§ 67.4 Description of functions and procedures. ( a ) In accordance with the *Statement of Principles and Objectives,* NED is currently developing and funding programs in five substantive areas: ( 1 ) *Pluralism.* NED encourages the development of strong, independent private-sector organizations, especially trade unions and business associations. It also supports cooperatives, civic and women's organizations, and youth groups, among other organizations. Programs in the areas of labor and business are carried out, respectively, through the Free Trade Union Institute and the Center for International Private Enterprise.
( 2 ) *Democratic governance and political processes.* NED seeks to promote strong, stable political parties committed to the democratic process. It also supports programs in election administration and law, as well as programs that promote dialogue among different sectors of society and advance democratic solutions to national problems.
( 3 ) *Education, culture and communications.* NED funds programs that nourish a strong democratic civic culture, including support for publications and other communications media and training programs for journalists; the production and dissemination of books and other materials to strengthen popular understanding and intellectual advocacy of democracy; and programs of democratic education.
( 4 ) *Research.* A modest portion of NED's resources is reserved for research, including studies of particular regions or countries where NED has a special interest, and evaluations of previous or existing efforts to promote democracy.
( 5 ) *International cooperation.* NED seeks to encourage regional and international cooperation in promoting democracy, including programs that strengthen cohesion among democracies and enhance coordination among democratic forces.
( b ) As a grantmaking organization, NED has certain responsibilities that govern its relationship with all potential and actual grantees. Briefly, these are: ( 1 ) *Setting program priorities* within the framework of the purposes outlined in NED's articles of incorporation and contained in the legislation, and guided by the general policy Statement of the Board of Directors;
( 2 ) *Reviewing and vetting proposals,* guided by the general guidelines and selection criteria adopted by the NED Board;
( 3 ) *Coordinating among all grantees* to avoid duplication and to assure maximum program effectiveness;
( 4 ) *Negotiating a grant agreement* which ensures a high standard of accountability on the part of each grantee;
( 5 ) *Financial and programmatic monitoring* following the approval and negotiation of a grant, and ongoing and/or follow-up evaluation of programs prior to any subsequent funding of either a particular grantee or a specific program. Grantees will also be expected to monitor projects, to provide regular reports to NED on the progress of programs, and to inform NED promptly of any significant problems that could affect the successful implementation of the project. NED grantees will also conduct their own evaluations of programs.
( 6 ) As a recipient of congressionally appropriated funds, NED has a special responsibility to: ( i ) Operate openly,
( ii ) Provide relevant information on programs and operations to the public, and
( iii ) Ensure that funds are spent wisely, efficiently, and in accordance with all relevant regulations.
( c ) Institutes representing business, labor, and the major political parties carry out programs which are central to NED's purposes. As a result of their unique relationship to NED, institute programs are an integral part of NED's priorities and the institutes themselves are “core” grantees. As such, the institutes, while subject to all the normal procedures governing NED's relationships with grantees, will be treated differently in the following respects: ( 1 ) The institutes will have the mandate to carry out programs funded by NED in their respective sectors of business, labor and political parties.
( 2 ) As an integral part of the process of budgeting and setting program priorities, the NED Board will target a certain amount of its annual resources for institute programs in their respective fields of activity.
( 3 ) Unlike its practice for the majority of its grantees, NED will fund significant administrative costs for each of the core grantees.
( 4 ) Institute staff will assume responsibility for program development and preparation of proposals for the Board in each field of activity for which it has a special mandate.
( 5 ) NED will expect its core grantees to perform their monitoring/evaluation function described in programmatic monitoring under *Financial and programmatic monitoring* above in a manner that will minimize the need to devote NED resources for these purposes. (Individual copies of the Grants Policy are available from the NED office.)
( 6 ) As stated above, in awarding grants the Board is guided by established grant selection criteria. In addition to evaluating how a program fits within NED's overall priorities, the Board considers factors such as the urgency of a program, its relevance to specific needs and conditions in a particular country, and the democratic commitment and experience of the applicant. NED is especially interested in proposals that originate with indigenous democratic groups. It is also interested in nonpartisan programs seeking to strengthen democratic values among all sectors of the democratic political spectrum.
( d ) *Selection criteria.* In determining the relative merit of a particular proposal NED considers whether the grant application: ( 1 ) Proposes a program that will make a concrete contribution to assisting foreign individuals or groups who are working for democratic ends and who need NED's assistance.
( 2 ) Proposes a program, project or activity which is consistent with current NED program priorities and contributes to overall program balance and effectiveness.
( 3 ) Proposes an activity that meets an especially urgent need.
( 4 ) Does not overlap with what others are doing well.
( 5 ) Proposes a program that will encourage an intellectual climate which is favorable to the growth of democratic institutions.
( 6 ) Proposes a program that is not only culturally or intellectually appealing, but will affect the education and the awareness of minorities and/or the less privileged members of a society.
( 7 ) Originates from an organization within a particular country representing the group whose needs are to be addressed.
( 8 ) Appears to be well thought out, avoiding imprudent activities and possibilities for negative repercussions.
