Future of NGOs following reforms of budgetary institutions

Government representatives, businesses and NGOs took part in a round table discussion — “Support for Budgetary Institutions: Profitable Partnership or Honorary Obligation?” The round table was organised by CAF (Charities Aid Foundation) Russia and PricewaterhouseCoopers (PwC). Reforms to Russian budgetary institutions will take place on 1 January 2011, following the bill “Introduction of changes into legislation of the Russian Federation on improving the legal status of state and municipal institutions”.

Artem Shadrin, deputy director of the Ministry of Economic Development’s Department of Strategic Programme Management and Budgeting, explained the new law: “The transition from a system of estimated expenditure to a budgetary system will mean that the institution takes responsibility for the outcome, volume and quality of the services provided.” According to Shadrin, estimated costs are currently worked out yearly and it is difficult to reallocate funds after they have been distributed.

Shadrin explained that “With the transition to a governmental budgetary system, the institution alone will decide how to allocate their funds, the economy will get a boost, there will be extra profit, paid services will be provided, and this will not be to the detriment of main activities.” The expert predicts that with the new bill in law, demand for leadership in different sectors of budgetary institutions will rise.

As Shadrin says “What we are talking about here is about businesses taking part in managing budgetary institutions and acting as advisors. It is necessary to consolidate the efforts of businesses, the charity sector and the state in development of social programmes.”

The short time in which the reforms will be carried out, coupled with a lack of information about the changes, has aroused anxiety in the participants in the round table. Nataliya Kaminarskaya, Executive Secretary of the Donors’ Forum, noted that “Budgetary institutions are not ready for regular and strategic co-operation with business and many organisations actually refuse a partnership. Furthermore, I think that there will be a reduction in financial assistance to budgetary institutions and funds will be allocated on the principle that they “will not cause a social riot.” ”

Representatives of civil society believe that the volume of funds received by the charity sector will be greatly reduced. Victor Kalinin, assistant to a State Duma minister, and a specialist in the Joint Advisory Council on Economic Policy and Entrepreneurship, said “Both budgetary institutions and the charity sector will suffer. It goes without saying that NGOs will start to see a funding deficit for those programmes which they are currently successfully developing. NGOs will now have to prove their importance as consultants and be professionals in social management and fundraising.”

The issue of reform of Russian budgetary institutions will be raised at various future meetings and events organised by CAF.

Valeria Kurakina (CAF Russia) Telephone number:  (495) 792- 59-29, +7-926-223-99-55, e-mail: vkurakina@cafrussia.ru.

Translated by Lina Numan




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