2017 Annual Report
From the President
Carl Gershman
In 2017, working with the Prague-based organization Forum 2000, NED helped convene a meeting of leading writers and activists from around the world to discuss the challenges facing democracy today. The group adopted a statement called The Prague Appeal for Democratic Renewal that opened with the ominous declaration that “Liberal democracy is under threat, and all who cherish it must come to its defense.”
The threat, according to the Appeal, is comprehensive and multifaceted, having both external and internal dimensions. Democracy is threatened from without, it said, by resurgent despotic regimes in Russia and China that are tightening repression internally and expanding their power globally, “filling vacuums left by the fading power, influence, and self confidence of the long-established democracies.” The Appeal warned that democracy is also threatened from within by a number of troubling developments, including the rise of illiberalism in backsliding democracies like Turkey, Hungary, the Philippines, and Venezuela, and the erosion of support for liberal values in many established democracies. It decried the declining faith in democratic institutions, leading to the rise of populist parties and movements in advanced democracies where governments seem unable to cope with the complex challenges of globalization, and elites managing global institutions seem remote and over-bearing.
The Appeal called for the creation of a new coalition for democratic renewal to serve as a moral and intellectual catalyst for the revitalization of democratic values. The goal would be to change the intellectual and cultural climate by waging a principled, informed, and passionate battle of ideas that would defend democracy against its critics and fashion persuasive arguments for liberal democracy that could shape the course of public discussion.
The starting point of such a campaign, it said, must be to reaffirm fundamental democratic principles, above all the basic freedoms of expression, association and religion; political and social pluralism; and a culture of tolerance, civility, and non-violence.
In addition to waging such a campaign, the coalition would also provide a forum to discuss the complex new challenges that democracy faces, from declining living standards and the backlash against immigration, to the rise of “post-truth politics” in an age of social media, and the erosion of support for liberal values.
Taking the initiative to bring about the adoption of The Prague Appeal and the creation of the new International Coalition for Democratic Renewal is an example of the way NED has acted proactively to mobilize a response to the threat faced today by liberal democracy. It has acted in many other ways as well.
For the second consecutive year, NED has funded programs in six strategic areas that help democrats respond to the threat posed by resurgent authoritarianism. The 88 strategic programs that NED supported in 2017 have included:
- Helping Civil Society Prevail Against the New Repression: We have supported building a network of “hubs” in different regions to coordinate aid to Democrats at Risk (DARs), the brave frontline democracy activists who must cope with harsh repression or – if they have been forced to flee – the challenge of continuing their work from their place of refuge.
- Defending the Integrity of the Information Space: Through the Beacon Project, IRI has created an integrated approach to countering the Russian threat in the information space by linking the most active groups in Europe and Eurasia and connecting them with people doing cutting-edge thinking on such subjects as computational propaganda, audience demand, and techniques for addressing disinformation.
- Combatting Modern Kleptocracy: In order to maximize the impact of investigative reporting, strategic programs are linking journalists who are uncovering kleptocracy with key international advocacy organizations and litigators who can amplify the stories and press for political and legal measures to deny kleptocrats access to international financial and other institutions.
- Strengthening Democratic Unity in Defense of Democratic Standards and Values: Key institutions and leaders have been engaged in different regions to start efforts to reassert core democratic norms and to counter authoritarian influence – for example, in Asia with groups in Japan, South Korea, India, Indonesia, and Taiwan; and in West Africa with the Court on Freedom of Information and Transparency of the Economic Community of West African States (ECOWAS).
- Fostering Ethnic and Religious Pluralism Against Extremist Movements: Working with the Arab Association of Enlightened Muslim Educators, cooperation has been strengthened among educational and cultural initiatives in the Middle East that promote pluralist and civic Muslim narratives rooted in respect for human dignity and freedom, mutual understanding, dialogue, and critical thinking.
- Strengthening the Capacity for Democratic Governance: Strategic grants have supported the creation of knowledge hubs that share lessons in successful governance in transitional situations, putting a special focus on Zimbabwe in the aftermath of Robert Mugabe’s downfall.
Beyond our grant making, NED used its research capacity to change the way the authoritarian threat is understood, which is the first step in developing a coherent response to the danger. For example, its International Forum for Democratic Studies published a report urging that the “soft power” tools of people-to people exchanges, education programs, and information initiatives that that are used by authoritarian countries like Russia and China should be categorized as Sharp Power because their purpose is to pierce, penetrate, or perforate the political and information environments in the targeted countries. The term has quickly caught on in the international media, including a cover story in The Economist.
