NGO Sustainability and Community Development Mechanisms in Armenia

NGO Sustainability and Community Development Mechanisms in Armenia RESEARCH Highlights Based on Evaluation of EPF DOC and RCCD Programs

The Eurasia Partnership Foundation (EPF) Armenia Programs Evaluated: • Developing Organizational Capacities (DOC) and • Resource Centers for Community Development (RCCD) Research is conducted by Civic Development and Partnership Foundation (CDPF)

Purpose: The Evaluation Research was initiated by EPF Armenia to evaluate DOC and RCCD programs and to investigate NGO sustainability and community development models, proved to be efficient in Armenia.

DOC and RCCD programs DOC and RCCD programs were launched in 2005 with the goals: • to strengthen the organizational capacities of non-governmental organizations to improve their performance and service delivery (DOC); and • to improve the capacity of community-based organizations so that they can play an active role in community development (through strengthening the capacities of resource centers serving to CBOs and establishing a country-wide network of community development resource centers in Armenia)

Research Methodology The following methods were utilized for data collection: (a) qualitative interviews (b) focus-group discussions (c) document/record revision (d) expert interviews

Research Methodology The number of respondents involved in the research: • 10 representatives of DOC implementing organizations • 8 representatives of RCCD implementing organizations • 22 representatives of CBOs individually interviewed • 49 representatives of CBOs participated in 6 focus-group discussions • 10 experts on NGO Sustainability and Community Development

Major Findings and Conclusions NGOSustainability aspects

1.1. Governance and Strategic Management (A) Functioning governing body and strategic management are not considered as priority for development; the functions of board are often perceived as more formal rather than necessary;

1.1. Governance and Strategic Management (B) Those received development assistance in this area share some commitment to developing practices on governance and strategic planning;

1.1. Governance and Strategic Management (C) Among the researched organizations members are recruited within the scope of beneficiaries and/or volunteers; the primary issue in membership development and management is establishment of motivational mechanisms. “It is difficult to have membership now, committed and willing to devote their efforts to NGO development. Probably, it comes from economic conditions, if a person is not secured with minimal necessities; it is all the same for him/her what this NGO does… Thus, many things depend on motivational aspects” (NGO Expert)

1.1. Governance and Strategic Management (D) Few NGOs practice membership fee generation. However, fee collection has been noted to be important in terms of getting more commitment on the side of members and developing sense of ownership. “When setting the fee, we look at the income level of the member. But people feel good when they contribute: when we tell that this or that thing is due to your membership fee, the are exited and want to contribute more” (Sisian NGO representative).

1.2. Financial Sustainability (A) For Armenian NGOs grant funding is still considered as the major source for NGO revenue (which becomes more competitive nowadays).

1.2. Financial Sustainability (B) The majority of respondents stated that the preferred approach towards financial sustainability is social enterprise, in particular for-fee service provision to beneficiaries. “Whoever helps you can afterwards claim that they “own” the organization. You can find some ways, but still lose your independence. LLC helps to solve this issue.” (Sisian NGO representative)

1.2. Financial Sustainability (C) NGOs resist initiating social enterprise due to lack of business and management skills; NGO legislation is considered to be not supportive as well. “Nobody would like to work in two fields and thus to have problems in two fields.” (Gyumri NGO representative)

1.2. Financial Sustainability (D) Organizations consider diversification of financial sources and planning fundraising activities as important precondition for sustainability; challenges: lack of fund-raising skills, absence of culture of giving and participation, etc.

1.3. Leadership and Human Resource Management (A) Human resources are of a key importance for NGO sustainability. Ongoing development of these resources is essential for a successful NGO. Professional development activities in NGOs are important for ensuring sustainability of available human resources as a motivational factor, and for development of NGO services in general. “If you want an NGO to have a good reputation, you have to have good specialists” (Martuni NGO representative)

1.3. Leadership and Human Resource Management (B) NGO leader’s personality is very important and can affect the sustainability in double ways. Thus, skills developed within the organization should be institutionalized not to be dependent on a personality. “In general, leader has been always important in our society, we are a country of leaders rather than law… If there is a leader which imagine mission, goals, resources, targets of the organization, and appropriate management style, then it is more probable that the sustainability of the organization will be more long-lasting” (NGO Expert)

1.3. Leadership and Human Resource Management (C) Skills and efficient approaches on human resource management need to be developed as part of NGO management culture. Professional development systems and motivational mechanisms should be customized. Efficient human resource management is linked with financial sustainability. “In each groups people have different functions. In ideal version, leader is changeable: whoever implements most urgent function for the moment, becomes the leader” (NGO Expert)

1.3. Leadership and Human Resource Management (D) The volunteerism culture is not developed sufficiently yet and requires major effort for cultivation. On the other hand, NGOs usually lack skills and expertise in volunteer management. “There is no volunteer in Armenia. Volunteerism is an issue of a rich society, where there is no daily bread problem so that anyone works for his/her ideas, pleasure. This cannot work in Armenia” (NGO Expert)

1.4. Service Provision and Administrative System (A) Elements of service delivery system including need assessment, monitoring, provision mechanisms, and evaluation, are used in part of NGOs involved in service provision; however, all these elements are usually not seen in their complexity, while implementation is usually more emphasized by NGOs.

