17:40 17.08.2021

A strong public sector is, among other things, a strong country – Victor Liakh, President of East Europe Foundation

10 min read
A strong public sector is, among other things, a strong country – Victor Liakh, President of East Europe Foundation

This is the second part of an exclusive interview with Victor Liakh, President of East Europe Foundation (EEF) to the Interfax-Ukraine news agency

Let's take a closer look at funding. While I was looking for information about the Foundation, I found how much the Eurasia Foundation had invested in total – about $44 million. But I could not find information about you over the 13 years of the Foundation's existence. Are these amounts in the public record? 

Yes. This is $30 million. It is more difficult to say in hryvnia, because the exchange rate varied all these years. All this information is public. We publish it on our website and indicate the amounts in our public annual reports.

I am interested in the distribution of grants of the Foundation by programs. For example, what portion of the Foundation's portfolio was for improving energy efficiency, improving digital networks, etc. 

That is an interesting question. We have never broken down [the Foundation's portfolio] into such categories. But surely, we will need to ask the finance department to do this analysis.

What is the Foundation's annual endowment? What is your budget for 2020 and what is its breakdown by line item?

We try to indicate this in our reports: in 2020 – $6.5 million. As for costs, more than 60% is spent on programs and about $1.6 million on grants. We also publish all recipients in our sources, with amounts. Administrative expenses are somewhere around 6-7%.

It is important to note here that according to the law, no more than 20% should go to the administration of a charitable foundation. Our percentage, as you can see, is much less. Unlike American foundations, which take for the development of the organization, conditionally, from one dollar 25-27%. That is, everything that we administer, every second of our time, every hryvnia, is spent on supporting programs.

Who are your donors?

Half of the funding comes from the U.S. government. The other half comes from governments of other countries, the European Union, and charitable foundations of other countries. We did not receive funds from private foundations and businesses last year, but we had earlier contributions from the business.

Does the private sector support the Foundation? 

Yes, especially in the context of community development. There were interesting projects for economic development, to support certain target social groups, for example, the elderly.

We had different experiences: DTEK, Telenor, Monsanto ... Until we made changes to the partnership policy – JTI, Carlsberg Ukraine, Philip Morris ... We did a lot of interesting things.

You mainly mention international companies, except for one. What about Ukrainian businesses?

Ukrainian businesses also. For example, Juscutum, the law firm that helped the Foundation with a blockchain-based solution. 

Why aren't Ukrainian businesses more supportive of your work? 

I think that it is not easy for Ukrainian business now, especially in light of the pandemic. On the agenda is the issue of resource optimization, and in some cases, survival. But indirectly, our small projects launched by us are, of course, to some extent financed and co-financed by businesses.

Are you interested in further business financing and looking for partners?

Yes, we are. The format of participation can be mutually beneficial. For example, one of our projects is the 'DIIA.Digital Education' ('DIIA.Cyfrova osvita' – Ukrainian, IF ). The platform itself, the idea was developed by us with the Ministry of Digital Transformation. We supported its creation and then different organizations came up with their ideas on how to introduce their educational courses there.

The first who responded was Kyivstar with the 'Smartphone for Parents' program. The idea is to attract people who work only with mobile communications of the usual third generation, to make them consumers of content. That is, to open up opportunities for them to receive public services, to stimulate them to be active citizens and the like. 

Here our interests with Kyivstar coincided. They have a new service and traffic monetization, we have new opportunities. They prepared a whole block of content on how to involve third-generation people in this process and passed this content to 'DIIA.Digital Education'.

In fact, this is always a win-win (the case when all participants remain in the black – IF): it is useful for society and the company is profitable.

Another example of cutting-edge cooperation with business is within the framework of the e-Baby (eMalyatko – Ukrainian, IF) project with the Ukrainian IT Association. As a pilot, we launched this e-service in maternity hospitals with the assistance of administrators – special people who helped young parents fill out online applications. This required more than 600 computers. In the shortest possible time, the state would not have had time to carry out the necessary purchase. We got together and found 200 PCs together with the business, which handed over the equipment to us. We completed the project, installed the software, and handed it over to the state.

Let's talk about the challenges. What is holding back the work and development of the Foundation? I understand that this is a general question. Are there barriers that inhibit the Foundation's work? 

Now, thank God, there are opportunities, so it is definitely not the funding. There are a lot of international assistance programs in operation. At the same time, there is a large shortage of people with expertise at the intersection of IT technologies, state, and the public sector. We have never trained such specialists in universities.