NED also acted to defend democratic heroes and elevate democratic values by organizing a memorial symposium for Liu Xiaobo, the imprisoned Chinese Nobel Laureate Liu Xiaobo who died on July 13. Liu was not only the conscience of the Chinese people but also an international hero of truth. By remembering him as we did – and our symposium was organized in coordination with a parallel symposium in Taiwan – we conveyed our conviction that the values and ideas Liu died for will someday provide the foundation for a democratic China.
In addition, NED rallied support for democracy by presenting its Democracy Award to five anti-corruption fighters from Afghanistan, Angola, Guatemala, Malaysia, and Ukraine at a major ceremony in the U.S. Congress. The event was also the occasion to celebrate the 35th anniversary of President Ronald Reagan’s Westminster Address that launched the creation of the NED. Please click here to watch the event broadcast.
In an article written for The Wall Street Journal on the occasion of that milestone, the NED’s Chair Judy Shelton explained with great eloquence how the Endowment “remains faithful to its founding mission: to help others achieve a system that protects the inalienable rights of individuals and guarantees the people’s freedom to determine their own destiny. The Endowment provides modest grants to democracy activists around the world,” she wrote, “but its greater gift is the imprimatur of moral support from the American people. Brave individuals on the front lines of the struggle for democracy in their own countries draw strength from that connection.”
Because of those individuals and the support NED is able to give them, we can realistically hope that the rise of authoritarianism can be reversed, and that the cause of democracy, challenged as it is today, will ultimately prevail.
Carl Gershman
NED LEADERSHIP
Board of Directors
OFFICERS
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Chairman
Judy Shelton
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Secretary
Marylin Carlson Nelson
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Vice Chairman
Martin Frost
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Treasurer
Robert Tuttle
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Vice Chairman
Vin Weber
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President
Carl Gershman
DIRECTORS
- Elliott Abrams
- Anne Applebaum
- Karen Bass
- James Boland
- William Burns
- Marlene Colucci
- Michele Dunne
- Francis Fukuyama
- Donald Horowitz
- Barry Jackson
- Zalmay Khalilzad
- Jayne Kurzman
- Marne Levine
- Princeton Lyman
- Will Marshall
- Andrew Nathan
- Fred Redmond
- Peter Roskam
- Stephen Sestanovich
- David Skaggs
- Melanne Verveer
- George Weigel
PAST CHAIRMEN
- Dante Fascell (1917-1998)
- John Richardson (1921-2014)
- William Brock
- Winston Lord
- John Brademas (1927-2016)
- Vin Weber
- Richard Gephardt
- Martin Frost
Africa
A Year in Review
Africa Regional Overview
In 2017, citizens across Africa took to the streets to demand democracy and an end to the corruption, poor governance, and repression that have robbed them of their rights and left them impoverished.
Elections in Kenya, South Africa, the Gambia, the Central African Republic, Tanzania, Malawi and Ghana all demanded change. Afrobarometer confirms that a formidable majority of Africans desire democracy and reject authoritarian rule, while advances such as social media and economic reform have increased citizens’ power. Yet ongoing challenges in countries such as South Sudan, Uganda, Rwanda, Burundi, the DRC, Eritrea, Equatorial Guinea, Chad, Niger, and Mozambique remain troubling. Likewise, the fragility of democracy, the threat of poverty, corruption and insecurity, and the enormous task of democratic consolidation has become increasingly apparent in countries such as Nigeria, Cote d’Ivoire, Senegal, and Burkina Faso, as well as Liberia, Kenya, and South Africa.
These contending trends, the aspiration for democracy versus its many impediments, characterized the NED program this past year in more than 30 sub-Saharan African countries. NED supported its partners struggling for freedom of expression in Ethiopia; respect for human rights in Sudan; and democratic transition in Zimbabwe. Others helped consolidate a democratic victory in the Gambia, and increase the political participation of women and youth in Nigeria. Citizens of Liberia and Côte d’Ivoire mobilized for peaceful elections. In Rwanda and Uganda, they pressed to expand political space. They confronted corruption in Angola, human rights abuses in Burundi, and conflict in Mali, Somalia, Niger, the Central African Republic and South Sudan. In the Democratic Republic of the Congo, nearly 50 NED civil society partners conducted training and civic education on respect for the constitution and free and fair elections. National Democratic Institute (NDI), International Republican Institute (IRI), Center for International Private Enterprise (CIPE) and the Solidarity Center, along with NED’s local partners all came together to engage with the political process in Kenya, where an independent judiciary mediated contested elections.
