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Organizational Development And Sustainability Of Non­Governmental
Organizations In Central And Eastern Europe  

 
«Organizational Development And Sustainability Of Non­Governmental Organizations
In Central And Eastern Europe»  

 
by Lewis Akenji
 

Source:  
CEU Political Science Journal (CEU Political Science Journal), issue: 03 / 2007, pages: 319­344, on  
www.ceeol.com.
 

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CEU Political Science Journal. Vol. 2, No. 3

ORGANIZATIONAL DEVELOPMENT AND SUSTAINABILITY OF


NON-GOVERNMENTAL ORGANIZATIONS IN CENTRAL AND
EASTERN EUROPE
groups – government, businesses,
Lewis Akenji citizens – to take up the rhythm.
Chairman of the Central and Eastern
European Network for Sustainable 1. Introduction
Production and Consumption
1
(www.CEEnetwork.org) (M.Sc.) In the beginning of 2004 a program was
lewis@tve.hu initiated that sought to establish a
regional network of non-governmental
Abstract organizations (NGOs) from Central and
Eastern Europe (CEE) dealing with
This article tackles the challenges faced joint issues of environmental protection
by NGOs in Central and Eastern and consumer protection. Such a
Europe in the beginning of the 21st network would identify the need around
century. With an organizational the region to have a common platform
development and sustainability that can facilitate work on cross-
approach, the main issues taken into boundary cooperation; to look at
consideration are the internal problems problems affecting the region from a
(shortage of funds, lack of capacity, broader angle; and to increase the
inefficient management of projects) and capacity of civil organizations as well
external problems (lack of supportive as strengthen their mandates to operate
networks, information unavailability, no in their countries.
common perspective on priority issues,
and overlap of interests) Moreover, in The role of NGOs in reforming society
addition to developing NGOs at the is widely recognized (Kaldor et al.,
national level, the trans-national 2003), yet the capacity of these
character of issues facing civil society organizations to perform optimally is
and sustainability require that NGOs limited. Especially around CEE region,
develop a regional platform.
NGOs face internal problems (shortage
The main conclusion of this article is of funds, lack of capacity, inefficient
that if NGOs working in sustainability management of projects) and external
want the message they drum to be problems (lack of supportive networks,
heard, they must start taking themselves information unavailability, no common
seriously in order for their target perspective on priority issues, and
overlap of interests). Most of these
problems are not unique to single
1
Lewis Akenji consults on research, organizations but occur widely and in
communication and management related to similar circumstances across the region.
sustainability issues.
319
CEU Political Science Journal. Vol. 2, No. 3

The term Non-governmental profit organizations,” “voluntary


Organization (NGO) is adopted and organizations,” “charitable
modified from the operational organizations”, etc.
definition of the Johns Hopkins
Comparative Nonprofit Sector Project.2 Today, the CEE Network is a
The project identifies five structural or partnership of 26 NGO member
operational features that make up organizations in CEE and six partners,
NGOs. These are: Organizations (with mainly international organizations and
some structure and regularity to their state agencies. Material for this article
operations); Private (with no affiliation is based mainly on a three-year process
to political parties and are not part of of consultation, interviews and focus
the apparatus of the state, even though group discussions. The three-year
they may receive support from period includes the preparatory phase
governmental sources); Not profit for the establishment of the network
distributing (i.e., they have no corporate (brainstorming, consultation and
affiliations and are not primarily interviews), the founding conference
commercial in purpose and do not (interview, focus group discussions and
distribute profits to a set of directors, workshop outputs) and the current
stockholders, or managers); Self- phase (post-foundation) during which
governing; and membership or the network has to become active.
participation in them is Voluntary.
The article explores a balance between
In the context of this paper, the use of practical implementation and theoretical
the term, non-governmental academic/scientific concepts on NGOs
organization, will generally be limited and their networks. While supported by
to those involved in issues of consumer data, it is mainly qualitative. It is also
protection, human rights, environmental explorative and some parts are based on
protection or sustainable development. the systematic observations of the
This therefore excludes the likes of author, being Project Manager of the
churches, hospitals, schools, boy scouts, process leading up to the establishment
etc., without any contradiction to of the organization and currently the
previously defined characteristics. Chairman of the network.
Further, the term Civil Society This article is meant to explore possible
Organizations may be used as a broad grounds from which to further develop
adaptation of the other forms of the new network, but also to challenge
appellation such as “Civil society the current thinking of the NGO
organizations”, “associations,” “non- community in the region, with the hope
that the search for answers would give
it a stronger hand in dealing with the
2
Lester Salamon, M., Anheier, Helmut K., increasingly demanding mandates
The Emerging Nonprofit Sector: An handed to NGOs both by the public and
Overview, Manchester, (Manchester
University Press, 1997a).
320
CEU Political Science Journal. Vol. 2, No. 3

by the inclusive nature of the process


towards more sustainable societies. For over forty years prior to the
transition, the heavily controlled
political system destroyed the non-
2. Opportunities and Challenges profit traditions that had existed in these
countries5; spun off organizations which
Some of the most influential changes in were supposed to represent the voice of
countries of Central and Eastern Europe the masses but which were never
(CEE) in recent years have been: the independent of government and were in
shift in the region to a market-based fact “institutions of social control” by
economy; and the accession of 12 communists6; and raised a generation
former communist countries to the that was so psychologically
European Union, as well as current indoctrinated in command-and-control
negotiations with more countries.3 systems that people were indoctrinated
These have brought about new as receptors, or at times passive
opportunities and new challenges. In resistors, of external orders.
both cases, the role of civil society in
contributing to democratic and The Johns Hopkins Comparative
democratizing governance, in Nonprofit Sector project discusses the
influencing production modes in the “larger processes and developments that
economy, and thereby contributing to have been, and are, taking place across
developing a sustainable society has the countries of [the CEE] region” as
been heightened. This role is executed follows:
through civil society organizations, in
effect non-governmental organizations.4 Their rich philanthropic traditions, and
their relatively well-developed systems
3
of private nonprofit institutions in the
Joseph Stiglitz, E Globalisation & its nineteenth and early twentieth
Discontents, (New York: Norton, 2002).; centuries, were disrupted by war and
Joseph Stiglitz E., and Hoff, Karla ‘The the subsequent establishment of
Transition from Communism: A communist regimes. Only after the mid
Diagrammatic Exposition of Obstacles to 1980s did the countries of Central and
the Demand for the Rule of Law’, in Policy Eastern Europe move towards a true
Research Working Paper Series number multi-sector society, when cautious
3352, The World Bank, (2004).
4
Sustainability, The 21st Century NGO: In
5
the Market for Change, London, Eva Kuti, “Hungary”, in Defining the
Sustainability, 2003. See Nonprofit Sector: A Cross-National
www.sustainability.com; Kaldor, Mary; Analysis, Salamon, Lester M., Anheier,
Anheier, Helmut and Glasius, Marlies (ed.), Helmut K. (eds), Manchester, Manchester
Global Civil Society 2003, Oxford, Oxford university Press, 1997. 471 - 492
6
University Press, 2003. Salamon, Lester M., Anheier, Helmut K.
Kaldor, Mary; Anheier, Helmut and Glasius, (eds) Defining the Nonprofit Sector: A Cross
Marlies (ed.), Global Civil Society 2003, National Analyses, Manchester, Manchester
Oxford, Oxford University Press, 2003. University Press, 1997b.
321
CEU Political Science Journal. Vol. 2, No. 3

