The restoration of democracy to Chile in 1990 was good news for the country as a whole, but in Chilean civil society it provoked a crisis. It marked the withdrawal of donor funding from the sector, accompanied by the loss of key personnel to the new government. Faced by this crisis, Chilean CSOs displayed an inability to act in concert.

Their consequent failure to secure an independent and accepted place in the new democracy continues to dog Chilean CSOs today. Why is this and what can the sector do to re-establish its resource base and its role in the development of society? Alliance asked Gonzalo de la Maza, former president of ACCION, Chilean Association of NGOs.

In the mid 1990s, foreign donors that had supported Chilean NGOs throughout the Pinochet era began to leave. What were the consequences for the NGO sector in Chile of the way this ‘exit’ took place?

To answer that, we need to go back a step. The system of international aid was transformed after the fall of Pinochet and the transition to democracy in the early 1990s. Donors began to leave from 1995 onwards, but NGOs were somehow overlooked in the transition process. As a result their role in the new Chile was never established, and NGOs today are still suffering the consequences.

I remember a conversation with Bernard Holzer, chairman of the French Comite Catholique contre la Faim et pour le Developpement (CFCD), at the ‘Cooperation and Democracy’ Encounter in early 1990, a few days before the first democratic government took office. He noted with pride that several of his former Chilean partners, accused of being near-guerrillas by critics of CCFD, had become ministers or government officials, and wanted to take a list back to France to show the doubters. I asked what would happen to those of us who wished to stay in the NGO sector and who were not on the list. My concern turned out to be well founded.

What was behind the changes that took place in the international cooperation system at this time?

During the transition to democracy in the early and mid 1990s, the international community made a strong commitment to the emerging democracy and supported the new administration with a continuous flow of resources until 1995, mainly on bilateral terms. The EU decided to maintain its ‘Chile Special Line’, formally focused on ‘Chilean NGOs’: it was in fact political support for democratic activists, negotiated with the political parties. At the same time, overseas development aid, especially from Europe, began to decrease in Latin America as a whole. Chile in particular was seen as ineligible or low priority owing to its relatively good economic health and improved political state. In fact the reorientation was based on politics, rather than economics.

How did the NGO sector fare under these changes?

Under Pinochet, international support for Chilean NGOs came from groups inspired by principles of solidarity with democracy and human rights. The sector had largely depended on such foreign funding, which, following the restoration of democracy, began to dry up. At the same time, in Chile itself, there were no new ways to fund NGOs, which faced tight restrictions and were forced to ‘compete’ for scant funds. Their resources were thus being squeezed both domestically and internationally.

At the same time, government officials were recruited from NGOs, where the new government’s programmes had taken shape and contacts with the overseas aid agencies had been made. A direct line of communication with the aid agencies was thus established, both because of this and because those agencies were in any case prepared to back the nascent democratic administration. Capabilities, funds, programmes, and to some extent legitimacy, thus passed from NGOs to government. The government didn’t develop a specific policy for the NGO sector, and the sector itself, weakened by the loss of some of its most prominent and capable members and by having many of its canons assumed by government, failed to press effectively for such a policy.

In sum, the sector lost out under the new arrangements. NGOs would have needed to join forces much more than they did to ensure that their future was part of the transition agenda. As it was, this was left to government decision-makers, who saw NGOs almost exclusively as implementers of its policies rather than as collaborators in shaping policy.

So the lack of a common negotiating platform for NGOs was an important factor in this?

Absolutely. While foreign donors and the government developed strategies for adapting to the new conditions, Chilean NGOs did not. Mostly, they cooperated with the new administration, in the expectation that support mechanisms would arise from the government side. Meanwhile, they continued to negotiate for funding with foreign donors on an individual basis.

There was little acknowledgment in government circles that it was necessary to rebuild a civil society destroyed by the prolonged dictatorship. Social reconstruction should not be a matter for the government alone, even in a democracy, all the more so in an incomplete, ‘low-intensity’ democracy. Those politically responsible for the transition failed to take account of this. Abroad, the new administration cultivated the image of a full democracy and adopted the slogan ‘we don’t want more cooperation but market opening’. It failed to include the non-governmental sector in its intensive diplomatic activity, and efficiently channelled bilateral and multilateral cooperation towards the public sector during the first half of the 1990s.

Could something like the Trust for Civil Society in Central and Eastern Europe have helped strengthen Chilean civil society?