On a pan-African level, NED supported sub-regional and regional initiatives promoting democratic norms with ECOWAS, SADC, IGAD and the African Union.
To learn more and to see a detailed list of our grantees, please visit the NED website.
Asia
In Review
In 2017, the Endowment prioritized countries in Asia that faced fundamental democratic deficits and where the NED was positioned to have the greatest impact. Building upon NED’s strategy from previous years, programs continued to be concentrated on key countries within each sub-region that faced significant and systemic challenges to democratization: China, including Tibet, and North Korea in East Asia, Burma in Southeast Asia, and Pakistan in South Asia.
In addition, the Endowment continued to shift significant resources towards countries facing acute political crises, namely Thailand and the Philippines, as well as countries where developments presented opportunities for democratic gains, particularly Sri Lanka. These seven countries represented nearly 80 percent of the spending in Asia in 2017. The NED also maintained targeted programs in other countries in the region, providing support for democratic development in Indonesia, Malaysia, Vietnam, Nepal, and elsewhere.
The Endowment looked for opportunities to engage in a more sustained effort in Bangladesh, where political dysfunction, rising security threats, and tightening space for independent civil society and media, posed a serious challenge to democratic governance and had repercussions for the region as a whole.
Although no single political narrative defined the Asia region, there were a number of cross-cutting issues and developments that the Endowment attempted to address. These included the growth of intolerant, chauvinistic and extremist forces that sought to erode democratic norms; tightening political space for civil society; dominant militaries and weak civilian governments; massive state corruption; and dominant- and one-party states. In virtually every country in the region, political developments were taking place within the context of rapid urbanization, economic development and integration, and expansion of access to information and communications technology. In 2017, the Endowment prioritized countries in Asia that faced fundamental democratic deficits and where the NED was positioned to have the greatest impact.
To learn more and to see a detailed list of our grantees, please visit the NED website.
Central and Eastern Europe
A Year in Review
Central and Eastern Europe Regional Overview
Europe faced significant challenges to its stability in 2017. Support for traditional political parties, trade unions, and institutions fell. Political populism, economic anxiety, and attacks on liberal values shook the region. The media space became increasingly polluted, stoking polarization, extremism, and xenophobia. Consequently, liberal democracy has weakened across the region.
In Central Europe’s new democracies, illiberal politics, far-right movements, and intolerance rose. The Eastern Partnership states that inked EU Association Agreements have been slow to enact reforms, leading to growing political instability and public dissatisfaction. In the EU aspirant countries of Southeastern Europe, most democratic transitions are stagnating or have regressed. Compounding the region’s specific post-communist and post-conflict challenges were the common problems of corruption, weak institutions, and political polarization. Russia exploited these difficulties, seeking to undermine the EU, destabilize its new democracies, and block European integration.
In response, NED expanded its support in Europe, focusing especially on accountability for governments and political parties. Proreform political parties and civil society organizations promoting good governance remain a priority. Civic groups are holding elected officials and politicians responsible for their promises and performance, fighting corruption, and countering internal and external attempts to destabilize transitions. NED also increased its support for independent outlets and investigative journalism networks to expand a free media space.
NED’s country priorities for Europe are those whose transitions showed promise initially but are now imperiled (Ukraine, Moldova), and those with autocratic or dysfunctional governments (Belarus and Bosnia and Herzegovina). NED also reengaged with the EU’s New Member States to defend post-1989 progress, and to counter Russian and other forces who seek to weaken democracies in Europe.
To learn more and to see a detailed list of our grantees, please visit the NED website.
Eurasia
A Year in Review
Eurasia Regional Overview
In 2017, the negative trends of the last several years in the Eurasia region continued to intensify, making democracy support work increasingly difficult and dangerous; from the closure of political space to the aggressive spread of authoritarian and illiberal messages, the necessity of the work conducted by NED grantees is more vital than ever.
