How can donors work with NGO? – Policy Brief, Recommendations

pear-small-eng copy“Region” International Analytical Center (RIAC) and Human Rights and Enlightenment Public Union proposed offers for donors by conducting donor analysis based on the new situation with civil society  

Background

Civil society development process had started in paralel with the establishment of independent Azerbaijan. In particular, the development of NGOs, one of the leading subjects of civil society started in this stage. Quantitative and qualitative increase of NGOs, its formalisation as an institution started to expand in the middle of 90s and became already well established structure  at the end of the century.

Probably, local donor institution in Azerbaijan didn’t exist until the establishment of State Support to NGOs in 2007. Due to this fact, NGO projects were esentially financed by foundations and institutes of different profile of USA and Europe. According to the requirements of the mentioned period, the preference was given to the selection of projects developed on human righst protection, creation of democratic institutions, electoral reforms and further priority fields.

However, various projects regarding the development of different environmental, agriculture and other fileds were supported as well. At these particular years, donor functions of the international organisations in Azerbaijan had expanded. Independent from availability of representation  or office in Azerbaijan, projects of hundreds of local organisations were supported in any way and fund was allocated for their implementation. From the middle of 90s of the last century, some of these donors established their local representatives in Azerbaijan and started to provide financial support to NGOs.

It should be mentioned that the principal and initial bases of NGOs were formed and their offices were opened, opportunities of systemic and permanent acting expanded exactly in the issue of this support. Wealth of ideas occurred, enlightenment of people increased, new jobs were created in the issue of systemic and permament action. Regulations specified in the Constitution of Azerbaijan Republic (1995) created favorable conitions for development of NGOs as well. Therefore, the broader range on the development of civil society was formed. The realisation of program “Strengthening Civil Society in Azerbaijan” implemented by the government of Azerbaijan together with UN Development Programme in 1997-2003 yielded great  contribution to the development of public sector. Resource and training centers of NGOs were created in the regions upon the performance of the program. National NGO Forum and other NGO coalitions were established. Great efforts were made on the development of Legislative framework  and Laws “On Grant” were adopted in 1998, “On Non-Governmental Organisations” (public communities and foundations) in 2000.

Thereafter, some international and donor organisations started to operate in Azerbaijan. Other part of foregin donors started their operation and cooperated with NGOs in Azerbaijan  after legislative framework regulating their activity be completely formalised. Establishment of NGOs as an independent branch of civil society increased the interest of the international organisations in the activity of these organisations and caused to the support of their projects.

A number of prestigous donors in the world – Open Society Institute, US Agency of International Development (USAID), US National Democratic Institute, US Republicans Institute, International Reasearch and Exchanges Board (IREX), American Bar Institutions (ABA, CEELI), Marshall Fund, National Endowment for Democracy (NED), Eurasia Fund, International Media Support, Oxfam GB’s humanitarian organisation, US “Counterpart International” Humanitarian Organisation, Institute for Democracy in Eastern Europe and tens of international organisations and donors operated in Azerbaijan, established their representation and financed the projects of local NGOs.

If we add the embassies operating in the country to the mentioned list, a great donor institution is formalised: US Embassy in Azerbaijan, British Embassy in Azerbaijan, Embassy of Norwegian Kingdom in Azerbaijan, OSCE Office in Baku, Embassies of Germany, Japan as well as Canada and Australia.rafael

