring that the CSO is delivering the agreed outputs and it
is contributing towards meeting intended outcomes. This requires some level of reportin g from
the CSO . The government implements the mon itoring by focusing on outcomes , in proportion
with the size of funding, the size of the provider, and the perceived risk .

EXAMPLE : England’s Home Office Connected Fund Round 6
Support of small communiti es group tackling gun and knife crime and ga ng culture in their
local areas 17

Areas covered : England and Wales
Total fund value : £ 500,000 ; e ach successful applicant may get up to £ 5,000 .

The project must meet one of the following criteria :
– Work with y oung people involved in, or at risk of becoming involved in gang activity ;
– Support victims of gang activity and their families, for example providing advice and support
services, or supporting witnesses during trials ;
– Invest in and support the involve ment of local people in decision -making processes that impact
on law enforcement agencies in tackling gang activity and improving trust in the community,
with a priority on young people (16 -25) and under -represented groups.

To be eligible applicants must also meet the following criteria :
– Groups must be small, locally managed voluntary organizations ;
– Projects must cost less than £10,000 in total to carry out (the maximum grant is £5000) ;
– Grants must be spent by 31 March 2008.

Successful projects mu st:
17https://www.governmentfunding.org.uk/VCSSearch.aspx?WCI=htmschemeview&WCU=SEARCH=DS=
DSCLIVEGF~pTI=%22GRANT~pABI%22~pOI=%2212 –
O17%22~pTM=1,DSCODE=DSCLIVEGF,SCHEMEID=12 -S69

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– Demonstrate how the group has previously been involved in anti -gun/knife crime activities ;
– Demonstrate how the project fits in with other activities in the local community ;
– Demonstrate that the community is actively involved at all stages of pl anning and carrying out
the project ;
– Show those who will benefit from your project will be identified ;
– Give a clear breakdown of the timescale and cost of the project.

Note: Applications must include a signed letter of support from a local organiza tion or individual
who has a role in the community. This could be from the local council, police force, school, GP
surgery (local doctor), your local Council for Voluntary Service (CVS), faith group or another
voluntary organization

In 2006 , the English G overnment published the: “Improving financial relationships with the third
sector: Guidance to funders and purchasers ”18. The aim of the Guidance is to “set out best
practice and provide advice on effective and efficient use of public funds in a way that i s
consistent with the principles of public accountability” and to ensure that “the principles of
value for money, efficiency, sustainability of services and reducing bureaucracy are embedded
in funding practices throughout the public sector.” The Guidance is applicable to the granting
and procurement schemes that are being implemented by various departments and agencies across
the Government.

Among the palette of recommendations promoted in the Guid ance it worth mentioning the
following:

 The length of fu nding should be tied to the length of the objective ;
 Value for money must be the overriding principle that dictates whether or not a longer –
term funding arrangement is appropriate ;
 Funding arrangements should be agreed between all parties if they are to b e effective and
offer the right incentives to deliver value for money ;
18 https://www.hm -treasury.gov.uk./media/485/B9/guidncefunders1505061v1.pdf

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 Historical tendency to fund for a certain period is not an acceptable reason to maintain
short -term funding arrangements ;
 Departments should consider fully the opportunities for cascadi ng multi -year funding ;
 The timing of payments should be considered in collaboration with, and not imposed
upon, the organization responsible for providing the service ;
 Funding bodies should agree the timing of payments with funding recipients at the
beginn ing of a program ;
 Funding bodies should make a commitment to pay within a specified time or on a
specified date or dates, and such commitments should be fully honored ;
 Payments in advance of expenditure to third sector organizations should be made on the
basis of need and therefore can and should, where appropriate and necessary, be made in
order to achieve better value for money ;
 Funding bodies should ensure that their application procedures are clear, and wherever
possible, as simple as they can be ;
 Fund ing bodies should seek to minimize the monitoring and inspection burden on the
recipients of funds to a level proportionate to the level of funding and risk, and which
maintains proper control of public monies ;
 Where bodies are multi -funded, co -operation b etween both internal and external auditors
should be encouraged, and the audit burden on funding recipients minimized.

C. FRANCE

The centerpiece of the French regulation of government funding to CSOs stems from a series of
circularies issued by the Prime Mi nister, the latest in January 2007 19.

The state emphasizes that it s sources are limited and that public funding can be channeled only by
the central administration , ministries or its delegated local bodies .

19 Circularly 5193/SG of 16 January 2007 on Government Funding to Associations and on Multi -annual
Goal – assorted Contracts, which follows two im portant previous Circularies of 24 December 2002 and 1
December 2000.

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The core of state funding is allocated for ope rational costs or programmatic costs, on the basis of
an individual decision , i.e. an order from the minister 20. However signing of a contract
becomes more and more frequent requirements in the decision process and is even mandatory
when the amount of the funding is over 23,000 Euros.

