Effectiveness of nonprofit organizations for the regional economy: conceptual foundations for identification

The growth of social inequality and the inability of the state to provide equal access to meritorious goods for all categories of the population regardless of their territory of residence necessitated the formation of a nonprofit sector in the economy. It was assumed that the creation of nonprofit organizations (NPOs) would level out the growing dysfunctions (failures) of the government and the market. Attention was focused on such comparative advantages of NPOs as an individual approach and accelerated adaptation to the changing needs of beneficiaries, the ability to attract additional resources (volunteers, donations), the ability to continue their work in case of reduction of state funding (Mersyanova, Benevolensky, 2016). As a result, a significant number of studies on the factors that determine the size and level of development of the nonprofit sector have appeared. Such factors include the heterogeneity of society (Matsunaga, Yamauchi, 2004; Paarlberg, Gen, 2009), the amount of state financial support (Lecy, Van Slyke, 2013; Bae, Sohn, 2018), the level of socio-economic development of the territory (Gronbjerg, Paarlberg, 2001; Sevak, Baker, 2022).

However, as we know from institutional economic theory, the formation and development of a new institution under the conditions of the existing institutional environment without the creation of special mechanisms for its stabilization is always accompanied by the growth of disproportions. As applied to the nonprofit sector, this manifests itself in a wide range of problems faced by NPOs in their activities. Numerous studies have focused on the specifics and depth of problems in different countries. For Russia such problems as lack and project nature of financing, forced competition with state institutions, shortage of qualified personnel, etc. are especially relevant (Grigoryeva, Parfenova, 2021).

In our opinion, all of them arise due to the lack of incentives to create transparent rules of NPOs activities, understandable and unified for all interested economic agents (the state, business, society and NPOs themselves). One of the grounds for the formation of such rules is a clear understanding of the long-term socio-economic effects and specific criteria of effectiveness of NPOs activities for the territory (region) where they are located. As our analysis has shown, the specified aspect of the research is presented extremely fragmentarily.

In this regard, the purpose of this study is to substantiate the importance of creating institutional conditions for the development of NPOs on the basis of identifying the social and economic effects of their activities on the economy of the region.

We will briefly outline the theoretical basis of our research in the next section of the paper.

Theoretical concepts of the emergence and specifics of NPOs development

One of the main approaches explaining the emergence and development of NPOs is the theory of state failure, presented by B. Weisbrod in the 1980s (Weisbrod, 1986). It consists in the fact that the state produces benefits for the majority and is unable to take into account the needs of all groups of the population. The origins of this lie in political processes, where the state tries to ensure the support of the majority of citizens participating in elections. At the same time, the number of categories of citizens who are in the minority is gradually increasing, which requires an alternative participant to meet their needs (Lu, Xu, 2018, p. 455). The more of these groups, the more heterogeneous the society, the more likely nonprofit organizations will emerge, which are ready to produce goods and services, the demand for which cannot be met by the state (Skokova, Rybnikova, 2022). Note that failure theory is quite widely used as a theoretical basis for research. Thus, Japanese researchers in their analysis of the interdependence of the size of the state and the size of the nonprofit sector on the data of 22 countries revealed a negative correlation between the amount of government spending on education and health care and the size of the nonprofit sector in these sectors (Matsunaga et al., 2010). The results obtained in the framework of the panel analysis are confirmed by studies conducted at the national level (Lecy, Van Slyke, 2013; Van Puyvelde, Brown, 2016). This suggests that nonprofit organizations are characterized by a supplementary function, which means that they occupy “niches” in which the demand for goods and services is significantly lower than the supply (Lu, Xu, 2018).

The theory of failure is based on the theory of interdependence, according to which the relationship between the state and nonprofit organizations has a cooperative nature. The state relies on NPOs as alternative providers of public goods, especially for minority populations. At the same time, in order to carry out such activities, NPOs receive state support in the form of grants, subsidies, social contracts, etc., information and advisory and legal assistance, which can lead to their dependence on it (Gazley, 2010; Bae, Sohn, 2018). Research confirms that the bigger the nonprofit sector, the more significant this support (Kim, 2015; Lecy, Van Slyke, 2013). However, a negative trend has been revealed: NPOs, striving for financial stability, prefer to work in regions with a higher level of socio-economic development and a smaller number of people in need of their services (Sevak, Baker, 2022). To some extent, this conflicts with the intuitive notion that NPOs emerge as a response to existing population problems. Nevertheless, the financial sustainability acquired as a result of state support allows nonprofit organizations to develop expert competencies and introduce new practices into their activities, implementing the established social mission. In fact, we are talking about the complementary role of NPOs, which in this case act as partners of the state (Lu, Xu, 2018).

