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1. Building on Transition: The Iraq Civil Society Program

Regardless of the laudable goal of sustainability whether organizational or financial, the Iraqi context is deeply problematic for the following reasons:

· The Civil Society Sector (CSO) sector has not yet established the habits and practices of seeking financial support from individuals, business or foundations.

· While the CSOs that were interviewed for this evaluation have an emphatic vision and a strong sense of social purpose, very few yet manifest an understanding of how to identify, build and nurture a constituent base of support that could provide the energy and financial support necessary to sustain the work of the organization.

· In talking with many CSOs, there is a pervasive and counter-productive view that Iraq society will not contribute to social purpose organizations and that funds can only be obtained from international donors.

· Repeatedly CSO leaders argued that they did not have the capacity to approach individual donors or to raise money in the community because their constituents and members lacked funds.

· There has been virtually no attempt to raise funds from the business community and CSOs believe that this is currently infeasible because of negative economic conditions and the lack of a tradition of business giving.

· While a few CSOs have initiated income generating activities such as a hair salon in a women’s group, the incremental funds from this source are limited and the time and energy needed to operate these initiatives may deter the group from work more directly connected to their social purpose mission.

· Very few CSOs are of a size or level of technical skill to contract with local government.

· CSOs are reluctant to approach the mosques for charitable support for fear of being drawn into sectarian disputes.

· Although funds are available from the political parties, these resources inevitably draw the recipient into the political arena.

· CSOs appear to have a mindset of growing reliance on the international donor community despite the fact that most of them understand that the donors will not be in Iraq forever.

However, on the positive side, the following factors suggest that sustainability is possible:

· There is a deep humanitarian and philanthropic tradition in Islam that in the long run may provide the attitudinal structure necessary for charitable giving to flourish.

· There are roughly 2 million Diaspora Iraqis that could be cultivated for purposes of supporting Iraqi-based social purpose groups.

· When and if stability returns, multi-national firms can be expected to supply significant amounts of community based giving.

· Most of the CSOs that were interviewed for this Report have a group of founding members that contribute considerable time and energy to the work of the CSO. While this is rarely monetized it does illustrate the potential for voluntary giving in the future.

· In a few cases, CSOs with a membership base receive a small monetary contribution from their members.

2. The Emergence of Non-Governmental Organizations in Central and Eastern Europe.

Lessons Learned

1. Local ngos must recognize and confront the issue of long-term financial sustainability, given declining donor resources. The level of foreign support from usaid, EU/Phare, Soros, and other private foundations continues to drop, while indigenous corporate giving and government contracting–granting is just beginning to appear on a modest scale. ngos need training and technical assistance in devising strategic plans and long-term diversification strategies. usaid and its AmericanU.S. ngo implementing partners have a key role to play in such endgame planning, which should begin at the start—not the end—of ngo support programs.

The study identifies a number of diverse instruments and techniques that can be used to encourage participating ngos to move toward a sounder financial footing. These include cost-sharing provisions, training in strategic planning and organizational development, and technical assistance in designingthe design of revenue-generating activities.

2. The nurturinging and development of ngo sectors is a staged, sequential, long-term process. Policymakers should not see the cultivation of ngo sectors in cee/nis countries as a short-term, single-stage, restorative intervention. The maturation process forby which the independent sectors in these countries are maturing necessitatesrequires a long-term approach and changing forms of assistance tailored tothat change with evolving needs. Virtually every ngo sector support program in the cee/nis region has been restructured to reflect changing conditions, and t. This process is likely to continue.

3. Creating and sustainingaining a positive, enabling legal environment is immensely important and will pay off generously. In many cee/nis countries, laws and the legislative process often reflect host-country ambivalence toward ngos. Technical assistance provided through the International Center for Not-for- Profit Law has led to significant advances including new enabling legislation in countries as diverse as Estonia, Hungary, Macedonia, and Uzbekistan. Revisions in the tax code or a new framework law are expected soon in Albania, Bulgaria, and Slovakia. Investing in a supportive legal and regulatory environment by providing technical assistance, advice and regional networking opportunities yieldshas a significant pay-off.