Many countries continued to experience serious economic problems, stemming partly from the low price of oil and partly from the ripple effects of Russia’s economic downturn. As the recession in Russia led to budget cuts and social discontent at home, the downturn also had regional implications. Almost everywhere in Eurasia, there was a pessimistic atmosphere, continued repression of civil society, and the possibility of civil unrest, or armed conflict. The Kyrgyz Republic’s democratic gains since 2010 were partly reversed; in Tajikistan, the government banned the only moderate Islamic political party in the post-Soviet space and labeled it an extremist terrorist organization, while simultaneously increasing pressure on civil society and independent media. Even in the Caucasus, Russian disinformation won support among some segments of the population, while recruitment for ISIS grew among others. In this environment, the work of civil society was more critical than ever as a bulwark against repression, radicalization, and instability.
The Endowment prioritized countries in Eurasia that faced the greatest democratic deficits and where NED was positioned to have the greatest impact. Building upon its strategy from previous years, NED continued to concentrate on key countries within each sub-region that faced significant and systemic challenges to democratization – Russia, Georgia in the South Caucasus, and the Kyrgyz Republic in Central Asia. Elsewhere, NED continued to support activists and organizations facing significant pressure and persecution, including in Russia, Azerbaijan, Tajikistan, and Turkmenistan. Finally, NED targeted resources in countries where new developments presented opportunities for democratic gains, such as Armenia and Uzbekistan.
While the environment for civil society remains very difficult throughout Eurasia, the Endowment’s priority is to sustain and support our partners through this critical period, allowing them to plan and prepare to take greatest advantage of any future openings.
To learn more and to see a detailed list of our grantees, please visit the NED website.
Latin America and Caribbean
In Review
Regional Overview
Latin America & Caribbean
Throughout Latin America and the Caribbean, citizens spent 2017 preparing for intense electoral processes in the region while simultaneously assisting in uncovering widespread corruption-related scandals and confronting the hemispheric and global implications of a heightened crisis in Venezuela. An intense electoral cycle that started with elections in Honduras and Chile at the end of 2017 and would continue throughout 2018 in several countries was framed by citizen demands for transparency and accountability within the context of a mounting number of politicians associated with the Brazilian Lava Jato bribery scandal. Meanwhile, the autocratic governments of Cuba, Nicaragua, and Venezuela continued to challenge democracy, with Venezuela’s multifaceted crisis posing the most critical ongoing political, social, and economic challenges. Following months of street protests, violent repression, and more than 150 deaths, the Venezuelan government held a fraudulent election for a Constituent Assembly that gave unlimited power to President Maduro’s party. Thereafter, the crisis began to be felt in full force in neighboring countries such as Brazil, Colombia, and Peru, as Venezuelans fled in search of refuge.
Because of this, NED supported partners working to stymie corruption and promote reforms throughout the region, ranging from access to information laws in the Southern Cone to comprehensive institutional reforms in Mexico and Central America. Partners in Peru uncovered high-level corruption scandals through investigative journalism, and in Colombia provided oversight of the implementation of the newly agreed upon peace accord. As democratic players in Ecuador helped to consolidate a democratic transition, civil society in Bolivia attempted to prevent democratic backsliding and the president’s consolidation of power. Cuba aimed to identify new areas of opportunity under a continually oppressive regime, and to maintain a democratic space in their country. All the while, NDI, IRI, CIPE and the Solidarity Center worked alongside Venezuelan organizations to defend human rights and promote democratic values against all odds in Venezuela. Throughout it all, NED partners continuously engaged at the regional level with institutions like the Organization of American States and the Inter-American Commission on Human Rights.
To learn more and to see a detailed list of our grantees, please visit the NED website.
Middle East and North Africa
A Year in Review
Regional Overview
In most countries of the Middle East and North Africa (MENA), prospects for democratic progress and reform remained challenged by mounting turmoil, conflict, and terrorism. The need for security and stability dominated, sidelining discussions and efforts for political reform or liberalization in almost every country. Despite instability and increasingly repressive environments, civil society throughout MENA continued to demonstrate a resounding resilience and commitment to reform.