A significant focus of the recent regulation has been to harmonize the way funding applications
are instructed among the different government ministries. A single collegial body is in charge
within each ministry in order to have a general overview of the funding allocated and maintain
the coherence of the actions funded. Government employees at the central and local level are
especially dedicated to instruct the funding applications and monitor the use of the public money.
The decision about awarded fund s must mention how the use of public money will be monitored.
In addition evaluation of the funded action or project is mandatory in case of multi -annual
funding.

France has created a single application form for all the government fund ed applications (except
government funding sought by a CSO for investment purposes.) The first application the
organization will submit, will be used to set up a permanent file 21 for the applicant, so that the
same applicant does not need to provide the basic data again in future . This simplifies the paper
work required from the applicants. Consequently, if funding is renewed the information and
documents already communicated in the permanent file are not to be produced again. Only a
report of activities and financial statement for the passed period is required to be submitted .

No application for government funding will be awarded before it is confirmed that the full year
budgetary previsions show a sufficient available credit to cover the requested funding. Therefore,
an annual CSO funding plan is established in order to monitor the overall government’s financial
commitment to the CSOs.

20 The order materializes the administrative decision but will be preceded most of the time by an instruction
phase delegated to a specific body. As explained further, the norm promoted by the Government for State
funding in its latest circularly is a single collegial body dedicated to that instruction in each ministry.
21 The principle of a permanent file is also useful with regard to the legal obligation imposed on the public
authority since 2000 (and for funding above a certain amount) to communicate the budget and amount of
funding allocated to a given NCO at the request of any person (law of 12 April 2000, Article 10.5).

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The system of government funding is organized in order to assess for all types of funding, annual
and m ulti -annual:
 The amount of the expenses resulting from prior funding commitments;
 The evaluated full year amount of repetitive expenses;
 The full year amount of expenses that are directly linked to legislative provisions and
regulation;
 The amount of delegated credits granted at the beginning of the year to local
administration to cover recurring expenses as well as expenses resulting from prior
commitments taken by the government at the local level.

Among the criteria stated in the regulation on whi ch the decision to fund a CSO concern the
eligibility to the related funding with regard to its:
 Purpose;
 Financial coherence;
 Realization of past funded actions or projects.

Government funding requires the filing of an application by the CSO and is allocated only when
the purpose of the request matches the funding policy of the related administration .

It is important to emphasize that only those CSOs whose purpose is of general interest are
eligible to the government funding . Associations and founda tions, which have been granted a
“public utility” status by the Conseil d’Etat (highest administrative court), are considered of
general interest. For others , the assessment of the general interest of their purpose or activities is
made by reference to the provisions of the Tax Code 22

22 The notion of public benefit organization (PBOs) has two face s in France. ‘ Public utility ” status is one of
them and is granted by decree to a limited number of associations after a lengthy and thorough instruction
process. Autonomous foundations in France may only legally exist after being granted that “public uti lity”
status. The second type is the “ general interest ” purpose according to the Tax Code standards. The vast
majority of associations in France are in that category. The difficulty for them is that their “general
interest” does not proceed from a decla ratory document, but most of the time from their own assessment
that they meet the standards set by the provisions of the Tax Code. This leaves a significant margin of
interpretation to determine whether a given simply registered association may be eligibl e to Government
funding or not.

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The French system suffers from the lack of a clear legal definition of the notion of subsidy or
grant, which blurs the frontier between that type of public funding and others like procurement. 23
This situation is often the sou rce of much confusion when it comes for the public authority to
choose the proper legal framework for its contractual relationship with CSOs.

EXAMPLE : 2007 Guidelines from the Ministry of Youth, Sports and Associative Life 24 for
Funding of Experimental Actions in Support of the Development of Associative Life 25;

Eligibility
– Applicant associations must have a democratic organization (regular meetings of statutory
bodies, renewal of elected bodies, transparency of the management, respect of the freedom of
conscience) ;
– Applicant is not a quasi -governmental organization (meaning its budget comes mostly from
government funding and a majority of its board members are member of the administration or
elected officials );
– A strong plus for the applicant is to be involved in difficult areas and/or in the development of
volunteer work and volunteer civil service as those concerns are key priorities of the Government .

Implementation of the action:
– The hypothesis on which the action is based must stated clear ly;
– The estimated duration of the action must be stated ;
– The experimental aspect of the action stems from its purpose pursued or in the methods used ;
– The action must be preceded by an analysis of the transformation of the social and cultural
environm ent of the applicant -association (expectations of the membership and of the
beneficiaries) and cover aspects on which the applicant thinks its action and organization may be
improved in order to better deal with the social demand .

23 For definition of different type of funding see State Financing of NGOs, a paper developed by ECNL for
BCNL (on file with ECNL)
24 https://www.jeunesse -sports.gouv.fr/IMG/pdf/i06 -208c.pdf
25 The action considered here are for example aimed at mobilizing volunteers and civil service volunteers
into activities directed towards young people facing social and professional difficulties. Another example is
the promotion of actions that help volunteers to value their work as recognized professional experience.

