Funding for sustainability - sharing experiences
In February 2003 the Trust for Civil Society in Central & Eastern Europe organized an intensive four-day study tour for executives of grantmaking foundations operating in the region. The event was conceived as part of a learning process to improve institutional grantmaking in Trust target countries. What did participants learn from the tour?
There are several institutional strengthening programmes just starting up in Central and Eastern Europe. The Czech VIA Foundation has just launched one and Soros Foundation Hungary is about to launch one. Freedom House Budapest plans to make institutional grants within its Regional Networking Programme, and the Baltic American Partnership Fund has been running an institutional grants programme for the past three years. Two indigenous organizations that have experience in institutional grantmaking are Ekopolis Foundation/ETP in Slovakia and the Polish Stefan Batory Foundation.
The study tour consisted of seminars on the institutional grantmaking experiences of these two indigenous donor organizations and site visits to eight organizations that have received institutional grants from them.
What are institutional grants for?
Large, strategic institutional grants are seen as one way of helping mature NGOs with excellent track records to achieve long-term financial sustainability. There has not been much experience with this type of grant in Central and Eastern Europe, as most funding to NGOs has been strictly project-driven and project-oriented, thus frequently not allowing for organizational development.
Even where funding has been given under the heading of ‘institutional grants’, it has actually been to cover core costs and so has not served as an opportunity to prepare a sustainability strategy for the organization. This is especially true of the public policy-oriented think-tanks, which have been very successful in achieving policy impact with their programmes but have not succeeded in creating convincing long-term strategies for their own sustainability. In fact the tour arose partly from the Trust’s growing concern about the potential failure of public policy think-tanks to become Trust beneficiaries, either because they lack the skills and experience needed to draft feasible self-sustainability strategies or because of the limited experience of domestic grantmakers (including Trust partner organizations) in supporting/working with the policy institutes.
Problems facing public policy think-tanks
Some of the most thought-provoking discussion of the study tour seems to have occurred during visits to two major-think tanks – the Institute for Public Affairs in Bratislava and the Institute of Public Affairs in Warsaw. Although so successful in their programmes, their long-term future remains uncertain owing to poor financial planning. The main problem seems to be that they base their strategy on future grants. One participant commented that some think-tanks ‘didn’t seem to understand that international funding will be cut off in the near future’. The think-tanks seem now to be focusing on domestic business and EU funding. But, as one participant commented, ‘Corporate funding of policy analysis is a challenge. Experience in this regard is very meagre.’
Several options were discussed to ensure these organizations are sustainable in the long term. Among them, one (unrealistic) is to provide think-tanks with reserve funds or endowments sufficient to generate income to cover their core expenses. This would require significant improvement in their financial management skills. Another option is to create a CEE Public Policy Fund to continue funding them in the present way. Yet another is developing income-generating activities.
What did participants find most useful?
Although the site visits and discussions with grant recipients about their understanding of institutional grants and the challenges they face seem to have been very useful, feedback from tour participants shows that what they found most valuable was the opportunity to talk openly with each other about their experiences of institutional grantmaking. They were also clearly interested in the detail of the Batory/Ekopolis institutional grantmaking programmes – eligibility requirements, application processes, evaluation criteria, etc. One described the Batory Foundation’s NGOs institutional development programme hand-out as ‘the best summarizing material I have ever seen concerning institutional grant making’.
Participants liked the fact that Ekopolis doesn’t necessarily give institutional grants to ‘star’ organizations, ‘which would have been a more comfortable approach’, and is even willing to award grants to ‘controversial’ organizations. In some ways Ekopolis’s approach seems to embody a lot of trust. It was noted that they don’t suggest solutions to applicants, but only ask questions. It was also surprising to some that Ekopolis doesn’t ask grantees to report on how they spent the money, only on changes made, surmising that ‘it may be easier with an in-country programme where you know the players better and can trust them more’.
While all participants were keen that there should be some follow-up activity, there is clear preference for a ‘practical workshop’ and apparently little demand for ‘establishment of a mailing discussion group’. The Ford Foundation in Poland is now considering organizing a similar event.
For further information, see www.ceetrust.org