1.4. Service Provision and Administrative System (B) One of key aspects of service provision is effective marketing of NGO services which is at place mostly only when an external assistance is provided.

1.4. Service Provision and Administrative System (C) The culture of maintaining administrative procedures and processes is not at place and often taken as formality. Lack of sound administrative procedures is also linked with lack of appropriate human resources for administration system management.

1.5. External Relations and Partnership (A) Effective communication and PR is one of the keys for organization’s successful activities; however, organizations do not put proper emphasis on their PR activities and make limited use of their PR materials especially in terms of fundraising. “Which of us ever went to a business with our brochures, materials, just put these materials in the front of them and ask to get introduced?!” (Goris NGO representative).

1.5. External Relations and Partnership (B) Collaboration with other organizations is valued as a factor for sustainability. However, in practice this approach is not always utilized. “There is a jealousy and contest among our NGOs. When any of them win a grant they are trying to keep that from others. Together with Asparez and Sakharov center we are trying to break this practice: we are spreading all the information we have through the NGO network. Now a lot has changed in this field.” (Gyumri NGO representative)

1.5. External Relations and Partnership (C) Seminars and other joint events serve as a good ground for NGOs in terms of exchange of information and for settling personal contacts. In this regard, joint events organized by development agencies and Resource Centers have been of a great support to organizations in enlarging the scopes of partnership with each other.

1.5. External Relations and Partnership (D) Some progress in development of mutual trust between local NGOs and LSGB is observed. However, still very few organizations had successful systematic experience with local self-government bodies in regard to financial support. “When 8-10 years ago we used to enter the municipality, they didn't even understand what is NGO and how useful it can be. They even referred to us with sarcasm. But now they invite us when having international guests expecting that some of us will do some reasonable suggestion.” (Martuni NGO representative)

1.5. External Relations and Partnership (D) Limited practices of social contracting and partnership exist and could be enlarged. It is noted that partnership between NGOs and LSGBs in often based upon personal factors and does not have systematic character. “The collaboration with LSGB was based on individual relations. It was successful due to the personal and friendship ties of the head of our NGO.” (Vanadzor, NGO representative)

1.5. External Relations and Partnership (E) As to NGO collaboration with business, it seems to be fragmentary and not institutionalized; however, there are seeds of successful collaboration which could start traditions and extended to other NGOs and businesses.

1.5. External Relations and Partnership (F) There is high dependency of NGOs on grant funding. As a result, NGOs often try to fit with donors’ funding requirements. When implementing grant projects, NGOs have little possibility to influence donor organization's approaches. Some respondents mentioned that there are no sound mechanisms and systems for communicating with international organizations, which weakens collaborative efforts. “There is a lack of information about donors. While we get the information on donor's requirements, priorities and began to adapt to them, next year it's changed and we start everything from the beginning.” (Gyumri NGO representative)

1.6. Capacity-Building Assistance Many findings briefed above show that NGOs still need technical and capacity-building assistance. External assistance is crucial for NGO capacity development for a range of reasons: (1) lack of financial resources for operational expenses and for capacity development; (2) need in coaching and consultation in planning and implementation of capacity development activities; (3) nonprofits needing development do not and could not have enough awareness on their development gaps and opportunities.

Major Findings and Conclusions Community Development aspects

2.1. Planning and Need Assessment (A) Community development initiatives are not always based on thorough and comprehensive need assessment. When needs assessment is being conducted, few participatory approaches would be used involving multi-level stakeholders. ”X organization has done a reconstruction in the school. First they have changed the floor, then they came next year and changed the glasses and passed the water lines. As a result, for passing the water lines they had to remove the floor. There is no a systemized approach for one to understand what should be done first.” (MartuniNGO representative)

2.1. Planning and Need Assessment (B) Research proves that participatory approaches are more efficient both in terms of sound need assessment as well as all stake-holder involvement in the process and creating ownership of development effort. “You must support the involvement of people in the process from the beginning. If you come and say let do this project now, it doesn’t work.” (CDP Implementer)

2.2. Mobilization Mechanisms (A) When beneficiary mobilization and participation is larger, the project implementation is more effective and the results are more sustainable. For funding community development projects, donors prefer working with communities where the level of mobilization of the population is higher.

2.2. Mobilization Mechanisms (B) The mobilization process is more efficient when started at the need assessment stage. The motivations for people to be involved are necessary to be considered to expand mobilization. “One has a background in architecture, but lives in the village, so can be of help during reconstruction activities. The other suggests helping in uploading the sand with his tractor. Another says that has good connections in Yerevan”. (CDP Implementer)

2.2. Mobilization Mechanisms (C) Combined approach to community participation, when financial and in-kind contribution are required, is more efficient in terms of mobilization. Involving community formal leaders is also essential for successful mobilization in most of the cases as well as for sustaining the results achieved.

