# Presentation: 505040

## Funding for Civil Societyin a Changing Europe

- Andrew T. Green, Ph.D.
- www.DGMetrics.net

**Notes:**
Introduction from Marty Sletzinger, WWICS/EES:

“Andrew Green holds a Ph.D. in Political Science from Illinois, and was a post-doctoral research fellow at the University of Southern California. Andrew is currently an independent consultant (SSRC, ARD, ICNL, East-West Mgmt Inst), as well as a Researcher at Georgetown's Center for Democracy and Civil Society; he has also been an Adjunct Professor at Georgetown in the M.A. in Democracy Studies, where he taught a course on democracy promotion. He is an experienced Social Scientist with substantial background in the creation and analysis of indicators, the development and implementation of field research protocols, and involvement in international collaborative projects. His most recent position was as a Democracy Fellow in USAID’s Office of Democracy & Government, designing and implementing a multi-year research project to analyze the impact of US democracy assistance on democratic development for 1990-2005. Based on a research approach that utilizes both quantitative and qualitative analytical techniques, Mr. Green assembled a 50,000 record database of USAID budget figures; worked closely with international advisory boards composed of academics and practitioners; and laid out the conceptual frameworks and operationalization for 25 country case studies. He has also organized workshops on democracy research with such governmental agencies as SIDA, CIDA, DfID, Netherlands MFA, GTZ, and OECD, in addition to earlier collaboration with Eurostat, UN Volunteers, ECLAC, and UN Statistics. Besides co-authoring an evaluation of a nonprofit law program in four post-communist states, Mr. Green provided expertise within USAID for the development of new indicators of media, civil society, decentralization, and election administration. Prior to being a Democracy Fellow, he worked at Johns Hopkins University’s Center for Civil Society Studies managing a major international project that gathered economic data on nonprofit organizations in over 40 countries. Mr. Green’s personal research has developed indicators for nonprofit organizations, trade unions, access to information, and US foreign policy priorities. He has published articles in /Democratization/, /Europe-Asia Studies/, and /Voluntas/, among others, and his recent written work includes a published article on donor agency research challenges and a manuscript critiquing Freedom House’s 2005 study on nonviolent civic coalitions. Andrew is an alumnus of the East European Studies Program's Junior Scholars Training Seminar.”

## Context

- Tremendous Change in ‘Eastern’ Europe
- Civil Society a Key Actor...
-                 ...Drawing Attention from Donors
- Funders Have Changed & Adapted

**Notes:**
The human landscape since the demise of communist-authoritarian regimes in the Soviet bloc has been altered radically by political, economic, and social change.

Civil society has been a key actor in all three of these areas of change, and is generally viewed as the best means to increase political participation in new democratic institutions, ameliorate the pain of economic reform, and provide social services as the state restructures its relationship with society.

Civil society in particular has been the target of considerable attention by official donor agencies, private foundations, and multilateral organizations.

Over the span of more than fifteen years, however, funders have adapted to changing conditions: EU accession by states in North and Central Europe was preceded by drops in official donor assistance and the establishment of legacy institutions, while needs and opportunities in Southeast Europe, the Caucasus, and Central Asia attracted increased funding. In coming years the legacy institutions must be self-sustaining, EU structural funds will arrive, and donors will begin to leave Southeast Europe.

Although official and private foreign assistance have supported improved enabling environments and government-NGO venues, there has been no analysis on the nature, trends, and implications of civil society funding shifts 

## Project Questions

- How has mix or ‘personality’ of funding changed?
- How do other funding channels factor in?
- What implications are there for civil society?
- What implications are there for democracy?

## Methodology

- Large Number of Data Sources
- Geographic Coverage
- OECD/DAC Coding Rules
- Time/Donor Coverage Gaps

**Notes:**
Large Number of Data Sources
USAID budget data		OECD/DAC Creditor Reporting System
National Endowment for Democracy	Ford Foundation
Charles Stewart Mott Foundation	Open Society network organizations
Baltic-American Partnership Fund	Trust for Civil Society in Central & Eastern Europe
Estonia Ministry of Foreign Affairs	Czech Development Cooperation
SlovakAid		PolishAid
NIOK ‘One Percent’ Study	Nadacni Investicni Fond (Czech Rep)
National Foundation for Civil Society Development (Croatia)

