Letter From Soros Lays Out New Plans for Open Society Organizations

Following is the text of a letter the financier George Soros sent in May to grant recipients and

others that have worked closely with the Open Society Institute:

We have always prided ourselves on moving with the times and, if possible, ahead of the times. During our short history, we have undergone several far-reaching transformations. But most of these changes have occurred in response to opportunities that presented themselves and without a strategic plan.

We are again in the midst of a radical transformation but this time we are following a strategic plan. As we are about to implement major structural changes, I want to spell out what the strategic plan is so as to minimize the disruption and give everyone clear guidance where we are heading.

Our previous goal was to help with the transition of the former Soviet empire from closed to open societies. There was a strategic vision behind the lack of planning: It was a revolutionary moment and we would have missed an historic opportunity if we had insisted on planning before acting. It will be recalled that for several years we spent money without a budget. Then we had to introduce some order into the chaos and that is how the Open Society Network (OSN) consisting of a matrix of national foundations and network programs came into existence.

It was a valid vision and we can be proud of what we have accomplished. Our mission is far from complete — the collapse of closed societies does not necessarily lead to the emergence of open societies — and we must continue our engagement. But the revolutionary moment has passed, and the challenge of our times has shifted from the problems of transition to the problems of globalization. We must shift our own focus accordingly. Our new goal is to foster a global open society. (What I mean by this is explained in my books and I will not repeat myself here.)

To serve our new mission, we need a significantly different organization. It has to be global in scope and it has to be able to make an impact on how governments and international institutions conduct themselves. In the past, what we have accomplished we have done on our own; I was singularly unsuccessful in influencing Western policy — and I tried repeatedly. Now the situation is almost completely reversed. We can achieve relatively little by acting on our own because the problems of globalization are so large that we can hardly make a dent in them however hard we try. To put it in perspective, we have been spending hundreds of millions a year, but the United Nations Millennium goals require $50-billion a year. We can achieve a lot more by influencing what governments, international institutions and other foundations do. And for the first time we seem to be able to influence policy. For instance, we have played a role in getting the U.S. government to step up its international assistance by $5-billion a year in the coming years.

In order to influence policy, we must maintain and expand OSN. But we cannot do it the same way as before. OSN is a large international organization with wholly dependent local units which enjoy an unusually large degree of autonomy. This model has served us well. It has allowed us to implement the principles of open society better than any other form of organization. But we cannot go global with a network of wholly dependent national foundations disbursing grants. We must reshape our structure more thoroughly. But, in contrast to our previous habits, we must act on the basis of a strategic plan that will take several years to implement. This is not a revolutionary moment. We have built up a valuable, well-functioning network and we have much to lose by unduly disrupting it. We need a strategic plan that is implemented over an extended period, say three or four years, so as to put in place a new form of organization without destroying what we have created. I am happy to say that I have such a plan. It consists of converting OSN from a wholly dependent network into a partly dependent network of networks (OSNN).

The strategy has been maturing in my mind for some time and the transformation is already well underway. Imperceptibly we have formed a loosely knit network of independent but like-minded organizations — from the International Crisis Group to Global Witness and even UNDP — that could cooperate with us and each other on specific issues. In Africa we have established regional rather than national foundations. Some of our network programs have gone global; we have a national presence in Turkey and Indonesia that have been only partially funded by us; and we are getting engaged in a number of countries (Peru, Mexico, Afghanistan) without thinking of setting up a national presence. But it is only recently that I have come to terms with the budgetary implications of the new strategy and formulated what may be properly called a plan.

The plan involves cutting some existing activities as well as adding new ones. In some countries, the national foundations will cease to exist in their current form. Whenever there are cuts, there are job losses. We shall try to mitigate the human costs by announcing the cuts well in advance and providing assistance and support to those who are losing their jobs. Above all, we do not want to keep people in the dark because that would be demoralizing. We cannot announce the strategic plan in detail because there are too many moving parts and the details will be worked out only after consultations with the people involved, but we want to communicate the broad strategic decisions that have already been reached. We have set ourselves the following main objectives:

* Preservation and nurturing of the intellectual capital and goodwill that has accrued to the national foundations and the network as a whole, because this is the platform that allows us to be heard;

* Expansion of the geographic reach of the foundation network;

* Reallocation of resources within the existing network to where they are most needed;

* Development of expertise in new areas concerning issues of globalization;

* Refocusing of existing network strategies to concentrate on the areas most relevant to global open society;

* Increasing cooperation with partners at both a local and international level.