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Expected value -added:
– Must be stated by the applicant as well as the method to evaluate it ;
– An important decision’s criterion is the ability for the action to serve as a pattern for the
nonprofit sector as a whole.

Note : The guidelines remind any applicant that government fu nding is not a right.

D. HUNGARY

The cooperation of the Hungarian government with the nonprofit sector has been
institutionalized, notably through the creation of the Department for Civil Relations established in
the Prime Minister’s Office in 1998. This d epartment develops and coordinates the policies
affecting the nonprofit sector as a whole. It has developed a comprehensive strategy for the
support and development of the nonprofit sector that was adopted by the government in June
2003 26.

State financin g for CSOs in Hungary is available through a range of central and local channels .
In 2004, approximately 4.85% of the total state budget was channeled to nonprofit
organizations. The majority of this funding to CSOs comes from central channels , such as t he
Parliament, the Government, ministries and ministry funds, independent central funds, normative
support (per capita support to nongovernmental social service providers 27), and the “percentage
mechanism”, which enables taxpayers to allocate 1% of their in come tax to a designated CSO.
Based on the statistics only between 10 – 20% of the funding comes from local channels , such
as local councils, local council committees, mayors, local tax designation of companies 28. State
support constituted 36 .4% of the tot al income of the nonprofit sector in 2004 .
26 Nilda Bullain, Mechanisms of Government -NGO Cooperation in Hungary , (2004) https://www.efc.be/cgi –
bin/articlepublisher.pl?filename=NB -SE -01 -04 -1.html
27 In this paper the focus of Hungary will be on government grants and other type of funding will not be
discussed.
28 Sources: Kuti Èva, Bocz János, Mészáros Geyza, Sebestény Istvan, Emri Istvánné: Nonprofit
Organizations in Hungary (Nonprofit Szervezetek Magyarorszagon) 2001, KSH (Report of the Central
Statistical Office) cited in Nilda Bullain, About Miracles and Misrepresentations – Lessons from the

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The state budget specifies a smaller amount of subsidies for the support of “social organizations”
(this amounted to 0.06% of the total budget in 2004), which includes support of operational costs
of certain NGOs , professional unions and public associations as specified in the laws regulating
these entities (e.g., the Red Cross, the Hungarian Academy of Sciences or the Hungarian Olympic
Committee). The tendency for the past few years has been a decrease in the nu mber and volume
of such organizations supported.

CSOs mostly receive public funding from two types of sources: the ministry budgets ( through
direct funding, grant programs, or via ministry funds or agencies) and the independently
resourced public funds .

In terms of ministry funding , CSOs may appear by name in the annual budget of the competent
ministry according to their field of activity and receive a determined amount of public support.
Ministries also run their own grant programs to support implement ation of their policies
throughout the year. Until recently, CSOs could also receive funding from public foundations ,
which used to be a special form of grantmaking foundations which may be established only by
the Parliament, the Government, or local gove rnments. Those foundations were quasi –
governmental bodies, which received an annual budgetary support from the ministries competent
for their field of intervention. As of January 1, 2007, these have been discontinued and re –
integrated into the competent ministries, therefore CSOs may now apply to the same funds
through new structures and procedures. In some cases, the ministries merged the public
foundations’ programs with their own grant programs, while in other cases they were maintained
as separate fu nds within the ministry.

CSOs may also receive central public support from so -called public funds , i.e. special budgetary
appropriations and basic programs operating under the authority of the competent ministers.
Those funds are financed by separate bu dgetary funds and external non budgetary sources (taxes,
contributions, fines, etc.), therefore – unlike the public foundations above – are not dependent on

“Percentage Me chanism” in Hungary (2006), www.icnl.org online library; and Nonprofit Organizations in
Hungary 2004, KSH (p.40).

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the ministry budget. They also have a decision -making body independent from the supervising
minist ry.

Example: the Labor Market Fund , which through its grant programs and tenders aims to
address issues of employment in Hungary. It is financed in part by contributions of employers
and employees, the contribution for rehabilitation and annual suppo rt from the state budget. The
Minister of Social and Family Affairs is in charge of the management of that fund along with a
body composed of representatives of the government, of the employers and employees, and the
Ministry of Education 29. The fund has c entralized and decentralized lines of budget. The latter
may be used to fund public benefit organizations involved in the related field, which access this
support on a competition basis. It supports a wide range of projects, from organizing a one -time
con ference on employment policies to a multi -year complex rehabilitation project for a whole
region. Supported projects may provide services for the unemployed, improve vocational training
or promote employment of those who have undergone a vocational rehabi litation, among others.

