The Influence of Western Donor Programs on Civil Society in Ukraine: A Quantitative Analysis of the Effect of International Financing on Ukrainian NGOs

Since the end of the Cold War Western donor organisations such as the EU or USAID try to foster civil society in Eastern Europe by funding NGOs (Gibson, 2001; Howell & Pearce, 2002; McIntosh Sundstrom, 2005). On one hand, helping NGOs financially should increase their capacity to act more professionally and develop into strong civil society actors (Henderson, 2002; Seibel, 2003; Howard, 2003). On the other hand, critics of these programmes have complained that those NGOs are out of touch with the concerns of the citizens they are supposed to represent, because they mirror the interests of their donors (Fowler, 1998) or even came into being artificially (Kuti, 1999) for the sake of acquiring funding (Regulska, 1999). Our study intends to argue based on a quantitative statistical model, working with a yearly collected dataset on a panel of 120 Ukrainian NGOs (Counterpart Creative Center, 2010). Using indices of NGO performance, we evaluate the impact of Western donor money on the behavior of third sector organizations. First results of TSCS regression models with a lagged dependent variable indicate that a general criticism of western donor funding is ill-advised. Our data suggests that the performance and capacity of an NGO in Ukraine is predicted to be highest when substantial fragments of an NGO budget come from international donors. However, NGOs that are entirely financed by western donors do not perform better than mainly member-funded NGOs. We conclude with a rather optimistic stance on international donor financing of Civil Society actors, quite contrary to many studies that use qualitative approaches.