reforms opened up the first those in the alternative, growing civil


opportunities for the establishment of society movement, have equally shown
private institutions…Overall, however, a passion. It is perhaps in this light that
before 1989, so-called “social the most progressive NGOs in the
organizations,” i.e., nationalized and
government-controlled institutions took
region are those run by the younger
some of the roles nonprofit generation. Some of that passion needs
organizations assume in democratic to be tamed and channeled, and there is
market economies…these compelling indication that this is
organizations were incorporated into coming to consciousness.
the State apparatus, and enjoyed no
independence.7 3. New Roles and Growing
Responsibilities
The older generations especially find it
hard to comprehend the dwindling state In addition to developing NGOs at the
availability, or “the withdrawal and national level, the trans-national
redefinition of the State”.8 Fifteen years character of issues facing civil society
of post-communism have proved not to and sustainability require that NGOs
be enough time for recovery, to fully develop a regional platform. Kaldor et
regain such mental attitudes or to set up al.10 highlight the development of civic
the mechanism and infrastructure that networks as a means of building “social
are needed to build an independent, capital” by “building relationships of
organized and proactive civil society. trust and cohesion”, the importance
being that “self-organization across
Yet the younger generation (born in the borders creates social cohesion within
last, waning days of communism, or trans-national communities.” However,
just after) is coming up, and an international cooperative effort
characteristically seeks to assert its should not overshadow the need for
independence. One means of exercising cumulative efforts to provide a subtle
this freedom has been an uneducated balance between generic, transferable
rush towards consumerism9; however action and action which truly reflects to
local conditions.
7
Lester M Salamon,., Anheier, Helmut K. - “Prompted in part by growing
(eds) Defining the Nonprofit Sector: A Cross doubts about the capacity of the state to
National Analyses, Manchester, Manchester
University Press, 1997b.
cope with its own welfare,
8
Eva Kuti, “Hungary”, in Defining the
Nonprofit Sector: A Cross-National
Analysis, Salamon, Lester M., Anheier, EEA, Household Consumption and the
Helmut K. (eds), (Manchester, Manchester environment, EEA, Copenhagen, 2005.
10
university Press, 1997),471 - 492 Mary Kaldor, Anheier, Helmut and
9
Cohen, Maurie J. Sustainability: Science, Glasius, Marlies (ed.), Global Civil Society
Practice, & Policy, Volume 1, Issue 1, 2003, (Oxford, Oxford University Press,
(Spring 2005) http://ejournal.nbii.org/ 2003).
322
CEU Political Science Journal. Vol. 2, No. 3

developmental, and environmental problems,” wrote


Figure 1: Public trust in institutions, by sectors
Who does the public trust?

70
NGO
59
60 55 54 Governments
Trust (%)

Corporations
50
Media
40

30

20 16 17
13 14 14 12
10 6 7
4
0
Environment Human Rights Health
Issues

Source: Edelman Trust Barometer, 2003


technologies linking and empowering
1
Kaldor et al. , “analysts across the individuals and groups worldwide;
political spectrum have come to see - the withdrawal of government from
NGOs as strategic components of a many areas of service provision,
middle way between policies that put especially to vulnerable communities;
primacy on ‘the market’ and those that - falling trust in traditional
advocate greater reliance on the state.” institutions (governments, church,
This mandate to NGOs is further business);
emphasized by the public: data from - on-going social inequality and
annual surveys repeatedly reveal that continued environmental degradation.
the public trusts NGOs most – ahead of
governments, media and corporations. To fill these new shoes, NGOs need to
step up their game, not as responders
Below are some of the reasons for why but as drivers, leading the agenda for
NGO support continues to grow: sustainability. For this to happen, they
the opening up of ex-communist and need to set a common vision for
other emerging or transition economies themselves, professionalize their
to markets, democracy and civil society working culture, develop sustainable
models; financing mechanisms, and to engage in
- the communications revolution, stakeholder dialogue and constructive
with the internet and other information partnerships. These issues are explored
below.
1
Kaldor et. Al., Global Civil Society, 2003
323
CEU Political Science Journal. Vol. 2, No. 3

4. Lack of Vision operates in two levels as described


below:
Most of what is understood as - At the level of individual
sustainability within civil society organizations, several NGOs do not
organizations is intuitive rather than have a common vision of what they are
clearly defined. In a focus group session working towards. Some organizations
during the founding conference of the have a vision written down on paper,
CEE network, 23 participants were but there is no common understanding
asked to describe what was to them the of it by employees; it doesn’t
vision of a fully sustainable society. As necessarily transla te into the strategy or
it turned out, largely all participants had daily tasks of the staff.
differing answers, even when they - At a broader level, and perhaps
shared some intersecting aspects. It was more troubling, there is lack of a
observed that some participants who sectoral vision. There is no single
came from the same organization had shared and commonly interpreted vision
different views of what sustainability is. of where the third sector is going with
By and large, there were patterns; it the society they are out to build, of what
emerged, albeit loosely, that a sustainable society would look like, if
environmental NGOs had a vision achieved. In a broad sense, most NGOs
which was different from what attest to the unsustainability of
consumer NGOs had, and which also contemporary lifestyles. They consider
differed from what cultural and the need for sustainability as opposite to
grassroots NGOs had in mind. Though these lifestyles, a negation of the
there are similarities in the sector, the current system. The variety of
so-called third sector, of what has come interpretations of this leads to denial of
to be understood as NGOs; there remain what is at present. This might not be
large gaps between and among the wrong in itself, yet it fails to propose a
organizations.22 much needed alternative way. In
refusing contemporary structures and
The above example highlights one of yet not presenting a visionary direction
the main issues affecting the NGO of what a sustainable society would
movement: a lack of shared vision. This look like, NGOs are caught in a limbo.

