Resilient and positive

The last two years have been financially hard on Estonia’s third sector but, according to Urmo Kübar, executive director of NENO, an organisation that unites and advocates for Estonian non profit organisations, people not money have always been the sector’s biggest asset.

Estonia will join the Eurozone in 2011. The road to Brussels has not been an easy one. To get there Estonia has had to satisfy the Maastricht Convergence Criteria . To do so the government cut spending by 8 billion EEK (€511 million) in 2009. That same year Estonia’s GDP fell by 14 per cent.

Vita Europe spoke with Urmo Kübar of NENO about the resilient nature of the sector.  

What does joining the Eurozone mean for the third sector?

I don’t think that the impact of joining the Eurozone differs much between the sectors. In general, it is expected to have a positive impact on the Estonian economy and if that happens the third sector will also benefit. One has to keep in mind that there is nothing new about currency reforms in Estonia. Currency reforms have already occurred in the 1940s, the 1960s and again at the beginning of the 1990s. Older generations lost all of their savings and had to restart financially three times during their lifetime. Compared to these reforms joining the Eurozone will be a piece of cake.

What impact has the economic crisis had on your organisation ?

We have lived with different cuts for two years now, because of the economic crisis but also because the government has been trying to meet the criteria for the Eurozone. NENO has seen its funds reduced from 1,000,000 EEK [€63,911.49] in 2008 to 700,000 EEK [€44,738.04] in 2009 and then to 465,000 EEK [€29,718.84]in 2010. We have had to find other sources of income.

What impact has the economic crisis had on the sector as a whole?

Last year we surveyed non profit organisations on the impact of the crisis. Our report indicates that 53 per cent said that they had to cut their budgets, 47 per cent said that the number of funding sources had diminished and only 10 per cent said that they had been able to hire more staff. At the same time 63 per cent said that their workload was growing. This is natural, many NGOs work with people in vulnerable situations like unemployment, drug addiction, debt, poverty and domestic violence. With the crisis there are more people dealing with these issues. One third of the organisations responded that they had to cut the services they provided.  Most of these cuts are due to the economic crisis rather than joining the Eurozone but to be honest it is difficult to distinguish between the two causes.

How has the third sector fared throughout all of this?

 Compared to the public and business sector we have made it through without any huge losses. One of the reasons for this could be that we have always had to make do with relatively limited resources. The sector has seen far worse. The situation in the beginning of the 1990s was far worse and that was only 20 years ago. Also I think that our biggest asset has always been people not money and the crisis has not impacted participation in the third sector.

Has the crisis had any positive impacts?

The prices of goods and services, including rent for office space, are unusually low right now. Much lower than they were two years ago. Also it is easier to find staff, because there have been major layoffs in both the public and private sectors.

Will the crisis have an impact on the availability of funds from international donors?

International donors are no longer a major source of funding for the third sector. Their funding was crucial during the 1990s but for the past 10 or 15 years we have been relying on national funds. For certain organisations and certain services they remain crucial but overall the funds we as a sector receive from our own tax payers are far more significant. It is clear that in the long term our country’s development cannot depend on foreign donors and there are other countries in the world who need much more help than Estonia.

What can organisations do to manage the impact of the cuts?

Two things that havn’t happened yet but that could help organisations cope with this difficult situation are mergers between NGOs and the establishment of new financial models. The latter could mean developing ways to earn some income through economic activities. So far, project hunting or institutional support from the public sector are still seen by most NGOs as the only ways to secure funding.