Funding for events and publications for non -state actors of the labor market
Call for proposals of the National Employment Foundation (NEF)

1. Objectives of the program:

To provide opportunity for organizing events and/or prepa ring publications that ensure :
a) The publicity of employment policy ;
b) Theoretical background about practical work of nonprofit organizations and evaluation of
experiences in a wider, professional context ;
c) Revealing the tendencies of unemployment, pre paring and developing nonprofit organizations
for their tasks ;
d) Possibilities of the implementation of equal opportunities for men and women; revealing the
causes of inequality, looking for solution ;
e) Enhancing partnership of local organizations that a im at reducing unemployment and
establishing well -founded cooperation .

29 Ibid.

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2. Eligibility of applicants:

Nonprofit organizations based in Hungary: umbrella organizations, foundations, public
foundations, associations and other civil organizations (except for political parties and insurance
associations), churches, denominations, public benefit companies, whose registration happened
before December 21, 2006 .

In case of financial support, the applicant has to certify – at the time of signing the contract – tha t
it has at its disposal 10% of the total budget of the program in cash. Financial support may not be
given to applicants who apply for other, complex NEF programs that would enable the
organization to arrange an event and /or prepare a publication.

3. Eligibility of cost and action:

a) C osts relating to preparation and organization of a maximum 3 -day event or conference and
preparing a publication that presents the materials of the program .
b) C osts relating to a publication that features: research mater ial, studies relating to the issues of
employment; Hungarian translation of foreign publications; translation of Hungarian studies to
other languages.

The publication can be in a printed or electronic format. Funding is eligible only for one -off
publicati ons. NEF does not support periodicals, newspapers, program brochures or newsletters.

As one of the special funds, in 2003, the Hungarian Government established the National Civil
Fund (NCF) specifically to advance the development of the civil society sec tor in Hungary. The
NCF aims to support:

 operational expenses of civil organizations;
 public benefit activities of civil organizations;
 anniversaries, festivals, domestic and foreign events involving civil organizations;
 ensuring the presence of Hungari an civil organizations in international civil relations;

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 scientific research related to the civil sector; supporting monitoring activities and tasks
related to registration;
 educational, service, advisory, development and assistance activities and institut ions
related to the civil sector;
 promotional materials introducing the civil sector, supporting electronic and written
media specialized in this field;
 civil organizations to raise their own contributions for tenders;
 grantmaking organizations based on th e decisions of the Fund Program Council and the
Colleges, such decisions pertaining to automatic provision of resources determined by
unified principles;
 covering the expenses related to the operation and administration of the Fund Program;
 supporting ac tivities of civil society representation.

Essentially, the National Civil Fund supplements the mechanism of percentage allocation in that
the government matches the amount of funds that are designated to CSOs through the percentage
system. Uniquely among governmental progr ams, 60% of the resources of NCF are allocated to
CSOs to support operational costs. In addition, funds from this source also support development
programs (research, education, international representation). Elected CSO representatives sit on
all regional and other committees which are deciding on the distribution of the funds. In the first
year a total of 28 million euros were distributed to support the operational costs of over 3,500
organizations. 30

EXAMPLE: Outline of Guidelines for Call for Proposals
National Civil Fund, Hungary

1. General information
2. Objectives of the program
3. Financial allocation provided by the NCF
4. Eligibility of applicants
30 For more see: A Supportive Financing Framework for Social Economy Organizations, by Katerina
Ha dzi -Miceva, www.ecnl.org

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5. Form and amount of financial support
6. Validity of applications
– administrative check list: formal aspects of assessment
– cases when applications will be rejected and no supplements accepted
7. Submission of supplements (if they are accepted)
8. Criteria for substantive aspects of assessment
9. Deadline of assessment
10 . Submitting applications: how, wh ere and when?
11 . Information for applicants
12 . Contracting
13 . Modifying contract
14 . Transfer of funds
15 . Reporting
16 . Further information
17 . Checklist

Annex I. NCF principles of financial support
Annex II. Indicative timetable

The existing practices of the funding of CSOs in Hungary have been criticized 31 on several
grounds. Most of all, the system is deemed to lack transparency and accountability. A 2002
Report of the State Audit Office revealed that 80% of the government and ministries support to
CSOs was allocated on the ground of individual decisions (as opposed to open grant
competition), and that 50% of the funds allocated by public foundations was distributed without
grant announcements as well. In addition, the government -CSO cooperation is said to be strongl y
politicized in Hungary and favoring an increased weight of the government on the nonprofit
sector as a whole, through the strong development of quasi -governmental organizations. More
recently (September 2006) the State Audit Office found that the NCF fa ced serious transparency
and accountability challenges as well. The implementation of the mechanism revealed that the
31 See Nilda Bullain, supra .

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Minister and the Council did not elaborate an overall strategy to develop the sector, did not
elaborate performance indicators, and the cr iteria for support remained unclear. Even the uniquely
designed CSO participation in decision -making raised controversies over conflict of interest
issues.