4. Sectoral infrastructure development is one critical element of sustainability. Indigenous intermediary support organizations (isos) that provide training, encourage professionalism, promote the interests of the sector, mobilize financial resources and facilitate networks and coalitions, will be needed to maintain the infrastructure of support for ngo sector growth and sustainability after foreign donor support phases out.

5. Increased management capacity is a key to ngos’ ultimate sustainability and effectiveness. Training and technical assistance provided by Democracy Network and similar ngo support programs has significantly improved the managerial competence of ngos. This assistance has helped cee/nis ngos make the transition from voluntary to more institutionalized governance and professional staffing. In turn, the increased professionalization of the sector has strengthened ngo’s credibility as advocates, service providers, and as vehicles offering citizens a chance for citizens to participate in their communities.

6. Training and technical assistance for local ngos should be closely integrated with small grants in a coordinated, activity-based approach. Connecting grants with lessons learned and capacities developed in training provides more tangible impact than generic grant -giving. Further, the process of application review and award must be transparent and accommodate significant local input.

7. Training should increasingly focus on individual organizational needs. As ngos mature, training is more effective if it evolves from a seminar approach embodying , with a core curriculum that builds basic skills, to an onsite, and closely tailored approach that addresses the uniqueindividual needs of the organization.

8. Strategic reassessments of ngo support programs should be periodically undertaken. A usaid mission should occasionally assess the ngo sector’s stage of development and make any necessary corrections to programs—not only to take advantage of current targets of opportunity, but also to lay the groundwork for sustained sectoral development. The annual ngo Sustainability Index offerscan provide a framework for the strategic reassessment of program activities.

3. Alternative Futures: The Polish American Ukraine Cooperation Institute

Strategic Positioning

Strategic positioning constitutes the market placement of the PAUCI identity and “product” in relation to competition, funding sources, beneficiary groups and organizational mission. Factors that will shape the new organization’s market position include:

· The need to retain certain core elements of the current program that are so central to the PAUCI identity that it would be infeasible to proceed without reflecting these priorities in the new program. These include: the bi-national, cross-border nature of the program and the emphasis on Ukraine’s integration with Western European countries.

· The importance of avoiding direct competition with a wide variety of organizations that exist to promote component parts of stronger ties with the West, many of whom are current PAUCI sub-grantees.

· The serious absence of a wide range of good funding sources with an interest in promoting cross-border linkages between Poland and Ukraine including the absence of good governmental funding sources in both in Poland and Ukraine, (despite support for the program) and limited opportunity for funding support from the corporate sector in either country for the medium term.

· The existence of the current tri-lateral government structure and image which is imbedded in the PAUCI name.

· The real and perceived institutional strengths and weaknesses of the current organization enumerated in a previous section.

While there was not adequate time at the Conference Retreat (discussed below) to engage in a prolonged discussion of Strategic Positioning, there was broad implicit consensus with respect to the following principles:

· The new PAUCI program should be bi-national in nature and continue to emphasize Ukraine’s relationship with Poland but be gradually broadened to include other European Union countries to the extent that there is an identifiable interest in working in Ukraine.

· The new PAUCI program should continue to emphasize the transfer of skills, attitudes, techniques and relationships relevant to the commercial and social integration of Ukraine with European Union countries.

· The new PAUCI program should continue to work primarily through NGOs in Poland and Ukraine but should be open to a limited number of relations with NGOs in other countries.

· Within this broad mandate, PAUCI should adopt and become expert in several important program areas and develop unique interventions in these areas that will distinguish the PAUCI program.

These factors and views suggest the following with regard to how the new PAUCI positions itself:

Continued primary focus on Polish/Ukrainian relations. The new organization will need to capitalize on the unique PAUCI program by continuing to emphasize bi-national, cross-border relations, Ukraine’s integration with Western European countries and the transfer of skills from the Polish experience.