Definitely. However, foreign donors did not see a need to build the capacity of the NGO sector in order to strengthen the emerging democracy: after all, the fall of Pinochet had taken place through the democratic process, so presumably democracy in Chile was alive and well.

There seem to be very few funding opportunities for NGOs in Chile today. Is this related to this unsatisfactory transition?

Actually, there are numerous funds available to NGOs through competition. Government funds are available for particular programmes, but in very piecemeal fashion and only for a year or so. Programmes lack continuity and the requirements for qualification are constantly changing. No funds are allocated exclusively to non-profits: they have to compete with consulting firms and other organizations. Basically, as I’ve said, government views NGOs as instruments for implementing its programmes, with no input into policymaking.

There are also a handful of private and foreign-based foundations. The contribution of the Ford Foundation was substantial in the 1990s, but has lately diminished. The same is true of the Kellogg Foundation, which has turned to other areas of Latin America. The few domestic corporate foundations usually run their own programmes and so are not donors. The donor foundations are wary of development NGOs and lean towards supporting welfare assistance and educational establishments. The notion of corporate social responsibility is only beginning to emerge in Chile, and is following the same pattern.

Might a too early exit of foreign donors from the NGO sector have been prevented if communication between the different parties involved had been better?

There was dialogue, it just didn’t involve NGOs. At the Cooperation and Democracy Encounter, mentioned earlier, the new president acknowledged the contribution of international cooperation to the recovery of democracy and announced the creation of the Chilean Agency for International Cooperation, which would be responsible for following up the offers of support that the new authorities continued to receive. These helped to create new institutions and programmes, which were subsequently funded from the national budget. Those conducting this dialogue on the Chilean government side were former NGO directors and members of think tanks, who had joined the administration and kept up contacts with foreign donors. The other side of the dialogue was led by the political parties, which succeeded in securing the continuation of the aid they had received in the 1980s.

The NGOs, however, negotiated with their funders on an individual basis, or through platforms created by agencies in the north (EZE, Novib, and other northern NGOs), but these never had a formal constitution which might have given them weight in the decisions of donors. The first domestic attempt to establish a joint platform to negotiate with the donors came in April 1994, when ACCION, the Chilean NGO Association, organized a meeting on the theme ‘Challenges for a New Cooperation’. This was inconclusive, however, and certainly did not provide any practical means of solving the problems identified. To date, NGOs have failed to act in concert, either to lobby or to secure funding, and the vibrancy of the sector is much reduced. Many NGOs have disappeared or reduced their activities, while others have substantially changed, and have effectively become for-profit organizations.

Could things have been done better so that the withdrawal of foreign donors had less damaging consequences for Chilean civil society?

In the past, the aim of restoring democracy had created strong ties between the political agenda and social and academic action in the non-governmental sector. That tradition became our weakness in the 1990s. In the first years of the decade, civil society organizations largely relied on friends in government to do what they needed. But, the conditions under which civil society could have assumed an independent, authentic and generally accepted place in society were never established.

We failed to understand the nature of the new stage and demonstrated a great lack of cohesion as a sector. This was partly due to Chilean political tradition and to the transfer of senior and technical staff to the government, but also partly to dependence on foreign donors, which had not the slightest interest in promoting political platforms for NGOs in Chile. Their assumption was that democracy in Chile was in good health and didn’t need their support.

What was really needed was an agency similar to the Chilean Agency for International Cooperation I mentioned earlier, but NGOs only began to organize in the early 1990s, and even then their distrust of mediation in the matter of funding hampered them. The NGO Association created in 1991 didn’t even succeed in getting its own members to put this issue on their common agenda.

More collaboration among foreign donors would have helped, but as with the NGOs themselves, actual collaboration was very weak and short-lived. I think that each donor was guided by its own agenda. Besides, donors don’t necessarily have a lot in common, and such collaboration as there was only involved their representatives in Chile, who, in some cases, had little latitude for decision-making.

Beyond organized negotiation, it would have been necessary to establish a new means for developing the sector. This would have had to be completely original, because neither of the two classic funding models that have served in the developed world could be applied to Chile. A non-governmental sector financed with funds transferred from government, as in some European countries, does not seem feasible, nor is it possible to rely on corporate philanthropy, which has neither tradition, legal framework, nor pioneers in Chile. So, during the first years of democracy (1990-94), a concerted strategy involving both government and NGOs would have been needed to lessen the effects of fund reduction and to devise alternative means of funding. At a later stage, efforts might have focused on ways of becoming self-sustaining by means of financial diversification.

