A truly civil society
By : Roseanne Gerin
After falling into disrepair for almost five decades, it took just six years to transform one of the oldest community hospitals in Warsaw into a modern medical facility.
The children's hospital on ulica Litewska in Warsaw managed to turn itself around after the United States Agency for International Development (USAID) helped it establish a foundation to raise money for its renovation. Since the inception of the Friends of Litewska Children's Hospital Foundation in 1994, donations from local corporations have provided most of the financial lifeblood needed to improve and sustain the hospital's operations.
"From the beginning, we focused on foreign companies (for donations) because we realized they understood the role of charity activities much better," said Adam Jelonek, the director of the Litewska foundation.
After foreign companies gave money and helped boost the foundation's credibility, Polish firms also started doling out the cash. "After we collected from those (foreign) companies, we were able to attract Polish companies," Jelonek said. The initial cash injections paid for the installation of a new elevator for the hospital's intensive therapy ward, a fire-alarm system, a power generator and the establishment of a modern bacteriological department for infection control, he said.
"I couldn't believe the response of businesspeople and regular individuals could be so enormous," said Jelonek, whose foundation receives no funds from the Polish government. He added that 1999 was Litewska's most successful fundraising year with donations of cash and medical equipment totaling more than zl. 4 million ($1.02 million).
For the past few years, Polish non-governmental organizations (NGOs), and in particular non-profit foundations such as the Litewska foundation, have looked to the corporate sector for cash and in-kind contributions to meet their financial goals.
Finding the funding
Polska Akcja Humanitarna (Polish Humanitarian Organization), for example, relies on cash and in-kind contributions from individuals and corporations since it doesn't receive any government funds. Supplies, such as food, blankets, tents and sleeping bags, are currently shipped in convoys to war refugees in Chechnya, said Patrycja Karwan, PAH's program coordinator. The non-profit organization also uses the funds and supplies to provide housing and services for war refugees living in Poland and to serve hot meals to children in some of the country's poorest areas.
Anna Ostaszewska, the director of the Warsaw office of Caritas, an international Catholic charity, said that her office cooperates with the Polish Food Bank, which collects food from companies to donate to poor families. In addition, money contributed by both private and corporate donors this year is being used to pay for holidays for 700 children from poor areas around the country, she said.
In Poland and other countries in Central and Eastern Europe, the collapse of communism brought a significant decrease in funding for state-supported services, especially in the areas of social welfare and health care. At first, international organizations stepped in to support NGOs, which acted as the new service providers. During the same period, new domestic businesses and multinational corporations were busy setting up shop in the region. But as funding from the West has decreased considerably in recent years, NGOs have had to look to corporations and private donors to fill the cash void.
According to the latest data from the Klon/Jawor Data Bank on NGOs, which conducted its last national study of the Polish NGO sector in 1996 and 1997, there are approximately 32,700 registered NGOs in Poland, including foundations, associations, social organizations, work-related associations and commercial and professional self-governing groups. Based on questionnaires completed by more than 5,000 NGOs, the survey estimated that about 18,500 of them are operational. Of the number of registered NGOs, foundations account for 22.7%. In addition, the study said that foundations receive most of their income from private individuals and corporations.
The pro bono bandwagon
While U.S. and European corporations are accustomed to being approached by NGOs for cash and supplies, Polish companies were skeptical at first, those involved with the NGO sector said. After Western companies set an example by providing money to credible and trustworthy projects, however, Polish companies started ponying up cash as well. Today, a mix of foreign multinationals, small and medium-sized domestic companies and other Polish firms contribute to NGOs. Even state-owned companies have started to make donations. Jelonek of the Litewska foundation said he was surprised when the state-controlled telephone company Telekomunikacja Polska (TPSA) recently contacted him and pledged money to help rebuild the hospital's lobby. Although he declined to disclose the amount pledged, he said the construction work would be completed this summer.
In 1999, the Civil Society Development Foundation conducted a survey of 99 businesses in Poland that were involved in social causes. Based on their responses, the survey said that the average company in Poland which contributes to social institutions employs 700 people, has an annual turnover of zl. 200 million ($46.5 million) and donates zl. 360,000 per year to charitable causes. The sectors supported most often are social welfare/assistance, health, education, culture and sports, the study said.