Development of a distinctive capacity. It will be important for the new organization to develop a unique program skill area that cuts across this geographic orientation provide a distinctive advantage and supports the claim that the new PAUCI adds value.

Development of an advocacy capability. The new PAUCI should develop an advocacy/education program in support of the goals and values that it promotes. The effort must be non-partisan and concentrate on provision of relevant information with regard to integration with Western European states and the advantages of EU membership. An advocacy program will sharpen the PAUCI identity, add value to what PAUCI does and constitute an indirect form of fund raising.

Retention of the Council structure in modified form. The PAUCI Council or a similar entity should be retained in order to sustain the PAUCI identity and provide access to policy makers. (While the current Council has not always functioned in an optimal manner, it would be a serious mistake to disband this entity at a time when a network of support is most important.)The role and functions of the Council should be revised to address ambiguities with respect to the role and function of members and to clearly separate strategic oversight from operations. In this respect, consideration should be given to establishing a non-operational Board of Overseers that would meet annually in support of the release of (for example) PAUCI’s annual report on the state of Ukraine/Western Europe relations.

Continuation of the US connection. A non-ex-officio American presence on the Council or similar entity should be retained. Linkages with the US Embassies should be maintained on a nuanced and informal basis in order to capitalize on these relationships and provide access to decision makers in both Poland and Ukraine. The “A” from PAUCI should not be dropped and the historical US connection should be identified in a symbolic manner in promotional material and perhaps in the form of honorary positions or through the establishment of Friends of PAUCI initiative.

Increased NGO participation in governance. Membership on the Council or similar entity should be expanded to include representatives from the NGO communities in both countries and a representative from the corporate sector from both countries.

4. Building Durable Partnerships

This Guide identifies eight factors that are normally associated with an effective relationship.

THE EXTERNAL CONTEXT

Active NGO Sector

Some situations are more conducive to the establishment of partner relations than others. In general, countries that have an active and growing independent sector, an established tradition of citizen advocacy, grass roots participation, or inter-sectoral collaboration to deal with social and economic issues, provide a good environment in which to encourage partnerships. The pre-existence of these conditions provides the financial, managerial, and psychological environment conducive to a healthy process of organizational formation.

If a partner’s country has a weak NGO sector:

· Explore the possibility of funding civil society or democracy programs that result in a more enabling environment.

· Place extra emphasis on institutional strengthening of the local organization.

· Emphasize financial diversification and the strengthening of the revenue base.

· Be open to the provision of training in management, fundraising and organizational development.

Legal Parameters

Certain laws and regulations may discourage partnership relations. These tend to fall into four categories: currency control, onerous taxation provisions, difficult registration requirements and restrictions on affiliation between local and foreign organizations. Rarely are these barriers sufficient to fully prevent a partnership from developing. However, they are irritants and can affect the relationship. For example, there may be a restriction on the ability of a local organization to receive funds from an overseas organization, or there may be laws prohibiting the establishment of an overseas entity. Where these impediments do exist, it will be important to encourage the prospective partners to research the laws and fully understand the impact that these will have on the relationship and identify options for handling them. If you suspect negative legal and/or regulatory restrictions, identify the restriction and encourage prospective partners to “cost out” the impact.

CAPACITY OF THE PARTNER ORGANIZATIONS

Maturity of Participating Organizations

Organizations that are consolidated and well established have a higher capability for sustaining a partnership than those in an early stage of development. An emergent organization tends to be financially insecure, prone to rapid change, and committed to a particular technique and set of values. Also, an emergent group is often managed by a founder or leader who has a highly focused and sometimes rigid conception of the organizational mission and how it is to be accomplished.

If there is a significant dissimilarity in the maturity of the two organizations:

· Include a tailored training program in your grant or sub-grant.

· Be open to funding strategic planning and/or establish strategic planning as a pre-condition of support.

· Encourage both organizations to visit with other groups in their country that have established strong overseas partnerships.

· Insist on such basics as 1) a written partnership agreement 2) headquarters visits and 3) leadership meetings.

