APPENDIX 2 Interview Guide
IX. Sustainability strategies
5. RESULTS OF THE SURVEY
Figure 1.
Annual Budget of the Surveyed Organizations
Figure 2.
Localization of the Surveyed Organizations
Less than PLZ 50,000 23.1%
Between PLZ 50,000 and PLZ 250,000 36.5%
More than PLZ 250,000 36.5%
No data 3.8%
Villages 8%
Towns with population over 100,000
53%
Towns with population of less than 10,000
8%
Towns with population between 10,000 and 100,000 inhabitants
31%
5.3 Results of the Survey
The first question of the survey addressed the financial activity of organizations within the past 12 months. According to 50 percent of the organizations, their situation worsened during this period. For 36 percent, the situation improved, and 13 had no comment. Expectations of the Law on Public Benefit and Volunteerism were quite high.
Nearly 60 percent of the organizations surveyed believed that it would have a positive impact on their financial stability, whereas only 17 percent expected it to worsen their financial situation in the following two years. Twenty three percent did not comment.
Ninety seven percent (47 out of 52) of the respondents said they would apply for Pub-lic Benefit status. Among those organizations, 23 percent felt the one percent system would improve their financial situation; 32 percent felt this could be achieved with public/private partnership (such as governmental contracts); only 4 percent felt that the best solution would involve conducting profitable nonprofit public benefit activities, a special category outlined in the Law on Public Benefit and Volunteerism for generat-ing income outside of fiscal activities; and 29 percent felt that direct assistance from European funds would benefit them. The Public Benefit Law does not cover European funds, so the respondents were either unaware of this or they were referring to the public/private partnership’s use of EU structural funds. The remaining respondents left the question unanswered.
The second question dealt with income expectations from the one percent system and was applicable only to organizations that were applying for official public benefit organization status. This question was also answered by the respondents who had no such intentions. As such, Figure 3 refers to 49 of the organizations as opposed to 47.
Most organizations confirmed that they would not carry out any promotional campaigns or invest any financial resources in such activities (Figure 4). Only 11 out of 47 organizations were ready to spend however much money on a campaign, whereas the majority had not planned on spending more than PLZ 1,000 (approximately USD 270). In the following questions, organizations could choose up to three means of communication for their campaign. The majority chose personal contact with taxpayers, existing donors, and friends and family. No one had planned a nation-wide campaign on television or any other medium. Comparatively low-cost methods of communica-tion, such as leaflets, the Internet or local media were chosen by only a small number of the organizations.
Forty-five organizations confirmed their knowledge of the one percent designation process. Six organizations were unfamiliar with it, and one did not answer. The major-ity of them—23 respondents—thought the procedure was too complicated, while the remainder felt that it strengthened the relationship between the organization and the donor. The anonymity of the donor was not an issue for any of the respondents, since
there isn’t any anonymity in the donor system. The motivation behind this question was to assess the respondents knowledge of the process.
Figure 3.
Expected Income from the One Percent Scheme by the Surveyed Organizations
Figure 4.
Expenditures for a One Percent Informational Campaign
No data More than 6%
PLZ 100,000 6%
Between PLZ 10,000 and PLZ 100,000
6%
Between PLZ 1,000 and PLZ 10,000
45%
Less than PLZ 1,000 37%
No campaign 19%
No financial cost campaign 50%
Less than PLZ 1,000 17%
Between PLZ 1,000 and PLZ 5,000 2%
More than PLZ 5,000 2%
No data 10%
In the following question, organizations were asked to rate the impact of the one percent system on the nonprofit sector. This question was used to determine whether respondents treated the one percent system as conflicting with the system of tax-deduct-ible donations. Respondents were allowed to choose more than one answer. The two groups of respondents were easily identified. The first group, the pessimists, included 27 groups that were convinced that the one percent system would not bring about any major changes and would even decrease the amount of donations. The second, and smaller group, the optimists, consisted of 19 organizations that believed this solu-tion would radically improve the situasolu-tion of civil society, or would at least strengthen philanthropic activities in Poland. The outcome considered least probable, which was selected by only four of the respondents, was that the one percent would coincide with an increase in tax-deductible donations. Five organizations did not answer this question and one respondent believed that the system would radically improve the situation of NGOs, even though it would reduce the total amount of donations.
