Jamaica Environmental Foundation of Jamaica EFJ The Environmental Foundation of

Jamaica Environmental Foundation of Jamaica (EFJ)∗ The Environmental Foundation of Jamaica (EFJ) is a private nonprofit organization created in 1991 by the governments of Jamaica and the United States. Through years of work, it has developed into one of the strongest organizations in Jamaica, promoting and implementing activities whose objective is to conserve and manage the environment and natural resources of Jamaica in a sustainable manner, and to promote child survival and development. EFJ has financed more than 500 projects in areas related to the environment and child development, and its work has strengthened the NGO community and promoted the creation of new NGOs who are the principal implementers of the projects supported. The Environmental Foundation of Jamaica is a private nonprofit organization dedicated to the improvement of social and environmental conditions in Jamaica. The initiative was developed by the governments of Jamaica and the United States in 1991 under the first of two debt reduction agreements under the Enterprise of the Americas Initiative (EAI). EFJ was legally established with the principal goal of promoting activities to conserve and manage natural resources and the environment in Jamaica, in a context of sustainable development and improvement of child survival and development. These two themes were included in the agenda of the institution by their status as priorities of the EAI. One of the requirements for channeling resources from this debt swap was that the organization include members of the civil society from NGOs and community based organizations (CBOs) working in areas related to conservation and sustainable use of natural resources in the country, and in child development and/or community development. Actually, EFJ has 40 member organizations that work in distinct thematic areas and regions of the country. Origins of the Fund EFJ was legally established as a limited company, with guarantee and without capital, under the Companies Act of Jamaica, in November 1991. From its beginning, the objective of EFJ was to finance environmental activities and child development projects through local NGOs. Under the agreement creating EFJ signed in 1991 and amended in 1993, the Fund receives resources in two independent accounts. The first, established in 1991, was capitalized with the payment of interest owed on debt to USAID for a total of $9.2 million between 1991 and 2001. The second account is capitalized from the interest owed by the Government of Jamaica as payment on PL 480 debt, totaling $12.3 million between 1993 and 2012. ∗ This case study is not an evaluation of the operation of the Fund, but rather, a description derived from information provided by the Environmental Fund. This document does not include input from other stakeholders and clients outside the Fund. Operation of the Fund EFJ was created as a membership organization formed by NGOs and CBOs working in three aspects of civil society: the environment and natural resources, child survival and development, and community development. Its highest decision making body is the annual general meeting (AGM), involving representatives of the 40 member organizations, who choose their representatives to the organization’s Board. To elect Board members, the members present a group of seven candidates to the government of Jamaica (normally the Minister of Environment), who from this list chooses the new members of the Board. EFJ’s status as a membership organization aims to guarantee legitimacy to its operations, since the members can review and propose new ideas through the annual meeting and participate actively through the Board in decision making in the institution. The Board is composed of nine members: (1) three permanent members who represent the governments of Jamaica and the US and the University of the West Indies (UWI); and (2) six members representing NGOs, one of whom must represent the interests of child survival and development. The government of Jamaica has the right to elect the representative of UWI and the member who represents NGOs involved in child survival and development; so despite the fact that the government has only one representative among the nine members, it has considerable influence in the composition of the Board. The Board meets every three months and elects both its President and the executive director of the organization. Among the principal functions of the board are supervising the administration of the resources and acting as an arbitrator in cases of conflict of interest. EFJ’s Board members are active, dedicated, and well qualified. The government of Jamaica has had an outstanding role; its representatives on the Board have been actively involved in the decisions of the organization, and its interest has been increasing gradually. On the other hand, despite serious problems of government budget reductions in recent years, EFJ has promptly received the quarterly appropriations committed in the bilateral accords. Through the years, EFJ has established four working committees that work in coordination with the Board: a. Membership and Community Relations Committee composed of one member of the Board, who serve as the Chair, five NGO representatives, and two support staff. This committee works to promote dialogue among the members about the importance of their role, and identify organizations that could be potential members, as well as on governance matter of the EFJ, such as, nomination of Board of Directors. Finance Committee, composed of four members of the Board and one member of the staff, with functions