Geographic Coverage
Post-Communist Europe (except Russia)
NEEur = Est, Lat, Lith
CEEur = Pol, CzRep, Slvk, Hun, Slvn (the latter due to EU accession timing)
SEEur = Rom, Bul, Cro, Bos, Alb, Srb, Mnt, Mac
EurFSU = Bel, Mld, Ukr
Regl = broad coverage, unable to discern

OECD/DAC Coding Rules
* Coding rules for the Creditor Reporting System [basic background on CRS development/structure]
* ‘Govt & Civil Society’ sector not well-explicated; each donor deals with public sector/economic reform differently
* Difficult to disentangle conflict resolution activities, which many donors treat as DG

Problem #1: Every bilateral/multilateral donor agency has its own activity classification scheme, and each agency re-classifies for CRS with some error (eg Italy)
Problem #2: Each private donor has a different classification scheme; reporting often mixes activity areas; funds received for re-granting not clearly identified
Problem #3: Each donor aggregates activity in different ways, so dataset will be available at aggregate activity level

Time/Donor Coverage Gaps
German political foundations only 2000-2003
Westminster Foundation for Democracy after 2001
UNDP spotty
Open Society network before 1999
Major donors haven’t reported for 2005

## Patterns, Trends, Mix

**Notes:**
Despite progress in North-Eastern Europe and Central-Eastern Europe, donor funding climbed up to almost $1.2b

Major Programming Areas
Civil Society (plus Free Flow Info, Elections, and Human Rights)
Legal & Judicial Development
Government Administration (includes Local Government & Decentralization)
Conflict Resolution and Security-system

More
Human Rights is largely Bilateral, but note Ford+OpenSociety
Legal & Judicial Development is Bilateral and EU
Government Administration is EU and Bilateral
Free Flow Info is Bilateral and Private (OpenSociety)

## Slide 6

**Notes:**
 Dominance of South-Eastern Europe
 Funding in other regions somewhat stable despite EU accession and donor close-outs

Not adjusted for per capita because (a) lacking accurate population figures for many SEEur states; (b) it is not clear that population size factors into donor funding levels, although there is a more general relationship between state size and funding level; and (c) this chart makes it clear that funding does not seem to follow size, rather funding follows urgent needs.

More
Bilaterals driving SEEur funding growth; Ukraine also increasing; other regions more or less the same since 1995
Politicals reduced funding in NEEur & CEEur, increased funding in Serbia & Ukraine
Privates maintain activities in NEEur & CEEur
EU also driving SEEur funding growth; Regl & CEEur funding for cooperation activities

## Slide 7

**Notes:**
Note dominance of Bilaterals

More
Privates versus Multilaterals
‘State’ funding is from ‘one percent’ laws, Czech NIF, Croatian NFCSD

## Slide 8

**Notes:**
Mix of State institution-building and Society institution-building

More
Note consistent level at/about $10m despite USAID close-out and EU 2002
Civil Society funding maintained/persisted through 2004
Major donors:	BAPF		$8.7m
			USAID	$7  m
			Mott		$5.9m

## Slide 9

**Notes:**
Civil Society funding much more prominent (role of civil society in transition, as opposed to NEEur?)

More
Increase/volatility of Govt Administration due to EU
Human Rights funding Privates (Ford, OpenSociety) and EU
Civil Society funding:	MOTT		$40.4m
				USAID	$38.9m
				OpenSoc	$21  m
				TCSCEE	$18.6m
				Ford		$15.6m
				NED		$10.9m

## Slide 10

**Notes:**
Dominance of society institution-building than state institution-building (eg Ukraine)

More
Public Sector Fincl Mgmt spike in 2003 is anti-corruption
Civil Society funding:	USAID	$98.1m
				US State	$18.8m
				Mott		$10.8m

## Slide 11

**Notes:**
Mix of state institution-building and society institution-building

More
Civil Society funding	USAID	$641.6m
				SIDA		$  68.8m
				US State	$  59.5m
				Norway	$  45.4m
				CIDA		$  44.2m
				Neth		$  23.7m

## Slide 12

**Notes:**
Increased role of Civil Society, Free Flow Info, and Elections

More
Civil Society funding:	NED	$45.7m

## Slide 13

**Notes:**
Regional mix for Privates differs from Bilateral and EU

More
VHavel: Specter haunting Eastern Europe...Batman

## Slide 14

**Notes:**
Dominance of Civil Society funding, differs from other funding sources (especially with Free Flow Info, Human Rights)

More
Civil Society funding:	MOTT		$89.9m
				OpenSoc	$55.4m
				Ford		$25.7m

Comparison of funding donors shows dominance of US.

