Organisational Capacity of Non Profit Organisations in the Russian Federation

Jo Crotty

Salford Business School

University of Salford

Manchester

Sergej Ljubownikow

Nottingham Business School

Nottingham Trent University

Nottingham, NG1 4BU

This research was funded by the British Academy for Humanities and Social Sciences

grant SG111936

Summary

This research investigated non-profit organisations (NPOs), engaged in the

area of health and health care in the Russian Federation. The aim of the research was

to explore whether and how such organisations provide services to their clients and

the extent to which these groups are a substitute for services normally provided by the

State. The research studying twelve Russian non-profit organisations in the health

sector found that such organisations require the development of several organisational

capabilities in order to effectively deliver sustainable services alongside the Russian

State.

Specifically the research project highlighted that health NPOs in Russia need

to: i.) develop their skills and capabilities to engage with volunteers; ii.) be more

proactive in planning for organisational leadership transitions; iii.) develop their

advocacy skills in order to be more active in influencing the State’s service provision

activities; and, iv.) be more active in exploring the diversification of both income

streams and activity focus. However the research also found that NPOs with clients

with HIV/AIDS engage in commendable and innovative ways to deliver their services

drawing on both global best practices and on the most up-to-date research in their

respective field. The HIV/AIDS area was also the best organised in terms of intra-

organisational collaborations. The research also found that all of the participating

NPOs where very proficient at navigating a very difficult official environment.

Introduction

This research project set out to examine the organisational capacity of Russian

NPOs in the health area. In light of the conclusion of the literature that Russian NPOs

lack the capacity or capability to hold the State to account (Crotty & Hall, 2013;

Ljubownikow, Crotty, & Rodgers, 2013; Sundstrom, 2005; Taylor, 2006), we were

interested as to whether this is also the case in their primary activities of providing

services. This is a particularly pertinent issue in the health sector as since 1991 the

Russian State retreated from the provision of many social services (Rivkin-Fish, 1999,

2005; Sil & Chen, 2004; Thomson, 2002). This left NPOs to fill the voids often with a

fraction of the resources (Thomson, 2002). Thus exploring and understanding whether

Russian health NPOs have the relevant organisational capacity and organisational

attributes that enable them to act as service providers is important (Cairns, Harris, &

Young, 2005; Eisinger, 2002).

The Literature

Capacity and capacity building is a widely debated topic within the literature

(Aragón, 2010; Ayuk & Basil, 2005; Baser & Morgan, 2008; Brinkerhoff, 2005,

2010; Brown & Farrelly, 2009; Cairns et al., 2005; Fiszbein, 1997; Goodman,

Steckler, & Alciati, 1997; Harrow, 2001; Herman & Renz, 1998; James, 1994, 2001;

King & Bouchard, 2011; Minzner, Klerman, Markovitz, & Fink, 2013; North, 1990;

Postma, 1998; Teskey, 2005) and has received particular attention in the health and

health care sector (Corrigan & McNeill, 2009; Fredericksen & London, 2000;

Germann & Wilson, 2004; Hamel & Schrecker, 2011; Hanusaik, O’Loughlin,

Kishchuk, Paradis, & Cameron, 2010; Hawe, 2000; Klarner, Probst, & Soparnot,

2008; Liberato, Brimblecombe, Ritchie, Ferguson, & Coveney, 2011; Proudfoot et al.,

2007; Simmons, Reynolds, & Swinburn, 2011). In an organisational setting,

organisational capacity has also received some attention (Eisinger, 2002; Madden,

Duchon, Madden, & Plowman, 2012) and generally refers to the ability of an

organisations to engage in activities (Aragón, 2010; Kapucu, Healy, & Arslan, 2011;

Madden et al., 2012). Thus organisational capacity links directly to the mission of an

organisation (Austin, 1994; Letts, Ryan, & Grossman, 1998) and the effectiveness of

their activities (Baser & Morgan, 2008; Bourgeois, Hart, Townsend, & Gagné, 2011;

Sharpe, 2006; Sowa, Selden, & Sandfort, 2004). Therefore organisational capacity is

best defined as “the resources, knowledge, and processes used by the organisation to

achieve its goals and satisfy stakeholder expectations” (Madden et al., 2012, p. 692).