Leadership Commitment

Because strong partnerships are difficult to form and sustain, the interest and commitment of the leadership of both organizations is of critical importance if the partnership is to address and resolve the issues that will inevitably develop. If the leadership is disinterested or ambivalent, it will be very difficult to energize the staff and to sustain interest in the benefits of the partnership during its formative period.

If leadership commitment is in doubt consider:

· Allocation of modest travel funds for a headquarters visit.
· Making leadership participation a precondition.

· Support for leadership training.

· Not moving forward with the partnership.

COMPATIBILITY OF THE PARTNER ORGANIZATIONS

Nature of the Work of the Organizations

The more similar the work of two organizations, the easier it is to establish and maintain a partnership. Similarities in activities are likely to be echoed in similarities in management systems, decision-making processes, and in the norms and cultures of the two entities. The establishment of peer relations between professionals working in similar fields can be a powerful link that adds perceptions of value and legitimacy to the partnership.

However, in some cases, dissimilarities between organizations may actually increase the potential for a rich and rewarding association since each organization has more to offer the other. For example, there is increasing evidence that non-profits and commercial organizations can enter into beneficial partnerships without corrupting the social service mission of the former.

Where the work of the organizations is different:

· Encourage the partners to pay particular early attention to issues of organizational culture and systems compatibility

· Place special emphasis on headquarters visits and extensive interpersonal contact.

Similarity of Norms and Organizational Culture

If the norms and cultures of partnering organizations are in alignment, the two entities will be better able to communicate effectively and work together. Every organization develops a unique set of beliefs and a supporting culture that influences how it interprets situations. Sharp dissimilarities between organizations can make communication, joint planning, and priority setting very difficult.

However, while dissimilarity in values present an impediment, it can also provide a catalyst for positive change. A well-established organization might, for example, make a deliberate choice to partner with a vigorously entrepreneurial group in order to benefit from new energy. Also, over time, partnerships tend to develop their own cultures and norms of behavior. While similar values may be very important at the beginning of a relationship, they may become less so as the partnership matures.

Where norms and culture appear to be dissimilar:

· Use a trained facilitator to explore areas of similarity and potential disagreement.

· Fund experimental joint projects to test compatibility.

· Support a joint staff conference to explore practical issues of working together.

Complementary Income Structure

Organizations that depend heavily on similar funding sources or on the same donor may find it difficult to work together because of the propensity to compete with each other for scarce resources and an underlying awareness that their association may not yield a net increase in income. Alternatively, when the pattern of financial support is markedly dissimilar, incentives to collaborate may be strong. Of course, there are cases when a similar donor profile is a distinct advantage. For example a foundation that gives to both groups may conceivably increase their total level of support when the groups are collaborating in order to support synergies that they believe will emerge.

Where the income structure appears to be competitive:

· Make sure participants openly discuss it.

· Make sure participants address this impediment in their letter of agreement.

· Provide support and training in fund raising to the local group.

Strong Monitoring and Evaluation Systems

Partners need to see tangible benefits from the relationship and to mutually understand ways to improve it. In most cases, partnerships do not think about monitoring and evaluation until after they have begun to work together. Yet, it is important to have systems established from the beginning. Partners should agree to develop a monitoring and evaluation system in their memorandum of understanding, and the work plan should reflect the anticipated results and indicators at the partnership activity level.

USAID or the intermediary organization can help the partnership construct an effective monitoring and evaluation system by:

 

· Training partners to understand and apply the principles and techniques contained in USAID’s results-based program process. (De-mystifying the language of the USAID process at the beginning of a partnership exercise will be important.)

· Including funds for the mutual design and establishment of a joint evaluation unit.

· Including funds for training in monitoring and evaluation.

Asking partners to collect baseline data in order to provide a benchmark against which to measure the impact of the new relationship.

5. Building Partnership Relations Between Romanian and American Organizations.

Key Points!

 

· The grant making process (i.e. the announcement, application, review, award, etc.) can itself have a positive impact on the attitudes, procedures and program priorities of recipients. A professionally managed grant making process encourages the growth of professionalism among recipients.

