How far did the Mott-funded resource centers go in terms of sustainability?

The Cluj center downsized significantly, paying only one full-time employee and closing its newsletter, while maintaining the library, technical assistance, and advisory services, management of electronic groups, and facilitation of a club of new NGOs, with US government support.²⁶ CENRES Suceava implemented a citizens’ information center, financed through a Phare program, and a local advocacy effort, with US funding. The Suceava, Valcea, and Constanta centers were able to continue all of their services, though at a somewhat reduced level, thanks to good relationships with local public administra-tion and a series of projects that covered their operaadministra-tional costs—even though these projects were not 100 percent related to their missions as resource centers.

Most centers continued to participate in the organization of local NGO forums and managed to conduct training sessions for local NGOs. CENTRAS involved all five centers in a training-of-trainers program with a focus on public relations/media relations for NGOs. CENTRAS also included the Constanta center in a technical assistance contract with World Learning for a USAID-funded program.

The centers in Constanta, Valcea, and Timisoara started, and secured funding for, volunteer centers, run as projects within their organizations. This enabled them to cover a portion of operational costs while staying close to their mission. The Constanta center also founded, together with a school and another NGO, a center for sustainable rural development, which shares premises with the resource center. This particular move can be interpreted as a shift in strategy based on available funding, given that rural develop-ment is now a priority for EU’s financial aid to Romania.

2.4.5 How far did the Mott-funded resource centers

NGOs, it is still hard to prove the immediate benefits of an NGO resource center. This makes it hard to effectively fundraise for the activities of such a center. Thus, even where local resources are available, they are generally directed towards organizations with an immediate, direct impact in the community, such as organizations working in social services, catering to youth, or seeking to protect the environment. Also, it seems it was still too early for some centers to recover even a part of their costs through paid services, because beneficiary NGOs were not willing or able to pay for training, consultancy or participation in events.

This outcome seems consistent with the findings of a study on philanthropic be-havior conducted by the Association for Community Relations Romania in 2003. The study suggests that the “less visible” types of organizations, which include organizations working for democracy or human rights, as well as resource centers, still have to rely on the support of institutional donors.

The following table of funding sources for the resource centers shows that most of them depend to a very large extent on international donors.²⁷

Table 2.

Sources of Funding for Resource Centers

Center Total budget (USD)

Own income (%)

C. S. Mott funding

(%)

Other int’l sources

(%)

Local admin-istration

(%)

Bank interest, VAT reim-bursement, credits, etc.

(%)

AID-ONG Timisoara

25,013 10 8 82 0 0

CENRES Suceava

48,335 0 7 89 4 0

CENTRAS Bucharest

14,910 23 0 75 0 2

CRR Cluj 7,630 41 52 0 0 7

CERAS Rm. Valcea

37,130 0 8 92 0 0

CENTRAS Constanta

29,434 16 10 73 0 1

CREST Satu-Mare

180,172 18 0 67 0 15

Source: Annual reports.

For comparison, the Orpheus network of resource centers in CEE estimates that the budget of the average center in the region comprises two main categories: grants (80–90 percent) and other contributions, such as donations from local government and the corporate sector, and income-generating activities (10–20 percent). The funding of resources centers varies, and it depends on the scope of activities undertaken, services provided, and the range of the target group. Well-developed centers reach annual fund-ing at the level of USD 150,000–200,000, while smaller centers report havfund-ing budgets of around USD 20,000.²⁸

An interesting perspective, according to Dan Siegel, Jenny Yancey, and Caroline Hartnell,²⁹ is that many leading infrastructure organizations in poor countries and emerg-ing democracies have relied heavily on foreign foundation fundemerg-ing duremerg-ing their startup years. While their setup and survival could not have been possible without this support, the article notes that this model can trigger suspicions about civil society being controlled by foreign agendas, thereby making it even more difficult to get local support.

From the non-financial perspective, the centers faced several challenges, one of which was cooperation, both with regard to their communities and among themselves.

While lack of collaboration in the sector—including asymmetry of information, limited resources, cultural and leadership issues—is a problem external to the resource centers, the absence of real cooperation within the network of centers was a major setback from the point of view of sustainability. The centers missed opportunities to conduct joint projects, to take proactive behavior towards funders, and to exchange best practices.

