Jadranje po nemirnih vodah

Dominique Cochard

OPERATIVE SOLUTIONS AND MEASURES RELATED TO GRANT APPLICATIONS IN THE NON-PROFIT SECTOR –applications, guidelines, etc,

case study: EU

The only way for NGOs to find proper operative solutions and measures related to EU grants is for them to globally understand the EU policy towards NGOs, its structures and procedures to implement it. On the second

hand, there is a need for NGOs to understand the fundamental principles of EU funding, as EU programmes in their specificity are constantly evolving, while these basic rules remain. Finally, is there a need for Slovene NGOs to adapt in order to cope with the requirements of EU grants?

A - The EU need for NGOs

A.1 - Legitimisation of the decision-making process

The relationship between NGOs and the European Commission has to be seen in the framework of the democratic decision-making process of the European institutions. Even though the decision-making process in the European Union is first and foremost legitimised by the elected representatives of the European people, NGOs make a valuable contribution to it in fostering a more participatory democracy both within the EU and beyond.
The right of citizens to form associations to pursue a common purpose is a fundamental freedom in a democracy. Consequently, NGOs are increasingly recognised by the EU and its Member States as a significant component of

civil society and as providing valuable support for a democratic system of government.

This is of particular relevance in the context of enlargement. According to the so-called Copenhagen criteria, membership in the EU requires that the candidate country, like Slovenia, has achieved stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities.

A.2 - NGOs' Contribution to European Institutions' tasks

NGOs are representing the views to the European institutions of specific groups of citizens (such as people with disabilities, ethnic minorities) or on specific issues (such as the environment, world trade). In particular, many NGOs have an ability to reach the poorest and most disadvantaged and to provide a voice for those not sufficiently heard through other channels. Through their links at local, regional, national and European level, NGOs can provide expert input for EU policy-making. In particular they can provide feedback on the success or otherwise of specific policies thereby contributing to the Commission's task of defining and implementing policies by fully taking into account its overall public policy responsability.
Besides, NGOs contribute specific expertise to managing, monitoring and evaluating projects financed by the EU. The contribution of NGOs is particularly important in tackling social exclusion and discrimination, protecting the natural environment and the provision of humanitarian and development aid. The expertise and dedication of NGO staff and their willingness to work under difficult operational conditions mean that NGOs are vital partners for the European Commission. In the European context, NGOs perform this role not only in relation to the Commission, but also the European Parliament, the Economic and Social Committee, the Committee of the Regions and the Council.

A.3 - NGO Contribution to the public acceptance of the EU

The involvement of NGOs in policy shaping and policy implementation helps to win public acceptance for the EU in general. This is particularly true in the case of the candidate countries. Furthermore, EU policies are the best communicated to specific and local target audiences by the NGOs as they are representing the interest of these specific groups of citizens. A good example of this role of awareness building played by NGOs in candidate countries are the grants given under the Small Projects Programme run by Delegations (in Slovenia, 150.000 euros were allocated for 7 projects running in 2001).
By encouraging national NGOs to work together to achieve common goals, the European NGO networks are making an important contribution to the formation of a "European public opinion" usually seen as a pre-requisite to the establishment of a true political entity. At the same time, this also contributes to promoting European integration in a practical way and often at grassroots level.

B - The EU implementation of its relationship with NGOs

At present it is estimated that over 1.000 euros a year is allocated to NGO projects directly by the European Commission, the major part in the field of external relations for development co-operation, human rights, democracy programmes and humanitarian aid (on average 400 million of euros). Other important allocations are in the social (around 70 million), educational (around 50 million) and environment sectors within the EU. However, although the Commission's current practice clearly proves its willingness to maintain and strengthen its partnership with NGOs, the structures and procedures involved have not kept up with this. The complexity of EC policies as well as the growing number of regulations and funding sources (budget lines) coupled with recent financial security problems have created a great deal of uncertainty for NGOs about co-operation with the Commission.

