In Denmark, pay and working conditions are typically laid down by collective agreements concluded between trade unions and employers' organisations. This system of labour market regulation is referred to as the Danish Model.

The main purpose of DA/LO Udviklingsfonden is to ensure continued development of the Danish Model with emphasis on flexible agreement regulation combined with a safe framework for employee conversion and mobility. The Danish Confederation of Trade Unions (LO) and the Confederation of Danish Employers (DA) will follow developments that challenge the Danish Model, and in this context work to counter social dumping.

The contributions received are divided between DA and LO. DA receives 25 percent and LO 75 percent.

DA funds are distributed to the member organisations. Employers can contact their employers' organisation for more information on the use of the funds.

LO together with their member associations uses their share of the funds for educational activities for elected representatives under the heading FIU - Fagbevægelsens Interne Uddannelser (in Danish). Each year LO publishes an annual report describing the previous year's use of the FIU funds.