Empirical research confirms that the size of public expenditures is related to the level of NPOs activities in addressing poverty problems (Joassart-Marcelli, Wolch, 2003) and generally correlates with the size of the nonprofit sector in a region (Kim, Kim, 2016; Liu, 2017). The theory of interdependence suggests that nonprofit organizations are more effective in providing social services to the population due to a better understanding of local problems, the ability to provide a personalized approach and less bureaucratic organization of work. In turn, the state compensates the costs of

NPOs and provides information-consulting and legal support. Thus, there is an interdependent relationship between the state and nonprofit organizations.

It seems that the considered theoretical approaches can contribute to the conceptual substantiation of the impact of NPOs performance on the development of the region. Currently, there is an opinion in the scientific discourse that the nonprofit sector in Russia is developing under the strong influence of the state (Tarasenko, 2015, p. 172). Consequently, using financial mechanisms, the state will set the priorities of NPOs activities, the determination of which will make it possible to identify the niches of leveling the failures of the state. On this basis, it is further possible to determine the socio-economic effects of NPOs activities for the territory of location in the short and long term. The next section of the article describes the tools we used to implement the goal of the research.

Methods and information base of the research

The following methods were used to achieve the goal:

• a)    сontent analysis of scientific literature, relevant legal and regulatory documents, published reports of nonprofit organizations;

• b)    analysis of statistical data of the Federal State Statistics Service on the activities of socially oriented nonprofit organizations (SONPOs); the choice of the object of research is determined by the importance of SONPOs in the structure of the nonprofit sector, as they implement the role of its core; the functionality of SONPOs, concentrating their activities on providing socially important services to the population, having a priority for a balanced development of the regional economy; greater availability of indicators of SONPOs activities in the system of state;

• c)    content analysis of applications from NPOs that received support from the Presidential Grants Foundation (PGF);

• d)    the winning projects of the 2022 contests (two main and one special) were selected for analysis; the Volga Federal District (VFD) was chosen as the object of research. The reason for choosing the Volga Federal District (VFD) as the object of the study is that the approach proposed in the article to evaluating the effectiveness of NPOs activities for the regional economy was tested on one of the entities of the VFD through our participation in the creation of the “Concept for Promoting NPOs Development in the Perm Territory” at the request of the Perm Territory Governor Grants Foundation¹.

The choice of the PGF as the information base is connected with the possibility of carrying out an objective comparative analysis of applications from NPOs from different VFD regions, because the Foundation, as the largest domestic regulator of financial support to nonprofit organizations, applies unified evaluation criteria to all projects. The data for all 13 project areas are characterized by openness and partially include a description of potential effects of organizations by applicants.

An empirical analysis of priority spheres and criteria of nonprofit organizations’ effectiveness (on the example of the Volga Federal District)

Since 2012, the number of socially oriented nonprofit organizations in the VFD, as well as in the country as a whole, has increased almost threefold and currently amounts to 24,839 units. The active growth of SONPOs is due to the increasing acuteness of the problems associated with the growth of social and economic inequality, and the importance of using the potential of the nonprofit sector to solve them. A set of measures aimed at the development of SONPOs and their access to budgetary foundations was adopted, a “roadmap” (action plan) “Supporting access of non-state organizations to social services” was developed, changes were made in the federal law “On nonprofit organizations” and the concept of “NPO is a performer of socially useful services” was introduced, a Presidential Decree was adopted, defining priority areas of SONPOs’ activities. Priority areas include preschool education, organization of recreation and health rehabilitation for children, educational activities under additional general education programs, implementation of territorial programs of compulsory medical insurance, early services for diagnosis, socialization and rehabilitation of children with disabilities, and development of nonstate (nonmunicipal) organizations in the sphere of culture2. The priorities established by the state are reflected in the activities of the nonprofit sector. Thus, an analysis of the activities of SONPOs confirmed the concentration of their services in the areas of education, health care, social services, culture, and sports (Tab. 1).

