In the social contract model a government funds CSOs to provide social services that the government is generally responsible for. These services may include direct health care, public sector health care worker training, supply chain related, and health care information systems. A social contract includes a legally binding agreement that stipulates the type and amount of health care services a CSO would need to provide and how the government will pay for the costs of providing those services. Social contracting allows a CSO to tap into different government agencies/departments and access funding tied to payment for services through competitive procurement, in addition to grants.
Financing through social contracting can happen in at least three different ways:
Results-based financing:The government pays money once the agreed-upon results of the service provision have been achieved.
Procurement and contracting: The government makes payments at certain times based on a contract outlining the level of service provision and timeline. Reimbursements from insurance schemes for services provided may also fall under this type.
Grants: The government provides funds to a CSO to deliver services and report back to the funder on activities undertaken.
Additionally, social contracting may occur at the national and subnational levels, depending on how authority for contracting has been decentralized within the country.
Sources:
United Nations Development Programme (UNDP). Guidance note for the analysis of NGO social contracting mechanisms: the experience of Europe and Central Asia. New York: UNDP; 2019.
CSOs that have a strong service-delivery infrastructure and reach populations that national health systems have a hard time reaching.
Key factors to consider
Supportive policy and regulatory environment
Policies allow for government agencies to design contracts with CSOs for delivery of health care services
An enabling environment where community members do not hesitate to receive health care services from CSOs
Clear funding parameters and process to access funding provided by the government
Clear accreditation standards (where required) for CSOs to be certified to provide the necessary services
Sufficient infrastructure and capacity
The CSO has key infrastructure in place to provide the services
For results-based contracts, the CSO already has enough capital to provide services to receive contract payment from government at a later time
Where to begin
Are there any government agencies or mechanisms that provide funding to CSOs to provide essential health care or related services?
Are there discussions between government agencies and community partners on the needs to establish a mechanism for government funding for CSOs?
Example in practice
Investments by the National Health Security Office (NHSO)—the health funding arm of the Thai government—more than doubled to support recruit-to-test interventions from 2016 to 2020. Key- population-led organizations were reimbursed for testing 40,000 clients in 2020, substantially contributing to national HIV testing targets. These organizations are increasingly supported by domestic financing, with NHSO funding providing almost half their operation budgets on average in 2021.