including (1) forming policies to guide fund management; (2) reviewing and monitoring financial status; and (3) reviewing and approving accounting policies and financial control systems. Grant Making Committee, composed of a group of nine persons, three from the Board, four independent professionals, and two representatives from the respective governments of Jamaica and the US. This committee’s responsibilities are (1) review and make decisions about projects seeking financing; (2) make recommendations about areas of priority in which EFJ will work; and (3) supervising and conducting follow-up to the reports of the project director. Special projects committee, which examines and determines the feasibility of new proposals presented under the special projects portfolio, and assigns funds for approved projects. b. c. EFJ has an executive secretariat led by the Executive Director, who evaluates and monitors projects, disburses funds, and implements the policies of the organization. The staff team is 19 individuals working in the following areas: (1) fundraising and communication, (2) special projects, (3) projects, (4) finance, and (5) membership and community relations. Since its inception, EFJ has recruited personnel with administrative skills, instead of technical specialists. Until 2000, when the special projects unit was established, EFJ did not employ any environmental, child development, or community development specialists. The membership committee prepared a matrix of skills required and promoted a broad search each year for new talent required by the Board and staff. There is a ceiling of 15% of the resources annually assigned to the foundation by the debt payments, plus 15% of the interest generated by capital, to finance administrative costs. The technical team has doubled over the past two years from 9 to 19 persons, principally due to the incorporation of capacity strengthening of NGOs and CBOs to prepare projects. EFJ’s first strategic planning exercise was conducted in 1999. Currently EFJ is updating this plan. EFJ’s mission is “to promote, support, and implement activities designed to conserve the environment and natural resources of Jamaica, and to improve the quality of life of children.” Because there are limited financing mechanisms for NGOs in Jamaica, most organizations approach EFJ to solicit funds. However, a high percentage of the proposals presented do not meet the technical and administrative requirements. This has been a challenge for the institution, which has seen a need to strengthen organizations in the design and preparation of proposals. Another factor that has been a challenge for the management of EFJ is the lack of clear national policies, which has meant that EFJ has had to play roles that are not technically its responsibility. One example of this situation is the management of protected areas. The government has assigned the management of these areas to organizations that do not have adequate capacity for this task. Additionally, to date there is no plan for the national protected areas system, which has made it difficult to set priorities for financing. Some of the challenges that EFJ has identified for its future management are: (1) to establish a line of credit to improve productive processes by enterprises, with the objective to enhance efficient use of natural resources; (2) to assure adequate operational development for efficient and effective work to meet new demands within the operational cost ceilings established; (3) training for the members of the Board; (4) standardization of the methods for selection and evaluation in the two lines of project financing; and (5) design of manuals and administrative procedures that will regulate important processes such as procurement and hiring of personnel. Activities supported EFJ, in selecting projects to be financed, considers national environmental priorities defined in the Plan of Action (included in the document State of the Environment). Additionally, the strategy for identifying priorities implies the identification of the most important problems, in collaboration with environmental authorities (the National Agency for Planning and Environment) and the NGOs working in the theme of child development. Upon identification of those problems, the Fund defines an action strategy that will be the base for the selection of projects. EFJ has two lines of financing: (a) Special projects In 1999 a program of Special Projects was presented to the Board, developed in response to specific requests in themes that were not financed by other sources. The program of Special Projects was introduced to promote development projects, programs of national extent, and projects of significant impact that promoted the participation of a large number of actors and beneficiaries. This type of project is designed by EFJ and implemented by NGOs. Special projects seek to establish strategic alliances among sectors benefiting or affected by the theme in question, with the objective of developing solutions to problems with national impact. Special projects are selected by the Committee on Special Projects of the Board, and there is no limit on the amount that may be financed. The Board, together with the Special Projects unit, decides the thematic priorities for this line of financing. The current priorities are: (1) watershed management and silviculture, including establishment of baselines, mapping of watersheds, and the coordination of actions by civil society related to protection of forests and restoration of vegetative cover; (2) environmental management, focused on strengthening national policies related to management of oceans and coastal zones; (3) development