The Government of Croatia has taken an extraordinarily bold stand in recognizing and fostering the development of civil society. A process that began in late 1998 with the establishment of the Government Office for Cooperation with NGOs (Ured za Udruge – UzU) has now culminated in the establishment of the National Foundation for Civil Society Development, registered in November 2003. This marks a critical step forward for the development of civil society and the financial sustainability of NGOs in Croatia.

Prior to the formation of UzU in 1998, to be headed by Cvjetana Plavsa-Matic, each ministry had its own budget for NGOs. The lack of transparency in the distribution of funds and the fact that different ministries used different criteria when making grants led to the concentration of resources in the hands of one body.

Developing government-NGO cooperation

The next step occurred a couple of years later. Pledged to the building of civil society and a democratic and market-oriented state – a prerequisite for Croatia’s integration into the European Union – the new coalition government, elected in January 2000, gave UzU a more influential role. This included developing a Programme of Cooperation between government and the NGO sector,[1] implementing an openly advertised national grants scheme, overseeing the revision of existing NGO legislation and developing transparent grantmaking procedures.

In early 2002, UzU established a Council for the Development of Civil Society, a cross-sector expert advisory body whose remit was to agree projects to be funded by government through UzU, further develop the Programme of Cooperation, and draw up a strategy for the development of civil society and philanthropy in a decentralized decision-making system. The Council is made up of representatives of relevant ministries and of civil society organizations (CSOs). It is worth noting that the civil society representatives were nominated without government influence.

The National Foundation

By mid-2002 the Croatian Parliament had passed the Law on Income from Games of Chance and Competitions. Drawn up by UzU with support from ICNL, the law stipulated that 50 per cent of funds generated from the lottery[2] would be allocated to CSOs through a new public foundation. On 16 October 2003, the Croatian Parliament enacted the Law on the National Foundation for Civil Society Development. Croatia’s National Foundation, registered in November 2003, promises to become one of the most innovative examples of NGO-government partnership in the region.

The Foundation will support grassroots programmes developed by NGOs and informal, community-based initiatives. Its six core activities will be grant-giving, education and publications, public awareness campaigns, evaluation services, research, and regional development. Finance will come from a variety of sources, including the state budget, the Croatian lottery, private donations, and income from economic activities. Five of the nine-person Management Board are civil society representatives.

Towards a decentralized system

The enactment of the Foundation Law marks a shift from a highly centralized system, in which the Government Office for Cooperation with NGOs (UzU) played a critical role, towards a more decentralized system, under which different ministries will again be responsible for distributing funds in pursuit of their strategic goals. A Code of Good Practice for Grant Making[3] will ensure that all state institutions adopt the transparent standards already developed by UzU. Training will be provided to ministries and local authorities to help them develop the skills to work within the new system.

But establishment of the Foundation will not mean the end of UzU. Instead, UzU will provide technical and administrative support to the Council for Civil Society Development. The Council will create a database of NGO programmes being funded by the Government, monitor implementation of the Programme of Cooperation at all levels, and initiate further changes in legislation relating to NGOs. But it will be left to the Foundation to distribute lottery funds to the sector.[4]

Drawing on the British Government’s own experience of establishing a National Lottery to help fund the voluntary sector, the UK Department for International Development is financing a programme to support development of this institutional framework and help ensure that it is sustainable and will function independently of central and local government.

1 Similar to the Compact between the voluntary sector and government in the UK

2 This also includes income from betting sports companies, casinos and slot machines.

3 This was prepared by UzU, with support from ICNL. It has now been submitted to the Croatian Parliament.

4 It will also manage one project (‘Strengthening the Capacities of the Non-for-Profit Sector in Croatia for Social Service Delivery’) in the new EU technical assistance programme CARDS (Community Assistance for Reconstruction, Development and Stabilisation).  In addition, the Foundation will seek to attract other international donor finance to supplement indigenous funding.

Cvjetana Plavsa-Matic has been heading UzU and will now head the new National Foundation. She can be contacted at ured.za.udruge@zg.htnet.hr
Libby Cooper is heading the DFID programme, which is being implemented by CENTRIS. She can be contacted at libcooper@blueyonder.co.uk