Objective: to describe legal framework and current practice of social contracting between governments and NGOs in context of transition process towards domestic financing national HIV responses Joint work of UNDP and national stakeholders; collaboration with European Centre for Not-for-Profit Law (ECNL)

1. Christoph Hamelmann, Timur Abdullaev,
Predrag Durić
UNDP Istanbul Regional Hub; HIV, Health and Development
HIV Investment Approach in EECA – Moving from analysis to action
Regional Meeting in Vienna, 23-25 February 2016
NGO Social
Contracting:
Opportunities
and Challenges

2. Introduction
• Objective: to describe legal framework and
current practice of social contracting between
governments and NGOs in context of transition
process towards domestic financing national
HIV responses
• Joint work of UNDP and national stakeholders;
collaboration with European Centre for Not-
for-Profit Law (ECNL)

4. Structure
• HIV epidemiology in brief
• Legal and institutional aspects of the national HIV response
and the role of NGOs
• NGO landscape in a country
• Contracting of NGOs under most recent GF grant
• Government social contracting to NGOs: Legal and
regulatory frameworks
• Quality control and assurance
• Other prerequisites for service provision (licenses, special
permissions, etc.)
• Government social contracting of NGOs: The practice
• Recommendations

5. HIV prevalence - concentrated epidemics
in key populations*
0
5
10
15
20
25
People who inject drugs Men who have sex with men Sex workers
%
Belarus Bosnia and Herzegovina fYR Macedonia
Kyrgyzstan Moldova Montenegro
Serbia Tajikistan Ukraine
Uzbekistan *For the last year available. Source: IBBS surveys

6. Number of people living with HIV*
*Data for the last year available. Source: national progress reports, UNAIDS
96 65 **
83 51 329
114 95 56
0 50,000 100,000 150,000 200,000 250,000
Belarus
Bosnia and Herzegovina
fYR Macedonia
Kyrgyzstan
Moldova
Montenegro
Serbia
Tajikistan
Ukraine
Uzbekistan
PLHIV - on ART PLHIV - registered, but not on ART PLHIV - not registered

7. ART coverage*
*Data for the last year available. Estimated number of people living with HIV in fYR Macedonia were not available. Source: national progress reports, UNAIDS
6,062
114
1,900
3,116
83
1,300
2,167
66,409
10,948
7,465
95
4,195
3,775
51
656
3,075
70,981
19,367
15,473
56
3,315
10,650
329
1,044
10,758
85,610
1,685
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Belarus
Bosnia and Herzegovina
Kyrgyzstan
Moldova
Montenegro
Serbia
Tajikistan
Ukraine
Uzbekistan
PLHIV - on ART PLHIV - registered, but not on ART PLHIV - not registered

8. Estimated coverage of HIV testing
in the past 12 months
0
10
20
30
40
50
60
70
People who inject drugs Men who have sex with men Sex workers
%
Belarus Bosnia and Herzegovina fYR Macedonia Kyrgyzstan
Moldova Montenegro Serbia Tajikistan
Ukraine Uzbekistan
Source: IBBS surveys for the last year available.

9. Estimated prevention programme
coverage*
0
10
20
30
40
50
60
70
80
90
People who inject drugs Men who have sex with men Sex workers
%
Belarus Bosnia and Herzegovina fYR Macedonia Kyrgyzstan
Moldova Montenegro Serbia Tajikistan
Ukraine Uzbekistan
*Composition of programmes might differ from country to country. Estimated number of people who inject drugs and men who have sex with men in Montenegro are not
available. Source: IBBS surveys, estimation of population size surveys and national reports for the last year available.

10. Number of NGOs supported by the GF
*
15
9
17
28
22
6
27 28
15
Belarus Bosnia and
Herzegovina
fYR
Macedonia
Kyrgyzstan Moldova Montenegro Serbia Tajikistan Ukraine Uzbekistan
190
30
20
10
190
*In the last Global Fund grant phase. Source: GF principal recipients.

11. Average annual budget from the GF per NGOs ($)
0
100,000
200,000
300,000
400,000
Belarus Bosnia and
Herzegovina
fYR
Macedonia
Kyrgyzstan Moldova Montenegro Serbia Tajikistan Ukraine Uzbekistan
Source: GF principal recipients

12. GF prevention budget available for NGOs per person
from key populations ($)*
People who inject drugs Men who have sex with men Sex workers
Belarus Bosnia and Herzegovina fYR Macedonia Kyrgyzstan
Moldova Montenegro Serbia Tajikistan
Ukraine Uzbekistan
300
100
50
*In the last Global Fund grant phase. Source: GF principal recipients.