## Slide 15

**Notes:**
Dominated by state institution-building (EU accession)

More
Civil Society funding by EU  $68 m

## Slide 16

**Notes:**
Dominance by Bilaterals, note persistence of Privates
EU funding largely for ex-Yugoslavian states & Albania

More
State funding a new and growing source

## Slide 17

**Notes:**
Privates & Publics dominate once Bilaterals close out

## Slide 18

**Notes:**
Bilaterals close out, growing role of Privates & Publics
Note role of State sources of funding

## Slide 19

**Notes:**
Bilaterals still major source (Ukraine), but Privates

More
Mott the largest Private ($10.8m)

## Slide 20

**Notes:**
Dominance of Bilaterals, note EU & Privates

More
Civil Society funding:	USAID	$449.2m
				EU		$  45  m (Serb/Mont, Alb, Kos)
				Norway	$  41.8m
				US State	$  29  m
				Mott		$  23.7m
				OpenSoc	$  23.6m
				SIDA		$  15.6m

## Slide 21

**Notes:**
Need to examine ‘private’ and internal funding for Civil Society

Privates decreasing, Publics stable (Balkan Trust in 2005), State increasing

## Adding to the Mix

- USAID is largest donor
- Close-outs soon, funding dropping already
- EU Accession candidate funds increasing
- Focus on state institutions, not society
- EU Structural Funds arriving
- Economic/service provision, not advocacy

**Notes:**
USAID close-outs: 2008 Romania, Bulgaria, Croatia (?); 2009/10 Albania, Macedonia; 2010/12 Serbia, Montenegro, Moldova, Ukraine

EU accession candidate funding increasing in SEEur, but really aimed at state institutions (very EU)

EU Structural Funds for new Members aimed at economic development and service provision, not advocacy, human rights, NGO sector issues

## Emerging Sources

- Public ‘legacy’ foundations limited
- BAPF 2008, TCS 2012; Balkan Trust 2005
- New state bilateral agencies
- Innovative funding sources, but...
- ‘Percent’ laws, NIF

**Notes:**
Legacy Foundations limited
BAPF to be self-supporting in 2008
TCS still has funding through 2012, increasingly focused on EU candidates in region
Balkan Trust started in 2005, substantial assets for at least 10 years

New state bilateral agencies
* New EU Members had to create foreign assistance units
* Czech Devt Ctr, SlovakAid, PolishAid; Hungary, Estonia, Slovenia just getting started in late 2006/early 2007
* Each development agency has small set of selected countries, most have one EurFSU and one Caucasus

Innovative funding sources
* ‘Percent’ laws: Hungary, Poland, Slovakia; Bulgaria, Lithuania, Romania soon...
	...pros: considerable money for NGOs
	...cons: necessitates NGO PR campaigns; human rights/advocacy support marginal; at expense of other sources?
* Czech NIF funded by 1% of proceeds from second round of voucher privatization; political battle, first money in 1999...
	...sometimes perceived as elite/political

## Domestic Sources

- National Foundations, ‘Sin’ taxes
- Procurement
- Unrelated economic activity, Volunteers
- Donors’ forums

**Notes:**
National Foundations
* Hungary Natl Civil Fund: More or less central point for state funding for NGOs; perceived sometimes as elite/political...
	...very EU to centralize NGO funding in one state-sanctioned body

* Croatia Natl Foundation for Civil Society Devt: Funded in large part from lottery proceeds, large amounts go to sports/culture particularly with political connections; initial competition perceived to be elite/political, subsequents viewed less so...
	...state authority over NFCSD clear and potentially problematic, plus eliminates pressure for other sources to develop?

* Estonia: ‘Sin’ taxes are to be used by a national board controlled by Parliament, but debates over procedures, accountability, and program areas have delayed start-up

Procurement
* Per JHU/CNP, the first or second largest source of funding (philanthropy always third)
Procurement of contracts for goods/services by NGOs is difficult and often ad hoc by ministries; NGOs may even be blocked from procurement

Unrelated economic activity
* Some states rule out or severely hinder NGOs from engaging in unrelated economic activity (Macedonia, for now; Lithuania?)
* Market for such output (reports, consulting, calendars, t-shirts) may be limited and evolutionary

Volunteers
Status of volunteers in legal limbo in some states, sometimes volunteers seen as a tax dodge. Uncertainty chills recruitment and participation of volunteers

Donors’ Forums
* Czech, Slovakia, Poland, Romania, Bulgaria; somewhat in Estonia, Hungary
* Provides voice to NGO sector