Consequently, the way organisations build capacity is important (Minzner et al.,

2013; Sobeck & Agius, 2007). Within an NPO setting this is often associated with

funding provision arrangements (Germann & Wilson, 2004; Kapucu et al., 2011;

Minzner et al., 2013). Minzner et al. (2013) argue that within NPOs, organisational

capacity building activities centre on organisational development, program

development, revenue development, leadership development, and community

engagement. Proactive engagement by NPOs in improving their activities in these

areas has been found to have positive effects at the organisational level with regards

to the effectiveness of their activities (Brown & Farrelly, 2009; Doherty & Cuskelly,

2012; Doherty, Misener, & Cuskelly, 2013; Glickman & Servon, 1998; Herman &

Renz, 2008; Kapucu et al., 2011; LaFond & Brown, 2003; Minzner et al., 2013;

Wing, 2004). Drawing on this background we examined three specific aspects in this

study that contribute to the advancement of knowledge about and understanding of

organisational capacity in NPOs and specifically health NPOs in Russia.

The Insights

The analysis of the collected data provides the project with good insights into

the organisational capacity of Russian NPOs. Extensive fieldwork highlighted that

health NPO did not actually engage in many activities. This indicates a lack of

organisational capacity in particular with regards to attracting resource that would

enable organisations to maintain paid staff and to ensure the scaling of their current

activities (for elaboration of lack of resources and regulatory aspects see

Ljubownikow & Crotty, 2014). Organisations did indicate that they would like to

engage in more activities but lacked the capacity or scale. However, as expected the

majority of NPOs engage, according to their narratives, in the provision of services,

which did not exist within the government service provision framework previously.

Thus health NPOs did have the ability to develop the capacity for activities relevant to

their context (see also Fröhlich, 2012). However it also indicated that they are unable

to substitute for State service provision, which might become a pertinent issue given

that respondents illustrated an increasing opportunity to work as subcontractors to the

government.

Overall when considering Russian health NPOs against Minzner’s et al.

(2013) five dimensions of capacity building in more detail we find few specific

activities and behaviours dedicated to these aspects. In particular we found little

evidence in the interview data of organisational engagement with the wider

community that is beyond the specific client groups severed. This applied to all but

one organisation, which once a year did organise a fundraising event that relied on

wider community engagement. However none of the organisations were active in

developing or establishing wider community engagement on a more regular basis.

Continuous consideration of programme development was not driven by NPOs

assessment of their activities, but often related to whether or not these program were

able to access funding. Although programme and activity development did draw on

the needs of their constituents, it was also clearly driven by the availability of

funding. A continuous and regular assessment process was only observed in one

organisation addressing the issue of HIV/AIDS, which was mainly made up of staff

with medical backgrounds.

Across all observed and examined organisations we also found little evidence

of effective revenue development. Although significantly we did find, amongst

organisations whose constituents were mainly children, some innovative ways of

cooperation with businesses that the contemporary literature of Russian NPOs has not

yet illustrated. However, these are often for specific activities or events and provide

little contribution to long-term organisational maintenance (Duer & Mateo, 2013).

NPOs also looked positively at the prospect of competing for government contracts,

in addition to the already established grant funding competitions, as part of the

expansion of social contracting introduced by regional governments. NPOs saw these

contracts as being more long-term (for up to five years) facilitating organisational

maintenance and potentially opening up opportunities to diversify revenue streams on

the back of these contracts. Even though some aspects of organisational capacity are

presented and NPOs in this study did engage in the development of parts of their

organisational capacity, we also found a total lack of leadership development.

Amongst health NPOs it was this aspect of organisational capacity that was most

neglected in particular with regards to the awareness of it and strategic planning for

long-term succession. This was demonstrated in a lack of forward planning vis-à-vis

succession and in one case has already led to the decline and de-facto ceasing of one

organisation. However this specific organisation still maintains its legal registration

(which required regular accounts and demonstration of activity submitted to the

Russian state regulatory authority) and the current leader (also the founder of the

organisations) was aware of the continuing demand the work they used to do.

The literature highlights that a system of Public Chambers has been

established by the State as channels for NPO-state interactions as well as providing

resources (Richter, 2009a, 2009b; Richter & Hatch, 2013). Surprisingly, respondents

did not indicate the Public Chamber had played a role in their day-to-day activities.

