Risk Tolerance, Collaboration and Long-Term Commitment – How the Romanian-American Foundation is making catalytic investments
Section
Case in Brief
The issue
Romania suffers from a historical lack of trust, which is a key ingredient of democracy and economic development. Furthermore, there is a limited philanthropic tradition in the country, which hinders civil society and the development of solutions to societal challenges. Building trust and nurturing collaboration are essential to tackling these problems, to reinforcing democracy and to boosting economic development.
The context
Civil society in Romania emerged late due to historical barriers, specifically heavy suppression during communist rule. After 1989, its development was met at first with government hostility, and since then, with mixed public perceptions – shaped by political shifts and foreign aid dynamics. However, civil society has gradually strengthened, and there are initial signs of systemic change in key sectors such as agriculture, education and community development. Still, there is a long road ahead.
The path forward
Tackling societal challenges often requires patience and sustained efforts that rely on trust and authentic collaborations. Approaches that highlight the importance of adaptability, long-term commitment and continuous learning are also key to driving systemic change. In a context dominated by project-based funding, the foundation has focused on collaboration, multi-year investments and refining strategies in response to evolving challenges.
The Romanian-American Foundation: A Snapshot
The Romanian-American Foundation seeks to build a sustainable economy and democratic society in Romania by promoting equal access to opportunities. Its vision is a prosperous, engaged society where citizens act responsibly, rural economies thrive, innovation is commonplace, youth lead progress, and philanthropy is a core value. Through partnerships and focused investments, the foundation aims to create meaningful, lasting impact in communities across Romania.
Mindset
- Long-term commitment
- Risk tolerance
- Collaboration
Overview
The Romanian-American Foundation’s flexible and iterative approach is grounded in its long-term perspective and collaboration
In the early 1990s, the United States Congress created an instrument to assist Romania and the region in transitioning to a free-market economy. The Romanian-American Foundation inherited this endowment making it the only endowed foundation in Romania at the time. Not only did the foundation inherit the endowment but also an entrepreneurial spirit and risk tolerance.
With a vision of a prosperous, engaged, and entrepreneurial society, the foundation supports initiatives that empower communities to shape their own futures, encourage rural economic growth, integrate innovation into the economy, and inspire youth leadership. In its long-term goals, the foundation envisions a culture where philanthropy is embraced as a societal value grounded in solidarity and trust.
The foundation’s approach goes beyond traditional project-based funding, offering institutional grants and supporting locally driven solutions that promote sustainability and resilience. For example, through strategic investments in community foundations and cooperative models, the foundation has helped shift Romania’s philanthropic culture for the long term, fostering grass-roots organisations that encourage collaboration and self-reliance.
By working closely with partners to test and scale innovative solutions, the foundation ensures its initiatives are adaptable to Romania’s changing needs, contributing to a more vibrant civil society. This flexible, long-term funding model has enabled the foundation to build partnerships that drive meaningful, lasting improvements, positioning communities for future success and helping to foster social and economic progress across the country.
Challenge
In Romania, a deep-rooted lack of trust has long hindered the development of effective community-driven initiatives. Recognising this challenge, the Romanian-American Foundation took a patient and adaptive approach, focusing on long-term, flexible funding and a collaborative framework. The foundation’s strategy emphasises the importance of demonstrating the power of cooperation by showing communities what they can achieve together.
The country’s limited philanthropic tradition underscored the necessity for a funding partner willing to exercise patience and embrace calculated risks. By offering 5-7-10 year funding, the foundation can address these systemic challenges by promoting rural development, fostering innovation and supporting civil society. Using an adaptable framework to define incremental steps toward long-term impact allows the foundation to envision the future it wants to create and systematically map the actions needed to get there.
Approach
The foundation supports a range of organisational partners (grantees) by embracing a long-term funding strategy that prioritises scalability, sustainability, and capacity building. This approach fosters collaboration and adaptability to evolving needs. By cultivating a culture of flexibility and utilising foresight tools, it ensures agile decision-making and continuously refines its strategies to align with its mission. It works closely with its partners, assisting them throughout the process from diagnosis of the problem towards supporting them in their work towards systemic change.
The foundation’s approach:
- To start with, the foundation develops a long-term funding strategy together with the partner organisation (grantee), based on diagnosing the problem and identifying potential solutions.
- A clear vision focused on scalability and sustainability guides the partner’s activities, ensuring its model meets community needs and delivers results for the community it serves. Continuous evaluation ensures the model incorporates elements for immediate impact and future growth.
