Community Fund and Social Enterprise Program

DEVELOPMENT CHALLENGES Despite growth in the number of active NGOs, improved advocacy skills and a more favorable legal environment, the future sustainability of Bulgarian NGOs is still fragile. Dependent on financial support from international donors, Bulgarian NGOs tend to respond to donor goals rather than the needs of their constituents. The level of volunteer, citizen and business engagement in civic affairs is increasing but it is still relatively low. However, new NGO-legislation opens the way for Bulgarian NGOs wishing to engage in economic activities and creates new opportunities for innovative approaches toward NGO sustainability. It is USAID’s belief, that the constraints encountered by Bulgarian NGOs could be overcome through developing new approaches for financial sustainability and community involvement in the planning and decision-making process for community development.

USAID INVOLVEMENT Starting in 1995 with a focus on promoting organizations through small grants, USAID has greatly contributed to the viability of the NGO sector in Bulgaria through various programs. The Community Fund and Social Enterprise Program (CFSE) was launched in September 2001 to address the financial dependency of the NGO sector by introducing new models. In the first year of the program operations three Community Funds were established in the pilot communities of Blagoevgrad, Chepelare and Gabrovo and twenty three Social Enterprises were enrolled into the program.

GOAL The goal of the Community Fund and Social Enterprise Program is to enhance the sustainability of Bulgarian NGOs through:
• Development of Community Funds in Bulgaria,
• Development of Social Enterprises throughout Bulgaria,
• To synergise best practice of Community Funds and Social Enterprises in developing model Social Contracting methodology
• Dissemination of best practices and lessons learned for community Funds and Social Enterprises.

PROJECT DESCRIPTION USAID’s Community Fund and Social Enterprise Program is a five-year program which introduces new models for financial sustainability of Bulgarian NGOs by increasing participation of businesses, citizens, and local governments in the third sector.

• Community Funds. By funding NGO activities from the local community, Community Funds ensure NGO accountability to the people they serve, rather than to external donor organizations. The USAID CFSE program provides technical assistance and trainings to community funds in selected Bulgarian communities. The types of trainings include community fund basics, strategic planning, fundraising, project design and management, accounting and financial management, and cross-border study tours. The program provides ongoing financial support through seed grants and matching grants for the implementation of community projects. It aims to develop sustainable Community Funds as local grantmaking organizations that increase civic participation in local decision-making and in planning local development; and revive Bulgarian traditions of philanthropy and volunteerism.

• Social Enterprises. Social Enterprises offer a mechanism for NGOs providing social services to attain financial sustainability. The Social Enterprise Program in Bulgaria was designed in response to the opportunities presented by the Law on Non-Profit Legal Entities that allows NGOs to undertake economic activities in support of their mission. The USAID CFSE program provides social enterprises with training, technical assistance, access to finance, and cross-border study tours.

• Social Contracting. The decentralization process and transfer of state provision of social services to local governments presents new opportunities for social contracting, and for the participation of NGOs in the delivery of public services. Under this program component USAID assists municipalities in identifying social service providers and in conducting needs assessments. 17 municipalities are enrolled in the program as recipients of matching-grants under the USAID CFSE grant program.

SUCCESS STORIES Donor of the Year to Community Funds Award. In the final program year the Community Funds supported by USAID/Counterpart launched this award to acknowledge private donors from throughout Bulgaria who have used the foundations’ services to do good for their communities. A competitive selection process was carried out at the end of 2005 and 17 individuals and 5 corporations were nominated in areas ranging from health and social care to education and improvement of the living conditions in the community. The impact of community fund work is growing. Surveys conducted by the Bulgarian Donors Forum in 2004 shows that the Community Funds provided 10% of locally generated resources for civil society development in Bulgaria.

Technitari Social Enterprise provides employment and income for Roma people. In 2005 Technitari Association joined the Counterpart program and started a social enterprise which supports production of traditional Roma crafts by providing access to markets and generating income for extended Roma families. Currently 20 Roma craftsmen are producing unique products and through participation in the Roma Fair they have signed contracts for more than 1500 USD. Technitari Social Enterprise presents a successful example of employment for minorities, who are creating a livelihood for their families through production of traditional crafts.

^{Last updated: 12 February 2007}