According to Table 1, the largest number of SONPOs are involved in providing various types of personal services to the population (for example, repair and maintenance of computer equipment, household items and personal stuff, etc.). Such support is especially relevant for the elderly and people with low mobility. Besides, it is necessary to take into account that the mentioned data are collected in the framework of sample survey of socially oriented nonprofit organizations and the questionnaire provides several variants of answers to the question about the types of activities. This means that along with the main activity respondents could choose non-specific personal services. Thus, excluding general personal services from the calculation, it becomes obvious that SONPOs predominantly operate in the fields of education, health care, social services and cultural and leisure activities. These sectors are extremely important for the region, because they create the formation and improvement conditions of the human capital quality, which is the main factor of production in the modern economy, contribute to the growth of social protection and, as a consequence, are aimed at reducing social inequalities.

Data from a sample survey of socially oriented nonprofit organizations also allows us to assess their financial situation and determine the main sources of income. The results of 2021 show that in the district “external” financial support (grants, subsidies and similar revenues, but not revenues received from the sale of their goods and services) remains the main resource for SONPOs, its share was about 65% of total revenues (for comparison: 75% in 2017). Moreover, there is a differentiation among the regions of the VFD: for example, in Perm Krai the ratio of external/internal sources is approximately 54/45%. However, this aspect of the functioning of SONPOs needs a more thorough

Table 1. Structure of the spheres of SONPOs activities in the Volga Federal District in 2021

Scope of activity	Total for the Volga Federal Disctrict
	Number of SONPOs	Share of the total number of SONPOs
Activities in the sphere of culture, sports, recreation and entertainment	3506	14.1%
Education	2791	11.2%
Health and social services activities	1654	6.7%
Other types of services	13459	54.2%

Note: the table does not include areas of activity in which the number of SONPOs is less than 1654 units. Source: Unified Interdepartmental Statistical Information System. Available at:

2 On approval of priority areas of activity in the sphere of public utility services: Decree of the President of the Russian Federation of August 8, 2016. no. 398.

analysis, which is beyond the scope of the article and could be the subject of future research. At the same time, the fact that SONPOs rely to a large extent on grant support provided sufficient grounds for referring to the data of the Presidential Grants Foundation, one of the main operators of financial support to the third sector.

In order to identify the specific effects of the activities of SONPOs for the location territory, we carried out a content analysis of the projects supported by the Presidential Grants Foundation, submitted in 2022 from the regions of the Volga Federal District. Quantitative indicators and volumes of financing in the regional context are shown in Table 2.

We should note that according to the data presented in Table 2, the amount of own foundations invested by SONPOs to implement projects is 44%. In the short term, this means that in fact they are also invested in solving local problems of citizens. In the long run, as we will show further, this can be expressed in a whole range of multiplicative effects for the regional economy.

The content analysis of applications revealed that the predominant area of activity of SONPOs in the regions of the VFD are social service, social support and protection of citizens; the second most important is the protection of citizens’ health and promotion of healthy lifestyles. The third priority, depending on the region, was education and science or family support projects (Tab. 3).

The results of a detailed content analysis of the projects indicate that the main target audience of SONPOs are socially vulnerable categories of the population: low-income families with children, the disabled and the elderly. Accordingly, projects are implemented either to provide them with in-kind assistance (in the form of provision of food or stuff), or focus on solving problems of citizens’ socialization (patriotic education of children, involvement of the disabled and the elderly in social and labor activities, creating conditions for getting out of a socially difficult situation and improving the quality of life). A noticeable trend, reflecting the state’s influence on the determination of areas of activities of SONPOs, was the fact that this year a significant part of the projects that received support under a special grant competition of the Foundation is aimed at providing various assistance to citizens who are in a difficult life situation due to the conflict in Ukraine.