· Regardless of whether an individual grant was successful in accomplishing an activity objective, recipients of RASP grants learned a lot about partnering and how to build and manage partnership relations. In some cases, a problematic collaboration was more educational than an easy success.

· The availability of grant funds is a powerful incentive to stimulate a search for new partners. The best way to encourage insular NGOs to reach out to offshore partners is to offer money to finance joint projects.

· In a related vein, working through the nuts and bolts of joint implementation of a project is the single best way to test the viability of a relationship.

· Physical proximity and day-to-day contact between two partners is very important, particularly when the local group is small and organizationally weak. Despite modern communication technology, face to face contact is essential at the beginning of a relationship.

· Once established, partnerships tend to seek their own direction and to deviate from their original objectives. This is a healthy process of maturation but it means that donors will have to be tolerant of change and allow flexibility in the relationship if it is to be successful.

· It can be a serious mistake to assume that a US group will continue to fund a partnership after project money disappears. Most American non-profits are severely short of discretionary income and unless the partnership is squarely within their mission, they will lack resources to continue to support it.

· On the other hand, many American non-profits are very good at fund raising and can transfer their fund-raising skills and attitudes. In the long run, this is more important than the direct transfer of money. In designing partnerships, it is important to emphasize the transfer of fund raising skills and attitudes.

6. Autonomy and Independence: The Sustainable Development Services Program

Whether a lesson has been learned in a conclusive sense is always a problematic judgment. Lessons learned in one context are quickly forgotten in another. The following constitutes a list of insights that derive from the previous discussion that may have applicability with regard to future program and/or project design.

· Efforts to stimulate increased organizational interest in financial sustainability can be effective. A USAID/PVC funded organizational development program can be influential in changing organizational behavior and can accelerate a PVO community wide paradigm shift at least in those instances where the change is already beginning to occur.

· Attitudes and norms must change before new mechanisms will be adopted. While there are useful models and interesting techniques, these will be of little use in a climate of deep organizational resistance. Many PVOs approach ideas of cost recovery and revenue generation with a view that these techniques either cannot or should not be attempted.

· A deeper understanding of the current financial situation is a powerful incentive to change within an organization. The combination of hard headed and factual analysis of financial realities coupled with a tailored approach to revenue generation constitutes a very strong incentive for a PVO to look very seriously at the adoption of SDS approaches.

· There is no secret formula. The adoption of cost recovery and revenue generating mechanisms involves the gradual and systematic application of common sense approaches tailored to the programs and attributes of the organization. While there are very important principles associated with “high performance” organizations and useful mechanisms that can be very helpful in applying cost recovery and revenue generating techniques, there is no magic technology that constrains non-profits from moving in these new directions.

· The transition is difficult and time consuming and normally requires mentoring assistance. Shifting to cost recovery and revenue generation is complex and difficult because it involves a comprehensive transformation in values, systems, structure and practice. Because the process is gradual and the perceived risks of failure are high, the transition will frequently require external assistance. This in itself can be problematic because PVOs are not inclined to pay for a long-term technical assistance process, particularly when good prospects for recovery of related expenses is questionable. In SDS, the learning MOU provided assistance in transferring the financial sustainability approach to field programs.

· Linking organizational development (OD) support with practical TA works well. The integration of organizational change services with hands on technical assistance offering practical approaches tailored to the needs of the organization is an effective strategy. Imbedded norms that view cost recovery and fee for service programs as anathema to the culture of the organization must be addressed. Similarly, OD interventions that lack a practical follow through are likely to be viewed as theoretical and impractical.

· At the same time, the distinction between program (or service) sustainability and organizational sustainability is relevant and important. In the long run, if an operating PVO or NGO wants to be financially self-sustaining it will have to figure out strategies for converting subsidized field programs to income generating activities. While the transitional process can start either at headquarters or in the field, the roots of financial sustainability need to be planted in field programs.