22 As a consequence, there is sometimes


Sustainability, 2003, Salamon and
Anheier, The emerging nonprofit sector,
no coherence in activities carried out by
1997; Salamon, Lester M., Anheier, Helmut the organization. Programs become
K., The Emerging Nonprofit Sector: An disjointed from one phase to another,
Overview, Manchester, Manchester weakly linked, and fail to see common
University Press, 1997a. direction in actions.
Lester M Salamon,., Anheier, Helmut K. Also because of a lack of vision and set
(eds) Defining the Nonprofit Sector: A Cross direction, NGOs tend to become
National Analyses, (Manchester, responsive (to government and business
Manchester University Press, 1997b).
324
CEU Political Science Journal. Vol. 2, No. 3

agenda), instead of being proactive, term nature of sustainability against the


leading the way to sustainability.133 myopic perspectives of electoral-cycle
This reactive pattern has clearly been government policies and corporate
seen in the area of fundraising for profit activities, visioning a sustainable
programs, where NGOs respond to society poses a challenge which neither
donors’ whims, and also in policy policy instruments nor traditional
processes where NGOs quite often limit economics methods are designed to
themselves to making comments on handle.155 In recent decades,
policy drafts – a phase past the point Environmental Economics has fast
where they could lobby for inclusion of become a “fashionable” academics area
their own ideas. (see Financial Times, 2006) not least
because of the new kinds of challenges
The mandate of the third-sector is thus that it opens.
not clearly understood by NGOs
themselves, and less so by the public. 5. Developing a Shared Vision
Internal confusion has easily led to
mixed signals for external stakeholders. A vision, according to Brain Murphy166,
This could be due to the sometimes low “involves ‘seeing how things are’,
public awareness of issues they particularly how things are for oneself –
advocate, and loss of some of the public creating our own knowledge and
support they should have. In fact, perception and relevance rather than
analysts seem to suggest that NGOs merely absorbing or adopting a
generally enjoy a high amount of public prescribed perception. In seeing how
trust, not mainly at the strength of their things are, vision also involves seeing
own workings but seemingly owing to ‘how things are not’. And, finally,
the disappointing failures of vision involves creating intention, ‘see
governments, business and the media.144 how things might be’.”

The issue of lack of vision of a An organization’s vision (where it


sustainable world is not limited only to wants to go) lends to its mission (what
NGOs. It extends to governments and to it must do to get there) and is then
businesses, too. Because of the long broken down to a strategy (how it want

13
Peter Drucker, Managing the Non-Profit
Organization (Oxford: Butterworth –
15
Heinemann, 1990). David C Korten,. When Corporations Rule
14
Evelyn Iritani, “From the streets to the the World, (Kumarian Press, 1995).
inner sanctum” in Los Angeles Times, Stiglitz, Joseph E Globalisation & its
(February 20, 2005); Fuchs, Doris, and Discontents, New York: Norton, 2002.
16
Lorek, Sylvia, “Sustainable Consumption Murphy, Brian K., Transforming
Governance: A History of Promises and Ourselves, Transforming the World: An
Failures”, in the Journal of Consumer Open Conspiracy for Social Change,
Policy, 28 (2005):261 – 288. (London, Zed Books., 1999).
325
CEU Political Science Journal. Vol. 2, No. 3

to get there).177 These three are towards it. Each organization will then
interlinked, and are effective in set its mission under this common
accomplishing objectives. vision. Peter Drucker188 highlights a
common mistake when NGOs set to
In the same focus group discussion developing their mission: setting a
referred to above, less than 50% of mission that is too broad and not
organizations said that they had a feasible for the organization, “a hero
concrete strategy developed by sandwich of intentions”. A mission
breaking down the vision and mission statement must be operational. This is
of the organization. The rate dropped to then further broken down to a strategy,
25% when asked those who had action action plans, and periodic activities. To
plans derived from the strategy. It was stay relevant, the mission and strategy
then argued by some organizations that should constantly be reviewed and
not being confined by a tight strategic adjusted against internal and external
action plan allowed the organization to changes in the operational environment.
be more organic, making it more A well defined vision would give room
flexible to adopt new trends and hop for creativity199 and would present the
onto niche programs. (As shall be seen organization as a force for policies and
later, this attitude is part of the working businesses to then respond.
culture of organizations that are donor-
driven). The organic, spontaneous 6. Work Culture
projects run by NGOs are easily
adaptable to fluctuations in issues 6. 1 Staffing
arising on the political agenda. Yet if
these projects do not fall within a Workers in non-governmental
coherent pattern, each project building organizations would usually fall under
upon the previous, guided by an one of the following: full-time
ultimate vision, there is a resulting employees, part-time employees, or
inefficiency. It allows organizations to volunteers.
stretch themselves thin by engaging in
irrelevant activities, at times in favor of a) Full-time employees. They are
those that are tempting to donors but usually the daily administrative and
less strategically relevant. overall management staff. Because
Together then, NGOs need to develop a NGO employees’ salaries are
vision, one which is commonly
understood and shared. Such a vision
18
must ideally be able to attract people Drucker, Peter Managing the Non-Profit
Organization Oxford: Butterworth –
Heinemann, 1990.
17 19
Covey, Stephen R. The Seven Habits of Brian K.. Murphy. Transforming
Highly Effective People: Powerful Lessons Ourselves, Transforming the World: An
in Personal Change, (London, Simon & Open Conspiracy for Social Change,
Schuster, 1989). (London, Zed Books., 1999).
326
CEU Political Science Journal. Vol. 2, No. 3

comparatively low, these positions do employees. The value of volunteers’


