Promoting local development and encouraging partnerships between the third sector and financial institutions is an issue that civil society in Central and Eastern Europe is particularly interested in approaching as the European border continues to expand. It is also the topic that over 100 European representatives from public, non profit and public spheres will be discussing at Budapest in April over the course of the two day conference being organised by the Euclid-network of European third sector leaders.
Peter Nizak, senior manager of the Open Society Institute
Peter Nizak, a senior manager of the Open Society Institute who has worked in the Hungarian non profit sector for almost 20 years covering management roles in environmental, pro democracy and development NGOs (Independent Ecological Sector, DemNet Foundation, Civil Society Development Foundation, Hungarian Soros Foundation), will be one of the event's keynote speakers.
Even though Hungary has a good law that promotes philanthropy, the 1% law, few people use it. How come?
I agree that the 1% law is a good one, but whether it promotes “real” philanthropy or not is a controversial issue. First of all, designating 1% of one's income tax is not really a philanthropic activity because tax payers have to pay the tax anyway, so they are not giving away their own money but “only” designating their taxes to a specific purpose. The counter argument also says that being able to allocate your taxes to a social goal means that people may think that they are already fulfilling their “duties” toward the community, so they loose their motivation to support other NGOs or other societal goals. However, I think the law is very positive because it lets people control the use of their taxes, provides possibilities for NGOs to be visible and also it is huge source and income for NGOs.
It is true that less than 40% of the tax payers designate the 1%. I think that there are several reasons for this. There is certainly a percentage of tax payers who do not want to give money to NGOs but I think that the real underlying reasons are different: the weak PR and promotion capacity and skills of NGOs, the general reputation and lack of “visibility” of NGOs, administrative difficulties (the law was modified this year and the administration has become easier than before) and lack of information. The positive aspect is that there is a good potential for NGOs to attract more money from the “1%” to finance their activities.
What would you say are the main obstacles to participatory democracy and civil engagement in Hungary today?
It is a difficult and sensitive question at this time in Hungary. I think that the concept of “public participation” or “civil engagement” is not clearly defined or accepted in Hungary and is used to mean different things. Although Hungary has a real tradition in the field of philanthropy and (local and national) civil movements, I think public participation is not a strong element of our political and societal culture and attitude. In addition to this, the current sharp division of politics has reached the civil sector too, so it has become politically polarized. It is very difficult to separate and distinguish what party politics and what public policy issues are, which obviously makes the situation difficult. As I see it, public participation (which is the basic element of participatory democracy) suffers from serious weaknesses in Hungary: neither the willingness of people (level of participation in planning processes, decision making processes in local and national levels) nor the institutional background (structures, channels to articulate opinions and interests) are sufficient. So, I would say that the main obstacles are conceptual confusion and lack of tradition and I think that both actors (the state and the civil sector) have duties to improve the situation.
From your position as Senior Manager at the Soros Foundation, who are Eastern Europe's future Soros? Does civil society need new philanthropists or do you think that there should be a move towards social enterprise so as to become more financially independent?
Yes, I am Senior Manager of the Open Society Institute and in the past years I was the executive director of the Hungarian Soros Foundation (Soros Foundation Hungary has been the largest private, not state, grant-making organization in Hungary during the last twenty years). In the present context I cannot see who will be the future Soros, I do not see any local private foundations or philanthropist in the region who would be able to substitute the role of US and Western European actors that have been actively involved in the region and who have helped out those areas that have trouble in accessing funds. I think it will take time to “find” them. There are, however, a lot of examples of philanthropy and significant amounts of money are given by individuals and companies to NGOs and societal issues. Developing and establishing the institutions and channels of philanthropy is a long-term process.
Currently, it is obvious that there are not enough strong private foundations, and there are many areas (watch-dog or think tank activities) that are not “attractive” or recognizable enough for local donors to support.
But I would not mix social enterprises with other activities of the civil sector. While I do believe in social enterprises, they only make sense in certain areas, like employment, economic development, agriculture or maybe environmental issues but there are certain segments of the civil sector for which the concept is simply not relevant, such as advocacy, think tank or watch dog type activities.
What do you expect from Euclid's meeting in Budapest and what do you expect to bring to it?
I expect to meet experts who can introduce me to local development methods and approaches. I think the issue (innovative ways to enhance local developments in Central Eastern Europe) is very relevant, numerous countries in the region have reached new phase of their history with the EU Accession but this status is not only “fun” but means lot of difficulties and challenges. I am especially interested in innovative, practical approaches that can be applied to this region. I think each region and each country has its own speciality, so it is difficult to find the relevant and authentic solutions for the difficulties, we can not use simple models from other regions or countries. But – to be able to tailor them to our local circumstances and find out the best ones – exchanging experiences and networking are crucial. Maybe it is not too ambitious to say that I can contribute to this process by sharing the experiences I have accumulated in the last 17 years working in the Hungarian NGO sector.
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