Table 2. Quantitative characteristics of the projects supported by the Foundation in 2022

Region Number of supported projects Grant volume, rubles Co-financing volume, rubles Republic of Bashkortostan 175 204635006.9 163287479.9 Kirov Oblast 36 59695098.62 44795745.7 Mari El Republic 20 37465125.22 18895093 Republic of Mordovia 41 48337340.64 40807011.06 Nizhny Novgorod Oblast 94 259711940.7 193710365.9 Orenburg Oblast 48 78247423.83 65049552.33 Penza Oblast 32 93196393.99 90233715.51 Perm Krai 78 138605416.1 166508377.1 Samara Oblast 146 290884796.8 221621101.7 Saratov Oblast 58 103591928.1 58113145.41 Republic of Tatarstan 98 192308118.5 145704867.3 Udmurt Republic 91 129008666 111782162.7 Ulyanovsk Oblast 61 81524522.8 54783511.93 Chuvash Republic 22 41015257.71 25299701.5 Total for the Volga Federal District 1000 1758227036 1400591831 Own compilation according to:

Table 3. Prioritization of SONPOs activities, share of the total number of SONPOs in % (based on 2022 data)

Region Activity areas Health protection Environmental protection Youth projects Education Family support Civil society development History preservation Social service Republic of Bashkortostan 17.1 1.7 3.4 16.6 12 2.9 5.7 33.1 Kirov Oblast 5.6 11.1 11.1 22.2 13.9 5.6 8.3 19.4 Mari El Republic 40 5 - 10 10 5 5 25 Republic of Mordovia 24.4 - 14.6 2.4 19.5 7.3 7.3 22 Nizhny Novgorod Oblast 19.1 3.2 5.3 13.8 11.7 2.1 11.7 25.5 Orenburg Oblast 12.5 4.2 8.3 6.3 12.5 2.1 12.5 35.4 Penza Oblast 25 6.3 - 12.5 12.5 6.3 6.3 31.3 Perm Krai 19.2 10.3 9 10.3 6.4 3.8 7.7 29.5 Samara Oblast 21.2 6.8 8.9 6.8 15.1 6.2 6.2 24 Saratov Oblast 22.4 3.4 5.2 - 19 3.4 15.5 27.6 Republic of Tatarstan 15.3 2 8.2 12.2 13.3 4.1 10.2 28.6 Udmurt Republic 16.5 1.1 9.9 31.9 4.4 1.1 12.1 17.6 Ulyanovsk Oblast 23 16.4 4.9 13.1 6.6 3.3 9.8 23 Chuvash Republic 13.6 4.5 4.5 13.6 13.6 4.5 18.2 18.2 Own compilation according to: Notation (full name of the grant area): protection of citizens’ health, promotion of a healthy lifestyle; environmental protection and protection of animals; support of youth projects, the implementation of which covers the activities provided for in Article 31 of the Federal Law 7-FZ, dated January 12, 1996 “On nonprofit organizations”; support of projects in the field of science, education, enlightenment; support for family, maternity, paternity and childhood; development of civil society institutions; preservation of historical memory; social services, social support and protection of citizens; Notes: 1) three priority directions for the region are highlighted. 2) directions with limited participation of regions, the share of which is less than 5% are not included in the table. Own compilation according to:

Taking into account the research goal, the question arises about the results of the projects implementation and the possible socio-economic effects for the region stated by the SONPOs. The content analysis of the projects revealed that the majority of SONPOs define them in terms of beneficiaries, which are the target audience ( Tab. 4 ).

On the one hand, it is obvious that the specifics of the activities of SONPOs determine the focus of their employees on the social significance of projects. The implementation by SONPOs of the functions of an intermediary in the provision of social services, their proximity to the population explains focusing on a point solution of the problems of the target audience. On the other hand, dealing only with the local problems does not allow SONPOs to work out a longterm development strategy, creates a situation of “patching up holes”. In our opinion, this is one of the objective reasons for the lack of an effective mechanism of intersectoral cooperation to systematically solve existing socially significant problems in the regions.

