Major changes are taking place in international development and relief. As donors re-examine their priorities, NGOs may benefit - or lose - from the latest fashion and trends but they will all have to face the challenge of increasing competition for sparse resources. Southern and eastern NGOs in particular are being forced to find funds from domestic sources while lessening their dependency on foreign donors. Money, however, is only one part of the equation. Establishing firm financial roots requires clear vision and organisational planning. Above all it demands a return to the core values of the NGO. When finance is sought it must be appropriate to the aims of the organisation and to its stage of development.
The financing of European NGOs active in the social sphere must be reviewed as a matter of urgency, warns the Platform of European Social NGOs in a 1999 document entitled "The Funding of European Social NGOs". This study demonstrates that the current funding system in this sector is critical and that activity is threatened by cumbersome procedures and bureaucratic management structures in the different European Commission services dealing with the social sector.
The Platform proposes: 1) European NGOs which comply with clearly laid out criteria of representativity, effectiveness, good governance and management and compliance with equal opportunities should be eligible to receive core funding, which should be on a multi-annual basis and include appropriate secretariat and management costs, as well as the costs of convening statutory meetings; 2) an equitable and efficient schedule for grant applications and payments needs to be put in place in order to facilitate effective organisational management and good practice; 3) projects and budgets should be agreed in principle between the Commission and NGOs at least four months before the start of the year; 4) the responsibility for matters such as contracts, payments, calls for projects, problems over funding should be clearly defined both at the level of officials and at the political level; 5) the procedures included in the Vademecum need to be reformed. In particular, the issue of bank guarantees for grants in excess of euro 1,000,000 and the uneven application of in kind contributions are causing difficulties.