13. GF budget available for NGOs for prevention
among key populations (% of budget line)
*
0
25
50
75
100
People who inject drugs Men who have sex with men Sex workers
%
Belarus Bosnia and Herzegovina fYR Macedonia Kyrgyzstan
Moldova Montenegro Serbia Tajikistan
Ukraine Uzbekistan
*In the last Global Fund grant phase. Source: GF principal recipients.

14. Distribution of the GF budget for NGOs –
national or sub-national level*
0
20
40
60
80
100
Belarus Bosnia and
Herzegovina
fYR
Macedonia
Kyrgyzstan Moldova Montenegro Serbia Tajikistan Ukraine Uzbekistan
National level Sub-national level
*In the last Global Fund grant phase. Level concerning beneficiaries. Source: GF principal recipients

15. Key Findings: Common features
• NGOs need registration to operate and access public funding
• NGOs recognised as possible social service providers
• NGOs are mentioned as implementing partners in national HIV
programmes, strategies and laws
• Countries are at different stages of development of mechanisms of
social contracting of NGOs
• When receiving public funding, NGOs required to provide financial
and programmatic reports
• In Belarus, Tajikistan and Uzbekistan foreign funding to NGOs has to
be approved by/reported to the government
• Where license is required for provision of social services, non-
compliance with quality standards may lead to license suspension
or revocation

16. - Registration procedures vary depending on NGO form (stricter
for public associations)
- Beyond social contracting, limited opportunities for NGOs to
carry out economic activities and to get engaged in public
procurement of services (up to 15% deposit requirement
applies to non-state bidders under public procurement
procedures)
- Minimum quality standards for social services; oversight to be
ensured by contracting authority
- No license needed for social service provision
- In 2014, social contracts worth US$ 160,000 awarded to 6
NGOs for provision of social services (not HIV-related)
Key findings

17. - At state level NGOs can operate without registration;
registration required to access public funding
- Quality standards and monitoring procedures not
specifically defined and depend on practices in entities
- No license required for NGOs to provide social services
- Most public funding comes from municipalities
- Since 2012, annual allocation from national, entity and
Brčko District budgets to NGOs app. US$ 72 million
Key findings

18. - Expeditious NGO registration procedure
- NGOs may receive grants from national and municipal
budgets
- Quality standards for social services and service quality
monitoring envisaged by law
- Social service providers to be licensed by the Ministry; staff
of social protection organisations to be licensed by Institute
for Social Affairs and Policy
- Ministry maintains registry of NGOs providing social services
(currently 75 NGOs, incl. HIV service providers)
- Every year Government publishes NGO Financing Programme
- In 2014 and 2015 the Government funded projects of 40
NGOs (app. US$ 210,000 per year)
Key findings

19. - NGOs identified as service providers in Ministry of Health
ordinances on HIV testing in high-risk groups
- Easy and inexpensive NGO registration procedure
- Draft new State Social Contracting Law introduced to
Parliament in 2015
- Draft law envisages 3 mechanisms for state financing of NGO
services: contracting under public procurement mechanisms;
grants for public benefit projects; social vouchers
- Contracting authority to monitor service provision
- Quality standards envisaged for state and municipal services
- No license required for provision of social services
- In 2013, 29 NGOs received funding from Ministry
- No social contracting from local budgets due to lack of
funding
Key findings

20. - Simplified registration for NGOs by local authorities
- State support to NGOs envisaged by legislation: targeted
funding for programs, procurement of services, social
contracting
- Social services may be funded from national and local
budgets
- Both existing and new draft law on public procurements
require financial guarantee for offer submission and contract
implementation
- Quality standards exist for some of the 41 types of social
services in the Nomenclature
- Ministry of Labour, Social Protection and Family responsible
for monitoring quality of social services
- To provide social services, accreditation required
- In 2014-2015 first social contracts and grants awarded by 3
ministries, incl. for HIV services
- Practice of state social contracting of NGOs is limited due to
lack of funding
Key findings