Would it have helped if there had been organizations/resources focused on helping NGOs become more self-sustaining? Whose responsibility should it be to set such things up?

A key element of any such strategy is mobilization of domestic resources. These exist, but they are not directed toward development nor are they available to civil society. Here again, to change this, both increasing civil society visibility and new cooperation mechanisms are needed. In both cases, collaboration between international donors and their domestic counterparts might help. Recently, Novib has made some moves in this direction, as part of its withdrawal from the country.

In the transition phase, there was considerable pressure to convert NGOs into implementers of government policy. No means were created which would facilitate cooperation between NGOs, nor which would allow the sector to present itself as a sector. Ironically, government designed development and subsidy programmes for corporate innovations based on forms of association, but failed to do the same for the non-governmental sector. It aided cooperation among organizations that normally compete, and required competition from organizations which should cooperate.

Is there anything government could or should have done in the process of foreign donors leaving Chile that would have benefited Chilean NGOs?

The first and most important step was to recognize the existence of the problem and foresee its effects. The bulk of the development aid that the new government received came from bilateral and multilateral sources. In the 1980s much of this had gone to NGOs, owing to Chile’s exceptional circumstances. ‘Normalization’ was thus bound to have negative consequences for the NGO sector. Government should have included the sector in its international negotiations and allowed a specific place for it rather than confronting it with the official line that ‘we want trade, not cooperation’ (a line government adopted once it had obtained significant support from the international community).

A national cooperation policy should also have contemplated new funding mechanisms, such as matching funds, tax exemptions and programmes to strengthen NGO capacity, an issue that has only come up for discussion in the early 21st century.

Can any lessons be learned from the case of the Fund of the Americas, which was managed by a Council of 11 members – six from the NGO sector, four from the Chilean government and one from the US government?

The Fund of the Americas originated in an agreement between the Chilean and US governments in 1993. What it shows is that bilateral cooperation is not incompatible with transfer of resources to civil society (the Fund provides funding only to social and non-governmental organizations) with mechanisms based on civil society autonomy and governance. The Fund was successful in mobilizing additional resources and managing domestic funds of government origin. However, its non-governmental character arose from a requirement of the US, not the Chilean, government. Once the funds from the first stage were exhausted, in 2003, the Chilean government lacked the will to begin a new negotiation with the USA or to set in motion a similar fund with domestic resources, and the NGO sector lacked the means to induce it to do so. As far as governance was concerned, the Fund only included those involved in its projects. Other sectors of civil society were not represented.

Some people would say that the idea of exit should be part of grantmaking from the beginning. This might mean some sort of explicit agreement between funders and funded about what the funding is supposed to achieve, and some discussion of sustainability. Could this sort of model be applied to relationships between foreign donors and NGOs at a country level?

I think that it should apply to individual projects, rather than at country level, because international funders, like their grantees, are very diverse in rationale, capabilities, type of projects they engage in, and so on. Today Chile may not require international cooperation in matters of social infrastructure or basic services; it does require it, however, in drug use prevention and care of senior citizens, among other things. The emphasis of government social policy is on the visibly ‘very poor’, often at an individual level. What is also needed is support for hidden poverty and marginality. We need to support research and new ways in which local development can serve poor communities.

Or, final thought, is this focus on the country level a red herring, and should we rather be looking for better dealings between funders and individual grantees, including negotiated ‘principles of disengagement’?

Red herring? In Chile – and probably in many other places – international cooperation for development was a political issue. Even the non-governmental agencies came here and then left owing to political changes, either in Chile or in their own countries. Now, we can look for better dealings and new ways to cooperate, but we should not be naive enough to overlook the political aspect of development aid.

Gonzalo de la Maza has worked in social development projects with Chilean NGOs since 1977. He was the founder of ACCION, the Chilean NGO Association, and president from 1991 to 1995. He is currently Director of the Citizenship and Local Management Program at Fundación para la Superación de la Pobreza (Foundation for Overcoming Poverty) in Chile. During 2003 he was Visiting Scholar at the David Rockefeller Center for Latin American Studies at Harvard University. He can be contacted at gonzalo.delamaza@fundacionpobreza.cl