· Overseas NGOs appear to offer a strong market for SDS services. Emergent NGOs in developing and transitional countries have a very strong and growing need for assistance in learning how to develop financial sustainability strategies. Many of these organizations have been started and nurtured by donors who are withdrawing and reducing support. The amount of charitable giving in these countries is severely limited and the philanthropic ethic is poorly developed. On the basis of a limited sample under SDS, overseas NGOs appear to be highly interested in and responsive to the SDS message.

· More attention must be paid to the design and development of benchmark information and progress indicators to gauge the impact of capacity building programs.

· Future support should be responsive (rather than pro-active) based on self diagnosis (rather than USAID diagnosis) be explicitly keyed to NGOs and overseas programs and be tightly linked to the programs and needs of the regional bureaus and missions.

· PVC should continue to support studies and research designed to deepen our understanding of issues faced in moving toward greater financial sustainability and should continue to support the development of tools and techniques to support self-assessment and financial sustainability planning.

· Micro enterprise based experience provides important insights but the development of broader models and tools are required and the effort needs to be sustained for a longer period of time than the four year SDS effort. Existing micro enterprise models and tools are the result of 15-20 years of USAID support.

· More discussion is needed with regard to the definition of sustainability. The SDS definition is coherent and dynamic but applies primarily to field programs.

· Forming consortiums should be done with care and thought about how they can work together. Full involvement of all parties is a must at the planning stages. Part of this should be a centralized system for marketing, initiating interventions and tracking results.

7. The Legacy of Experiment: A 35 year Retrospective Analysis of the Work of the Office of Private and Voluntary Cooperation

Outstanding Issues and Matters “Left on the Table”

A unifying strand throughout this Report has been that the completion of the work of the Office constitutes a marker of significant achievement. Clearly, conditions have changed and foreign policy and foreign assistance priorities have shifted in response. However, measured against original intent, it is difficult to not conclude that the aspirations of those who designed the Program 35 years ago have been largely accomplished.

But there are important issues and challenges left on the table and it would be irresponsible to complete a report of this nature without discussing them.

Making policy

The US non-governmental sector has become hugely important to the implementation of the development assistance program and an influential force for development in its own right. The sector is changing in complicated ways and its capacities and interests will have an impact on foreign assistance priorities and on the way USAID does business in the future. To an important degree, PVC has acted as a point of coalescence around the diversity of issues related to this community of organizations. The Office was a source of information, an advocate and a progenitor of analysis. Its existence validated the importance of the sector and encouraged policy makers to think strategically about how to deal with it. Certainly, the continuation of ACVFA will perform these functions to a limited degree. But ACVFA is constituency based, lacks a well staffed and funded professional secretariat and is an external body with limited capacity to work down through the bureaucracy. Its existence is, in fact, largely unknown among USAID Missions and to the extent that it is known it is viewed, albeit unfairly, as an entity with a narrow special interest.

While the need for continued centrally funded financial support for U.S. PVOs may have declined, the need for coherence in policy and consistency in treatment has not. In particular and as an example, the Agency needs a capacity to think through the implications of its actions with respect to issues of independence, dependence and institutional sustainability. The sensitivity and concern manifested by the founders of the Office with respect to these issues should be should be maintained.

It is inconceivable to me that a world class development agency would not have a role in thinking about, understanding and shaping the world of international non-profits here and in the developing countries. I don’t have any idea what that capacity should like or where it should be located or what it should be called. But I know it needs to be there.

The role and function of local non-governmental actors in the development process also needs to be continually addressed. In part this responsibility falls under the category of civil society which is well represented within the Agency. However, PVC brought with it a unique concern regarding sectoral strengthening including the building of networks, the establishment of partnerships, the importance of standards of measurement and certification and an overall sensitivity to organizational dynamics that needs to be continued.