B.1 - Lack of co-ordination

The European Commission: implementing the policies of the European Union and being one of its five institutions; divided in Directorate-General. Sort of ministries....In fact, the EU co-operation with NGOs is organised by policy areas (environment, social affairs, ...) and run by different Directorate-General of the Commission. This is implying considerable differences in the relationship between NGOs and the Commission from one sector to another regarding access to information, the way dialogue and consultation is organised and the availability and the conditions of funding. The political will of co-operating with NGOs, presented in A, is

not translated into structured access to information and funds for the NGOs: there is not such a body of the European Commission to co-ordinate, give coherence and ensure equal access to its programmes and funding for

NGOs. Consequently, there is lack of sufficient information for NGOs in particular on funding and financial procedures.
This model is reproducing at the level of Slovenia, where beside the 3 programmes designed for NGOs (Democracy, SPP and ACCESS) and managed by the Delegation of the European Commission, a number of Community programmes are opened to Slovene NGOs and managed by sector through the national competent

ministries.

B.2 - The administrative constraints

There are a series of challenges facing the Commission in managing those grants that are awarded under its direct responsibility. One of the fundamental problems of the Commission is the low ratio of staff to financial resources managed compared with similar managerial structures in the Member States or in international organisations. In order to cope with this situation, the Commission has developed a range of different management schemes, the common features of which is the delegation of certain administrative or support activities to various bodies, including NGOs, outside the Commission.
The three Commission-run programmes for NGOs in Slovenia are at the best illustrating these different management schemes:
The Democracy programme is managed for the Commission (DG External Relations) by a Brussels-based NGO, which is responsible for managing the programme in all the beneficiary countries. The latter is presenting the advantage of giving coherence to the programme and ensuring equal conditions for application in the ifferent countries. At the same time, to ensure the local situation is taken into account and the local needs met, the Delegation of the Commission in each beneficiary country is responsible to manage the grants (amount of the grants, priority policy areas, timetable of selection process, implementation of the projects). Finally a local NGO is chosen by the Brussels-based NGO in order to serve the Delegation as technical assistant.
In the case of the Democracy programme, the consequences of complicated administrative structure and different levels of contracting were considerable delays in implementing the programme and handling applications, badly adapted length of projects and breakdown of confidence from the NGO side.
SPP: the grant is managed by the Delegation with the technical assistance of another NGO, directly contracted by the Delegation.
PHARE ACCESS: the grant is managed by the Delegation itself.
In such a small country as Slovenia, for 3 EU programmes, there are 4 intermediary bodies, complicating dialogue on EU co-financing.
Beside the use of intermediary agencies, the European Commission is also, in many cases, opting for concentrating the available resources on a smaller number of larger projects with a view to reducing the administrative burden of grant management. While the intermediary agencies run the tender and the selection process, the responsibility of contracting with the NGOs, of checking the reports and of the payments always lies with the Commission services. By giving priority to larger projects, the Commission is discouraging applications from small NGOs, often the source of innovative ideas or is excluding funding for small projects where these

most answer the needs or the EU priorities.

C - The Requirements of the Application

C - 1 The Tax Payers' constraints

The application-forms are the expression of the way in which the Commission applies its procedures that are aimed at ensuring the sound management of Community funds. As the taxpayers' money must be spent in a judicious, economic and transparent way, the award and management of EU grants are subject to specific conditions and requirements to be fulfilled by the applicant organisation, notably in terms of its capacity, both operational (technical and managerial) and financial. At the same time, some characteristics of the NGO sector such as the small size of the organisations, a sometimes tight cash flow situation, difficulties in providing financial guarantees, may well mean that their internal structure and capacities are not necessarily well adapted to meet the administrative requirements placed on them by the EU institutions.

C - 2 Conditions and Requirements to be fulfilled by applicants

The Commission's Vademecum on Grant Management (1) is providing the minimum procedures and standards that must always be observed in the EU grant management. This Chapter is intending to summarise the main requirements put on applicants by the Commission, as they stand in all the applications for EU grants.
Basic Requirements for Application for grant
- treatment of incomplete applications:

an application will be considered incomplete not just if it is not signed, for instance, or if not all the questions on the application form have been answered, but also if it is not accompanied by all the annexes listed on the application-form (balanced budget, adequate description of the project, statutes of the organisation, ...). Regarding the administrative constraints of the grant management (presented in B), the possibilities for the applicant to complete its application are seldom exceptions.