Some respondents did highlight that they were part of the regional Public Chamber

and saw it as a way of liaising with other NPO leaders and ‘talking at’ the

administration. They did however stop short of illustrating the Public Chamber as

platform that has stimulated the interaction and collaboration between NPOs and the

State or led to more NPO participation in policy decision-making. Thus about eight

years after the introduction of the Federal Public Chamber and subsequent set-up at

regional levels, having a State controlled channel for NPOs to interact with the

administration (Crotty, Hall, & Ljubownikow, 2014; Richter, 2009a, 2009b) has not

affected their daily activities. For most NPOs the Public Chamber was not a platform

for interaction but merely a potential source of resources. Consequently, from the

perspective of the organisations, apart from the grant competitions the Public

Chamber (both at federal as well as regional level) played little relevance to their

activities. The limited effect of the Public Chamber on the day-to-day activities of

NPOs is indicative of their pragmatic approach to dealing with their complex

institutional environment. However, the interview data from state officials setting out

the funding priorities of the Public Chamber highlighted that the chamber might not

affect the activities of NPOs directly, but the activities NPOs engage in can affect

whether or not they will be able to access the resources provided. Thus our data here

outlined the existence of specific funding priorities with little funding available to

organisations that have been negatively noticed by engaging in activities such as

demonstrations, indirect advocacy (Mosley, 2011) or embarrassing the state.

The final aspect the project explored was the perception of the service

provision offered by NPOs in contrast to the one offered by the State. This is of

particular interest as much of the basic health care services have been provided by the

Russia state in the past (Evans, 2006) and NPOs are often characterised as lacking

legitimacy with the public to provide such or similar services (Crotty, 2003; Smolar,

1996). However, NPOs did not feel that they are seen as illegitimate service

providers. Conversely, they illustrated that their constituencies were often unwilling

to access the service offered by the State. This was particularly true for service

provision in areas such as HIV/AIDS or drug use. Here NPOs highlighted that such

clients often felt uneasy about accessing services directly associated with the state for

fear of repercussions by other State authorities (such as arrest by the police). NPOs

highlighted that for these clients State service were also insufficient. In the palliative

care area, NPOs illustrated that the service provided by the state were inadequate and

lacking humanity because they were done on the cheap. Hence clients preferred what

NPOs offered but availability of such services was not widely publicised and often

relied on relationships or knowing people in proximity to the organisation. NPOs saw

themselves, because of the type of service they offered and the marginalised nature of

the groups they served, as a more legitimate service providers then the state. NPOs

highlighted that the state was also acknowledging this with the introduction of social

contracting giving them more responsibilities. The seemingly acceptance of services

provide by NPOs indicates a fundamental shift within the Russian public and state

authorities. It could lead to the improve legitimacy of such organisations in the

Russian context – at least in the social services sector.

However, apart from the NPOs active in more medical sectors such as drug

abuse, palliative care or HIV/AIDS prevention, our evidence highlights that other

NPOs in our study did not offer such essential services to clients. Nevertheless, these

NPOs did run social clubs (for example a singing club or a chess club for the

disabled), engage in some advocacy activities (for example lobbying for additional

funding to support a special treatment of a child with cancer abroad), or organise

specific events (for example clown afternoons at the children’s cancer treatment

wing). These NPOs saw themselves mainly as complementing the State’s service

provision or as in the case of one disability NPO work to affect resource allocation

preferences within State authorities. It is thus not surprising that NPOs felt that their

constituencies or clients appreciated their services. Although this group of NPOs

complement rather than substitute for State service provision, it does suggest an

increasing acceptance of the activity of such organisations, in particular by the State

run organisations that provide essential services. Thus as highlighted above this could

be indicative of a positive shift in the perception of NPOs by the state, potential

clients and the wider Russian public.

In summary despite its small scale (12 organisations across two different

Russian regions) the project has provided a coherent overview of organisational

capacity in Russian health NPOs and thus crucial advancements to our knowledge and

understanding of such organisations as well as the wider context in which they exist.

Our research points out that Russian health NPOs have some deficits in their

organisational capacity of which they are not aware and that require further

development and capacity building. It is vital for Russian health NPOs to engage in

the development of these parts of organisational capacity (mainly leadership

development, revenue development and community engagement) if they are to take

up similar roles to their counterparts in the UK in the provision of health services.

Even though we find a significant capacity deficit on the governance side (in

particular leadership development), we also find that Russian health NPOs have good

delivery capacity with regards to providing services or engaging with their clients.

Thus after the repeated conclusions of various studies that NPOs lack the capabilities

of performing key tasks (Crotty, 2009; Crotty & Hall, 2013), our project finds

positive signs of change and improvement. However, in order for Russian health

NPOs to strengthen these positive steps, ensure sustainability of their existence, and

be able to scale up their work further organisational capacity development is required.

Furthermore, the pragmatic way in which NPOs behave has made them very

adaptable and able to navigate what is still as hostile (both in terms of regulation and

public perception) environment. Overall our understanding of NPOs in the Russian

context provides a more positive assessment than one could expect given the

collective conclusions of previous studies.

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