Supporting new entrants

The maturation of the U.S. PVO community has brought with it a higher cost of entry. The institutional grants that helped launch the many U.S. PVOs that are now implementing foreign assistance projects no longer exist and the costs of building an overseas presence and capability are immense. At the same time, the surfacing of a perpetually new crop of topical development issues suggests that there is a continuing need for new organizations with specialized expertise to deal with them. While the need for new multi-brand NGOs that can offer a full panoply of development services has passed, the opportunity to make a considerable contribution in de-limited niche areas still exists. To some degree, the responsibility for nurturing the establishment of these groups can be located in the various central offices that have a discipline-based orientation. But the importance of new ideas and new approaches suggests the need for a monitoring and guiding capability at a central point of leverage within the Agency.

PVC did what no other donor would do. It supported creativity and it funded risk.

Thinking about Capacity Building

PVC has consistently provided a central point within the Agency to reflect on the nature of institutional capacity building and support new and sometimes experimental approaches in this important area. Some of the ideas that PVC first explored, such as new partnership forms, revenue generation or support for a controversial but ultimately successful experiment in organizational development have had significance influence and some have been mainstreamed into the work of the Agency.

Perhaps more importantly, the existence of an Office devoted to improving the organizational health of a group of organizations has tended to legitimize the value of this function in an Agency where immediate results can overshadow the importance of sustainable change. For those concerned with long term development, there is a concern that foreign assistance priorities are neglecting the importance of building durable institutions that can have a sustainable impact. Although the term “capacity building” is in abundant use, among some there is a belief that the type of “capacity building” associated with long term organizational vitality is simply not being done. As one USAID staffer noted:

We think only in sector specific terms and we pigeon hole our programs into small niche areas. We don’t think about the long term and we don’t think about the strength of the organizations left behind. There is an attitude that if you simply push money through an NGO they will learn how to manage it. We need a center of excellence that will advocate for the importance of organizational development and establish standards in this area.

Whether this responsibility should be centralized or dispersed to bureaus, the important point is that there exist a repository for thinking about approaches to capacity building and in particular, for tapping private sector expertise in this important area. This will become increasingly important as the Agency moves to apply the concepts enshrined in the White Paper and to incorporate citizen participation in efforts to implement the fragile state framework.

The Legacy of the Work of PVC

In summarizing the impact of 35 years of work, it is difficult to balance between soft generalizations on the one hand and anecdotal case studies on the other. At the highest level of generalization it is accurate to observe that PVC’s principal contribution was simply “being there.” By “being there,” the Office constituted a certification of credibility and authenticity for the sector and a validation of the important and relevant work that was being done. “Being there” also highlighted the need for coherent and integrated policy toward U.S. PVOs and later toward local NGOs and underscored the utility of having a data base of information and an analytical and evaluative capacity that could make judgments about the comparative advantage and weaknesses of these organizations.

While there were many influencing variables, PVC can justifiably claim an important degree of responsibility for the transition of the U.S. PVO community toward development work and for the important role that these organizations now play. In this respect, the Office has been particularly successful in:

· Identifying, supporting and promoting areas where US and later local NGOs had a comparative advantage and could demonstrate their competence and professionalism. Examples include micro-finance, child survival and work at the grass roots in health care systems and environmental activism.

· Providing fledgling organizations with initial seed capital to experiment with new and innovative approaches establish an overseas presence and build organizational capacity thereby launching their entry into development work. Specifically, the ability to support administrative and related costs was absolutely critical to the successful launch of a number of new organizations and to the ability of more established groups to add professional skills and analytical ability that they would otherwise have not been able to afford.

· Persistently concentrating on the importance of organizational capacity as a prior necessity to effectiveness. Despite skepticism from others, over its life PVC maintained constant pressure on U.S. PVOs to become professional and sustainable. By doing this, they helped legitimize the discipline of organizational development and elevated the importance of professional standards of assessment, measurement and performance.

· Establishing avenues of entry and communication within the USAID bureaucracy that deepened internal understanding of the strengths and weaknesses of the U.S. PVO sector while at the same time informing these organizations about development issues and also about the practicalities of doing business with the Agency.

