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The purpose of this paper is to find the challenges confronted by NGOs in the implementation of the active labour market policies of Finland and Sweden, and how the challenges could be overcome.

This is a qualitative empirical case study where two NGOs were selected in Finland and one NGO was selected in Sweden for the data collection. The two selected NGOs in Finland were Jyväskylän Katulähetys in the City of Jyväskylä and Pirkanmaan Sininauha in the City of Tampere. Meanwhile, the one selected NGO in Sweden was Stockholm’s Stadsmission in the City of Stockholm. Primary data for this study were collected through interviews with two senior executives of the selected NGOs in Finland and Sweden. Secondary data were collected through the websites of the selected NGOs in Finland and Sweden, the organizational records, books, published and unpublished research and from internet websites. The data were analyzed through qualitative content and thematic analyses.

The findings revealed that the selected NGOs in Finland and Sweden were confronted with four main challenges in their work, namely: funding challenge because the NGOs did not have sufficient funds to carry out their activities effectively; credibility challenge mainly by the NGO in Sweden because Sweden is a very secular country where there is political resistance for public money being given to faith-based organizations in the country; workforce recruitment challenge because the NGOs have to employ specifically long-term unemployed people from disadvantaged groups in the case of the NGOs in Finland, and because whenever they have to compete with other stakeholders for a bid to win a project funded by the city council, the city council often demands that about 80 per cent of their staff need to have a social work qualification in the case of the NGOs in Sweden; and competition challenge because of competition with other stakeholders to win bids from the city council in the case of the NGOs in Sweden. On the other hand, the findings revealed that these challenges could be overcome if the Government of Finland and Sweden provide the NGOs with sufficient funds for them to carry out their activities.

The limitations of this study are that this is a case study focused only on two NGOs in Finland and one NGO in Sweden. Thus, in order to generalize the findings to include the whole country, it is recommended that a more representative number of NGOs be studied in future studies. This study also focused only on NGOs with a religious background in Finland and Sweden. Future studies could include NGOs with a non-religious background.

The practical implication of this study is that the study may be useful to policy makers in the development of policies for NGOs involved in the area of social service provision.

The social implication is that this study may contribute in making NGOs to become more effective in their work in the society.

This study is original in that it is an empirical research.

This is a mixed method comparative case study. The aim of this paper is to find the role played by non‐governmental organizations (NGOs) in the implementation of the active labour market policies (ALMPs) of Finland and Sweden, and also the relationship that the NGOs have with the government of the two countries.

Two NGOs were selected in Finland and one NGO was selected in Sweden for the data collection. The two selected NGOs in Finland were Jyväskylän Katulähetys in the City of Jyväskylä and Pirkanmaan Sininauha in the City of Tampere. Meanwhile, the one selected NGO in Sweden was Stockholms Stadsmission in the City of Stockholm. Primary data were collected through questionnaires and interviews, while secondary data were collected from literature reviews, books and internet websites. A total of 130 employees responded to the questionnaires from the two selected NGOs in Finland, while 140 employees responded from the one selected NGO in Sweden. The questionnaires were analyzed using SPSS.

The findings revealed that first, the selected NGOs play active role in the implementation of the ALMPs of Finland and Sweden by employing long‐term unemployed people in the labour market. Second, the findings revealed that the selected NGOs play active role in the implementation of the ALMPs of Finland and Sweden by providing social services, mobilizing local resources and undertaking other types of activities which have created jobs for the unemployed. Last, the findings revealed that the selected NGOs play active role in the implementation of the ALMPs of Finland and Sweden by providing voluntary work to volunteers – some of who acquire skills that can help them to find a job in the open labour market.

The relationship between the NGOs and the Governments of Finland and Sweden was found to be one of partnership cooperation through the local Employment Offices and the City Councils. However, Finland was found to have a more bureaucratic system than Sweden in the implementation of their ALMPs with regard to NGOs. The main similarity between the two countries was that the implementation of ALMPs with regard to NGOs, takes place at the local level through the local Employment Offices and the City Councils. This study concluded that although Finland and Sweden are two “Nordic countries”, the two countries slightly differ in the implementation of their ALMPs with regard to NGOs.