not necessarily attract the most formally work was estimated to approach HUF
qualified persons. Occasionally 18 billion” – approximately € 64
however, the head of the organization million (www.nonprofit.hu).
would be reasonably qualified, fortified Organizations with the highest number
by a strong sense of commitment. This of volunteers are those that organize
head would also have most likely spent public campaigns or demonstrations,
a long time within the NGO, thus is such as environmental groups, human
experienced in its field of activity and rights groups, or generally groups
has a “feel” of the internal sense of the dealing with issues to which the public
organization. is sensitive.2010 Volunteers usually have
a high sense of motivation and loyalty
b) The more usual type, and a higher to the objectives of the organization.
number, of workers are part-time Occasionally, some qualified
employees. Usually they would be professionals or retirees are called up to
project coordinators, coordinators of offer their services. Still, most
minor programs, or persons responsible volunteers are untrained for their
for periodic tasks within the particular tasks, and because they are
organization. Quite likely, a part-timer offering their time out of good will, are
would split his time to work for more not obliged to carry out work that,
than one organization, or would also be although might be necessary, they do
self-employed. Another category of not feel comfortable with. This last
workers for NGOs would be persons point, as shall be demonstrated soon,
who are frequently subcontracted more affects the way NGOs are managed.
specialized but less frequently
occurring tasks, such as translation 6.2 Management
work, soliciting support for an idea or
project, etc. The NGO movement gathered
momentum in the 1970s as a
c) Because staffing is limited, NGOs
usually rely on volunteers. These form,
new, “alternative movement”
in numbers, the majority of workers (Harrison, Newholm and Shaw,
within the organization. Most of them 2005). It rose from the fringes of
are students, part-time employees who communities to the center of
volunteer the rest of their time to the civil society by challenging
organization, or persons of sympathy to
the group’s course. According to
statistics in Hungary, in 2000 “the
number of volunteers exceeded
20
400,000; the almost 35.5 million hours Sustainability), The 21st Century NGO: In
of volunteer work corresponded to the the Market for Change, London,
working hours of about 17,000 full-time Sustainability, 2003. See
www.sustainability.com
327
CEU Political Science Journal. Vol. 2, No. 3

human rights obscurities, Northern


Table 1: Workforce and Revenue hemisphere-dominated trade, etc. This
Patterns in CEE221 struggle against the mainstream has
All Developing
Eastern Czech Roman
countries and Hungary Poland
Europe Rep. a
* transitional
Workforce (*A)
FTE paid 2.8% 1.2% 0.8% 1.3% 0.9% 0.6% 0.4%
FTE volunteers 1.6% 0.7% 0.4% 0.7% 0.2% 0.2% 0.4%
FTE total 4.4% 1.9% 1.1% 2.0% 1.1% 0.8% 0.8%
Composition of workforce (*B, *D)
Service 63.3% 62.5% 44.7% 42.4% 40.0% 49.5% 58.2%
Expressive 32.4% 32.7% 50.3% I54.0% 55.2% 46.2% 36.9%
Other 4.3% 4.9% 5.0% 3.6% 4.7% 4.3% 4.9%
Cash revenues (*C, *D)
Fees 53.4% 62.3% 49.0% 46.6% 54.6% 60.4% 28.5%
Government 34.9% 21.6% 31.5% 39.4% 27.1% 24.1% 45.0%
Philanthropy 11.7% 16.1% 19.5% 14.0% 18.4% 15.5% 26.5%
Total support (with volunteers) (*D, *E)
Fees 42.4% 51.4% 42.9% 37.9% 52.7% 57.1% 13.0%
Government 27.2% 16.9% 24.6% I32.1% 26.2% 22.8% 20.5%
Philanthropy 30.4% 31.7% 32.6% 30.0% 21.1% 20.1% 66.5%

* Workforce: 35 countries; composition, revenues, and total support: 32 countries.


*A - As percent of economically active population.
*B - As percent of total civil society workforce (paid and volunteers).
*C - As percent of total cash revenues.
*D - Percentages may not add to 100% due to rounding.
*E - As percent of total cash and volunteer support.

Source: Johns Hopkins Comparative come to characterize the NGO


Nonprofit Sector Project movement, more strongly so in newly
paradigms that were considered given at democratizing areas where civil society
the time212–corporate led globalisation, activism is at a young stage and gaining
momentum. In positioning themselves
against the dominating and ill-effects of
capitalism, for example, NGOs have
22
Note that contents of the table are drawn
from a broader definition of NGOs than is
21
used in this paper. Data on this table Ed Mayo in Harrison, Rob; Newholm,
includes churches, hospitals, universities, Terry and Shaw, Deirdre (ed.), The Ethical
etc. Consumer, (Sage Publications, 2005).
328
CEU Political Science Journal. Vol. 2, No. 3

sought to define their operational style thus lowered, and work ethics are
to be as far away from the corporate mixed with interpersonal liaisons.
style as possible – irregular working
hours, unclear hierarchy and structure, The period just after the founding
casual, sometimes streetwise dressing, meeting of the CEE network in 2004
community activism, low salaries, etc., was summer. This is an especially
are but a few. This is the “alternative unruly time to expect intense output
cool”, said a participant in an NGO from NGOs in the region. Summer
management course in Brussels months, especially July and August, are
organised by the European Consumers’ unofficial NGO holidays. The sector-
Organization, on behalf of the European wide silent consensus is not to carry out
Commission Directorate General for serious tasks or to demand such of
Health and Consumer Protection.13 others. Activities slow down; phones go
Part of the attraction of this alternative almost dead; one or two persons linger
cool – especially to young people and around the offices, usually alternating,
volunteers - is the laissez-faire involved to show a face; emails are not
at work. Some volunteers comment answered. After the founding
seeing NGO offices as community conference, in spite of the agreement on
ground rather than a workplace per se. follow-up tasks and close deadlines,
There may be work to do, and it some organizations could not be
eventually gets done – even if at self- reached for joint project proposals that
determined paces – but people do not had been agreed upon weeks back.
feel compelled to be as serious or
“performance-driven” as in corporate Another trend worth exploring is the
offices. Many NGO staffs are friends angry-activist predisposition. This
with each other, thus it is hard to see the refers to persons who are angry about,
organizational hierarchy, to be strict for example, the encroachment of
with each other, or to know the lin capitalism into the cultural sphere – and
between professional relationships and foreign-owned multinational companies
personal ties. Some contend that this into areas considered traditionally of
leads to the feeling of involvement and national significance. The NGO is
“job satisfaction” when people feel generally popular among such people,
cared for and personally connected to who see it as a forum to fight against
the work environment. Others argue such unfair, exogenous forces and
that there is a need for moderation; that defend individual, cultural or universal
the present situation has too much human interests.242 It is perhaps telling
laissez-faire, professional standards are of these NGOs that many of their