Nevertheless, as these criticisms have been repeatedly voiced by NGOs and the State Audit
Office, as well as the media, a slow but visible tendency of improved transparency and
accountability is clearly taking place. While there is no one law that would determine overall the
principles for public support of nongovernmental organizations, a number of laws and regulations
contain applicable articles (State Household Act and its implementation regulation, Law on
Transparency of Use of Public Funds, Law on Freedom of Electronic Information, among others).
In addition, there are mandatory rules that shoul d be applied by all public agencies when
distributing EU funds. Based on these provisions, some of the ministries and public funds have
indeed developed a sophisticated system of funding policies, strategies, criteria and procedures
for support that match international best practices and which serve as a model for others that are
still working to improve.

E. IRELAND

Ireland led a consultation with the volunteer sector and issued a “W hite Paper on a Framework
for Supporting Voluntary Activities and for Deve loping the Relationship between the State and
the Community and Voluntary Sector .”32 A set of good funding practice standards similar to its
English counterpart is attached to the Irish W hite Paper 33, raising out of the necessity to change
from ”the e xistin g highly -fragmented funding and support system to one based on the concept of
single line funding and single reporting mechanisms ”.

Funding from central budget to CSOs in Ireland is distributed through the different departments
and agencies . T he stan dards recommend that eligibility criteria and procedures for grants
32 https://www.cnm.tcd.ie/PDF%20Files/Voluntary.pdf
33 Appendix 3 of the White Paper.

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should be published by government departments and statutory agencies, including for
National Lottery surplus.

EXAMPLE: 2007 Sports Capital Program of the Irish Government’s Department of Arts,
Sports and Tourism 34

Aim:
To foster an integrated and planned approach to developing sports and physical recreation
facilities throughout the country .

Objective (among others):
To assist voluntary and community organizations to develop high qua lity, safe, well -designed and
sustainable facilities in appropriate locations to help maximize participation in sport and physical
recreation .

Project funded: Projects must be of a capital nature and must be directly related to the provision
of sporting or physical recreation facilities. This means that the project must involve:
– improving or building an asset; or
– buying non -personal sports equipment that will be used for at least five years.

Level of funding:
Applicant must make a minimum contribut ion to the total cost of its project and provide proof
with your application that you have this contribution in place. Applicant should be realistic about
the scale and cost of its project and the amount of grant funding it is seeking.

Assessment of the a pplications:
When assessing applications different criteria are use d, some of which are more important than
others. Each application is scored according to how well it meets these criteria and then it s rank in
order of priority within its own county. The M inister makes the final decision in relation to each
application.

34 https://www.arts -sport -tourism.gov.ie/pdfs/2007%20SCP%20Guidelines%20 -%20ENGLISH.pdf

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Criteria:
It is vital that applicants show that they have thoroughly researched the project and explain it
fully in the application. The application will be assessed and scored on the fol lowing criteria:
– Whether the project aims to increase active participation in sport and/or improve standards of
sports performance in line with clearly stated targets and the organizations show s how it will
measure these increases or improvements. In pa rticular, facilities which will help promote and
enhance female participation in sport will be prioritized ;
– Whether the organization ha s provided evidence that the project is located in a disadvantaged
area and meets a need for sporting facilities in th e area ;
– Whether the organization has provided : evidence of title to the project site; evidence of planning
permission applied for or in place; drawings/specifications for the project; and accurate costs for
each element of the project ;
– Whether the pr oject is realistic in terms of scale, costs and grant assistance sought ;
– Whether the organization has shown that it has a proven history of fund -raising and a good level
of own funding which will allow enable it to finish the project within a realistic timeframe ;
– Whether the organization has proved the level of your own contribution towards the project ;
– Whether the application includes realistic projections of income from the proposed facility that
will be used to maintain it when it is finished ;
– Whether the project has a high priority in relation to your existing facilities ;
– Whether there is already a good level of similar sporting facilities in the area ;
– Whether the application includes details and evidence of consultation with other club s,
community groups, schools and the local authority, especially t hose that will use the facility;
– Whether the application clearly explains how you will attract socially excluded people to use the
facility ;
– Whether the project fits in with the priori ties for your sport as identified by the sport’s national
governing body (for regional or national -level projects only) .

The White Paper also calls for the introduction of multi -annual funding for organizations
providing services or undertaking developmen t activities that are agreed to be priorities. It
underlines that the use of ad hoc annual grants is becoming more and more anachronistic in the
context of the parallel administration by departments of EU funded schemes, which are funded on
a multi -annual basis.

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In order to monitor the coherence of statutory funding among the various departments and
agencies an Implementation and Advisory Group is set up which is in charge of the follow -up on
the implementation of the white paper and has the responsibility to review the overlaps and gaps
in the support to CSO s at policy and program level .

EXAMPLE: Program of Grants for Locally -Based Community and Voluntary
Organizations , 2006 35

The program offers three schemes of once -off grants to local voluntary and comm unity groups:
– Scheme of Refurbishment Grants (grant support for the refurbishment of exist ing premises)
– Scheme of Equipment Grants
– Scheme of Training Education, and Research Grants .