## Overview

- Civil Society funding largely US origin
- Continued role of Privates/Publics critical
- New sources innovative/promising, but...
-  		      ...view with some caution
- Political dangers/vulnerabilities exist

**Notes:**
US Origin: civil society, free flow info, and human rights funding absolutely dominated by US-based/networked donors

The continued role of Privates/Publics in NEEur and CEEur was/is critical to civil society development in absence of Bilaterals

‘Percent’ laws, Czech NIF, national foundations are all funding sources that sprang from local innovation (Hungary Natl Civil Fund is probably EU-like exception)
There are lessons to be learned from these innovations – ‘Percent’ laws/debates have diffused throughout post-communist states – but we should temper this positive reaction with concerns about crowding/sufficiency

Civil society (esp advocacy/HR/sectoral) still vulnerable to political control over state funding mechanisms, plus service provision NGOs favored

##    Implications for Civil Society

- Cultural Shift for Civil Society?
- Major funders are USG, US-based foundations, or public-private partnerships
- Other funders have similar state-society approach to civil society
- USAID closing out, legacies still operating, but what about private foundations?
- EU funding flows to different types of NGOs

**Notes:**
Cultural Shift?
USAID, State, Mott, Open Society, Ford, NED, legacy trusts are major civil society donors
SIDA, CIDA, Norway, Netherlands
Will Privates stay on once USAID missions close? Do they view legacy trusts as their regional commitment?
EU funding flows to social service provision NGOs, usually at regional/local levels; this is likely a very good thing for such NGOs. Funding, however, does not go to advocacy/HR/sector organizations
?? Will the rather American-style civil society that we’ve done so much to create be un-done by our departure and EU’s arrival??

- Shake-Out within Civil Society?
- Shifts in funding sources and recipients
- Philanthropy limited
- Procurement limited, no state pressure
- Other economic options limited

**Notes:**
Shake-Out?
US vs EU patterns of funding/recipients could be bad for organizations that will lose out...but is a shake-out a bad thing? Could there be too many advocacy/HR/sectoral organizations for the ‘market’ to bear?
Philanthropy still limited in many states due to economic or political culture considerations. ‘Percent’ laws may also act to depress other philanthropy, but recent research indicates perhaps not (Hungary).
Procurement opportunities are difficult to identify, eligibility may be a problem, and quality proposals beyond the capabilities of many NGOs. In addition, states in which other mechanisms (%, NIF, natl foundation) provide support to NGOs, there is less pressure on the state to recognize NGOs as partners that need access to procurement.
Markets for other economic activity – if allowed or no disincentives – are likely too small to support many NGOs or experts

##   Implications for Democracy

- Could be problems!
- Watchdog functions possibly reduced
- State-society interaction limited
- Less NGO-citizen interaction
- It depends!
- Stable, but not dominant, funding sources
- Private & public ‘legacy’ foundations
- Programming
- Improvements in laws

**Notes:**
Could be problems!
Loss of funding and potential shake-out for advocacy/HR/sectoral organizations negatively impacts the very actors counted on to be watchdogs.
To the extent that the state provides funding via ‘percent’ laws or national foundations of some kind, it may limit the state-society interaction to just that single venue, which would also limit policy innovation, information gathering, and societal feedback.
There is the possibility of less NGO-citizen interaction without organizations that can stimulate social or political preferences for political action.

It depends!
On:
Development of stable but not dominant funding sources; ‘percent’ laws and other mechanisms are fine, but beyond insulation from elites/politics there need to be other state- and society-oriented sources for civil society
Continued activities of donors, particularly private foundations and ‘public’ legacy foundations
Programming related to advocacy, human rights, information flows and media, and sectoral issues
Improvements in procurement, nonprofit sector, and volunteer laws

Specific region/country thoughts
Baltics: somewhat statist, lack of bilateral emphasis on civil society plus early closure were mistakes
CEEur: Visehrad4 doing well, allthough Hungary is a bit statist and CR elitist
Slovenia: Most stunted civil society among new EU members; statist, small, ignored
Croatia: Need to de-politicize control over NGO funding, improve foundation law, consider donors’ forum
Macedonia: Allow for unrelated economic activity, look for stable funding sources, consider donors’ forum

## Implications for Donors

- Encourage stable state funding sources
- Promote state transparency/accountability
- Maintain presence after Bilaterals
- Focus programming
- Advocacy, Human Rights, Sector
- Improve legal environment