Table 4. Presentation of SONPOs on the results of the implementation of supported projects (examples, sample, based on 2022 data)

Direction Effect/Result Social services, social support and protection of citizens Support for refugees Providing refugees with seasonal clothing. In the framework of the project we will provide clothing assistance for at least 1,500 appeals. The average estimate of the cost of assistance received for each appeal will be 3,000 rubles (For the Good, the system of providing refugees with seasonal clothing. Penza Oblast) Support for the poor The result of the work will be the solution of family problems, which will lead to increased material well-being, increased parental and social competence, conflict resolution, and ultimately a higher start in life for children in these families (Professional Support for Families in Difficult Situations. Nizhny Novgorod Oblast) Support for people with disabilities Creating a favorable environment for social adaptation and self-realization of deaf and hard of hearing people through inclusion in a variety of activities (A Home Where We Are Heard. Inclusive playground for the deaf and hearing impaired in Kirov. Kirov Oblast) Protecting the health of citizens, promoting a healthy lifestyle Sporting events The most expected results of the project: the number of sports activities at least 2 per month, the number of participants in sports activities at least 35 people, the number of local residents engaged in Nordic walking at least 10 people (A Platform for Play, Sport and Health for Rural Residents! Bashkortostan) Increasing people’s physical activity, contributing to an increase in active longevity and life expectancy of the elderly (Sport in Every Home. Mordovia) Tourism development Creating conditions for social adaptation and versatile rehabilitation of visually impaired people through adaptive physical education, sports and tourism by organizing swimming training, rafting on the river, thematic hiking tours and educational activities (Swimming and Tourism – the Best for Life Motto. Mari El) Support for projects in science, education, and enlightenment Additional education for children Increase the number of students in one year of the project by 250 people to the basic number of recipients of educational services due to the introduction of new and adjacent to each other multiage studios-workshops. Accordingly, there will be an increase from 3.1% to 4.7% of the total number of children in the city enrolled in our organization’s supplementary education programs and from 6.6% to 9.8% of the target number of children enrolled in these programs (Theatrical and Creative Workshops “Tochka+”, Udmurtia) Preservation of traditional culture As a result of the project, at least 35 families will get acquainted with the cultural traditions of choral singing, and the image of a large family will be popularized. The project participants will improve their vocal skills, psycho-emotional background, and their knowledge of cultural traditions (Musical Evenings in the Big Family. Samara Oblast) Support for family, maternity, paternity and childhood Support for people with disabilities To improve the quality of life of families who are raising a child with disabilities by involving 100 parents in the habilitation process, increasing parental competence, including assistance in creating a developmental and habilitation environment, and including them in the habilitation process, in order to achieve the most effective and long-lasting habilitation results in children (We Are Coming to You! Tatarstan) Support for foster families Promoting comprehensive support for foster families both through training and through varied recreational activities and activation of inner potential, expanding new opportunities for a supportive environment for foster families (Expanding Horizons: New Opportunities for a Supportive Environment for Foster Families. Saratov Oblast) Own compilation according to:

In order to address the identified limitations in the next section of the article we will highlight the possible socio-economic effects of the activities of SONPOs for the territory of location.

Conceptual substantiation of the potential multiplying effects of SONPOs activities for the region’s economy

As our analysis has shown, the priority areas of activities for SONPOs in the VFD are the provision of services in pre-school and additional education, health care, social services and social support to the population. Below we will briefly present the range of socio-economic effects obtained for the region as a result of the functioning of SONPOs in the above sectors of the economy.

Education system in the region

Nowadays Russia is characterized by strong regional differentiation in the availability of preschool education, especially for children under the age of three: the maximum value of the indicator in 2021 is recorded in the Ural Federal District (36.8%), the minimum – in the North Caucasian Federal District (15%). In the Volga Federal District only 29.6% of children under the age of three are provided with places in preschool institutions (PI). There are more than 17% differences throughout the district: the leader is the Perm Krai (38.3%) and the outsider is the Saratov Oblast (21.2%). According to data for 2021, one hundred percent of children aged 3 to 6 in the VFD have preschool institutions only in the Udmurt Republic, while almost 15% of children in the Saratov and Orenburg oblasts do not have such an opportunity3. The unresolved problem has a number of negative socio-economic consequences for the population and the economy of the region. Thus, according to studies, more than 36% of women note the presence of young children (preschool age) as a barrier to participation in public production, professional and social development (Kolesnikova, Maslova, 2019). In addition, the lack of places in preschool institutions reduces the opportunities for secondary socialization of children. A particularly difficult situation arises in low-income families, large families, and families with persons with disabilities. Partial reimbursement of parental fees for children in preschool institutions (and even more in private kindergartens) is difficult for them (Abankina, Filatova, 2018, p. 231). In addition, the specialization of women in the accumulation of family capital (in G. Becker’s terms) as a result of the time concentration on the care of children limits their ability to returning to the labor market and, consequently, leads to a depreciation of human capital (in G. Becker’s terms – market capital). On this basis secondary inequality may form, limiting the quality of human capital of children in such families. For example, it has been empirically proven, that children from families in a less favorable socio-economic situation demonstrate less significant academic success (Uvarov, Yastrebov, 2014, p. 126).