- Once a vision is in place, the partners concentrate on capacity building. This involves identifying specific strategies to facilitate the model‘s expansion, which can include targeted fundraising efforts to secure necessary resources. Engaging diverse stakeholders and strengthening core operations are crucial for grantees in this phase. By fostering an environment that supports growth, the foundation can enhance its partner’s ability to achieve its goals and extend its reach to those who need it most.
- As the foundation embarks on this journey, it must be aware of the evolving landscape. Assessing new actors in the ecosystem and their needs is critical for informing strategic adaptations. By staying attuned to changes in the external environment, the foundation can enhance collaboration with partners, ensuring that its model remains relevant and sustainable.
- Central to this strategy is a commitment to cultivating an internal culture characterised by flexibility and adaptability. The Romanian-American Foundation promotes flexibility within its programmes by integrating foresight tools, such as horizon scanning and scenario planning, into its internal processes. This forward-thinking approach enables the organisation to anticipate future challenges and opportunities, helping it remain proactive and responsive to emerging trends.
- Finally, the foundation must embrace change as an ongoing journey rather than a fixed endpoint. By adopting a process-oriented approach, it can adjust its strategies and roles based on lessons learned and evolving needs. This perspective ensures that the foundation’s efforts are continuously aligned with its mission and the context in which it operates, fostering a dynamic organisation prepared to meet future challenges head-on.
Results
With a focus on collaboration, the Romanian-American Foundation partners with local organisations, civil society, public institutions and international organisations to drive systemic impact. Programmes are designed to rebuild trust and nurture a culture of collaboration that has historically been limited in Romania. Two examples of such investments are presented below – a programme aiming to offer a solution for small and medium farmers to reach markets through association; and the development of a network of community foundations engaging local people in solving together those issues relevant for them.
Spotlight on Cooperatives
Challenges & opportunities
Romania’s agricultural sector has long struggled with fragmentation and limited market access, particularly for small and medium-sized farmers. Forming cooperatives could help address these issues by pooling resources and improving market access, but a deep-rooted mistrust of cooperatives persists among farmers, stemming from negative experiences. However, new opportunities, such as EU rural development funding and support from experienced NGOs provided a promising foundation to rebuild trust and encourage farmers to view cooperatives as beneficial partnerships for growth.
How the foundation made an impact
The foundation invited four strong NGOs with extensive experience in rural development to design and implement an experiment supporting farmers to form associations. The programme, funded by RAF for ten years, had three phases: testing, groundwork and scaling. First, partner organisations launched pilot projects in four communities to show cooperatives could succeed in Romania. Next, they focused on research, documentation and advocacy to support broader adoption. Finally, they trained a network of NGOs to help set up cooperatives and access EU funding. Their efforts also influenced the Ministry of Agriculture to include cooperative funding in EU rural development programmes, paving the way for long-term support.
Signs of systemic change
While it’s too early to declare victory, the first signs of systemic change are visible. The cooperative model is beginning to take root, and though it’s still early days, there’s reason for optimism.
Local Engagement with Community Foundations
Challenges and opportunities
Romania has historically seen low levels of philanthropic activity, with limited volunteerism and weak NGO involvement at the local level. To address this, the Romanian-American Foundation saw the potential for community foundations to serve as local hubs for mobilising both people and resources to tackle community challenges.
In recent years, Romania has experienced improved economic conditions and a rise in civic engagement, especially on community-level issues. NGOs have been instrumental in mobilising communities, providing fertile ground for the establishment and growth of community foundations. The foundation’s strategy began 14 years ago with ARC Romania, a key partner organisation that worked at the grassroots, providing community facilitation and seed funding to help establish 19 community foundations across the country, 16 of which are still active. These foundations act as key local players in fostering both financial and volunteer support for local initiatives.
How the foundation made an impact
To ensure long-term sustainability, the foundation implemented a fund-matching mechanism, encouraging community foundations to raise funds in their own community from individual donors or to establish community thematic funds. To further strengthen the community foundations, RAF provided institutional funding to support them in designing and implementing organisational strategies. A Federation of Community Foundations was created, fostering a learning community to share best practices and continue scaling efforts.
Signs of systemic change
Today, the first signs of systemic change are emerging. While the results of course cannot be attributed solely to the Romanian-American Foundation and its partners, the growing role of community foundations in Romanian philanthropy signals a broader shift in local engagement and capacity building.