Grants allocated to civil society

More than 20 years these donors have allocated large amount of fund for the development of different spheres in Azerbaijan and supported numerous necessary and important projects of NGOs. Thousands of Azerbaijani citizens were involved in the projects in any way, enlightened, learned their rights or received salary. Because large amount of grants were allocated in this country. These funds provided opportunity for people’s enlightenment as well as played an essnetial role in the creation of new jobs and increase of employment. For instance, grant in the amount of more than 5 million US dollars were received in 2007 from 52 donor organisations. In 2009, this index was 5 844 025.4 USD, 3 095 578 euros, 105 000 pound sterlings, 1 921 500 Turkish Liras and 15 000 Canadian dollars out of 57  donor organisations The grant in the amount of 12 452 738,37 USD, 4 334 469,54 euros, 259 617,50 pound sterlings, 21 904 Swiss franks, 9 715 000 Norwegian crones, 3 020 000 Russian rubles and 43 250 Canadian dollars was received in 2011. The total grant was 39 542 569 AZN in 2012. Therefore, 21.090.811 AZN is accounted for direct foreign donors. In 2013, annual budget of NGOs was 65 million AZN. Approximately 35 percent, more than 22 million AZN is accounted for foreign donors.

Scope of grants were generally covered education, human rights, children and youth problems, economy, health, local self-management, environment, agriculture, problems of refugees and IDPs and other relevant issues. One of the interesting facts is that grants allocated for human rights decrease year by year. Despite majority of grants were allocated to this sphere in the previous years, this index gradually decreased. The grants allocated to this sphere constituted 12% of total grant amount in 2007. This figure was 5.9% in 2011. It indicates that the international donors were more interested in allocating grants to social spheres.

New situation concerning donors

In recent years, the relations between the government and international donors have gone down that caused to a number of problems. This “cooling” starting from the beginning of 2013 reached a peak and relations further deteriorated. Based on the deterioration of relations, majority of international donors saw “red light” on the way of their activity. The operation of organisations such as National Democratic Institute and IREX were suspended. Bank accounts of a number of local NGOs were seized. The government elucidates its decision with non-transparency of the activity of donors and organisations allocating grants: According to the government,

  • Allocated funds are not spent on its destination;
  • Allocated funds are directed toeards political goals;
  • Organisations receiving grant do not make statutory payments to the state budget;
  • According to confidential agreement between donors and recipients, funds are assigned in any form;

There are reasonable grounds for these doubts according to the position of the government. Because some of the international organizations finance NGOs only who oppose government. When grants are allocated, they do not fund social, historical, cultural or economical researches, pressure directly against government or projects indirectly financing opposition parties are funded.

According to the information of press, IREX allocated grant in the amount of 730 thousand manats from 2006 till 2013 that it was mainly given to the opposition-oriented organizations. “RevenueWatchİnstitute” allocated grant in the amount 952 thousand, NDI (National Democratic Institute) allocated 78 grants in the amount of 3 million 500 thousand dollars to NGOs of Azerbaijan during 10 years, that is in the years of 2003-2013. In addition, the main part of these subsidies was allocated in the years of 2010-2013 and total sum was 2 million 300 thousand dollars. While USAID has allocated 300 million dollars since 1992 until now, as well as 8 million 200 thousand dollars since 2008 and 93 thousand manats in addition. According to the government, USAID preferred projects with commercial and agricultural profile, but organization has mainly funded policy-oriented projects after 2008.

According to the other information, in some cases amounts specified in grant contracts do not enter Azerbaijan in general. While certain amount of those grants entered the bank account of recipient, it is unknown where and how the large part of the amount is transferred.

But according to another idea, the cause of tension between the government and donors is not transparency, or whether spending the allocated funds relevant to the purpose or not. Compulsory payments to the government do not play a main role in this issue as well. The main causes of this tension are the following:

  • The Vice-President of the USA Joe Biden mentioned the name of Azerbaijan in the list of potential countries in which revolution may occur in 2009.
  • It is considered that allocated grants will be directed at “revolutionary activity”.
  • Due to the demonstration of both public and political oppositional position of NGOs funded by international donors against the government.
  • Anxiety in all over the world caused by the Arabian revolutions.
  • Former Ambassador of the USA to Azerbaijan Richard Morningstar mentioned during his interview with “Azadlig” radio on May that Maidan events may occur in Azerbaijan as well.

Difficulties arose in donor activity as a result of the deterioration of the relations. As a result, financing of NGOs by foreign donors became difficult. Additions and amendments have already been made to the Law of the Republic of Azerbaijan “On Grants”. These amendments set several and strict obligations for the purpose of cooperation between NGOs and foreign donors and supporting the new projects. Now the financing of projects will not be as easy and simple as before, because amendments in legislation put great obligations on donor.