The Refurbishment Grant is a scheme of support for refurbishment of existing premises.
Ap plicants must be leaseholders/licensees or owners of the premises. (In the case of a
lease/licence arrangement, a minimum period of 3 years must remain on the current
lease/licence). Where planning permission is required, details must be provided with the
application. Up to 90% of the cost will be met, or a maximum grant of €40,000 where the
application is from a project which addresses disadvantage of a community. It the project does
not address such aims, but an evidence of need has been clearly identified they up to 60% of the
cost will be covered , subje ct to a maximum grant of €40,000. All applicants must show that
evidence that they have obtained the remaining funding from other sources.

The Grant Equipment scheme aims to support the activities of organizations that are addressing
disadvantage in their communities. Equipment (e.g., office, kitchen, IT) must be for the exclusive
use of the group in the pursuit of its aims and objectives. Up to 90% of the cost will be funded,
subject to a maximum of €10,000.

35https://www.pobail.ie/en/CommunityLocalDevelopmentProgrammes/DownloadableLeafletsForms/file,422
0,en.pdf

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The Training, Education and Research Grant sch eme support s or enhance s the activities of local
organizations who are addressing disadvantage in their communities. Funding can cover:
education or training provided for the local community; the development of an applicant own
organiz ational capacity incl uding training of the organizations’ own staff or management;
research initiatives addressing disadvantage in the community. Up to 90% of the cost will be
funded, subject to a maximum of €10,000.

General c onditions :
– All proposals must be locally based and target local communities. Priority will be given to
standalone funding i.e. funding which is not used to meet shortfalls arising from g rants obtained
from other Departments or agencies.
– Only local voluntary and community organizations/groups with a focus on disadvantage are
eligible to apply. G roups who do not have a focus on disadvantage but who demonstrate
significant evidence of need will be eligible under the Scheme of Refurbishment Grants.

The Guidelines contains a list of organizations which are not eligible to apply (e.g., providers of
social housing, sports activities).

Specific criteria:
– Extent to which the proposal tackles disadvantage;
– Extent to which the proposal involves participation of the local community;
– Need for and impact of funding;
– Capacity of the organi zation to undertake and manage the proposal;
– Value for money represented.

Applicants must give their ta x number, the name of the tax office dealing with their affairs and
must certify that their tax affairs are in order. For grants over €6,350, a current tax clearance
certificate must be submitted with the application. Those organizations which have been
recognized as Charities by the Revenue Commissioners are exempt from the requirement to
produce a tax clearance certifi cate.

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Importantly, the guidelines emphasizes that a ll unsuccessful applicants will be notified in writing
of the reasons for the decision in relation to their application.

A detailed application form is provided for the schemes.

III . SCOPE OF FUNDING

A. CROAT IA

Funding is available for both institutional support and program activities.

B. ENGLAND

The Code of good practice sets the principle that Government funding is allocated for full cost
recovery (also known as “core funding”). It is therefore legitimate f or CSO s to include in their
grant applications the relevant element of overheads in their costs estimates for providing services
and outputs .36

The Guidance to funders and purchasers specifically outlines that:

 There is no reason why service procurers sh ould disallow the inclusion of relevant
overhead costs in bids.
 When grant -making, funders should assess in a simple, proportionate and equitable
manner whether third sector organizations have allocated relevant overhead costs and
ensure that costs are re covered only once.
 Fixed percentages without any evidence base do not provide a sound basis for the
calculation and award of relevant overhead costs. Clear and consistent allocation of
36 The Code tries to prevent the practice by CSOs of fixed percentage adds -on., which means that the CSO
adds a fixed percentage to its estimated cost of the service for which the grant is applied for, in order to
“secure” its appraisal of the costs. Appendix E of the Code provides therefore guidance (mostly references
to guides dealing with the topic) to achieve a clear calculation and allocation of the d irect and overhead
costs of a project

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relevant overhead costs can provide a more accurate guide to funders of the true cost of
delivering a service or output.

C. FRANCE

Government funding is allocated, either for operational costs, or for programmatic costs.

D. HUNGARY

CSO s may use the amount of the state budgetary funding only to cover the operational and
progra m cost of their nonprofit activities. They cannot transfer the money to another
organization, except to a legal person, which is a member of the organization and already in
existence at the time of the application for the funding was produced.

E. IRELAND

State bodies can provide 100% funding only on specific projects with a specific focus on tackling
poverty and disadvantage, where an element of co -financing cannot be reasonably be expected.
Co – funding from the CSO is therefore the standard. As 100% fundin g is the exception, so is core
funding restricted to priority services and priority development work. A particularity of the
system is also to allow the eligibility for funding of out -of-pocket costs of volunteers.

IV . AMOUNT OF FUNDING

A. CROATIA 37

The Nationa l Foundation awarded 162 grants to CSOs in the above -mentioned program areas,
which amount s to HRK 11,517,778.77 (approx. 1,560,154.17 Euro) . Out of these, the total
amount of grants awarded for institutional support w as HRK 5,114,920.82 (692,847.638 Euro ).