24
Neera Chandhoke in Kaldor, Mary;
13
See www.BEUC.org, Anheier, Helmut and Glasius, Marlies (ed.),
www.eu.int/comm/dgs/health_consumer/ind Global Civil Society 2003, (Oxford, Oxford
ex_en.htm. University Press, 2003), 410.
329
CEU Political Science Journal. Vol. 2, No. 3

volunteers, and quite often their Indeed, most of them then believed that
employees, are angry persons who join they did not need anything that might
to fight off corporations. There is a be called ‘management’. After all, they
similar case with human rights activists, did not have a ‘bottom line’.”
environmental activists, anti- He continues, on identifying one of the
globalization activists, etc. major reasons why good management
Sustainability (2003) writes that “the models for NGOs are difficult to come
values that many of those who have by:
gone into NGOs hold are skewed when …little that is so far available to the
compared with those working in the nonprofit institutions to help them with
mainstream worlds of business and their leadership and management has
government.” “They prioritize ethical; been specifically designed for them.
Most of it was originally developed for
social or environmental issues in the needs of business. Little of it pays
different ways and feel a stronger sense any attention to the distinct
of outrage when these values are characteristics of the nonprofits or to
offended.” their specific central needs: to their
mission, which distinguishes them so
From their side, corporations regard sharply from business and government;
NGOs as unprofessional – not trained to to what are ‘results’ in nonprofit work;
cover their roles, acting emotionally, to the strategies required to market
and without a clear agenda or proposed their services and obtain the money
they need to do their job; or to the
solutions to resolve issues they are up challenge of introducing innovation
against. Governments are reluctant to and change in institutions that depend
take up the arguments of NGOs, owing on volunteers and therefore cannot
to the lack of well-researched material command. Even less do the available
to back their claims, and also for fear of materials focus on the specific human
being on the wrong side of companies – and organizational realities of nonprofit
the backbone of the economy. Owing to institutions; on the very different role
these external perceptions, NGOs tend that the board plays in the nonprofit
to operate in a sort of limbo, trusted and institution; on the need to attract
volunteers, to develop them, and to
mandated by the public, unheard by the manage them for performance; on
governments and institutions, ignored relationships with a diversity of
by corporations. constituencies; on fund-raising and
fund development; or (a very different
Peter Drucker, after 40 years of matter) on the problem of individual
working in the nonprofit sector, reflects burnout, which is so acute in nonprofits
on a situation in the US 40 years ago precisely because the individual
that is still very much prevalent among
CEE NGOs: “‘management’ was a very
bad word in nonprofit organizations. It
meant ‘business’ to them, and the one
thing they were not was business.
330
CEU Political Science Journal. Vol. 2, No. 3

commitment to them tends to be so - Private Charitable Giving,


25 3
intense. including gifts from individuals,
corporations, foundations, and bequests,
To their credit, NGOs are beginning to whether given directly or through
develop management training programs various federated fundraising efforts;
tailored to the NGO sector, and to have - Government Support, or Public
some sort of internal volunteer Sector Payments, including outright
management programs. A longer stride, grants, as well as contracts for
one which has been admitted to be particular services and payments by
costly, would be to actively engage in public sector organizations to non-profit
research into their core fields of providers;
activities, in order to present facts - Private Fees and Payments that the
(rather than only raise emotions), non-profit sector receives from the sale
analyses and proposals, and even move of its own services or some other
on to consulting stakeholders. product directly to the consumer.

7. Financial Sustainability Organizations in CEE show patterns in


accord with the above classification.
7.1 Classification of Revenue Sources Financial income sources can be further
classified into internally generated
The issue of financing has a pivotal income and external funding sources.
contribution to the character of NGOs External funding includes private
and their operations. It is not only a charitable giving and government
matter of how much funds are (not) support or public sector payments.
available; it includes how the funds are Characteristics of external funds are:
raised, and from which donor. - Core Funding. This is financial
The Johns Hopkins Comparative assistance to support the basic
Nonprofit Sector Project264 identified operations and maintenance of the
three broad classes of non-profit sector organization. It includes overheads,
revenue: administrative cost, primary human
resources, and the main activity of the
organization. Such funds are available
25 mostly to major organizations or to
Drucker, Peter Managing the Non-Profit
Organization (Oxford: Butterworth –
networks. Although such funding is rare
Heinemann, 1990), 175. in the region, well-branded
26
Salamon, Lester M., Anheier, Helmut K. organizations or those that have
(eds) Defining the Nonprofit Sector: A Cross established strategic partnerships with
National Analyses, Manchester, Manchester donors sometimes benefit from them.
University Press, 1997b. Typical donors would be ministries of
Salamon, Lester M., Sokolowski, S. Western governments (especially of the
Wojciech, List, Regina, Global Civil Scandinavian countries, the Dutch and
Society: An Overview, (Baltimore, Johns the English), ministries of countries in
Hopkins University, 2003).
331
CEU Political Science Journal. Vol. 2, No. 3