21. - No special legislation on social contracting; general public
procurement law applies
- Government grants may be provided for NGOs for social
services
- Quality standards for social services in place
- Quality of social services monitored by Institute for Social
and Children Protection
- Social service providers to be licensed by Ministry of Labor
and Social Welfare
- Notable increase in social service provision by NGOs: in
2012-2013 284 types of social services provided, of which
175 by NGOs
- In 2014, 417 grants to NGOs awarded (total app. US$
1,817,000), incl. HIV related project in “combatting misuse of
drugs” and 71 projects in “social protection and
humanitarian activities” (total app. US$ 213,190)
- NGOs also receive funding from local budgets, but
allocations have been decreasing
Key findings

22. - NGO registration easy, inexpensive and decentralised
- Minimum quality standards for social services
- Monitoring of quality standards by Social Protection
Inspection, Republican Institute for Social Protection,
Chamber of Social Protection
- Licensing required for NGOs to provide services in education,
home care and palliative care for PLHIV; staff to be licensed
to work in social protection
- In 2014, Ministry of Labor, Employment, Veterans and Social
Issues funded 122 projects (total amount app. US$ 677,395)
of NGOs for social protection services
- Social contracting practice at both central and local levels
Key findings

23. - Social service providers to comply with state quality
standards; detailed mechanisms for quality assurance and
control yet to be developed
- License not required for social services provision
- In 2014, NGOs received social contracts worth US$ 274,000
to provide social services (non-HIV related) and grants
worth US$ 230,000
- At sub-national level, social contracts were provided only
in one region
Key findings

24. - NGO registration quick and inexpensive
- State support to NGOs also through subsidies and tax benefits
(for NGOs with not-for-profit status)
- Quality standards for social service provision exist and are
monitored by government with involvement of NGOs
- No license needed to provide social services; medical practice
should be licensed (NGOs eligible)
- Social contracting relatively widespread both on central and
local levels, incl. for HIV services
- In Odessa, 230 projects accomplished within 12 years with
app. US$ 135,000 allocated from municipal budget; Odessa
experience replicated in other cities
- Funding from municipal budgets is limited (app. US$ 17,000
allocated for social contracting in 2015 in Poltava, Odessa,
Khmelnitsky and Nikolayev provinces)
Key findings

25. - 3 forms of state support to NGOs: grants, subsidies and
social contracts
- Special Parliamentary Fund (est. 2008) to support NGOs in
implementation of socially significant projects
- Monitoring envisaged for projects supported by the
Parliamentary Fund
- To provide social services no license is required; license
needed to provide medical services (NGOs eligible)
- Every year Parliamentary Fund provides grants and social
contracts to NGOs (US$ 6,500 – 140,550 per project; in
2013 193 projects supported, total app. US$ 1.2 million)
- Social contracts and grants allocated for limited period and
cannot be extended
- Other than Parliamentary Fund, no social contracting
mechanisms exist at national or sub-national levels
Key findings

26. Recommendations: Framework
• NGOs should be explicitly recognised as partners and service
providers in HIV/public health legislation and policies
• Consideration should be given to simplifying registration for
NGOs
• Laws and policies should further develop to make it easy for
state bodies to contract NGOs, and to make it easy for NGOs to
seek public funding for social service provision
• Legal frameworks should be reviewed to allow social contracting
at both national and sub-national levels
• Where not available, quality standards for social service
provision should be introduced
• When licensing is required for social service provision, the
process should be expeditious and affordable for NGOs

27. • Capacity of NGOs should be strengthened in social service
provision, and in accessing public funding
• State bodies’ capacity in social contracting should be built,
both at national and subnational levels
• To ensure quality service provision, capacity of monitoring
bodies should be strengthened
• Budgetary allocations should be ensured for social service
provision at national and sub-national levels
Recommendations: Capacity

28. • Tendering processes have to be in place
• Budgetary processes have to be aligned with legislation and
policies to ensure allocations for social contracting
• Information about social contracting opportunities should be
made public and easily accessible at both national and sub-
national levels
• Where social contracting and grant opportunities are
envisaged by state programmes, NGOs should be involved in
identifying service gaps and priorities for funding
Recommendations: Practice

29. Showcase Your
Experience with
Social Contracting!
• What works
• What doesn’t
• How to improve
• From analysis to action

30. christoph.hamelmann@undp.org
Follow @cahamelmann
Acknowledgement
Boyan Konstantinov, John Macauley,
European Centre for Non-For-Profit Law
Contact