Burkovska Alla, Candidate of Economic Sciences, Associate Professor of the Department of Finance, Banking and Insurance, Mykolaiv National Agrarian University, Mykolaiv, Ukraine

ORCID ID: 0000-0003-4158-1721
e-mail: burkovskaya@mnau.edu.ua

Nesterchuk Tetyana, Applicant of Higher Education, Accounting and Finance Faculty, Mykolayiv National Agrarian University, Mykolaiv, Ukraine

ORCID ID: 0009-0001-6140-774Х
e-mail: tanjanesterthuk@gmail.com

Grant funding as a tool for the development of territorial communities

Abstract. Introduction. The financial sustainability of territorial communities in Ukraine has become a pressing issue, especially given the ongoing decentralization reforms. Since these reforms were implemented, there have been significant changes in local community financing mechanisms. Territorial communities now have greater financial autonomy, with larger budgets and increased responsibilities. However, despite these positive developments, many communities continue to face challenges related to financial capacity and resource distribution. Introducing alternative funding sources, such as external grants and programs, has been recognized as a solution that can address these challenges and ensure the sustainable development of local communities.

Purpose. The purpose of this study is to examine approaches to enhancing the financial capacity of territorial communities in Ukraine through decentralization by improving the use of external funding sources, particularly grants and state programs.

Results. The study finds that while decentralization reforms have led to an increase in local budgets and enhanced financial autonomy for many communities, significant disparities remain in the financial capacity of territorial communities across Ukraine. The analysis shows that many communities still rely heavily on intergovernmental transfers, which limits their ability to finance strategic development projects independently. However, the potential for attracting external funding, particularly through international grants and programs, is growing. These resources play a crucial role in addressing infrastructure, healthcare, and educational needs, providing development opportunities even in the most financially constrained areas.

Conclusions. Grants from international donors have become an important resource for supporting socioeconomic initiatives, infrastructure development, and local entrepreneurship. A SWOT analysis reveals strengths, such as donor interest and diverse support programs, as well as weaknesses, such as limited local expertise and high competition for resources. To optimize grant usage, it is recommended that communities institutionalize grant management, enhance project management skills, plan strategically, and foster intermunicipal cooperation. The effective use of internal and external resources is essential for the sustainable development and competitiveness of communities.

Keywords: financial support; territorial communities; decentralization; grants; external sources of financing; financial capacity; infrastructure development.

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