Situation and Roles

From Peacebuilding

Activity: Get that Budget! A Three-party Negotiation

Handout 1 – Situation and Roles

The situation

A European Caritas agency is interested in working in your community. It aims to support disadvantaged people in rural communities, possibly by involving the public sector and fostering partnerships between local associations. The agency works only through partnerships with local actors, which means that their role will be limited to allocating funding for local associations’ projects.

After a round of consultations with local stakeholders they’ve agreed on a list of two local associations and one municipal agency that they’d be interested in working with:

1. The Rural Development Association of Farmers (RDAF),
2. The Family Association of Victims of War (FAVOW),
3. The Municipal Office for Social Development (MOSD).

Caritas has acted very transparently. They’ve said they can allocate a total budget of €242,000 for operations in your community. However, they want this money to be spent on the basis of projects proposed by a coalition of these three actors, or at least two of them.

Here are Caritas’ conditions:

Project proposed by:	Budget allocated:
RDAF alone	€0
FAVOW alone	€0
MOSD alone	€0
RDAF + FAVOW	€236,000
RDAF + MOSD	€168,000
FAVOW + MOSD	€100,000
RDAF + FAVOW + MOSD	€242,000

Note that Caritas doesn’t make any stipulations about how the budget is shared within a coalition. For example, if RDAF and FAVOW have an agreement, this might envisage RDAF getting 70% of the budget allocated for the agreement (70% of €236,000, corresponding to €165,200) and FAVOW getting 30% of the budget allocated for the agreement (30%, corresponding to €70,800).

In brief, how the money is divided within the coalition is totally up to the local agencies.

Also note that once a coalition is formed the remaining budget must be distributed on the basis of an agreement approved by the three agencies. For example, if RDAF and MOSD form a coalition they’ll get €168,000 (and this amount will be divided between them on the basis of their agreement). However, Caritas still has €74,000 to allocate, and this amount can only be allocated on the basis of an agreement involving all three parties. If the three parties fail to agree, the remaining sum cannot be distributed.

Your role

Your team represents ... (either RDAF, FAVOW of MOSD).

Your task is to create the best possible deal for your association, namely to obtain as much money as possible to spend on projects.