37 Source: Annual Report of the National Foundation for Development of Civil Society
https://zaklada.civilnodrustvo.hr

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The total amount of multi -annual grants approved on the basis of the 2004 calls for proposals was
to HRK 8,283,409.27 (1,122,038.99 Euros) . HRK 192,888.95 (26,128.001 E uros) was awarded
for the program area that encourages international networking and the transfer of knowledge
necessary for the further development of civil society in Croatia.

B. ENGLAND 38

Total central government funding of vo luntary and community organizations was ₤3,323.7
million in 2001/02. This funding accounted for around 1% of all government sending for that
same period of time. The largest proportion of tot al funding was allocated to development,
employment and housing, including housing associations (46.3% in 2001/02 .)

C. FRANCE 39

Public funding represents 54% of the budget of CSO s40. However, this figure comprises both
Government and local authorities funding as well as direct and indirect funding (through
employment su bsidies for example). In addition, the reality varies a lot depending on the size of
the CSO . Small CSO s seldom receive public funding, whereas it represents 60% of the funding
of CSO with employees.
According to a survey issued for the 100 year annivers ary of the law on associations in France,
the overall amount of public funding was estimated at FF25 billion (about 4 billion Euros). A
2000 report of the Cour des Comptes (body in charge of controlling the public finances) cites the
number of about 10,000 associations directly funded by the ministries for the years 1995 and
1996, not included the Government funding through its local bodies.

D. HUNGARY 41

38 Central Government Funding of Voluntary and C ommunity Organizations 1982/83 to 2001/02, Home
Office (2004) https://www.homeoffice.gov.uk/rds/pdfs04/misc39.pdf
39 www.associations.gouv.f r
40 www.associations.gouv.fr/article.php3?id_article=3
41 Nilda Bullain, supra.

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Direct government financing amounts to 150 bi llion HUF ($750 million) a year, generating more
than 1/3 o f the sector’s income . In 2004, appr oximately 4.85% of the total state budget was
channeled to nonprofit organizations

E. IRELAND

The executive summary of the white paper refers to the amount of about IR£ 1 billion funding to
the community and voluntary se ctor by the Irish government and EU sources for the year 1999.

V. DISTRIBUTION FROM LOTTERY PROCEEDS

Funding distributed to CSO s may come in some countries from other sources than the budget.
The lottery is an example of such alternative sources of fund ing, which can be found in several
European countries, among others, in the UK and in Croatia.

A. UNITED KINGDOM

Lotteries represent a substantial source of money. Currently, every £1 spent on the National
Lottery is broken down into:

 50p is paid to winner s in prizes;
 28p is given to Good Causes ;
 12p goes to the Government in Lottery duty;
 5p is paid to National Lottery retailers on all National Lottery tickets sold;
 4.5p covers the operating costs; and
 0.5p is profit for the operator.

At the beginning, f ive areas were set initially to benefit form the lottery proceeds: the arts, sport,
heritage, charities and voluntary organizations and projects to celebrate the new Millennium.
Money was split equally between the five areas. In 1998 a sixth good cause wa s created for
health, education and environment.

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The lottery proceeds from good causes are distributed through 14 Lottery Funders ,
organizations with specialized knowledge about a different sector, independent from the
Government . Funding is allocated thr ough grants under specific programs for which applicants
have to submit an application. Each grant scheme contains specific criteria for eligibility and
funding .

The “ Lottery Funding ” portal ( https://www.lo tteryfunding.org.uk ) was created as a j oint website
run by all Lottery Funders in the UK, which provides information on current funding program s.

The Department for Culture, Media and Sports is responsible for the overall funding, and the
lottery policy and structure within the Lottery Funders . It maintains a database of all grants 42.
Grants can be searched by area, dates, projects and also a search engine is created for an
interested person to check whether or not to a grant has been aw arded funding. In addition , a
regularly updated chart details the total monetary value of the grant awarded and the total number
of grants awarded per field , since the beg inning of the lottery in 1995 . The data is grouped under
generic good causes and the breakdown of gra nts is made under the following categories:
country/region , local authority , constituency and total grants awarded by distributing body .

So far £1 9 billi on have been raise d for good causes from the national lotteries players across the
UK , and over 250,00 0 projects have been funded .43 A report from 2003 presents that £ 2.59
billion were used to fund charities and the voluntary sector through the National Lotteries
Charities Board later called the Community Fund .44

The legislation on lottery distribution ad opted in 1993 in the UK has been modified twice since,
in 1998, and more recently in 2006 after a reform process started in 2003.