which the recipient organization is giving their time and expertise at no


based, The European Union (mainly to charge to help in operations run by
NGO networks active at the European NGOs. If this is factored in and
Union level) and Foundations. The calculated according to paid hours,
Soros Foundation, established by considering the booming nature of
billionaire philanthropist George Soros NGO volunteering in the region, the
is a major funding source of civil proportion of donations would rise
society core activities in the region considerably.
(www.soros.org). - Corporate Funding. Although
- Project-based funding. Usually quite often in needy situations, a
NGOs have to design a project and then majority of NGOs in the CEE have not
write proposals to donor organizations yet come to terms with accepting
to fund the project. The European financial donations directly from
Union is the major single source of companies. The few that have accepted
funding of civil society projects in the money speak about it in only low tones,
region. There are also government and refuse to be mentioned, with the
funds, as well as those operated by insinuation that a certain boundary
private foundations. Usually the donor within the sector has been transgressed.
organizations would send out “calls for Corporations are interested in funding
proposals” announcing the availability NGOs; for one, it presents their image
of funds, specific themes which it to the public as more socially
supports through the funding program, responsible. Tempting as the funds
deadlines, application procedures etc. might be to the NGOs; they are still
Project-based funding is the primary rejected and remain controversial.
type of funding available to NGOs in
the CEE. Internal income sources are mainly
- Donations. They come from Private Fees and Payments that the non-
private individuals (mostly those who profit organization receives from sales
sympathise with the cause of the NGO) of its own services or product directly
and Foundations. In most cases, NGOs to the consumer, e.g. membership fees,
have to go out fundraising to get such sales of publications or memorabilia,
donations and, again, only image- and consultation done to stakeholders
friendly or well-branded NGOs who on information, research, ‘green’
have public sympathy end up cashing projects, development of ethical or
in. It should be mentioned that private environmental strategy, etc. There
donations to NGOs are not a very exists some degree of internally raised
common thing in the region. The spirit funds, but this is limited compared to
of philanthropy needs to be uplifted to the external. Internally raised funds are
come close to matching levels of less pursued, partly due to the amount
problems being handled by NGOs. of effort involved in developing and
However, in non-financial terms, maintaining the mechanism, but also
donations could also be volunteers because the public still has to learn or
332
CEU Political Science Journal. Vol. 2, No. 3

be able to financially support NGOs funding limits the flexibility and


championing public interest causes to autonomy of recipient NGOs as they
which they subscribe. need to follow the guidelines set by
donors.
7.2 Funding Challenges
Many of the funds that were available
Of all complaints raised during to countries of the region after the
discussions about issues faced by collapse of communism are drying out.
NGOs, shortage of funds comes out on Funds by the European Union
top. A tacit is that solving the problem Directorate General for Enlargement,
of financial availability would go a long including the popular PHARE
275
way to solving the other problems faced program have dried up, most US and
by these NGOs. But international UK charities and foundations,
NGOs and the more experienced ones respectively, formerly financing
of the West know that this is not operations in so-called former soviet-
necessarily the case. bloc countries have now moved out of
the richer new EU member countries
Besides the general shortage of funds, towards the East. Slovenia, Hungary
when they are available they generally and Czech Republic especially suffer
have short-term financing cycles. This from this Eastward donor drainage
curtails the ability of NGOs to plan well given the relatively visible public
ahead; it derails a substantial amount of affluence of these countries. A heated
staff time towards fundraising, at the discussion among NGOs is the
expense of operations more targeted precarious donor vacuum that has been
towards strategic objectives; and it puts created and how to fill it.
much pressure on the staff, sometimes
forcing the organization to feel Paradoxically, governments of the
compelled to be more accountable to region have window dressing budgets
the donor than to other stakeholders of for NGO activities that never
their causes. materialize when needed. In the year
2000, in Hungary “28% of the [NGO]
Donor organizations, especially in the sector’s total income was allocated
case of project-based funding, usually from central and local government
follow the contemporary “fashion” in budgets. However, this percentage is
civil society activity fields. As trends still far below the level of the
move from human rights to government support to non-profit
globalization to terrorism, etc, the fund organizations in [Western] European
allocations also sway. NGOs depending Union countries.”286
on these funds have to keep tailoring
their project objectives – or become 27
http://ec.europa.eu/comm/enlargement/pas
project-design artists - to be able to /phare/
access funds. Furthermore, donor 28
www.nonprofit.hu
333
CEU Political Science Journal. Vol. 2, No. 3

possible (no more than 15% to 20% of


A spin-off of the above is that total expenditure);
governments have taken advantage of - It has a good public image to
the internal competition by NGOs for secure public trust and donations;
limited funds to create a “divide and - It is clear about its values and has
rule” approach. Governments foster them built into its objectives, strategy,
competition and even rivalry by playing activities;
one NGO against the other in order to - It has built up reserve funds to
weaken their strength and ability to sustain it for at least a year in case of no
criticise or orchestrate opposition to income.
unpopular ministry programs. At least After elaborating the above, the trainer
three national level NGOs reported asked the participants to use the criteria
having been offered “exclusive to evaluate their organizations whether
contracts” by the governments only to they were in financially sustainable
be later withdrawn and given to another situation or not. Of the 12 represented,
NGO. no organization was.

7.3 Towards a Stable Financial Base Owing to the critical nature of their
work, NGOs do need to have financial
In a capacity building training on autonomy from their donors. This
fundraising strategy for NGOs would allow an organization to be able
organized by the Association of to make its own decisions about how it
Conscious Consumers Hungary, spends its funds, and to be able to reject
Consumers International, the external income that comes with strings
international umbrella organization for attached as such funding could
consumer advocacy groups, identified compromise its integrity or legitimacy.
the following characteristics as those of One step needed to start addressing the
a financially sustainable organization: funding issue is for each organization to
consciously develop a strategy on how
- It has more than one source of to raise funds, which should be aligned
income to ensure balance and avoid with the organizational strategy. Such a
overdependence on any one specific strategy should be well focused,
donor source. It also needs a reasonable consider the efficient use of limited
spread of donors but not so many that it resources, and give room for the
spends too much time on reporting; organization to perceive threats and
- It has more than one way of opportunities. Elements of a fundraising
generating income. It also internally strategy, according to an internal
generates a reasonable percentage of its training pack by Consumers
income to ensure that it is not totally International, include:
dependant on donors; - assessing the contemporary
- It has adequate financial systems, situation of the organization;
and overhead costs are as low as
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CEU Political Science Journal. Vol. 2, No. 3