A similar situation is observed in the sphere of additional education. According to the National Research University Higher School of Economics, 44% of children not involved in additional education programs are children from families with low levels of education and income4. In addition, the extent of children’s involvement in additional education differs significantly in urban and rural areas. As a result of the lack of a network of specialized institutions in rural areas, the supply of supplementary education services is often limited to schools.

One of the main reasons for the current situation is that in Russian Federation constituent entities, the main share of budget expenditures for additional education of children falls on the local budgets, and since it is not covered by guarantees of free and public availability, its financing is carried out on a “residual principle”5.

Meanwhile, the activities of preschool and additional education institutions represent a special environment of socialization and create conditions for the acquisition of various social skills, which then influences the sustainability and quality of human capital of specific individuals and, as a consequence, the human capital of the region as a whole (Ivanyushina, Aleksandrov, 2014; Pavlova, 2020). Mastering social norms, values and rules determines the further behavior of an individual, their attitude toward society, forms the worldview, which is the basis for the formation of the region’s social capital (Churekova, Puranen, 2017).

It should be noted that the importance of these education subsystems is realized at the state level. The May Presidential decrees6 and a number of other normative legal documents provide for the achievement of one hundred percent accessibility of preschool education7 and set the task to increase the coverage of children from 5 to 18 years old with additional general education programs8. At the same time, it is obvious that the government “works” for the average consumer, and these problems, as we showed above, require targeted intervention, taking into account the individual needs of families. The participation of SONPOs in this area will reduce government costs9 and help to reduce inequality in access to preschool and additional education services in terms of both financial and space limitations.

Health care system

Health is one of the key resources of social production. At the same time, health care is among the areas of great concern for experts (Ivanov and Suvorov, 2021). The growing demographic burden (by 133% from 2005 to 2020 in the country) and the increase in the number of people over the working age (by 4.8 p. p. from 2005 to 2020) lead to significant socio-economic consequences. According to Rosstat forecasts, in 2035 average life expectancy will increase to 79.1 years (according to the average scenario)10. At the same time, the overall morbidity of Russians is steadily increasing, which is due to population aging and health deterioration11.

According to estimates, out of the total number of terminally ill citizens in Russia, only 15% of those in need of palliative care (PC) receive it, which corresponds to the world average (Fadeeva, 2019, p. 111). However, it should be taken into account that 78% of those in need of PC live in low- and middle-income countries12. It is known that the Russian Federation is classified by the World Bank as a middle-income country13 by the end of 2021, and its real income has a negative dynamic at present.

Population aging forms new challenges for institutions (pensions, employment, health care, etc.) and requires additional mechanisms to support senior citizens by creating a system of geriatric care (Chereshnev, Chistova, 2017; Dobrokhleb, 2018). The results of a Canadian study showed that the last year of a person’s life accounts for a quarter of the total costs of medical services14. The organization of palliative care allows for a more efficient and costeffective use of health care resources by reducing the cost of care for people with life-threatening chronic illnesses and transferring patients from hospitalbased to outpatient palliative care. For example, research indicates that starting palliative care for patients within three days of admission to the hospital significantly reduces costs to the medical institution (May et al., 2018).

