NGOs seek solutions as private sector turns off financing tap

“I think this year will be a difficult year. We were working a lot last year and have funds for this year but if we are not able to raise money, we will have problems in 2010,” Wajiha Harris, president of the Scheherazade foundation, tells Business Review. “I haven't started asking for funds this year so don't know exactly but seeing the market conditions, I feel it is a difficult year for everybody,” she says. In 2007 the NGO raised EUR 795,000 which was spent on two projects. Last year, the foundation implemented four, with a sum of nearly EUR 1.4 million. Of these sums, 50 percent was raised from events and 50 percent from donations from private companies.
So far the Scheherazade Foundation has raised about EUR 500,000 for this year, all of which will go on the renovation of the Marie Curie Emergency Hospital for Children. “We are concentrating on finishing the renovations by June. This means 10,000 sqm being renovated to EU health standards,” says Harris. While renovations costs have so far been covered, Harris says she will have to do some thinking to see how to raise funds in the future. “For the future, I will have to think of various ways to raise funds. By this summer, we will know the exact situation and most probably the solution as well,” says Harris.
Other NGOs are also feeling the pinch. “As far as companies are concerned, we have already noticed a reduction in their support, as early as the end of last year, especially from those in the construction and car distribution domain,” Gabriela Alexandrescu, executive president of Save the Children Romania, tells BR.
She says that 2009 will be a difficult year for forecasting incomes, both for companies and authorities. The authorities have funds available from the budget of the European Commission, which should be distributed based on the contracts that have been approved by the selection commissions. “At the moment, these European funds are stuck in the central authorities' accounts for the lack of a clear work methodology,” says Alexandrescu.
Save the Children Romania secures funds for concrete projects by applying to international and national financing organizations and to the private sector. The NGO raised more than EUR 1.8 million in 2007 while in 2008 the sum increased to more than EUR 2.5 million. The same year, private sector contributions to projects made up 30 percent of the total. Of this, 16 percent was generated through special events. At the moment the organization has funds of EUR 2 million, which could grow if state authorities release EU financing.
Elsewhere it's the same story. “We've already heard from some donor companies that they have to reduce their CSR budget by 50 percent and they will have to run (or even grow) their business through these tough times on a lower budget. Donations for Habitat projects will definitely be significantly reduced by some donors,” Adrian Ciorna, president of Habitat for Humanity Romania, tells BR.
Still, he is not worried. He says that overall the prognosis for 2009 is EUR 2.4 million to come from companies, up from EUR 1.5 million in 2008. The organization's total available funds from all sources in 2008 reached EUR 3.6 million, with a good chunk coming from the private sector “We already have EUR 850,000 available and pledges of EUR 1.3 million from donors. A remainder of roughly EUR 3 million is to be raised from both reactivated donors and new sources. So EUR 5.1 million should be raised in all in 2009,” says Ciorna. “In 2009 the prognosis is 70 percent growth or serving 1,000 families overall(…)We have no intention of implementing fewer projects.”
Still, should things not work out as planned, the organization would cut number of units delivered per project and postpone a couple of projects, says Ciorna. In the meantime, the NGO is asking for more building materials and services than cash as in-kind donations from companies that have stocks they cannot sell for instance. “As of November, the organization is a public utility charity as recognized by the government and is seeking EU funding.”
Ovidiu Rom raises money to fund its project Every Child in School, an initiative to get every child on the path to high-school graduation. In 2008 the number of children the organization was reaching more than doubled from 2,000 children in 2007 to 4,400.
“We'll be affected – probably not as much as the arts because I think most donors appreciate the primacy of education,” Leslie Hawke, founder of the NGO, tells BR.
“In 2009 we do not anticipate adding new communities – but we will continue to serve the children where we are currently working,” says Hawke. Additionally, the organization will get involved in a public awareness campaign in collaboration with the Ministry of Education and the National Agency for Child Protection. “This initiative could result in a much higher number and percentage of vulnerable five- and six-year-olds being registered for school. So we could continue to double the number of children we reach – but it would be in a less ‘hands-on' way” says Hawke.
Since Ovidiu Rom was founded, the amount of funding and the number of beneficiaries have increased by 15-20 percent year on year. “I'm not expecting that kind of increase this year,” says Hawke. In the early years, Ovidiu Rom was mainly funded by the US government through USAID. From 2005, the local corporate sector took over as first contributor. Over 80 percent of the organization's 2008 budget was met by the corporate sector from major investors and other proceeds from the Halloween Charity Ball.
“We have applied for European structural funds to undertake an exciting, highly ambitious project in three counties – but that won't help with our current expenses,” says Hawke. “Originally we were expecting to increase our budget to EUR 600,000 but we have revised our plan to keep the budget at about EUR 500,000 – which means that we will help fewer individual children than we had hoped with direct services.”
She suggests that a viable solution to this cost issue would be to organize public awareness campaigns which are carried out through partners that provide support and expertise pro bono. “How we attack this objective has been evolving since we started in 2001 and will continue to evolve based on the social and economic environment. From time to time, in any enterprise it's good to step back and scrutinize your strategies. This is one of those times,” she concludes.

By Otilia Haraga