Afghanistan and Iraq remained high NED priorities as international support to civil society in those countries continued to diminish. NED supported groups working for reform and challenging the idea that security and democracy work at counter purposes. In countries with a degree of civic space and an established civil society such as Morocco and Tunisia, NED supported broad-based advocacy and accountability efforts, independent media, and efforts to strengthen civil society as a whole. Despite the rollback of democratic reforms in Turkey, NED supported independent media and accountability initiatives to guard against further backsliding. As violent conflicts progressed in Libya, Syria, and Yemen, NED prioritized keeping democracy from being subsumed by other priorities. In those contexts, NED emphasized efforts to expand independent voices, represent critical constituencies for change, and strengthen emerging generations of civil and political leaders. In Algeria, Egypt, the Gulf States, and Iran where civil society is constrained, the Endowment offered a lifeline to civic actors promoting democratic ideas and values, expanding the space for dialogue and exchange, and serving as watchdogs in critical sectors such as labor and human rights. Where political environments limited civil society’s ability to have much direct political influence, such as Jordan, Mauritania, and the West Bank and Gaza, NED support positioned civil society partners to respond constructively when greater engagement is possible.
In addition, NED’s MENA regional programs strengthened emerging networks and built sectoral expertise in various democracy-related issues across the region, expanded support to buttress democratic gains, including Tunisia’s transition, promoted dialogue, pluralism, and building bridges among communities threatened by divisions, supported human rights defenders, and addressed systemic good governance failures and weak local and national institutions.
To learn more and to see a detailed list of our grantees, please visit the NED website.
Global
Global Regional Overview
Challenges that have defined the political landscape in recent years continue to confront democracy and human rights advocates around the world. The restrictions aimed at curbing independent voices through criminalization of their work, judicial harassment, and even physical attacks show little sign of abating. As governments employ a range of tactics to limit civil society’s ability to operate, democracy advocates need to find creative ways to respond to the threats and stem the tide of deteriorating rights. In countries that have registered progress, meanwhile, democracy advocates face a different type of challenge: following through on the promises heralded by significant elections and building on the traction gained through fledgling, at times fitful, transition processes.
The Endowment’s Global program aims to strengthen the impact of democracy advocates around the world by enabling them to share their lessons and insights across borders and beyond their regions. The program connects them to one another to learn and share technical expertise, provide solidarity, collaborate on key areas of advocacy, and foster the development and implementation of norms to strengthen democracy. The program leverages the work conducted in multiple regions to address crosscutting challenges and reinforce the work of partners to strengthen human rights, democratic governance, political processes, independent media, freedom of association, and market-oriented reform.
Transitional Justice Working Group
Transitional Justice Working Group (TJWG), based in South Korea, has worked to create new connections between transitional justice and human rights documentation experts and practitioners, enabling them to share experiences and strategies in human rights documentation practices, provide and receive technical skills, and explore collaboration on innovative joint initiatives to promote justice and accountability.
TJWG’s efforts to lay the foundation for more systematic knowledge sharing among human rights advocates on documentation approaches and methods began with organizing an international conference and training on applying information technology and forensic science in human rights documentation. Human rights advocates from Asia, Europe, Latin America and the Caribbean, and the Middle East and North Africa gathered to discuss their work in varied political contexts. Conference sessions covered topics such as obtaining and using reliable data backed up by credible methodologies in transitional justice processes and advocacy campaigns, and investigations, evidence gathering; forensic science, including site preservation in situations of mass atrocity and new technologies and methods for investigations; political, networking, and resource challenges in documenting atrocities; and what human rights documentation practitioners may encounter in an international criminal justice process dealing with large-scale human rights abuses.
The conference was followed by a two-day workshop featuring intensive introductory trainings on forensic science that focused on bringing anthropology and criminal methods together; the use of information technology to improve documentation collection and storage; how human rights groups can work through the criminal justice process and the limits of international law in prosecuting regime leadership; and key considerations in the design, management, and application of documentation information and the perils of misusing human rights data. Building on the foundation laid by the conference, TJWG has continued to strengthen the foundation for a resource hub for human rights documenters working to support transitional justice projects globally.
The Endowment's Democracy Promotion Activities
Report of the Independent Auditors
We have audited the accompanying financial statements of National Endowment for Democracy (the Endowment), which comprise the balance sheet as of September 30, 2017, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of National Endowment for Democracy as of September 30, 2017, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Report on Summarized Comparative Information
We have previously audited the Endowment’s 2016 financial statements, and we have expressed an unmodified opinion on those audited financial statements in our report dated February 9, 2017. In our opinion the summarized comparative information presented herein as of and for the year ended September 30, 2016, is consistent, in all material respects, with the audited financial statements from which it has been derived.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 12, 2018, on our consideration of the Endowment’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Endowment’s internal control over financial reporting and compliance.
RSM vs LLP
Washington, D.C.
January 12, 2018
Link to Balance Sheet