October 2002 saw the launch of a new joint investment project for Slovak NGOs. The aim of the scheme, undertaken by a consortium of three foundations as part of the programme of the Trust for Civil Society in Central & Eastern Europe, is to cooperate with the financial sector to increase the resources available to Slovak NGOs.
The model has been taken from the Czech Republic, where a similar scheme is working. The key difference is that in the Czech Republic foundations have substantial sums of money to invest, arising from the privatization of state enterprises. In Slovakia this is not the case. So far the three founding foundations have invested a total of around SKK19 million (approx US$445,000) in the scheme.
The process began in May 2002, when the consortium invited financial institutions to tender for the project. As many as 14 expressed interest and eight actually submitted proposals. Following a two-stage selection process, Tatra Asset Management (TAM, a member of the Raiffeisen Group) was chosen. TAM was chosen because it offered the highest added value for the NGO sector, including access to their lawyers, lobbying for better laws for the sector, and encouraging their clients to give donations collectively to all NGOs investing in the new fund. The consortium refers to this as ‘common fundraising’. Donations will be divided among the NGOs according to a predetermined formula.
The investment package managed by TAM is a mix of two mutual funds called CharitySet. Only NGOs can invest their assets in it, and the minimum investment is SKK100,000 (approx $2,400). Once the fund reaches SKK50 million (approx $1.2 million), CharitySet will be transformed into CharityFund – a separate investment fund managed by TAM.
1 One of the Trust partners in Slovakia is a consortium of three foundations (Open Society Foundation, Jan Hus Educational Foundation (JHEF), and Children of Slovakia Foundation). JHEF is taking the lead on this project.