European Mechanism for State Funding of Public Organizations

Abstract

This study highlights the results of a comprehensive study of the European countries practices of funding the public organisations that would become most applicable in Ukraine. The study comments on the comparative analysis of the models and mechanisms of public funding, describes the basic elements of the successful development of the institutional framework for financing the public organisations. The author suggests the following major steps towards developing an institutional framework for public funding of civic organizations in Ukraine: 1) identification (redefining) of the status of socially beneficial organizations, which can serve as the basis for creating certain tax incentives; 2) establishment of a fund for supporting civil society, aimed at expanding the capabilities of major non-governmental organizations, launching and promoting their local development; 3) gradual utalization of the system of normative regulation of financing of those public organizations that provide the social services approved by the state; 4) the possibility of directing the percentage of the financial turnover into charitable donations should also be considered; 5) full exemption from taxation of socially beneficial organizations if their economic activities correspond to the statutory purposes, and partial exemption from taxation of the income from their non-core economic activity.