An important part of the legacy of PVC was its avoidance over the years of things that might have been done that would have been destructive of the competencies and durability of the U.S. PVO sector. To its credit, PVC was able to sustain its sensitivity to the fundamental autonomy of the sector and resist the temptation to dictate to these organizations. In this respect, PVC was instrumental in:

· Elevating the importance of financial and organizational sustainability by persistently raising this issue and by supporting efforts of grant recipients to address it.

· Warning against the danger of financial dependence on government and establishing review mechanisms and threshold targets that would address this issue.

Finally, PVC has been successful in nurturing a constituency that supports the value and importance of U.S. foreign assistance. It has done this not only through its grant giving activities or its development education efforts but in its role in moving the locus of development assistance squarely into the private sector with the consequent outreach to the public at large that this transition has accomplished.

PVC has left a bright legacy. Those that learned well the lessons PVC taught about self-sufficiency and technical skills and tight programming are doing well. Those that have come later and lack the entrepreneurial seed capital that might have been provided by a DPG, an OPG or a Matching Grant have had greater difficulty.

The opinions of the many individual that were interviewed for this Study constitute an interesting dichotomy, which falls outside the Study but not outside the future of the non-profit development community. About half the respondents felt that PVOs have fully demonstrated their competence to function as central figures in development as shown by the fact that these groups have become mainstreamed and have assumed a growing role as contractors for USAID. For these, the termination of the PVC Program is a validation of their competence and maturity.

Others, however, feel that PVOs have lost their compass, their unique ability to work at the grass roots level, to focus on communities, and to be independent from the weight of USAID’s monolithic programming system. For them, the end of PVC is a near tragedy because without entrepreneurial risk capital they anticipate the gradual decline of a vigorous U.S. PVO community.

8. Organizational Learning

There is a vast body of literature on the subject of organizational learning and on the design and conduct of program evaluations. In discussions with ALO staff, several key principles emerged that appear to be directly relevant to the program they administer and the context in which they operate:

· Organizational learning is an attribute that responds to a complex set of subtle incentives and disincentives that influence attitudes and choices. It is important to understand these factors in order to improve the quality of thoughtful analysis.

For ALO, a key challenge will be to address the disincentives associated with being an intermediary organization that functions between two groups with different institutional cultures and strengthen those incentives that emphasize a proactive strategic approach. This will require a deeper and more nuanced understanding of USAID priorities and needs and a tactical ability to balance between the culture of a government bureaucracy on the one hand and a diverse group of academic entities on the other.

· ALO staff are deeply committed to their work and to a belief that the higher education community has immense resources that can be deployed to assist and support the development process. However, organizational learning that leads to a change in practice or behavior occurs when individuals within an organization encounter a problematic situation and experience a mismatch between expected beliefs and actual results that leads them to modify their initial assumptions. For a variety of reasons, ALO has had difficulty in establishing a structure that will identify critical mismatches that in turn lead to a modification of assumptions and changes in practice. As a partial consequence, within USAID there is the occasional perception that ALO and the higher education community in general are unwilling to question core premises.

· Some organizational cultures are more conducive to critical and innovative thinking than others. Participatory structures that engage staff in goal setting and strategy formulation tend to be more inquisitive and innovative than rigid structures that emphasize compliance. Universities believe and are proud of the fact that they possess a culture conducive to enquiry and learning. ALOs own internal structure appears to reflect this orientation through open and participatory practices. At the same time, the inherent nature of USAID’s planning and programming system can inadvertently create a climate of disempowerment that can undercut innovative thinking. Both ALO and USAID need to be aware of this fact and address it in an open and direct manner.

· There is an important difference between learning that improves performance and learning that changes the definition of what constitutes improved performance. ALO’s capacity to accept and incorporate this important distinction in their work will be fundamental to their capacity for “out of the box” thinking. The support of USAID in this respect and a willingness to entertain views that alter core definitions will be essential if ALO is to create a rich culture of learning and enquiry.

· Because ALO works in an immensely diverse and complex arena and functions between two dominant and quite different cultures and set of expectations, it is important that organizational learning and the process of enquiry and evaluation be approached in a structured, deliberate and strategic fashion.

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