The final question of Part I dealt with the anticipated beneficiaries of the one percent system. Below is a list derived from respondents’ answers, of the types of organizations or their main field of activities in order from most likely beneficiaries to least likely:
1. large, national organizations
2. organizations that support children and youth 3. educational organizations
4. organizations with the best informational campaigns 5. organizations that support the poor and unemployed 6. transparent organization with a good standing 7. health care organizations
8. organizations from large towns 9. cultural organizations
10. environmental organizations
11. local organizations from small villages or towns
12. watchdog groups that deal with human rights and democracy
In the second part of the survey, questions were asked about the potential for building endowments or at least reserving funds in Poland. Twenty-one organizations declared they had a financial surplus, which had not been spent on the organization’s activities.
No organization had recruited a financial advisor. Most of them kept the financial surplus in the bank. Figure 5 shows the breakdown of the respondents’ willingness to create an endowment fund.
Figure 5.
Building an Endowment Fund
5.4 Discussion
The surveyed group is small yet geographically dispersed, and it represents organizations that partake in a wide spectrum of activities. The opinions expressed are not representative of all civil society, but they do give some impression of the present financial situation of NGOs in Poland and their attitudes toward the one percent system.
The financial situation of half of the surveyed organizations has worsened, which implies that the situation within civil society has also worsened. This issue, however, requires further investigation, particularly investigation into the cause of the current situation. Most organizations will apply for public benefit organization status and believe that their financial situation will improve as a result, mostly through contracts with the local or national government. Only a small number of the organizations surveyed expect the one percent system to significantly improve their financial status, which sug-gests that the respondents are capable of reasonably assessing their situation. There is no particular correlation between an organization’s annual budget and its expectations of the one percent system. In other words, there are organizations with budgets below USD 10,000 and budgets over USD 60,000 that believe that the one percent system can improve their situation. This belief, however, is more common among organizations from cities where the population exceeds 10,000.
No answer 6%
We have it or we are collecting funds for this purpose
12%
Yes, we are planning 8%
No, we do not plan 19%
No, but we would like to have an endowment in better financial conditions
55%
The reaction of the respondents to the subsequent question is discouraging.
Apparently organizations see no need for an informational campaign on the one percent system. Taking into account that the process of designation is rather complicated and requires a considerable amount of good will on the part of the taxpayer, the informa-tional campaign is vital to the success of the one percent scheme. Most organizations intend to use an existing network of contacts, including previous donors, friends and relatives. This will prevent them from accessing new donors and increasing their support base. The results of the survey show a lack of foresight among NGOs. They should be expanding their approach to reach individuals who, to date, have been unaware of the vital role of NGOs in fulfilling the needs of society. According to the Law on Public Benefit and Volunteerism, public benefit organizations should have easier access to public television and radio broadcasting, both of which could be a powerful tool in the one percent campaign. The organizations participating in the survey, however, preferred to use personal contacts, presumably the most successful yet also most time consuming of all approaches. One should remember that “easy access” is a very ambiguous term, which does not, by any means guarantee free access to prime time television, yet or-ganizations resign themselves rather too quickly to this obstacle. The preliminary data from 2004 reveals that the frontrunners of the one percent system are organizations that have a strong brand identity and that dared to invest money and human resources into extensive campaigns aimed at the general public. This example may persuade other organizations to follow suit.
The respondents agreed that the one percent system of designation within the Polish model is too complex but said they appreciate the taxpayers’ personal involvement, which has the potential of building a stronger relationship between donor and beneficiary. It shows that they treat the taxpayer as a donor, and not simply an individual designating public money.
The survey question regarding the most substantial beneficiaries of the one percent system received very interesting responses. Although the respondents have no intention of conducting an extensive informational campaign, they believe that it could increase the amount of funds they collect through the one percent system. Environmental NGOs and watchdog organizations were at the bottom of the list of beneficiaries. This supports the assumption that, when private foreign sources of funding are replaced to a large extent by public sources of funding, the activities of these organizations could be jeopardized.
The fact that the respondents did not place the transparency of an organization and the level of public trust among the three key factors of their success is disconcerting, but not at all surprising. Similar findings appeared in the research presented earlier in this report. There are two possible explanations, as mentioned previously: In the view of the pessimist, neither the organizations nor the potential participants of the one percent system regard the trustworthiness of an organization as vitally important, while
the optimist seems to feel that their reliability enables them to receive funding through the one percent system.
Part II of the survey exposes two noteworthy issues. Only 10 respondents were not concerned with generating some form of reserve capital, which could financially stabilize their organization. This reveals the need for organizations to move towards financial self-sufficiency. On the other hand, if an organization has a financial surplus, it is being managed in a very conservative way. The most obvious explanation would be the complex legal and tax policies that discourage organizations from more active forms of asset management. The lack of asset management know-how is also likely a contributing factor.