By Barry Gaberman, Merrill Sovner and William Moody – Center on Philanthropy and Civil Society at the Graduate Center of the City University of New York

Thirty years after the fall of the Berlin Wall is an appropriate time for examination of the impact of philanthropy during that heady and optimistic time. The political climate since 1989 has changed, and the optimistic rhetoric on civil society and widespread support for liberal democracy has eroded. As three former US foundation staff, inside its executive suites when important decisions were made, we took on this task. With the benefit of hindsight, how effective were philanthropic investments in building a vibrant civil society that can endure over the long run, is embedded in the culture, and is supported from within? 

We embarked on a two-year project to examine five pooled funds that were established across Central and Eastern Europe, the Baltics, the Balkans and the Black Sea Region. From 1991 to 2008, US and European private foundations, sometimes working with government development agencies, established the Environmental Partnership for Central Europe, the Baltic-American Partnership Fund, the Trust for Civil Society in Central and Eastern Europe, the Balkan Trust for Democracy, and the Black Sea Trust for Regional Cooperation. While these Partnerships and Trusts shared the same broad aim to support civil society, their structures were tailored to their different contexts, missions and priorities. Each of these five Partnerships and Trusts have been assessed individually, but there has never been an attempt to see what comparative analysis across all five might reveal.

Our aims in undertaking this research are twofold. First, we seek to rekindle a conversation among individual and institutional philanthropic practitioners about the importance of building and supporting civil society itself and the organizations that encompass civil society. The reason for this can be captured in two basic points. First, in difficult times, civil society has an important role to play. We are used to thinking about the organizations of civil society in their instrumental function: the things these organizations do and the services they provide. But in their generic function, the collective of civil society organizations, can be considered a Fifth Estate in society guarding against the concentration and abuse of power. This is especially true for those edgier organizations that do advocacy, social justice, human rights, independent policy analysis, and investigative reporting, to name a few. After the Fourth Estate of the media, civil society has an essential role to play in holding democratic governments accountable to citizens’ interests.

There is a second reason, however, for philanthropic practitioners to be concerned about the health of civil society. The reality is that, for the most part, funders accomplish their programmatic objectives through the operating organizations of civil society. Shrinking civil society space reduces the options funders have. It is a symbiotic relationship. The effectiveness of funders cannot be divorced from the health of civil society.

If these two points fairly capture the importance of civil society, then what can be learned from past initiatives to build and support civil society? After our interviews with over 250 people involved in the Partnerships and Trusts and civil society in 15 countries, desk research, and leaning on our past experience, we drew out the legacy and impact of these pooled funds and key lessons for grantmakers looking to sustain civil society. These findings are summarized below.

It is remarkable that the impressive core of institutions built in the 1990s, such as the Environmental Partnership Foundations and early grantees of the CEE Trust, now serve as important national grantmakers and key funding intermediaries for other donors. Furthermore, many of the grantee organizations that received core support still operate today and are pushing back against the erosion of democratic procedures and norms.

We found that the pooled fund model itself enhanced certain positive outcomes for grantmaking, such as ameliorating burdensome requirements on grantees and increasing their donors’ tolerance for risk. A primary or secondary aim of all of the Partnerships and Trusts was the promotion of an enabling environment for civil society organizations and philanthropy. The resulting legislation for associations and foundations, mechanisms for giving by corporations, the state, or individuals, and cooperation and advocacy frameworks with governments have served as models around the world.

These achievements noted, sustainability of the grantee organizations remains an ongoing challenge, and most of those interviewed cited ensuring financial resources as their biggest headache, even for those under political pressure. Many US donors left the region in the last two decades, and European donors, for the most part, do not provide similar flexible institutional support. The report captures an array of practices and strategies by civil society organizations to deal with reduced funding and political pressures. These include reducing activities, personnel, and overhead costs or taking on commercial income. There has been growth in crowdfunding and individual donations. Some organizations have undergone a strategic reorientation, and a number have refocused on civic participation, community development and tolerance education rather than litigation and policy advocacy. Others have responded to political pressure with increasing professionalism, such as through financial and administrative audits, as well as supporting staff morale.

A number of lessons emerged which run counter to conventional grantmaking wisdom. For one, providing core support to new organizations and funding assets such as real estate purchases and endowments have proven smart investments over the long term. There is also a false dichotomy between funding individuals and institutions, and many we spoke to commented on the importance of study tours and fellowships to their careers in building institutions.

It was also clear that more work could have been done to build a culture around the grantee organizations that would embed and support them over the long term. Across the region (and indeed the world), a lack of trust in institutions has emerged as a serious obstacle in today’s political climate.  More effort could have been made to overcome a lingering statist mindset by inculcating civic education and participation. Also, more work was needed to communicate the stories of civil society and build a culture of giving and support for civil society. 

We also found that four special types of organizations merit special attention and increased resources. Infrastructure organizations often serve as keepers of the enabling environment and monitor and push back against proposed amendments and changes, and yet they go under-resourced by donors and unappreciated by society at large. Advocacy and watchdog organizations are the canaries in the coal mine and harbingers of political pressures on the sector. Community philanthropy with its bottom-up approach to developing local giving is an important actor in building the culture of civil society support. 

Finally, independent media plays an important role in both political accountability and as a means to confer legitimacy on and communicate the achievements of civil society organizations.

Philanthropic institutions, more than any other actor, can plan over the longer term, beyond their own exit strategies, to assure that the endgame they seek is put in place. This research is a call to philanthropic institutions to give serious attention to the importance of nurturing vibrant, civil societies that can endure over the long run and be sustained from within, as this process will take generations to develop.

The research was conducted under the auspices of the Center on Philanthropy and Civil Society at the Graduate Center of the City University of New York. The full report is available at www.gc.cuny.edu/cpcs.

Barry Gaberman – WINGS Chair Emeritus, Merrill Sovner – CUNY CPCS Research Fellow, and William Moody – Former Program Director Rockefeller Brothers Fund

The Center on Philanthropy and Civil Society at the Graduate Center of the City University of New York is committed to strengthening civil society through education, research, and leadership training. Read more: http://www.gc.cuny.edu/cpcs.