The first major cuts will occur in the 8 countries that are expected to join the EU in 2004. We intend to cut our spending dramatically to a total of $10-million by 2004 (excluding some network programs like HESP, health, and women, and pre-existing institutional grants, as to the Polish Helsinki organization). Two national foundations — Estonia and Slovenia — have already made the transition and the other six are facing it now. Each national foundation will have to find its own solution. Some may remain independent as the Estonian foundation; others may merge into a local institution as the Slovenian foundation. We intend to continue supporting programs in such key areas as the rule of law, vulnerable populations and civil society but this may be best done outside the national foundation. The foundation boards will be more concerned with the issues of open society, both at home and abroad than with the distribution of money. The executive directors will support the boards and act as the local coordinators of the network of networks. The foundations concerned are setting up a working group on how best to implement the new strategy.

We plan a similarly sharp reduction in spending in the Balkans a few years down the road, but the Balkan foundations have too important a role to play in their societies at present to be subjected to the additional burden of internal reorganization; nevertheless, they ought to be aware of what is in store and bear it in mind in designing their programs. We look to the Russian Foundation to support an increasing portion of its programs with funds from outside donors. Changes are also underway in the Mongolian foundation, which is establishing an open forum for influencing both governmental and donor policies, and in South Africa where the foundation will focus on open society issues while maintaining its crucial work on crime and criminal justice and its successful program on community radio. We expect to maintain close to our current level of expenditure in the rest of the CIS countries for a longer period; and we intend to increase our involvement in Latin America, Africa, the Middle East and Southeast Asia through our network programs rather than by establishing additional national foundations.

The US Programs will also be significantly affected. Engaging public opinion, shaping academic and public discussion, and monitoring and influencing policy will now take center stage, in Washington and at the state level, while grantmaking will begin to decline, meeting a target for steep reductions by 2006. Where program commitments exist, we will, of course, honor them, but will start to withdraw from some areas of activity sooner rather than later. We will take as much care as possible not to disrupt the important work our funds have enabled. In some areas, a spinoff of OSI-sponsored activities with co-funding may be desirable and possible.

Human rights in the United States will remain a priority, and I expect a significant continuing presence in this area, and, ultimately, to integrate it with justice and rule of law programs in the network as a whole. Influencing US foreign policy is increasingly important, and we will step up efforts to build a domestic constituency for a more multilateral approach. We have made a good start on this with the expansion of our Washington office. We will also make greater use of open society fellows.

Inevitably, network programs will be affected by our shifting geographic focus and our concern with global public policy. Some network programs, such as those in law, media, women, information, economic development, and East-East already operate globally. Others, such as the Local Government Institute (LGI) will also go global. Cultural Link will be merged with East/East and other cultural network programs will be phased out but we will maintain the Culture Sub-board as a policy and advocacy unit without a program budget. We will rethink our work in public health, cutting back on some programs, while maintaining our concern with vulnerable populations such as the mentally disabled and bolster our role as advocates in public policy debates on such issues as harm reduction, the relationship of over-incarceration to the spread of TB and Multi-Drug Resistant TB, the high cost of pharmaceuticals needed to treat AIDS and MDRTB and the need for increased international public expenditures to combat epidemics of infectious diseases.

Education and youth programs used to take up a third of our budget. Our main task in this field now is to find ways to preserve and build upon our past achievements without investing substantial new resources. I am pleased to report that Step by Step, on which we spent over 100 million dollars, is making considerable headway in embedding itself in national educational systems. The same is true of some of our other educational innovations. We are willing to devote limited additional resources to maintain these programs and we hope to influence educational policy with modest expenditures on programs. The Education Sub-board will entertain multi-year proposals from national foundations but only if they are directed at policy or have a clear exit strategy.

CEU has been permanently endowed. HESP and CEP will be more closely connected with CEU and continue as long as OSI continues, albeit with a gradually declining budget. We shall also maintain our Roma programs for the long term while attempting to enlist other donors to help us address the many forms of discrimination suffered by this minority.

While we are reducing the extent of our “wholly owned” programs, we are increasing our grantgiving to other organizations that pursue an open society agenda on a matching fund basis and we encourage the national foundations to follow a similar policy. This will give us greater flexibility and allow us to have greater impact with a given expenditure of funds.

Although we are moving away from sole support, we do not rule out being the sole funder when necessary. Insisting on co-funding in all cases would endanger our entrepreneurial and innovative spirit. But where opportunities for donor partnerships are available, we will pursue them. We shall also encourage the formation of alumni and professional associations and policy forums. We do not intend to give this loosely knit network of networks (OSNN) a formal structure because open society is too abstract a concept to sustain a network on its own but we are willing to maintain it in the hope that it will generate autonomous activities in a variety of fields that will promote open society indirectly.

Altogether, I have a strong sense that we are moving in the right direction. I have a few years of productive life left and I feel I can make the most of it by bringing OSNN into existence.