2.3. LSGB and Private Sector Participation (A) Participatory and accountable approach in implementation of CDPs helps to change the capacities and working style of LSGB work to more transparent and participatory one. It also contributes to the sustainability of development projects. “If anyone enters any community and starts up a project and does not involve the community leaders, then there might be an immediate result, but later on there will be serious issues connected with further development of the project and its continuation. May be the first thing that NGOs should do is to start collaborating with LSGBs.” (CD Expert)

2.3. LSGB and Private Sector Participation (B) There are no clearly defined and set mechanisms for LSGB participation in community development projects initiated by other stakeholders. The collaboration is often on-need base. “Governing bodies should have enough will, be powerful to understand that the participation of those structures does not mean the limitation of their authorities. They come to supplement the process with their functions. In fact, there are problems connected with lack of knowledge and skills in the rural communities.” (CD Expert)

2.3. LSGB and Private Sector Participation (C) At the same time, private sector institutions present in the community rarely get involved and participate in development projects. The collaboration between public and private sector is not institutionalized.

2.4. Impact Assessment and Project Sustainability (A) There are no well defined approaches for implanting development project evaluations in impact assessments. Respondents note that there is a tendency on the side of CDP implementers of emphasizing outcome and result level rather then impact. “NGOs don’t even have money for petrol for conducting impact assessment.” (CD Expert)

2.4. Impact Assessment and Project Sustainability (B) At the same time, sustainability of community development initiatives is a major concern of all stakeholders. When planning the effort, it is essential to assess human and other resources available and plan on developing and leveraging the existing capacity. “State should coordinate lots of things. They should say who should come and who should go. But they are not very strong in coordination activities, plus are not interested in that. Everyone does whatever wants, just money should flow in, they are not interested in the rest.” (CDP Implementer)

2.4. Impact Assessment and Project Sustainability (C) Paternalistic approaches and absence of culture of participating and giving for the sake of community in general creates major risk for participatory community development processes and further sustainability of results. Civic sector representatives state that it will take a long time to develop that culture and to change the attitude. “A lot must be done for changing their mentality, because they always expect the state to do everything. Villager is used to the idea that someone else will come and make things up and then give it to them to use; and what is more important villager does not want to have contribution in it.“ (CDP Implementer)

Major Recommendations Recommendations To NGOs

Recommendations to NGOs (a) • Only given recognition and successful utilization of the role of governing body, larger involvement of members and beneficiaries in governing bodies of organization will contribute toward more sustainable involvement of beneficiaries in decision-making level. • NGOs should concentrate efforts in developing and implementing membership policies and procedures in accordance to their internal and external environment. Motivational aspects of membership recruitment and development are to be considered.

Recommendations to NGOs(b) • Ongoing development of human resources is essential for a successful NGO. At the same time, it is important to ensure institutionalization of skills and capacities within the organization, which is necessary for sustainability of capacity development. • As volunteer base enlargement is critical to sustainability of NGO’s activities, volunteer management should be an important part of human resource management.

Recommendations to NGOs(c) • NGOs should developed service development and delivery approaches and practices as well as institutionalize those accordingly. Organizational internal culture should be addressed to maintain those challenges. • When both for-fee and free-of-charge services are provided, NGOs face difficulties in developing diversification principles and approaches, as well as in following those in administrative procedures. Clear principles and approaches should be elaborated here.

Recommendations to NGOs(d) • Diversified marketing and sales approach should be developed to provide sustainability of service provision. Non-profit marketing approaches also need to be learnt by NGOs. • Developing and implementing sound fundraising strategies would be another asset to ensure sustainability of service provision. At the same time, trainings alone are not enough for developing fundraising capacities: experience, networking, and appropriate human resources will generate the institutional capacity for fundraising.

Recommendations to NGOs(e) • Sound accountability mechanisms for generated and spent funds to build greater trust toward NGOs, together with developing NGO capacity on fundraising mechanisms, tools and approaches is needed for developing fundraising culture. • Efforts can be consolidated regarding development of social enterprise institution which is considered to be a powerful resource for insuring financial sustainability.

Recommendations to NGOs (f) • To build on existing experience and develop NGO collaboration, the following is recommended for planning further efforts: • NGOs should be open and innovative when investigating new opportunities and mechanisms for cooperation for the sake of efficient resource usage and maximizing the impact; • NGOs might work more closely when putting together fundraising efforts, and grant-seeking in particular; • efficient experience exchange and learning should be promoted and developed. • NGOs should develop their accountability, transparency, and marketing approaches, etc

Recommendations to NGOs(g) • To develop NGO-state partnership, the following measures can be practiced and/or promoted both on state and NGO part: social partnership practices and mechanisms; participatory monitoring of state funds; building mutual understanding and trust between non-profit entities, LSGB and state authorities. • Initiatives and positive experience in NGO-business partnership should be focused both by NGOs and development agencies to insure sustainability of approaches.

NGO Sustainability and Community Development Mechanisms in Armenia