The development of a public health intervention system is a necessary preventive measure that can reduce the burden on the health care system as a whole and the organization of long-term care in particular (Selezneva et al., 2022, p. 9). However, according to experts, the number of citizens who lead a healthy lifestyle has been decreasing in Russia over the past two years, and in 2021 their share will be just over 7%15, which is lower than the value set by the national project “Demography” (12%). Researchers believe that the negative trends are related to the low-income level of the population, highlighting that the consequences of the Corona crisis may cause an increase in morbidity rates (Pruel, Gradusova, 2021). As we pointed out in earlier publications (Bazueva, 2015), this will have negative consequences at all levels of the socioeconomic system, for example: an increase in the direct cost of medical care, an increase in indirect costs, a decrease in GDP caused by lost work capacity due to illness, absence of people at work and/or reduced productivity, an increase in social tensions and instability in society, a reduction in income for businesses and households, a decrease aggregate return on investment in human capital, etc. However, despite the importance of health as a strategic resource of the national economy, in Russia there is still no unified system of health protection, including measures for prevention and promotion of healthy lifestyles16.

Activities aimed at improving the quality of life, which forms the prerequisites for a healthier lifestyle, are implemented on a point-by-point basis, for certain categories of the population. For example, the Action Plan (“road map”) on improving the quality and availability of palliative care provides for achieving the value of 90% of all those in need of palliative care by 202417. The Action Plan for the implementation of the strategy for the support of senior citizens until 2025 also announced an improvement in the organization of medical care for senior citizens, including the introduction of a program for the prevention of cognitive disorders18. At the same time, the government is aware of the limitations of its ability to quickly and fully cover elderly citizens with these services, in this regard, within the framework of the national project “Demography” on a competitive basis from the federal budget since 2020, subsidies have been provided to private organizations for providing medical and social assistance to elderly citizens in 15 pilot regions19. In general, to fulfill this social order, the government has developed a particular order of interaction between medical organizations and social service organizations with public associations and other NPOs carrying out activities in the field of health care20. In 2021, according to Rosstat, SONPOs provided services in health care to about 29 thousand people; in the field of sports (this is the section that usually includes organizations involved in the formation of a healthy lifestyle) to 67 thousand people21. At the same time, the share of those in need of daily care due to limitations caused by chronic diseases is 29.4% of the Russian population (Selezneva et al., 2022, p. 40). Consequently, the potential of SONPOs is not fully exploited and there is an opportunity to increase their participation in solving these problems. An increase in the volume and range of services provided by SONPOs could substantially reduce inequality of opportunity in shaping the health capital of these population groups.

Social service system

The aging and the growth of disability in the population leads to the need to public spending on the provision of long-term care for citizens (Natsun, 2019). Currently in Russia, the demand for such services is satisfied by only 20%22. The low-income level of the population limits the possibility of full reimbursement of such costs.

The currently forming systems of long-term care and social support are aimed primarily at supporting the elderly population (Kolosova, Gushchina,

2021). At the same time, 93% of the total number of Russians living below the poverty line are working-age citizens and children under 16 years of age23. The targeted approach to social support and assistance declared by the Russian government has not actually been achieved (Usova, Grischuk, 2019). As a result, extremely high indicators for the national economy concerning the number of citizens in need of social support remain. In terms of population coverage, the existing system provides quite high indicators (65% coverage of the Russian population as a whole and 84% coverage of the low-income population), but the effectiveness of these measures is, according to expert estimates, on average 25%24. This acts as a factor in destabilizing the socio-economic situation in the country and its regions, fragments the social structure of society, and weakens the foundations of social solidarity by excluding vulnerable groups from normal social life (Zubova, 2017; Ilyin, Morev, 2022).

It is also possible to strengthen the targeted support of those in need of social assistance through more active involvement of nonprofit sector organizations, which, according to our analysis, are currently working in this direction on an unsystematic basis in a limited range of socially significant tasks. The potential of SONPOs is not used to the fullest extent in one of the preferred forms of living arrangements for citizens in need of long-term care – accompanied living, which ensures that citizens remain in a habitual and favorable social environment for them. At the same time, their independence and autonomy in the realization of basic life needs (organization of household, leisure, communication and social connections) are supported, and the skills necessary for living at home are developed25. Intensification of the participation of SONPOs in the functioning of the long-term care system will be a factor in its enhancement, which will improve the overall health of citizens, their psychological well-being, reduce the likelihood of depression (Brimblecombe et al., 2018), reduce the amount of demand for hospitalization (Feng et al., 2020), prolong life (Choi, Joung, 2016).

