In the countries of the Western Balkans^[1], shaking off long-standing socialist traditions where the state provides for all, can a culture of personal or collective philanthropy emerge at the same pace as democratic and market-oriented changes in the spheres of politics and business? To what extent is the durability of social reform in these countries still reliant on external funding and support?

Five years ago, these were some of the questions which arose as I worked as Senior Programme Officer for the Balkan Trust for Democracy. At that time, fears of closing space for civil society began to dominate my conversations with many non-profit organizations. These concerns were amplified in the Western Balkans by the gradual decline in foreign philanthropic and bilateral support.

My suggestion that domestic non-profit organizations (NPOs) might turn to domestic or diaspora-based funding was met with scepticism. There was scant evidence of the existence of organised giving within each country. Many NPOs believed their only salvation lay in convincing their traditional donors to either maintain or increase their funding to the Western Balkans.

Catalyst Balkans
It was from this that the idea of Catalyst Balkans emerged, an exercise conducted by Aleksandra Vesić, a Serbian development professional and activist, and me to map the existence of philanthropy across the Western Balkans and to make a set of recommendations about what could be done to spur the growth of domestic giving.

Nathan Koeshall speaking at the launch of the Catalyst Balkans Annual Report on the State of Philanthropy. Photo credit: @CatalystBalkans

We weren’t the only ones who realised that there is huge potential in mobilising local resources. Over the last five years, we have witnessed the emergence of domestic giving ecosystems in most of the countries of the region. We have also seen significant progress in regional collaboration and knowledge exchange through initiatives like the Southeast European Indigenous Grantmakers Network (SIGN), the newly formed Western Balkans Community Foundation Initiative (WEBCFI) and through the engagement of philanthropy professionals in programmes run by the INSPIRE Network of Romania and The Funding Network International of the UK.

Traditional non-profits like Trag Foundation of Serbia, Partners Albania and Forum for Civic Initiatives (FIQ) in Kosovo have retooled or refocused their programming to emphasise community philanthropy and direct and strategic engagement with corporate social responsibility. New actors have emerged, offering fundraising and campaign services (Propulsion Fund, Masta and Brodoto, to name a few). Professional associations or informal networks around CSR and corporate philanthropy issues have thrived.

There is a lot of passion for the potential of domestic giving and what its emergence means as a symbol of a healthy and empathic society.

Humanitarian and charitable organisations that raise funds exclusively for medical assistance or poverty alleviation – like Budihuman in Serbia or Pomozi.ba in Bosnian Herzegovina – have also blossomed throughout the region. Food banks have sprouted up and are primarily being financed through partnership with companies and SMEs. Donation-based crowdfunding websites like Kosovaideas and Donacije.rs have emerged providing individuals easier ways to give to non-profits.

A limited number of bilaterals and foundations have realised that some of their funding stream should be spent in building capacity for non-profits to engage in strengthening the philanthropy ecosystem and not just in perfecting their project cycle management skills. Thanks to the flexibility of the Mott Foundation, the Balkan Trust for Democracy, USAID and the EU, opportunities have emerged to engage in matched grant schemes that encourage domestic philanthropy and bring together philanthropy stakeholders in conferences and knowledge exchange opportunities. These are investments that will reap dividends throughout the sector.

The new question: not if, but how
Today, the topic of conversation among philanthropy stakeholders has therefore become not whether domestic philanthropy exists, but how we can jointly build a supportive infrastructure and advocate for a more enabling legal and regulatory environment. There is a lot of passion for the potential of domestic giving and what its emergence means as a symbol of a healthy and empathic society.

The numbers…
But how much is really given in the region from domestic sources and what are the trends?

Media monitoring and press clippings of more than 20 philanthropy-related words and phrases were recorded.

When Catalyst Balkans was launched in 2013, apart from a few isolated and limited examinations of giving levels and a handful of public opinion surveys, there was little data on how much is given, who gives and why. So we set out to change that, since having a solid understanding of the ‘how much?’ would bolster the arguments we wanted to make about why non-profits should invest resources in fundraising from their constituents and fellow citizens.