identifying organizational and objectives of NGOs297. Increase in


budgetary needs; stakeholder diversity and complexity
- determining the fundraising target, and the range of issues NGOs champion
i.e. the total amount to be raised within call for relevance of more active
a certain period of time; engagement in partnerships.
- identifying possible sources of For several international organizations,
funding and set income targets for the last decade has seen a move from
these; confrontation (which has proved a
- identifying strategies for securing highly effective means for raising
funds from those sources; awareness of critical issues) to
- identifying the resources the cooperation with other stakeholders to
organization has available; drawing an produce solutions to pressing global
action plan. challenges.308 This trend is now mostly
shown by large, brand name NGOs
Certainly, such a plan can only work if such as Greenpeace, WWF, Oxfam, etc,
it is a process that involves the based in Western countries. This does
management of the organization, and it not discount the need for partnerships
is continuously being monitored and among smaller, grassroots NGOs. The
evaluated against the internal and United Nations Environmental
external environment of the Program, Accountability, and
organization in view of its objectives. Stakeholders Research Associates
Canada acknowledge that in
NGOs in the region need to develop economically less advanced countries
financial management systems which where formal structures are still coming
take into account the need to raise their in place, “stakeholder engagement often
quotas of internally generated income has emerged from adverse outcomes of
(through sales of publications, poor governance practices by local or
consultations to stakeholders in fields of national governments. At one end of the
their core competence, membership spectrum, engagement by NGOs can
fees, etc). Given the current climate of mean an informal arrangement to hold
donor drainage, the financially discussions or to be present at an event.
successful NGOs would have to be
creative beyond traditional means that 29
Partridge, Katharine; Jackson, Charles;
have worked until now. Wheeler, David; Zohar, Asaf, The
Stakeholder Engagement Manual Volume 1:
8. Stakeholder Engagement The Guide to Practitioners’, (2005).
30
Ben Schiller, Business-NGO Partnership,
As the challenges of sustainability (Ethical Corporation, London, 2003).
become increasingly evident, so are World Economic Forum, Partnering for
strategies needed to achieve the Success: Business Perspectives on
Multistakeholder Partnerships, World
Economic Forum, 2005
www.greenpeace.org.uk
335
CEU Political Science Journal. Vol. 2, No. 3

At the other end, engagement can be and review the relationship and revise
marked by long-term collaboration or the agreement regularly.
partnership with business to complete a
defined task or to achieve common 8.1 NGO Stakeholders and Levels of
goals.”319 Engagement

In the CEE region, NGO projects Levels of engagement could vary as


usually have community impact but below:
have a tendency of not having influence - no engagement, in which
at levels that could bring in larger, stakeholders operate independently in
systemic changes that are necessary. spite of intersecting interests. Such was
Their experience in community water the case in the 1970s when the civil
management schemes, for example, society movement was gaining
3311
developing local farmers’ markets, strength in stringent opposition and
preservation of local plant species, etc, adversarial attitudes towards, say,
could have wider implications than just corporations – in the case of (anti-
immediate benefits by the involved )globalization.
communities. Though these projects - one-off consulting, in which
have public relevance, the management they work together once, say, on a
and outputs have no liaison to common project;
influential places that could make more - collaborative/retainer
meaningful use of outcomes and relationship, by which they come
experiences – no seats in policy groups, together more than once whenever a
thus their experience cannot help in mutual need arises; and
designing better policy for wider - partnership based on a shared
benefit; their products or schemes sense of mission and objectives.
cannot be used as replacement of less There can either be intra-sector or inter-
sustainable corporate models either. sector partnerships. Intra-sector
The potential of NGO efforts is thus not partnerships are the more common, for
maximised. example, business to business
partnerships, or NGO partnerships, the
According to Ethical Corporation3210 CEE network of which is an example.
and Sustainability, a partnership is a The focus on this part is more on inter-
cross-sector alliance in which sector partnerships.
individuals, groups or organizations
agree to work together to fulfill an
obligation or undertake a specific task;
33
share the risks as well as the benefits; Rob Harrison, Newholm, Terry and
Shaw, Deirdre (ed.), The Ethical Consumer,
31
(Sage Publications, 2005).
Partridge, The Stakeholder, 2005. Harrison, Rob; Newholm, Terry and Shaw,
32
Schiller, Ben, Business-NGO Partnership, Deirdre (ed.), The Ethical Consumer, (Sage
Ethical Corporation, (London, 2003). Publications, 2005).
336
CEU Political Science Journal. Vol. 2, No. 3

NGOs have relationships with several to train employees of Statoil to identify


types of stakeholders. These may and solve business dilemmas in relation
include: the corporations that they seek to human rights issues; FedEx and
to influence; the communities they Alliance for Environmental Innovation,
serve or operate within; other NGOs; to reduce the environmental impact of
individual members, volunteers and FedEx’s vehicle fleet; German power
supporters; trade unions and industry company RWE and CARE
associations; governments and public International, to develop an “easyJet
authorities; media; institutional funders, model” to deliver power supplies in
etc. For purposes of limited space, I will emerging markets. Almost all major
only dwell on NGO engagement with international NGOs could highlight one
corporations and governments – the two such partnership.
being very strategic stakeholder groups
where influence is possible, and yet the Down from the international level
most difficult to map. however, akin to corporate funding of
NGOs, NGO-Business partnerships are
8.2 Engagement with Businesses still by far very controversial, not the
least around the CEE region. “NGOs
At the World Summit for Sustainable worry about getting ‘too close’. They
Development in Johannesburg, 2002, fear falling out with their old-time
Greenpeace and Shell shared a platform supporters or loosing their integrity. In
to talk about their partnership, bringing dressing like business people, eating
to a high profile presence a trend that and drinking like business people,
has been in the making for a while.3412 attending conferences like business
Analysts of the situation have people, they run the hazard of becoming
commented that the Johannesburg just like ‘them’ – softened, co-opted
summit “heralded a new era for and embedded.”3614
companies and NGOs to interact, On their part, companies fear that
helping to accentuate, cultivate and getting into partnerships with NGOs
legitimise NGO-business partnerships might just be talking and wasting time38
15
in sustainable development” (See or simply being funders of NGO
Ethical Corporation, 2005;3513. projects.16 Still, at the international

Some common examples of business- 36


Ethical Corporation, “Business/NGO
NGO partnerships are: Norwegian oil Engagement All the Rage” in
company Statoil and Amnesty Norway, www.ethicalcorp.com, (London, Ethical
Corporation , 2005.
37
Tuxworth, Ben; Sommer, Florian Fair
34
Cowe, Roger. “Business/NGO Exchange?: Measuring the Impact of Not-
Partnerships: What’s the Payback?” in for-profit Partnerships, (London, Forum for
Ethical Corporation, (April 2004). the Future, 2003).
35 38
Partridge, The Stakeholder, 2005. Cowe, Ben, Schiller, Business-NGO Partnership,
”Business…”, 2004. (Ethical Corporation, London, 2003).
337
CEU Political Science Journal. Vol. 2, No. 3

level, companies and NGOs have social, environmental and economic


braved the challenges can only be resolved through
risks involved and moved towards each cross-sector collaboration, such as
other to work towards common partnerships, which often pool
objectives. resources, competencies and
“There is now a widespread recognition
that many of the world’s complex
Table 2: Potential Risks of NGO-Business Partnerships
NGOs Business
Being overwhelmed by corporate culture Wasting time in talks, being inefficient
Being used for “Greenwashing” and Divulging insider information to NGOs
offering lip service, for business PR which could be misused