Usually, real communication and cooperation only took place via an external facilita-tor, such as CENTRAS, in the cases mentioned before. Thus, rather than working as a point-to-point mechanism, the network has operated de facto like a hub-and-spoke system, meaning that, without the hub, the points at the far ends of the spokes were left disconnected. This did not so much occur due to lack of trust or leadership, but rather because resources were stretched too thin, and there was a need to pay atten-tion to operaatten-tional, urgent challenges, which took over strategic thinking and acatten-tions.

The executive management of the centers was so much involved in solving current activities that thinking and acting for long-term results was always at the bottom of the priority list.

Communication opportunities, infrastructure, and skills seem to have been under-used. Although centers frequently use electronic forums to disseminate information, few cases can be cited where communication vehicles like Atitudini or Voluntar were used to start analysis or debate in the sector. There are even fewer instances of these vehicles facilitating advocacy work, such as the successful promotion of the one percent mechanism in 2003.

Another problem is the attraction and retention of highly qualified staff. Inter-viewees have made it clear that, as the Mott funding diminished, most of the centers lost at least one person, who found more attractive opportunities elsewhere—usually

after they had gained qualifications and participated in training and events. The staff turnover issue has two main causes: the low financial and non-financial compensation, which in some cases was not adequate for staff members; and the vision of the organiza-tion, as well as the overall organizational culture, which in some cases was not a good fit for the centers’ staff. Because resource centers are knowledge organizations, based to a large extent on the knowledge, experience, and motivation of their employees, high staff turnover—which usually means discontinuing certain operations—affects them more than other organizations. Thus, maintaining a strong team is, for resource centers, a crucial component of sustainability.

Respondents also noted a lack of common strategy on the funders’ level. Many interviewees expressed the perception that, when specific strategies were drafted, they were not applied for periods longer than one or two years. Thus, even though funders might have recognized the need for resource centers in their strategy documents, they still seemed to fail to consistently support the respondents’ organizations.

One center leader said that another cause for the difficulties faced by resource centers was the international economic recession, which led to a general decrease in philanthropic support and a specific decrease from private US funders, who had been quite active in Romanian civil society until 2000.

Perceptions related to the capacity of nonprofit organizations to pay for services were mixed. Organizations based in Bucharest and Constanta, Romania’s second largest city, were more optimistic about this possibility, while smaller centers said that NGOs still had a very limited potential to pay even part of the cost of training, consultancy, event management, and other such services.

Some of the centers are structured around strong leaders or around people who have been NGO activists since the early 1990s. There are cases where these leaders are perceived as sole “owners” of strategies, human resource policies, resource distribution, etc. Such perceptions resulted in the departure or loss of motivation of qualified employees, who were not satisfied with high discrepancies in salaries, the level of use of the organization’s resources, and insufficient participation in decision-making. This “leader syndrome” is actually a common feature of many Romanian NGOs in various fields of activity. It can occur when a strong founder or executive director who “grew” the organization works with a weak board and a technical, rather than managerial, team.

Image, trust, and credibility are crucial non-financial elements of sustainability.

Some of the respondents interviewed appreciated that efforts could have been directed more effectively towards communicating with opinion leaders, funders, beneficiaries, and the media, to build a positive perception and improve credibility for the sector and for the resource centers. Such efforts could possibly have resulted in more publicity, local funding, volunteers, and partnerships.

No other resource centers were established in Romania as new NGOs after this project, though some organizations did initiate or continue activities falling into the

range of resource center services. No other specific funding was available until 2004, and, where some resources were available, donors, public administration, and NGOs preferred to work with existing NGO resource centers or stronger organizations.

In 2002, the Delegation of the European Commission in Romania announced, through its 2001 Phare program for civil society, a new competition for resource cent-ers. This program was based on a model similar to the one in 1997, whereby local or regional resource centers could be established by NGOs as projects, in areas previously uncovered by any support structures. The sub-program, called “Establishment of NGO Resource Centers,” funded six projects, with almost €200,000, to set up resource centers. The role of these centers includes the traditional functions: improving access to resources for new and small NGOs; promoting good practices in the NGO sec-tor; increasing the sector’s visibility; encouraging NGO involvement in solving local and regional problems; implementing more effective use of resources to build NGO capacity. Activities financed included: training and consulting; providing information on the legal framework, funding, etc.; developing partnerships; and promoting NGO participation in public policy making. In June 2004, the projects had just started for about half a year, and initial feedback reported by representatives of the EC Delegation was good. In August 2004, a second competition for funding, along the same lines, was announced. This time existing resource centers were allowed to receive funding, along with new organizations. It would be interesting to monitor the funded proposals submitted by already existing resource centers, but this was beyond the scope of this study, as projects were not expected to start earlier than January 2005.

