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Liana Sayadyan

NGOs Are Changing Their Thinking

"This whole movement of non-government organizations started after the earthquake and when our compatriots started coming to Armenia from Azerbaijan. There were no such things as non-government organizations back then. People from different professions and specialists in different areas came together and formed organizations to help the victims of these events. When that wave ended, and the necessity declined, the number of such organizations, especially charity institutions, decreased. But many people strived towards greater professionalism," said Hripsime Kirakosyan, President of one of Armenia's most well known charity organizations, Mission Armenia.

As of September, 2005, there are 4,350 non-government organizations (NGOs) registered at the Ministry of Justice. The earliest registered NGO is the August 23 National Alliance, a legal union that was registered on December 17, 1990. Edik Margaryan, head of the NGO Registration Department said, "Even for a small country like Armenia, 4,350 is not a very large number, because these NGOs are essential for the establishment of civil society, and especially for lobbying the government."

"Those 4,350 are not all visible in the field. In truth, there are very few NGOs, around 100 or 200 who are actually doing any work," said Vahe Hovhanissyan, president of the Center for Dialogue and Development.

The Ministry does not categorize NGOs by their field of work, but most of the organizations in Armenia deal with human rights, the environment, the problems of socially vulnerable groups such as the disabled, refugees, the elderly, and children as well with journalists' rights. The majority of NGOs registered are based in Yerevan with Gyumri in second place, followed by Vanadzor and Goris.

He who pays the fiddler calls the tune

The biggest issue regarding NGOs in Armenia is keeping them economically viable. According to law, an organization's assets are maintained through membership dues, grants and donations. As non-profit organizations, NGOs are not allowed to do business directly. Thus, the NGO sector almost completely depends on foreign donors. According to a study by World Learning, the total amount of funds provided in 2003 to NGOs in Armenia through grants (all donors combined) constitutes more than US $12.5 million. The largest donor for NGOs in Armenia is the United States government, through its various agencies, and the US Agency for International Development (USAID) in particular. From 2001 to 2004, it provided around US $32.9 million to the NGO sector.

This financial dependence has tainted the reputation of NGOs as far as both the government and the public are concerned. Many believe that NGOs work towards satisfying donors, rather than the Armenian public, and fulfill their orders, or are created purely for the sake of winning grants, which is why they are accused of being clandestine "money-eaters".

"I agree with the view that some NGOs were founded only to win grants. That is to say that they weren't founded around any publicly beneficial idea. Or they might seem to be so only on paper, having very broad targets listed in their statute, leaving the impression that that's it, if they were to get some funding, poverty or unemployment in Armenia and the South Caucasus would be eradicated. But in my opinion, such NGOs make up only 10-15% of the total number, no more," said Levon Barseghyan.

"We exaggerate the role of international organizations a great deal. There are fully-formed groups in Armenia that have a healthier and more realistic approach to the situation. It's just that we have common aims with international organizations. If, five years ago, we were to see an Azerbaijani or a Turk we would have called him an enemy, but today we attend conferences together, have discussions and exchange news articles and information. This is thanks to regional NGOs. What I'm trying to say is that maybe at first glance we don't see too much of what NGOs have done, but in reality there have been a lot of changes. And that is not due to the government or the opposition, but due to working NGOs," said Vahe Hovhanissyan.

"All of our funding comes from international organizations-we've received about US $ 8-9 million since 1988, yet we've always done what we've wanted to," said Hripsime Kirakosyan.

But the support provided by donors is not never-ending, and they could leave one day. The law regarding NGOs has outlined another possible source of income for NGOs - they are allowed create for-profit limited liability companies (LLC). This is positive on one hand, because it provides an additional means to raise funds for the NGO, but on the other hand running an LLC causes more headaches with the tax department in the current economic environment. "Very few NGOs utilize this option. We founded an LLC last year, but business was very difficult. You're doing social work, and it's hard to split yourself in half, but it's also hard to move onto a different track altogether. The tax field is very different, especially running the business, and the tax burden is heavy. We hired consultants to assess the field and analyze the likely ways to make a profit with an LLC, but they didn't see too many possibilities. That is why we tried another option - talking to local authorities about cost sharing, because we're providing social services to the population. The local authorities in the communities where we work say that social tension has decreased greatly. That is how it should be, the government should work out the strategy and should finance us to carry out concrete operations, i.e. the government should hire our services," Kirakosyan said. NGO managers demand either the direct right to provide services on a paid basis in order to make a profit, or tax allowances for their LLCs.

