By Robert Atkinson Now that market economics has taken hold in Central and Eastern Europe (CEE), non-governmental organisations need to be more business-like about their finances. Donors can assist in this process by taking a "venture philanthropy" approach to their grants: They can give seed money for investments that will help the NGOs become more self-sufficient. According to "Trends in Funding," a 1998 study carried out by the Regional Environmental Center for Central and Eastern Europe (REC) and Milieukontakt Oost-Europa, domestic funding to environmental NGOs in CEE has been increasing, but not as fast as other sources are drying up. The average amount available per NGO dropped from EUR 6,000 in 1995 to EUR 3,500 in 1997, the study found. To help address this problem, REC has been working with the partners of the Sustainable NGO Financing Project (SNFP) to integrate an innovative venture philanthropy mechanism into its traditional grantmaking approach. The pilot project, funded through the Phare Partnership Programme, provided the capacity-building and financial support necessary for NGO self-financing initiatives. This involved identifying NGO business (self-financing) opportunities, assessing them through a feasibility study stage, providing expert advice and support to the NGOs (through local business advisers and trainers), preparing and funding business planning and, finally, if applicable, supplying funds and expertise to implement the venture. REC and NESsT have helped start four such ventures.   Region's NGOs show an interest The project shows that there is interest in self-financing among NGOs in the region. Some 65 NGOs from the four target countries applied to be a part of the initiative, with 12 of them developing full feasibility studies for their own venture. From REC's granting experience that is a surprisingly robust response to such a new call. However, there are a number of areas that need to be addressed before the venture philanthropy approach can really be implemented here. Without the financial instruments (loans, start-up, etc) no amount of capacity-building will help. Donors should devote a proportion of funds to support self-financing initiatives. Furthermore, NGO leaders need more business training, while business advisers need training in NGO issues. A new publication, "Planning for Sustainability," relates how and why REC and the SNFP partners have tried to introduce venture philanthropy. For REC publications, see REC's website at: http://www.rec.org/REC/Publications/publications.html Robert Atkinson, ratkinson@rec.org, is head of NGO Support and Capacity Building Programmes at the REC.

Illustration: Laszlo Falvay ART FROM THE REC BOOK ON SUSTAINABILE NGOs: Give an NGO a grant, and it will live for a project. Teach it to fish for it’s own money, and it’s sustainable.