Donor wishing to operate in Azerbaijan, to work with the NGOs of Azerbaijan shall sign contract with the government, obtain license for donor activity, justify the project funded and acquire the reference of relevant executive authority. Only in this case their right to give a grant will be formalized. Otherwise, irrespective of their status, any donor organization may not give a grant in Azerbaijan. Obviously, NGOs and employees working there will be the ones who will suffer most from this issue, because relevant executive bodies (ministries, committees, commissions etc.) being the part of the government are less likely to encounter serious problems regarding the projects implemented or to be implemented. Because this will be solved soon and without bureaucratic obstacles for the areas deemed necessary. However, it is hard to tell the same thing about NGOs that it will be solved without problems in terms of both bureaucratic obstacles and time. Theoretically, NGO preparing the project relating to the upcoming parliamentary elections, agreed with donor may not get the permission for its implementation.

It is unrealistic that only donors will suffer from difficulties arising regarding the activity of donors. In fact, donors who cannot operate in Azerbaijan will direct their funds to the other countries of Caucasus, Georgia and Armenia. As well as it is hard to tell that NGOs considered the “permanent clients” of donors and their heads will suffer, because except from the ones arrested under the concrete articles, others have already settled abroad. Therefore, if they are allocated any funds, its variants will be found. Their activity in the country will be provided in any form.

Difficulties for independent NGOs and their employees are inevitable. Thus, NGOs, citizens and the state budged will be damaged. Compulsory payments will be reduced at the expense of the funds of employees working in NGOs, at the same time a number of unemployed people will increase, ideas and projects of NGOs will not get support, awareness activities will not be conducted. As a result, the development of whole civil society will be damaged.

What is the solution?

We believe that international organizations and donors shouldn’t avoid from the present situation. Amendments on legislation should not be accepted as prohibition. They should accept it as a bit strict variant but with its solution and apply new and more transparent activity mechanism. Organizations, acting under transparent principles, donor activity of which prioritizes the development of civil society, strengthening of democratic institutions and the solution of social problems in Azerbaijan should start negotiations with the government. They may establish their representative offices and achieve their registration. They should investigate the ways of solution in cooperation with the government and make its contribution to civil society development by complying with the requirements of legislation.

Recommendations

  1. Donors should not refrain from establishing representations in Azerbaijan and make effort on adapting to the new requirement of the law. Because, weakening of civil society may cause substantial disruptions in the field of human rights and democratic development. As the establishment of representations by donors requires a large amount of fund, donors allocating small grants can make choice among local NGOs, provide them a right of representation or employ an expert and issue the right of representation to it;
  2. Conduction of negotiations by donors with the government of Azerbaijan and establishment dialogue is very essential. Without holding dialogue, the solution of the problems seems impossible. Due to this condition, donors should make their best efforts for holding direct dialogues with the government of Azerbaijan;
  3. If memorandum on joint projects is signed with the Council of State Support to NGOs under the President of Azerbaijan Republic and the implementation of joint grant projects is agreed, majority of limitations can be eliminated;
  4. Selection of the Council of State Support to NGOs under the President of Azerbaijan Republic as the relevant executive government body for work with NGO and donors can prevent the problems supposed to be available in this field. As the council of the State Support to NGOs better perceieves the NGO philosophy, discussions conducted with them are more effective. Therefore, lobbying activity of the Council of State Support to NGOs with a view to be the relevant executive body may be useful for the developement of civil society.

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Authors:

Razi Nurullayev, founder and seniour expert “Region” International Analytical Center (RIAC)

Razi Nurullayev, founder and senior expert with “Region” International Analytical Centre (RIAC)

Razi Nurullayev, founder and senior expert with “Region” International Analytical Centre (RIAC)

 

Rafail Bejanov, Human Rights and Enlightenment Public Union

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