Through a methodology based on extensive media monitoring and press clippings of more than 20 philanthropy-related words and phrases across seven countries, we record individual instances of philanthropy on the Giving Balkans database, providing an open and accessible tool for any philanthropy stakeholder (donor or fund seeker) to understand transaction-level giving.

In cooperation with partners throughout the region – including HORUS in Macedonia, Partners Albania, Democracy for Development in Kosovo and Trag Foundation in Serbia Catalyst Balkans publishes an Annual Report on the State of Philanthropy for each country. Based on recorded levels and subsequently estimated up using an algorithm, it provides what we believe a full measurement of giving in the region would be. What is measured is only giving by individuals, domestic companies, domestic foundations (with domestically sourced funds) and the diaspora. All foreign-sourced funds, save those from the diaspora, are excluded.

…and what they tell us

What we have learned is that domestic philanthropy is not uniform in terms of amounts nor relative to population size.

Total estimated annual giving has fluctuated in the region between €50 million and €65 million over the last four years.

Countries with smaller populations like Montenegro and Kosovo tend to have a higher ratio of giving per capita than countries like Serbia or Croatia. The data also tells us that there is much scope in Albania and Macedonia for increasing the role that domestic donors have in creating social impact in their countries.

What we need to foster are a common set of values to govern the country-level and regional ecosystems for years to come.

Even more informative is looking at the causes to which domestic philanthropy is directed. Healthcare, poverty reduction and support to marginalised groups are the three most common cause areas, but in recent years, domestic donors are more and more focusing their giving on education and other more strategic ways of supporting long-term social impact.

More giving to NPOs
Another trend observed is that, in the past, the vast majority of giving in most countries of the region has been directed to institutions owned by the state (health, education, culture, etc) rather than to the non-profit sector. As the non-profit sector becomes more aware of the tools and methods of direct fundraising and corporate engagement, and as companies have realised that gaining added value and impact from investments in state institutions can best be done with a non-profit partner, there has been a steady increase towards giving to non-profits year on year. This is a trend that we expect to grow as more non-profits understand the power of engaging with their communities to co-create a better society.

Who are the donors?

While there is a wide range of sources from individuals, companies and grantmaking foundations, the trend lines show us that the majority of giving is flowing through two primary veins: corporate giving (around 40 per cent per year) and mass individual giving (on the rise from 20 to 30 per cent). Corporate giving includes a diverse array of community-based SMEs to corporate multinationals with offices in Serbia to the slow and steady growth of corporate foundations being established. Mass individual giving is on the rise as more accessible ways of giving have been created for individuals, namely SMS and online donations. But there is also an increase in the number of events and fundraising campaigns being held where small givers are the primary target audience.

Where is Balkan philanthropy heading?
With the evidence of domestic philanthropy’s influence through both data and anecdotes, what can be done to increase domestic philanthropy in the region?

What we need to foster are a common set of values to govern the country-level and regional ecosystems for years to come. We believe that the emergence of empathic practice among potential individual and corporate donors comes when non-profits and other philanthropy stakeholders commit to:

• Transparency and trust-building – the more transparent non-profits are about how much they raise, how they programme those funds, and whether they honestly evaluate the impact they have made, the greater the degree of trust is in an environment where many citizens still think that the non-profit sector represents the foreign donors who have traditionally funded them. Challenging this false belief is important and transparency and open communication are the keys to doing so.
• Collaboration and co-creation – philanthropy stakeholders from the non-profit, corporate and government sectors should make time to convene, compare knowledge, learn from one another, and collaborate on joint solutions to pressing programmatic, sector-specific or legal and regulatory issues that are holding the sector back from growth and maturity.
• Leveraging institutional sources of funding to expand the ecosystem – if the bread and butter of many non-profits is still the bilateral or foreign funding source, non-profits would better serve themselves by writing proposals that incorporate the leveraging of domestic philanthropy as part of the proposed project’s outcome. The openness of foreign donors to this is increasing as they are reviewing their exit strategies from the region and realise that leaving behind a durable and stable non-profit sector which looks to its own constituency for both funding and programmatic legitimacy are key elements.

Nathan Koeshall is the co-founder of Catalyst Balkans, a non profit philanthropy intermediary organization that promotes philanthropic data and best practices in the region