Benefits of increasing government investment in socially oriented NGOs

The share of NGOs in the
Russian economy is on average around seven times lower than that in developed
countries (0.9% of GDP as against 6-7%, the situation being similar regarding
third sector employment). However, NGOs are characteristically more effective
than state organizations in resolving social problems. In the next 10 – 20
years according to Boston Consulting Group (BCG) experts they will be able to
ensure growth of GDP by increasing the contribution to the economy made by
people with disabilities, parentless children and other categories needing
support in the areas of socialisation and employment,). Also they forecast that
growth in GDP, might be achieved by creating new markets for the supply of old
age homes, hospices and so forth.


The budgets of NGOs in
other parts of the world are predominantly made up of government contributions
and income from activities whilst in Russia their finance mainly comes from
donations. State support for third sector organizations in Russia in 2011 is
afforded via a number of programmes that have not been reconciled between the
grant givers: presidential grants (one billion roubles), ministry of health and
social development programmes (880 million roubles) regional programs (9.3
billion roubles) and so on. A further 880 million roubles will probably be
allocated this year by the ministry of economic development.


Furthermore, Russian NGOs
do not receive the same amount of non-financial government support as in
developed countries where it is given by means of favorable legislation;
co-operation in creating a positive PR background; and, promoting the financial
stability of third sector organizations. The latter is achieved via government
loans and guarantees, and subsidised interest rates.


BCG’s presentation may be
seen on the Internet at


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