And it's no surprise that the social assistance and health care sectors receive the most funding since they provide indispensable services for the whole community, those involved with NGOs said. "Health care in society is the most sensitive area and is the easiest one to collect money for," Jelonek said. Litewska provides both basic pediatric and exclusive medical procedures for children as well as serving as a training ground for medical students and physicians engaged in postdoctoral study, he said.
Another reason for health care's popularity as a destination for corporate cash is that donations to hospitals offer quick results since funds are immediately used to buy necessary medical equipment, said Agnieszka Suchecka-Tarnacka, an attorney specializing in civil litigation at Hogan & Hartson who performs pro bono work for non-profit organizations, including the Litewska foundation.
Learning to give and receive
But since the Polish business and NGO sectors are still fairly young, both have to learn how to get the most out of mutual cooperation, those active in NGOs said. "The actual skill of forming a local coalition and relationships between businesspeople and non-governmental organization is very rare," said Pawel Lukasiak, the president of the Academy for the Development of Philanthropy in Poland.
First, foundations must learn how to approach potential sponsors and build partnerships with them rather than relying on the old standard of sending or faxing letters for donations. "Businessmen are absolutely sick and tired of receiving piles and piles of letters requesting their support," Lukasiak said. As a solution, he pointed out that his organization supports a dozen community foundation centers across the country. The centers coordinate administrative requests for funds and disseminate information about non-profits to business leaders in their respective communities. "Businessmen don't have to read these letters anymore because the community foundations do that for them, and they (also) have easy access to information concerning (the NGOs') spending," Lukasiak said.
The Litewska foundation, for example, includes members of the local business community on its board and on various committees, Jelonek said. The business leaders, in turn, help arrange the hospital's fundraising events, such as celebrity concerts or charity auctions, he said.
Professionals at NGOs also stress that donors should be recognized for their contributions. Lukasiak said donor recognition is a way to publicly acknowledge support. Each year, the academy holds a benefactor of the year award ceremony where both individuals and corporations are honored for their year-round philanthropic activities. At the Litewska foundation, donors are honored in ceremonial presentations and with engraved plaques hung on hospital walls, Jelonek said.
At the same time, however, businesses must change their approach to NGOs, NGO professionals said. "Philanthropy doesn't mean the same as beggary, and we would like to change that," said Tomasz Schimanek, coordinator of the summer fundraising school at the academy. "We would like to show that philanthropy can be realized in many various ways. In fact, it just means helping other people." His organization conducts a summer fundraising school where NGO organizers from Western Europe meet with non-profit professionals from Central and Eastern Europe to discuss and define methods for forging and maintaining relationships with corporate donors.
According to the Civil Society Development Foundation survey, corporations and other businesses contribute anywhere from zl. 550 to more than zl. 55,000 to various social causes. Large multinational corporations usually provide more. Food manufacturer Kraft Jacobs Suchard Polska, for instance, contributed foodstuffs in excess of zl. 1.5 million ($386,000) to the Polish Food Bank in 1999, according to Maria Witas, the industrial relations director for Kraft Jacobs in Poland. She also said that her company contributed $60,000 to Kiwanis International Polska during the past two years to provide meals for poor children in rural areas.
The payoff
In addition, businesses can reap their own rewards from partnering with NGOs.
According to the Civil Society Development Foundation report, the most important reason that companies cited for contributing to social causes was that they had a moral responsibility and felt a solidarity with people who needed help.
"(A) reason that has been mentioned to us by entrepreneurs, which we believe to be a sign of great maturity, is that they give because in a way they feel responsible for their own community," Lukasiak said. "Their employees are a part of the community, which means that they simply want to give something in return."
Another reason is that corporate giving is part of the companies' public relations strategy to build a good name for the company and invite friendly relations with other firms. "For corporations in smaller areas, charity donations are the only form of public relations and of making themselves visible in the community because there are no public relations agencies or professional advertising agencies in the region," Lukasiak said.
The third reason cited was the tax breaks companies receive for cash and in-kind donations. But while tax exemptions of 10-15% depending on the purpose of the donation may entice some businesses to dig into their pockets, those involved in the NGO sector contend that the tax exemptions are not a major motivating factor for companies.
"They are (making contributions) because of their own internal policies and so that they can be established in their communities," Suchecka-Tarnacka said. "There are a lot of companies (making contributions), and they are donating much more money than the tax exemption allows."