- eligibility of applicants: proper legal status.

Given the wide variations in laws relating to NGOs in different countries, the term NGO usually refers to a range of organisations that share the following characteristics:

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  do not generate personnel profit,
  
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  are voluntary (formed voluntarily and have an element of voluntary participation),
  
• 
  are distinguished from informal or ad hoc groups by having some degree of formal or institutional existence (governing document setting out their mission, objectives and scope. They are accountable to their members and donors),
  
• 
  are independant, in particular of governement, political parties or commercial organisations,
  
• 
  are not self-serving in aims and related values. Their aim is to act in the public arena at large, on concerns and issues related to the well-being of people or society as a whole. They are not pursuing the commercial or professional interests of their members.
  

- Applicants' financial capacity: applicants should have stable sources of finances and will be asked to include with their application form their annual accounts for the last financial year, and, in some cases, an explicit undertaking from each co-financing organisation.

- Applicants' technical capacity: curriculum vitae of the staff.
- Projects for which an application has been made must not, as a rule, have started yet.

Basis on which grant will be awarded:

Projects must match the objectives defined by the Commission.

The expected results of the project must further the policy objective of the programme: the results as described on the application form must be measurable so that the extent to which they have been achieved can be monitored, checked and subsequently evaluated. A further result that can be taken into account is wether or not the award of a grant will contribute towards sustaining an organisation whose existence is useful for achieving the policy objective of the programme.

The project must be cost-effective: Do the probable results stand in a reasonable relationship to the amount of the grant? Have better ways of achieving these results been overlooked? Is there a way in which the same or equivalent results could be achieved with less cost to the EU budget (including costs of administration)? The breakdown of the budget, category by category, offers a way of ensuring that the amount of the grant awarded is the minimum necessary for the project to be completed.
The budget expressed in euros, as a rule.
eligible costs: the budget submitted with the application must be sufficiently detailed to allow "eligible costs" to be distinguished from any "ineligible costs";

contributions in kind: small organisations in particular often apply for part of their contribution to the costs of a project to be in kind. Such contributions in kind must appear on both sides of the forward budget, on the income side as the money equivalent to the services or materials contributed and as an equal amount on the expenditure side, but separately from the rest of the budget since they cannot count as eligible costs. In particular, contributions in kind include:

• 
  land, immovable property wether in its entirety or in part,
  
• 
  durable capital goods,
  
• 
  raw materials,
  
• 
  unpaid charity work by a private individual or corporate body.
  

Where contributions in kind are taken into account, the Community contribution is limited to the level of actual expenditure incurred, in other words to total eligible costs excluding the value of contributions in kind.
The budget presented in the application will then be incorporated in the grant agreement if the project is chosen: any change which the beneficiary wishes to have made to the terms of the agreement that would imply a change in the basic purpose or nature of the project must be submitted for prior approval by the Commission. Such changes must be set out in an addendum to the agreement. Where the change does not affect the basic purpose of the operation and the financial impact is limited to a transfer between headings of the budget involving an increase of less than 10%, the beneficiary may apply the change and inform the Commission without delay.
Final amounts:

The amount of a grant only becomes final after completion of the project and presentation of the final accounts. In no circumstances can the final Commission grant be higher than set out in the agreement. The grant is reduced if a comparison of the final accounts with the budget set out in the agreement shows:

• 
  that total income, including interest on advance payments, exceeded total expenditure; in this case the Commission grant is reduced by the excess amount;
  
• 
  that eligible costs are less than in the agreed budget, in which case the Commission grant is reduced proportionately;
  
• 
  that the amount of eligible costs minus income generated by the project is less than the grant; in this case the Commission grant is reduced by the excess amount.