The third financing option outlined for NGOs by law - donations - is almost never implemented in Armenia. Local businessmen or oligarchs rarely provide funds to charity organizations, particularly NGOs dealing with human rights or other issues. "We celebrate the Day of the Elderly every year on October 1. We have often asked the largest corporations in Armenia to sponsor our events on that day - Grand Candy, Coca Cola and so on - but they don't, very few of them help us. I guess it's a cultural thing that still needs to develop here," said Kirakosyan.

"There are 300 large business corporations today, businesses that can comfortably afford to give money. We took upon such an initiative once, where we got together with a few NGOs and decided to set up a fund, where businessmen would be able to make anonymous contributions, and we wanted to have an independent commission to govern the fair distribution of the finances. But that never got off the ground, because it's very difficult to convince a businessman today to give an NGO US $1,000. He would gladly spend it at a restaurant, but he will not give it to an NGO. The unhealthy social environment is also to blame. If someone were to say that they wanted to establish such a continually functioning fund, then people would immediately suspect that the oligarchs were creating a structure for future elections, political parties and other purposes," said Vahe Hovhannisyan. In truth, that is exactly what has happened; the big oligarchs have established their own private charity funds, within their electorates. "Everything is given a political twist in Armenia. They actually do such things with political motives," said Hripsime Kirakosyan.

The Government enters the NGO sphere

In 2005, through a Presidential order, 50 million drams was allocated in the state budget for grants to NGOs for the first time. That sum is expected to reach 100 million drams in 2006. Some NGOs are categorically against the government's entry into the NGO sphere. "The financial assistance of the government to NGOs is really useful in a country where democracy has begun to be advocated. It is not necessary for democracy to have established itself in the country, but for the advocacy of democracy to be irreversible. Otherwise, in the conditions of a fake democracy like ours, a similar scene could turn into a means to send state funds into certain pockets, a covert means to keep the authorities in power and could encourage the government to reproduce itself. They will say, 'Look, look, we have allocated a whole 1 (or 3, or 13) per cent of the budget to NGOs to realize this or that social work,' but no one will think about the mechanisms through which that will be done, and in this process the corresponding government bodies will not pay attention to any evidence of revealed corruption," said Levon Barseghyan.

"It's true, we work with the assistance of international donors, but our strategy is such that we have to work with the government in the social sphere, because the donors might leave one day. Throughout the world, local authorities in particular work with NGOs in the social sphere, but here the idea of 'social cooperation' is not acceptable yet. Last year, the United Nations High Commissioner for Refugees invited us to talk and said that since the government had announced a growth in the economy, their central office decided to decrease humanitarian aid, and our budget was cut by 30%, despite the fact that the economic growth in question did nothing for our beneficiaries, 18,000 refugees and lonely elderly people. There might be economic growth in the country, but that growth is not distributed evenly and does not benefit the poor. If that growth does not reach vulnerable groups, but our budget is cut anyway, then the government must compensate," said Hripsime Kirakosyan.

"Of course the government must give money. In 2005, 50 million drams (around US $110,000) was allocated to grant programs for NGOs for the first time. It's true, it's a very small and even a ridiculous amount, but that idea was introduced for the first time, and that is very important. But that does not mean that the NGO receiving the grant would have to depend on the government or the President. Will NGOs working on human rights cease to criticize the government for its mistakes and faults? You cannot be serious. The government cannot make such demands, the NGOs will get financing from other sources anyway, not only from the government. There are opposing voices who claim that the government has no right to allocate such finances. I don't understand what's wrong about it though. If programs are being realized in orphanages and elderly homes what's bad about that? It's just that everything gets politicized in Armenia, even the most brilliant idea. That it a result of the contaminated social environment we live in," said Vahe Hovhanissyan.

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