Losing objectivity; compromising on their Being treated as “cash cows” - mere


principles and campaigns funders, not partners

Extra work/costs; diverting scarce NGO Legal risks should something go wrong
resources
Losing public support for “selling out”;
damage to reputation and loss of legitimacy
Division, risks of creating divisions among
supporters and within the NGO community
Being used to do community engagement
work on behalf of companies
Adapted from Schiller, 2005; Partridge et al., 2005; Sustainability, 2003

Table 3: Success Factors for Effective Partnerships

1. Openness, transparency and clear communication to build trust and mutual


understanding;
2. Clarity of roles, responsibilities, goals and “ground rules”;
3. Commitment of core organizational competencies;
4. Application of the same professional rigor and discipline focused on achieving
targets and deliverables, that would be applied to governing, managing and
evaluating other types of business alliances;
5. Respect for differences in approach, competence, timeframes and objectives of
different partners;
6. Focus on achieving mutual benefit in a manner that enables the partners to meet
their own objectives as well as common goals;
7. Understanding the needs of local partners and beneficiaries, with a focus on
building their own capacity and capability rather than creating dependence.

Source: World Economic Forum, 2005

338
CEU Political Science Journal. Vol. 2, No. 3

knowledge. NGOs are increasingly sacrifice their competitive position for


adopting this as a core defining strategy an ethical stance. This highlights the
rather than as an activity that they need for governments to regulate, in
pursue in addition to their key vision order to create the incentives for
and mission,”391 companies to do the right thing and to
sanction those who breach acceptable
8.3 Engagement with Governments standards.”42
NGOs have gathered more strength and
To make broad systemic changes that public trust in the region, “partly
sustainability requires, a change in our explained by a deep distrust of central
contemporary framework of operations government and its institutions”, writes
is necessary.402 Since capitalism is the Eva Kuti.435 “There seems to be a
dominating system and the state is the general preference to ‘work around’
regulator, both have to be involved in government in an attempt to control
the change process, with the state economic, political, and social
providing the framework within which processes as directly as possible. The
businesses can act.413 NGOs have been nonprofit organizations seem
hard campaigners for this process of appropriate vehicles for this” (ibid).
stronger regulation to support the move However, NGOs must resist the
towards sustainability. temptation to be heroes on a passionate
rush to sidetrack governments. More
But capitalism is well established and inter-sectoral collaboration, not
market competition favours traditional division, is needed to achieve a
models of operation - business-as-usual sustainable society. NGOs must
strategies – unless something major therefore not “bite off more than they
gives or governments step in. Yet the can chew”, while weighing their
same business-as-usual models have mandates.
been shown to be highly unsustainable.
NGOs at both national and international The importance of the NGO sector is
levels must then move beyond being more and more recognized by the
campaigning. “Campaigning has been state. In Hungary, “according to a
crucial in creating the pressure for decision by Parliament, nonprofit
business to take social and organizations providing basic social,
environmental issues seriously, but few health, and cultural services have a right
companies have been willing to

39 42
Partridge, The Stakeholder, 2005. Cowe, Sustainability, 2003.
”Business…”, 2004. 43
Eva Kuti, “Hungary”, in Defining the
40
Tuxworth, Fair Exchange?: 2003. Nonprofit Sector: A Cross-National
41
Maurie J. Cohen, Sustainability: Science, Analysis, Salamon, Lester M., Anheier,
Practice, & Policy, Volume 1, Issue 1, Helmut K. (eds), (Manchester, Manchester
(Spring 2005) http://ejournal.nbii.org/ university Press, 1997), 475
339
CEU Political Science Journal. Vol. 2, No. 3

to the same per capita subsidies as infrastructure for a sustainable futures.


public institutions.”446 If NGOs are to optimize their impact in
Government agencies, including the the new market paradigm, they must
Department for International shape their campaigning, advocacy and
Development in the UK and the lobbying to ensure that public sector
Canadian International Development frameworks, rules and initiatives are
Agency, also now have programs efficient, effective and crucially
specifically promoting NGO politically sustainable (Sustainability,
engagement with stakeholders. NGOs 2003).
must start to influence policies,
politicians, governments and regulators 9. Conclusion
with more direct methods of
engagement, and possibly partnerships. NGOs are having increasing amounts of
Green Liberty, a member of the CEE responsibilities in a region caught in
network, has been working with rapid transition. The very nature of
government personnel to draft better what a non-profit, non-governmental
policies on green procurement. As organization is means that they deal
another example, the Association of with issues or use approaches that are
Conscious Consumers Hungary recently apart from those of other stakeholders
signed a contract with the Ministry of such as governments, businesses,
Environment Hungary to develop the religions. NGOs usually deal with
section on Sustainable Consumption important issues which, because they
and Production of the Environmental are not necessarily profitable to the
Operative Programme, which is part of financial bottom line or popular for
the National Development Plan from short-term electoral mandates, are
2007 to 2013. ignored by businesses and governments
respectively. But because of the means
Engaging directly with the used by NGOs (considered rather
governments, regulators and policy unprofessional, not backed by
makers is by far the most effective way researched facts and data, altruistic,
of brining large-scale changes, by emotionally charged) it makes it hard
putting effective frameworks within for the points to get across. Thus more
which stakeholders should act - NGOs often than not they are inefficient and
can channel experiences and outcomes fail to realize substantial results.
of their work, give expert opinions,
consult on creating mechanisms and In the above regard, there is much that
can be learned from countries with
more established and effective NGO
44
Eva Kuti, “Hungary”, in Defining the cultures. Of primary necessity are the
Nonprofit Sector: A Cross-National following: to create a common and
Analysis, Lester M/ Salamon, Anheier, shared vision for the NGO community
Helmut K. (eds), (Manchester, Manchester and for a sustainable society; to develop
university Press, 1997), 482.
340
CEU Political Science Journal. Vol. 2, No. 3

management systems that take into Civil Society Assesment Towards


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culture in combination with Production, ICSPAC, (2002),
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