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1.3 Funding Options

The Government uses a number of different funding arrangements, reflecting different activities that are being funded:

  • either full or partial funding of the agreed services;
  • entitlements attached to the user of a service;
  • funding on the basis of outcomes achieved;
  • grants (funding provided so long as certain conditions are met); or
  • the full or partial devolution of decisions on the allocation and use of funds to a community organisation.

1.3.1 Part Funding

In some cases Government agencies will provide funding explicitly on the basis of making a contribution to a service or activity undertaken by an NGO, without any expectation that the Government agency or agencies involved will pay all the cost of the service.

Part payment for services may be appropriate where:

  • The NGO approaches the Government agency to seek assistance for an activity it already undertakes or intends to undertake. The Government agency contribution provides for a marginal extension only.
  • A contribution is agreed by both parties to be short term only.
  • NGOs as part of their mission wish to contribute from their own resources.
  • Other organisations or foundations are contributing.

And:

  • The arrangement leaves intact the Government agency’s ability to arrange for the provision of these services by NGOs if required in the future.

Part payment is (at least in principle) distinct from the situation in which the NGO over-delivers on the agreed output which Government agencies are paying fully or nearly fully for (e.g. by producing more of it). It is also distinct from the situation in which several Government agencies pay for all of a service. It can, however, become problematic if the Government agencies involved either expect to exercise rights as if they were purchasing all of the output, or represent to other parties in their own reporting that they have secured the delivery of outputs they had only made a contribution to. The contract and reporting requirements should reflect the contributory nature of the funding.

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