42 https://www.lottery.culture. gov.uk/introduction.asp
43 https://www.lotteryfunding.org.uk/ The website also provides an interesting interactive step -by -step
scheme on how the money from the lottery proceeds is being used to fund good causes.
44 National Lottery Funding Decision Documents, (2003).
https://www.culture.gov.uk/NR/rdonlyres/4FADA4A3 -94E7 -4A73 -A022 –
4EDD1D67327C/0/reviewlotteryfunding.pdf

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The last reform undertaken was meant mostly to improve the way money was distributed by
reducing the number of Lottery Funder s45. One single distributor the Big Lottery Fund was set
up as a merger of the New Opportunities Fund , the Millennium Commission and the Community
Fund. It only distributes funds for projects that improve health, education and the environment
and support vo luntary groups that are helping those most in need . It runs its own search engine on
the supported projects: https://www.biglotteryfundgrants.org.uk:8080/grant -search/gs_00 1.xsql .

“The Big Lottery Funds rolls out close to £2 million in lottery good cause money every 24 hours,
which together with other Lottery distributors means that across the UK most people are within a
few miles of a Lottery -funded project ”.46

EXAMPLE: The Young People’s Fund – Reaching Out 47

For areas: Wales
Total available: £6.2 million ; maximum grant: £300,000

Projects should focus on young people between 10 and 19 years old, who are at risk of becoming,
or already, disaffected and disengaged, par ticularly in disadvantaged communities. They should
involve young people in constructive activities through prevention, outreach and intervention
work that will fill a gap in local.
Application process: Two -phase process, first phase being the completion of an outline proposal
form that is used for the Fund to identify the applications that it would be interested in funding.
For that review the Fund checks that (1) the organization is one that it is able to fund, (2) the
45 According to a consultation paper published in 2003, which grounded the content of the reform, the
former system needed to be improved on the followi ng aspects: strengthening the awareness about the
lottery funding by a better branding, increase the public involvement with the distribution priority setting
and greater transparency of the application and awards processes, introducing micro -grant for small
organizations with very simple application process, providing a “single front door” for the applicants to
make their case and the use of a single application for cross -distributor projects, early feedback about the
application’s merits and the opport unity to revise it and re -submit, see National Lottery Funding Document,
July 2003 supra .
46 https://www.biglotteryfund.org.uk/index/about.htm
47 https://www.biglotteryfund.org.uk/prog_ypf_reaching_out?fromsearch= -wal

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proposal will achieve at least two of the Young People’s Fund aims, (3) the project focuses on
young people within the target age range of 10 -19 years old, (4) the organization has a good plan
to involve the young people in the project, (5) young people who are at risk or who are already
disengaged or disaffected, are involved in the project, (6) the project targets areas are most
disadvantaged, (7) the project fills a gap in local provision that address local priorities and is
additional to existing planned services, (8) the project address es prevention and/or outreach and
intervention work, (9) an independent referee 48 has signed the proposal form.
The fund reviews the outline proposal within 10 working days. If funding is likely, a full
application form is sent to the candidate. If not, t he Fund explains why.
The full application form is sent to the applicant with some of the questions already completed
using the information already given. Extra information may be asked for example on the
resources available to the project. If the proj ect is large and complicated, a separate project plan
must be sent along with the application that shows how the applicant intends to deal with the
changes implied by the funding (hiring new staff, dealing with additional income, branching out
into new are as of work, etc.). The applicant must also establish how it will deal with the funding
coming to an end after three years (this specific funding being for up to three years) and how the
benefit of the projects will be continued beyond the lottery funding.
To make its final decision, the Fund will assess: How well the project outcomes achieve the
Young People’s Fund aims, if there is a need for the project outcomes offered, how well the
applicant will achieve the project outcomes
Timeline: Usually 5 month s are necessary after the submission of the application for the
decision to intervene. The applicant is informed within 10 working days of the committee
meeting.

B. CROATIA

48 Someone who knows the organization for at least one year and who can talk about its work and has a
relevant qualification for the given proje ct (here a teacher, social worker, childcare professional or police
officer)

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A system of lottery distribution is also in place in Croatia embellished through th e Act on Income
from Games of Chance and Competitions (2002).

The gambling revenues are used as a source of funding for the development of civil society in the
country. As mentioned above the Law on Games of Chance and Competitions, enacted in 2002,
cre ated the material basis for the establishment of the National Foundation. According to the law,
50% of the moneys collected through games of chance are allocated for civil society
organizations in Croatia.

Every year the Government adopts a “Decree on t he Criteria for the D istribution of the Lottery
Proceeds ”49. According to the decree from 2007, the 50% of the allocated funding were
distributed to the following fields:

 30,5% sport
 8% fight against drugs and other types of addiction
 4% social and hum anitarian activities
 28% problems and needs of people with disabilities
 6,5% technical culture
 5% culture
 3,5% out of institutional education and upbringing of children and youth
 14,5% development of civil society

The funds are distributed through r esponsible Ministries listed in the Decree. 96.55% of the
14.5% allocated to development of civil society are allocated through the Government Office for
NGOs to the National Foundation, which then distribute them for the program “Our contribution
to the c ommunity”. The remaining 3.45% are distributed through the Ministry of Foreign Affairs
and European Integration for international cooperation programs.
49 Official Gazette 18/2007