Supplementary Fund

The Autonomia Foundation and the Open Society Institute 2012 1 st of May started the Supplementary Fund (SF) program. The SF is mainly offered for the project owner participating or willing to take part in the PGF or the Mentoring project of Autonomia Foundation.

The aim of the program is to offer solutions for the financial problems faced by Roma civil organizations implementing EU grant financed projects.

There are two main causes behind the financial problems.

1. One is the lack of stable financial background of the organizations – presupposed by the donor agencies -, having no capital and no access to financial sources that would allow legal and transparent cross financing of their projects.

2. The other is that the EU grant system itself makes certain important costs of the projects noneligible or only allows a very limited, nonsufficient ratio of the budget for these costs.

In many cases, exceptionally with human development type projects (TÁMOP), the payment of grants can be delayed for several months with no reason provided. Applicants cannot manage these gaps by legally and financially acceptable methods. In most of the cases the organization cannot take a loan, because they have unpaid public dues due to the delayed payment of the grants or having no securities required by the bank.

Certain types of expenditure are not eligible for EU structural funds support because of the EU or national regulations. There are other costs, which can only be covered partially (proportionately e.g. management costs). Given that Roma NGOs do not have own infrastructure, HR capacity, and financial capital, they are in disadvantaged position compared to the other applicant organizations.

The program is designed to address the above described problems with three financial instruments:

1. Grant making program for non-eligible costs of Roma integration projects (mainly funded by EU structural funds).

2. Bridge loan for cash flow problems of EU funded Roma integration projects (preparation of loan application and contracting mechanism).

3. Financial planning and management consultation (this service will be compulsory for both of them).

1. Noneligible fund

The fund can support costs that are

– The organization must have on ongoing EU financed program

– Essential for the implementation of the project;

– A project meats all the criteria of OSI-PGF or Mentoring program aims, its main aim is Roma integration;

– Both the grant and the loan have to meet at least one of the four priorities of the Decade of  Roma Inclusion  which are: health, housing, education, and employment;

– The fund support is covers maximum 30 % of the total project cost;

– The implementation of the costs supported by the fund meets all the legal requirements;

– The implementation of the costs supported by the fund is transparent.

Maximum amount of the grant is 5 million forint (around USD 25,000).

1. Bridge loan

The Hungarian legal context allows Autonomia Foundation to provide loans with no business aim, therefore we can manage the bridge loan program but only as an experimental project, with a very strict protocol for the request of loan

Conditions of the bridge loan:

– The organization must have on ongoing EU financed program;

– Documents justifying the accounting reports completed up to now and their acceptance concerning the project required supplementary support by the organization

– The professional content of the project required supplementary support and the fulfillment of indicators aimed

– Effect of the project on roma integration

– Items of quarantee concerning the loan required (authority for collection on the bank account of the organization, other forms of covering)

– The professional and financial reports of the organisation up to now

– The maximum period of the bridge loan could be 12 months.

Maximum amount of the grant is 15 million forint (around USD 50,000).

III. Financial planning and consultation

Autonomia Foundation will employ an expert working exclusively in this program. The tasks of the expert will be:

– Keep a continuous contact and regular visits to the organizations of the program to follow their financial management;

– Consult and advise the organizations on their financial management.

– Provide information on the financial management issues of the organizations to Autonomia Foundation.

This service is compulsory both the nonegilible fund and the bridge loan beneficiaries.

Expected number of beneficiaries

1. Noneligible fund: 15 organizations

1. Bridge loan: 5 organizations

Supported organisations:

Real Pearl Foundation

Bhim Rao Association

Ugly Duckling drama group

Public Benefit Association for the Integration of Roma of South-Borsod

Association for the Roma and Disadvantaged People in the Valley of Hernád

Kompánia Foundation

Laurus Foundation

Hungarian Anti-Poverty Foundation

Roma Self-Help Association of Cserehát

Számá Dá Noj – Take Care of Us Association

Kiflinger’s Free Time Association

Roma Association of Somogyvámos

Hungarian Magiszter Foundation

Motivation Educational Association

Alliance of Democratic Roma Leaders

Khetanipe for the Roma Unity Association

“Hét Kútforrás” Social Charity Association

Straw Association of Mátraterenye

More About Each Other

I Will Not Give Up Association