It is worth noting some details about the two organizations that this research re-vealed to be more advanced in terms of sustainability: CENTRAS and CSDF. Both are Bucharest-based resource centers with an uninterrupted record of activity for almost 10 years. Although they were often initiators of large-scale efforts to improve the environ-ment in which NGOs operate—including working to change legislation, staging major events, putting out national publications, and conducting important research—neither organization perceives itself as sustainable.

CENTRAS passed through a difficult period at the end of 2002 and beginning of 2003, when lack of funding caused it to cut down on salaries, lose some staff and redistribute responsibilities among the remaining employees. From 14 full-time people employed at the beginning of 2001, CENTRAS now has eight, but it works more with sub-contractors and employs trainers and consultants on a specific basis. However, at the end of the 2003, the organization won grants for projects well connected to its mission as a resource center, and it managed to re-balance its finances. An important survival strategy for CENTRAS has been a radical shift towards paid services, especially training and consulting, which brought in more than USD 20,000 in cash.

CSDF has sustained its activities via various projects, including collateral initiatives that are not directly connected to its mission but help cover some administrative costs.

One such collateral initiative was research on the social services strategy in Bucharest.

Of CSDF’s more than 30 employees, four work full-time for resource center-related activities. The rest are involved in managing the Phare grants, for which CSDF is a contracted administrator. It might be asked whether there is truly a strategic fit between managing grants for NGOs and at the same time performing resource center functions.

But grant administration allowed CSDF to secure significant resources, without which the existence of this organization as a resource center would have been threatened. Like CENTRAS, CSDF has made many efforts to obtain funds from as many donors as possible. Both organizations try to avoid dependency on a limited group of financing sources.

Both organizations continue to perform advocacy on behalf of the sector, and they usually cover associated costs from their own money. In the case of CENTRAS, these funds are generated by paid services, for which no specific reporting is needed. As a recent example, the one percent NGO-support mechanism was introduced in Romania, thanks to a quick but well-thought-out process in which CSDF was a major player.

However, even though both organizations expressed awareness of the sustainability issue, neither of them has clearly formulated a formal medium- to long-term strategy for this purpose. A lot of creative ideas were expressed during the interviews, and some of them were built upon in the recommendations section of this paper, but respondents were aware that they do not have a coherent long-term strategy.

It can be concluded that, although there is a strong need in the nonprofit sector for the services of resource centers, and although much has been and continues to be done by existing resource centers to achieve their mission and to survive in difficult operating conditions, resource centers for NGOs are not sustainable. Furthermore, those interviewed acknowledged that they had not formulated viable sustainability strategies for the medium- to long-term. Survival tactics were mentioned for the next year or so, but it seems the centers are too caught up in managing daily operations to undertake a serious strategic effort for the coming years. Other challenges to sustainability exist:

coordination among existing resource centers can be much improved, staff turnover is a serious issue, funders are perceived to be inconsistent in their support, and the pos-sibility of recovering some costs from paid services seems to be limited to large cities with a better level of NGO activity.

Institutional funders for resource centers undertook short-term interventions, based on uncoordinated models, which resulted in major funding variations. Aside from funding for work in NGO support, resource centers could apply for funding for other programs that were sponsored by such international donors as the US Embassy, the Canadian Embassy, the Dutch Embassy, the Co-operating Netherlands Founda-tions, other Phare funds, USAID, and the Open Society Foundation–Romania. Thus, while some projects were funded for activities like information dissemination, training, etc., which are encompassed in the mission of a resource center, the centers also often

undertook activities unrelated to their mission, to become eligible for funding within specific competitions.

One member of the donor community pointed out in an April 16, 2004 inter-view that:

Many centers were set up based on donors’ agendas. Thus, they did not really pay attention to demand and dynamics in the market. They were not truly professional, and they could not sur-vive and were not appreciated by many organizations in a more advanced level of development.

There are NGOs that have far better experience in fundraising and project management than some of the resource centers. Thus, it is important for the centers, in order to survive, to be truly professional and to offer value-added services.