Social development largely depends on peoples satisfaction with the public (municipal) services provided to them. Societys demand for meeting social needs changes as the economy develops: the structure of needs and dynamics of demand transform, competition intensifies, and qualitative characteristics change. The state does not always have time to respond to such changes and the non-governmental sector is responsible for satisfying social demand during these periods. Interaction between the state and the non-state sector also poses the risk of over-regulation. What should be changed in order to create fair conditions for interaction between the state and the private sector? Will the involvement of non-governmental organizations in providing social services help increase their accessibility and quality? Who is responsible for the quality of the services provided? How can the transition from process funding to social project outcome funding be ensured? Is it possible in Russia for an individual to exercise the right to choose a state (municipal) service provider independently?