( 9 ) Takes into consideration not only what objectively could be significant to a certain society, but how the cultural traditions and values of that society will react to the project.
( 10 ) Incorporates an analysis of the problem of democracy in the area in question and the method by which the proposed program will have a constructive impact on the problem.
( 11 ) Proposes a program that will enhance our understanding of what really helps in aiding democracy.
( 12 ) Creatively enlists supports for foreign democratic organizations.
( 13 ) Encourages democratic solutions and peaceful resolution of conflict in situations otherwise fraught with violence.
( 14 ) Proposes a program, project or activity that is clearly relevant to NED program objectives and not better funded by other government or private organizations. (Proposing organizations will be be referred to other funding organizations where substantial overlap exists.)
( 15 ) Proposes a program or strategy that is appropriate to the circumstances in the country concerned.
( 16 ) Proposes a program that can be expected to have a multiplier effect, hence having an impact broader than that of the specific project itself; or establishes a model that could be readily replicated in other countries or institutions.
( 17 ) Proposes appropriate, qualified staff who have a demonstrated ability to administer programs capably so as to accomplish stated goals and objectives.
( 18 ) Proposes an appropriate ratio of administrative to program funds.
( 19 ) Is responsive to NED suggestions with regard to program revisions.
( 20 ) Proposes a realistic budget that is consistent with NED perceptions of project value and is performed within a stated and realistic time frame; and
( 21 ) Proposes a program that has, as one of its principal aspects, a major impact on the role of women and/or minorities.
( e ) The following guidelines also apply to all projects funded by NED. ( 1 ) The proposing organization must be able to show that it is a responsible, credible organization or group that has a serious and demonstrable commitment to democratic values. (Various factors may be considered in this regard: recognized democratic orientation; established professional reputation; proven ability to perform; existence of organization charter, board of directors, regular audits, etc.);
( 2 ) The proposing organization must be willing to comply with all provisions of the National Endowment for Democracy Act as well as all provisions of current and subsequent agreements between the USIA and NED;
( 3 ) The proposing organization must agree not to use grant funds for the purpose of educating, training, or informing United States audiences of any U.S. political party's policy or practice, or candidate for office. (This condition does not exclude making grants or expenditures for the purpose of educating, training or informing audiences of other countries on the institutions and values of democracy that may incidentally educate, train, or inform American participants);
( 4 ) The proposing organization must agree that no NED funds will be used for lobbying or propaganda that is directed at influencing public policy decisions of the government of the United States or of any state or locality thereof;
( 5 ) The proposing organization must agree that there shall be no expenditure of NED funds for the purpose of supporting physical violence by individuals, groups or governments;
( 6 ) The proposing organization may not employ any person engaged in intelligence activity on behalf of the United States government or any other government;
( 7 ) NED will not normally reimburse grantees for expenses incurred prior to the signing of a grant agreement with NED;
( 8 ) Each grant made by NED will be an independent action implying no future commitment on NED's part to a project or program;
( 9 ) NED may, from time to time, fund feasibility studies. Applications for grants in this category should include, but not be limited to, the following: Scope, method and objective of the study; Calendar; Proposed administration of the study; and Detailed budget. The funding of a feasibility study by NED does not imply support for any project growing out of the study. It does, however, imply interest by NED in the area under study and a willingness to entertain a project proposal growing out of the study; and
( 10 ) The proposing organization may not use NED funds to finance the campaigns of candidates for public office.
( f ) All proposals received by NED are reviewed by the staff in order to determine their congruence with NED's purposes as stated in the organization's Articles of Incorporation and the NED Act.
( g ) Grant applications must contain the following information: ( 1 ) A one-page summary of the proposed program;
( 2 ) Organizational background and biographical information on staff and directors in the U.S. and abroad;
( 3 ) A complete project description, including a statement of objectives, a project calendar, and a description of anticipated results;
( 4 ) A statement describing how the project relates to NED's purposes;
( 5 ) A description of the methods to be used to evaluate the project in relation to its objectives;
( 6 ) A detailed budget, including an explanation of any counterpart support anticipated by the applicant, whether monetary or in-kind, domestic or foreign; and
( 7 ) The names and addresses of all other funding organizations to which the proposal has been submitted or will be submitted.
( h ) After an award determination has been made by the Board, NED enters into a grant agreement with the recipient. That agreement is made in accordance with NED policy, the terms of NED's grant agreement with USIA, and the terms of the Act, and the terms of NED's standard grant agreement as they apply to the specific project in question. The NED Board of Directors approved a revised Statement of General Procedures and Guidelines on September 12, 1986. The statement, outlined above, is available from the NED office.
( i ) NED Staff welcomes preliminary letters of inquiry prior to submission of a formal proposal. Letters of inquiry and formal proposals should be submitted to: Director of Program, National Endowment for Democracy 1101 15th Street, NW, Suite 700, Washington, DC 20005-5000.
[51 FR 40164, Nov. 5, 1986. Redesignated and amended at 64 FR 54541, Oct. 7, 1999]