And, of course, there is the level of capacities of civil society organizations, which has improved over the years but still needs to get better. I heard from a colleague the following figure: 60-70% of grant assistance that donors provide to Ukraine remains unclaimed. Ukrainian public organizations cannot use it because there are not enough project competencies. As a result, there are few effective projects in the portfolio. I'm talking about the sector as a whole although there are areas where the situation is better. There are not enough strong teams, organizations do not have development strategies, there is no good project practices, etc. These are the areas where the public sector in Ukraine still needs to develop. After all, a strong public sector means, among other things, a strong country, both in a political, social, and economic sense.

How do you feel about the fact that organizations like yours are called grant-feeders?

If we take the entire volume of international technical assistance allocated to Ukraine and see what share goes to public organizations in the form of competitions, then this is 10%. The rest is distributed through the state: certain Foundation programs, direct assistance to the budget. This is where hundreds of millions of dollars go, not to the public sector. Under grant-feeders, we usually understand the organizations which receive funding that demonstrate no results and provide no reporting to the public. I think that EEF is not the case.

If we are talking about large grant Foundations, their recipients often work with individual entrepreneurs (FOPs). Do you cooperate in this format?

All of our key employees are staff members. We use the services of private entrepreneurs (FOPs) for project-specific tasks within the framework of program activities (so called project implementation team). But such involvement is limited in time and has a clear technical assignment – a set of services that this specialist must provide. The Foundation's policy is not to use FOPs as a way to minimize taxation.

Tell us about your plans, if you talk about them at all. Especially medium and long-term plans.

All our plans are subordinated to the strategic goals of the organization, the so-called smart goals. They are determined for the period from 2019 to 2024. We have three of them: a strong and active civil society, effective governance at all levels and institutional development. Every program, every project that we implement or financially support, contributes to the achievement of these goals. We use ten indicators to measure our performance. 

For example, we count the number of users who were able to join the decision-making process using all electronic platforms implemented with the participation of the Foundation: the e-democracy platform E-DEM, the portals of electronic petitions of the Verkhovna Rada and the Cabinet of Ministers, and others. From this graph, it can be seen (the graph shows – IF) that today we have moved towards the goal by 41%.

That is, speaking of plans, there is still a lot of work to be done?

Yes, now we are working with the Ministry of Digital Transformation and Secretariat of the Cabinet of Ministers of Ukraine on the development of the platform 'Interaction' ('VzaimoDiia' – Ukrainian, IF). It will be a national e-democracy platform with the help of which Ukrainians will be able to influence the decision-making process of the authorities online. There will be electronic voting, and electronic applications, and the opportunity to submit proposals to draft laws and regulations, and much more.

One of the platform's super-tools is an electronic application to funding from the state budget, where civil society organizations will be able to apply and receive support from the budget of all levels. We want to make this process transparent, easy, electronic, and accessible. So, that in 3 years a system will work that would allow any public organization to apply for state support electronically.

Further, we want to consolidate it by law, and we are working with the Ministry of Digital Transformation to transfer all public services to the online format. Any interaction with the authorities, which we have now, should have an online opportunity: receiving, filing complaints, filing applications, etc.

The ministry is one of your serious partners. But you also work a lot with the Verkhovna Rada of Ukraine. What is planned in this regard?

Yes, together with the Ukrainian Parliament, we have implemented a large-scale project for more than seven years – the USAID RADA Program. Its program activities ended on June 30th. But we do not lose hope for continued cooperation. For example, there is one initiative that I would very much like to implement – to organize an analytical and research service is the Verkhovna Rada. Such structures exist in the parliaments of all advanced countries. Our idea is to take the best international experience, bring it to Ukraine, connect those people who work here, with those who work in the British Parliament, U.S. Congress, and European Parliament. We want to show them how to write templates for documents, how to do research, etc.

And this service is planned for Verkhovna Rada or will it be an independent one?

We want this service to be independent, but to be used by the Verkhovna Rada, namely MPs and their aides. I very much hope that within six months a decision will be made to create such a service in the Parliament. As part of the USAID RADA Program, we created a prototype of the service – European Research Center which provided access to the international experience and quality analytics for MPs. Thus, in 2020 by request of MPs, our experts prepared about 120 policy briefs, about 50% of these materials were used while lawmaking. 

Everything that I mentioned is just a part of a larger mosaic. Now the Foundation has a dozen programs that relate to the development of civil society, e-government, economic and social development. A recent initiative is our expert support for the Crimean Platform.

Perhaps, the key idea that unites all our programs is the desire to transform Ukraine into a state that serves the people through our work, a state that will be efficient, open, and, most importantly, comfortable to live and work in.