Let us systematize the possible socio-economic effects of the impact of SONPOs on the region’s economy considered in this and the previous paragraphs ( Tab. 5 ).

The presented economic effects, in particular with regard to the increase in the level of incomes of the population, require some clarification. The actual data do not provide direct evidence of the impact of the activities of socially oriented nonprofit organizations on the growth of citizens’ income, but we take into account different forms of assistance from SONPOs (in-kind, resource, technical, financial support), which allows to redistribute items of spending of the family budget, to give more freedom of choice.

On the one hand, the socio-economic effects of SONPOs activity presented in Table 5 emphasize the importance of their development for the regional economy, on the other hand, they provide a systemic view of the potential opportunities from SONPOs activitiy, if they are carried out professionally, on a systematic and long-term basis for the territory of location. In addition, the effects indicate that the nature of SONPOs activity is not only socially important, as emphasized by the authors of existing studies and representatives of SONPOs, authorities and businesses. This, in our opinion, may form additional incentives for interested economic agents to create institutional conditions for the development of NPOs in the Russian Federation.

Table 5. Systematization of the potential effects of SONPOs activities on the region’s economy

Economic effects	Social effects
Education system
1)    growth of paid employment; increase in revenues to the Social Insurance Foundation of the Russian Federation and the territorial foundation of compulsory medical insurance; 2)    growth of income of the population; reduction of the poverty rate; 3)    increased efficiency of the use of women’s human capital; improved quality of the region’s human capital.	1)    diversity of children’s socialization; 2)    growth of the quality of children’s human capital; 3)    leveling of gender discrimination of women; 4)    increasing the quality of the region’s social capital.
Health care system
1)    increase in GDP and GRP; 2)    effective use of human capital, increasing the level of its return; 3)    increasing the efficiency of the use of budgetary foundations.	1)    improving the quality of life of the population; 2)    increasing the duration of active life; 3)    improving the quality of life of patients and their families.
System of social services
1)    reduction of state costs for the system of social security and social services; 2)    reducing the demand for hospitalization when long-term care cannot be provided; 3)    increase in the family income level; reduction of poverty and social inequality.	1)    defragmentation of the society’s social structure; 2)    increasing the level of social solidarity; 3)    improving the quality of life of the people in need of longterm care and their families; 4)    increase of life expectancy.
Source: own compilation.

25 Annual report for 2021 on the implementation and assessment of the effectiveness of the state program of the Russian Federation “Citizens’ Social Support”. Available at:

Conclusion

First, the analysis of conceptual approaches to explaining the causes of the emergence of NPOs (the failure theory and the interdependence theory) has established that the financial mechanisms used by the state to support nonprofit organizations influence the size of the third sector (the interdependence theory) and enable it to establish priorities for their activities in areas where the supply of public goods in conditions of limited resources and bureaucratized social system is much less than demand (the failure theory).

Second, based on the content analysis of the projects supported by the Presidential Grants Foundation from the VFD regions, it was found that the activities of SONPOs are focused on providing a range of services in the education system, health care and social support, which are of priority importance for forming the basic needs of the population. The possibility to meet these needs in the state in full regardless of the territory of residence and taking into account the population’s individual needs is limited.

Third, when evaluating the effectiveness of their activities, representatives of SONPOs focus on their social significance, using mechanisms of point solutions to the current problems of the target audience. At the same time, the contribution of SONPOs’ own resources to solving acute social problems in the regions of location remains underestimated.

Fourth, the range of potential socio-economic effects from the activities of SONPOs has been identified, under the condition of their implementation on a systemic and long-term basis, which broadens the idea of their significance for the economy of the region. In our opinion, this may become a starting point for the creation of institutional conditions for the development of NPOs in the Russian Federation.

At the same time, it should be emphasized that we certainly understand that the contribution of the socio-economic effects of the activities of SONPOs indicated in the article for the territory of location is not as significant as the contribution of other sectors of the economy. However, it should not be underestimated, especially considering the current trends associated with the need to transform the dominant models of economic development and the formation of conditions for inclusive economic growth, leveling the inequality of potential opportunities for vulnerable categories of the population. Modeling the system of management of specific regions of the Russian Federation based on the creation of institutional conditions to increase the contribution of SONPOs in their balanced development determines the prospects for future research of the authors.