Non-Governmental Foundations of Georgia
Requirements, Capabilities and Problems

Marina Kuchukhidze, the Horizonti Foundation

The legislation of Georgia defines a foundation as a non-entrepreneurial, not-for-profit legal entity, established with an endowment provided by one or more founders, for the benefit of the society. A foundation is an independent body, which has no members and does not work directly on the solution to a problem; rather it seeks funds from diverse sources, to be distributed to the executing organizations.

According to the data from the Ministry of Justice, there are up to six hundred foundations registered in Georgia, however, during the research only 268 of them were available for questioning.

The establishment and registration of foundations in Georgia started in the 1990s. This process reached a peak in 1998 and coincided with an increase of activities within the non-governmental sector as a whole and a boom in the establishment of NGO’s (non-governmental organizations) in the country. This year was the zenith for NGO’s, when 24 percent of foundations were established, and half of the existing foundations re-registered.

Subsequently, the energy of foundation establishment and registration decreased; presumably the boom is now over, and the current situation will continue, especially if donors are, neither encouraged nor express interest in foundation formation. This does not apply however, to the short-lived single-goal foundations, which are come and go.

All the non-governmental foundations of Georgia were established in towns, the vast majority in Tbilisi (96.2%). Most of Georgia’s foundations acting in the regions represent branches of foundations established in Tbilisi. Twenty-four (9%) of foundations questioned have regional branches; there are only ten independent foundations acting in the regions.

The Activity: Trends, Fields and Areas of Spreading

One third of Georgia’s non-governmental foundations are established to support “destination groups” (specific people or, population groups). The destination groups have a right to a share of foundation property; after liquidation the remaining foundation property, is also to be distributed among them. Destination groups generally represent the unprotected strata of population, such as: the IDPs (meaning?), disabled persons, orphans, homeless children, school children and teachers. Most frequently the destination groups of the foundations questioned were represented by school children, teachers, disabled persons, orphans, homeless children, IDPs, etc.

Grant making, represents the main goal of only 6% of the foundations questioned. The greater proportion of foundations questioned represent:

• Establishment / Institution (29.5%), conducting scientific research or cultural educational activity;
• Resource Center (28.7%), making informational, material and intellectual provision to physical and legal persons.

There are a large number of foundations of direct action (22.4%) established by individuals with the sole aim of attracting funds for their activities.

The activities of the majority of foundations are distributed over country, regional, urban and or local levels. The activities of 17% of foundations reach beyond the country’s borders.

Over half of the foundations, mainly school and nursery school foundations, act in the field of education. There is also a considerable number, operate in the fields of culture and health. Foundations also operate in the fields of social security, human rights, environmental protection, development of civil society, law making, development of local communities, economy, etc. A great part of foundations carry out charitable activity.

Based upon the above trends, the majority of Georgian Foundations conduct educational activities for example, training seminars (32.1% on a regular basis, 28.6% occasionally). They also; research, analyze and disseminate information; conduct scientific research; lobby for specific laws, and monitor or conduct public or alternative (?) examinations.

Presumably, the range of activities conducted by the Georgian foundations of Georgia is determined by a number of factors, such as:

• The lack of such activities in Georgian everyday life and therefore in demand;
• These types of activity, are promoted by donor organizations;
• The country’s intellectual resources from diverse budgetary scientific and educational institutions have come together in the non-governmental sector, particularly within foundations

Only 43 foundations (17.1%) consider their activity to be successful and 75 (29.9%) – partly successful. Some 63 foundations (25%) only partly achieve their goals; the rest 70 foundations (27.9%) consider their activity to be either partly or, fully unsuccessful.

Obstacles in the Activities of Foundations

Generally, the most considerable obstacles indicated by the managers of foundations, is a poor financial state, other stated obstacles include:

• Means of communication;
• Information;
• Support of volunteers;
• Cooperation with other organizations;
• High or improper taxes;
• Difficulties of relationship with governmental bodies, etc.

The Financial State of Foundations

Generally, the most considerable sources of financing are local donations and property endowments of their members; grants and funds obtained from economic activity play a less important role.

Half of the questioned foundation managers have complained about unfavorable financial state. The burden is evident from evaluation foundations budgets, and in the opinion of 85% of the mangers questioned, 29% state their finances to be extremely bad, 32% unsatisfactory, and 24& unstable; whilst only 15% are satisfied and 1% very good.

As regards the property of foundations, which is comprised of finances and all type of values, it is also insignificant; 72% of foundations estimate the total of their property as lower than 5 000 GEL, only 9% of foundations have a property exceeding 25 000 GEL.

During 1999 and 2000, 40.5% and 32.2% respectively had no budget. Most frequently the annual budget comprised 500 to 5000 GEL (25.3% and 31.4% of foundations in 1999 and 2000 respectively). An average of 7% of foundations have an annual budget exceeding 250 000 GEL.

The relatively insignificant financial capacity of foundations is also indicated by the fact that, only 13.9 % (37 foundations) own offices; 16.9% (45 foundations) rent their offices on a regular basis. The rest of organizations rent offices occasionally; in some cases the staff work either at their main jobs or at home. Only 12 % of organizations have a nice office – equipment, furniture and other supplies.

Cooperation with the Government, Business Sector and Media

Cooperation with Local Councils represents the most frequent type or relationship with government. The attitude shown by the respondents with respect to Local Councils is clearly negative: 202 out of 268 foundations questioned consider it to be confronting. Only 56 foundations (20.9%) cooperate with this branch of the local government.

A much larger number of foundations cooperate with Local Administration and municipality (28.4% and 27.6% of foundations respectively). Cases of cooperation with the government and the Parliament are also frequent (29.5% and 26.1% respectively).

A total of 34 foundations (12.7%) have the experience of working jointly with the business sector.

The foundations have frequent and multi-colored contacts with the media. Most frequently the media reflect an activity or a certain action (36.2% of foundations), prepare programs about them (24.3%). Besides, a large number of foundations react upon this or that event by means of media.

Relationship with Donors

Some 14% of organizations have their main donor; 42.1% have a single donor, 41 foundations (17.6%) have never had contacts with donor organizations.

The managers of seventy-two (26.9%) foundations questioned mentioned problems in the relationship with donors. The unawareness of projects evaluation criteria was mentioned as the most acute of problems. It should be pointed out that the priorities of donors often do not match the real situation existing in one single field or the goals of an organization fixed in its charter. The policy, strategy and priorities of donors are often vague and general. In addition, donors do not award grants for organizational development.

In order to overcome the above-mentioned problems it is desirable that donors:

• Clearly determine the criteria of evaluation of definite grant programs and make contest participants aware of those;
• Learn the real situation existing in a contest field prior to the announcement of contest and determine the priorities on this basis

As particularly valuable among means to overcome the difficulties of contacts with donors the leaders of foundations mentioned: consultations on the subject of donor search, study of foreign experience of working with donors, study of reference materials concerning foundations, information management and training on the development of skills required for the search of funds.