of green spaces; (4) waste management focusing on public education, studies, and design of programs for management and elimination of wastes; and (5) child survival. Because this line of financing began in 2001, to date the results have not been evaluated. (b) Grants This line of financing provides resources to projects presented by NGOs throughout the year. The guidelines established in the agreements that created EFJ are the basis for regulating the administration of these projects. Proposals for projects less than $100,000 are approved by the Projects Committee and applications for grants larger than $100,000 are approved by the Board and require the ratification of the two governments (Jamaica and the United States). Currently, EFJ supports projects in five areas: (1) capacity building, (2) natural resource management and sustainable alternative livelihoods, (3) child survival and development, (4) environmental awareness and action, and (5) technological innovation. To date, the majority of projects financed are in capacity building, child survival and development, and environmental awareness. For EFJ, strengthening NGO management capacity is crucial to assure the success of the activities supported. Capacity building involves providing technical assistance in the preparation of proposals, feasibility studies and business plans, project management, financial plans to assure the economic sustainability of the initiatives, and contracting staff for the organization being strengthened. This ultimate aspect is financed as bridge funding until the organization can find support from other sources to cover the expense. Monitoring of projects supported is accomplished through quarterly reports from the implementing organizations and regular visits to the projects by the Fund staff. Project results are evaluated at midterm and the end of the project. One of the challenges identified for the future management of the organization is the establishment of mechanisms to evaluate the impact of the projects financed. Between 1993 and 2001, EFJ supported 446 projects totaling JMD $413,341,090.56 million. The organization projects that it will be able to support an average of $4 million annually during the next five years; of this amount, $2 million will be directed toward special projects and $2 million to grants. Fund Administration The funds paid by the government of Jamaica to EFJ are managed by an asset manager who invests the capital in accordance with the investment guidelines established by the EFJ. 98% of the resources are invested in fixed income instruments and 2% in variable income instruments. In accordance with the bilateral agreement, funds received by EFJ in lieu of Jamaican government payments of PL 480 and USAID debt interest are reduced gradually each year. However, the reduction has been compensated by high income generated on the investments. This income has allowed EFJ to increase its capital rapidly. Due to the fiscal crisis of the mid1990s, the government fixed the yield of this type of bond at a minimum of double the rate of inflation, so that the real return has been unusually high in the global context. In 1994, the annual yield was 73%, and it has been between 20% and 47% from 1995 to 2000. However, in recent years the interest rates have gone down, and the investment strategy is being revised. The relatively slow disbursement by EFJ between 1994 and 2000, combined with the unusually high return on investments and the annual payments from the Government of Jamaica, have resulted in a notable increase in EFJ’s capital. Although disbursements increased in 2002, the flow of capital available to finance projects will continue to increase. This availability of funds has generated pressure on EFJ to spend more of its resources, especially because of the conditions of Jamaica as a country where financing of activities related to environment and youth is scarce. The Government of Jamaica appears to be interested in transferring to EFJ the responsibility for managing funds for some of its responsibilities, such as operation of national parks. These facts, among others, have promoted the analysis of the possibility of establishing an endowment fund. Although the process is in discussion, legal documents for its establishment have been prepared, and the US Government has given its approval. This initiative continues although it is not very likely that EFJ will continue to benefit from high interest rates. In this context, the endowment fund is needed to assure that the organization will have capital to continue its leadership in environmental activities and youth development in the long term. Lessons learned • • The work of EFJ has supported the creation of new NGOs. However, the dependency of these organizations on EFJ financing is a factor that needs to be addressed. The lack of national environmental plans has obligated EFJ to establish its own priorities to orient its programs of work. However, the strategic priorities identified are still very broad and, unlike other Funds, EFJ has not defined a specific niche for its programs. The establishment of the Fund revealed that effective demand for its support was not at the level expected. The number of NGOs able to prepare and administer projects is limited, and to address this, a program of institutional strengthening was begun to provide technical assistance to potential grant recipients. EFJ has a participative structure, in which a wide variety of interested parties are represented and involved. The sectoral interests of members, which were characteristic of EFJ’s early years, seem to be waning little by little. The members of the Board participate as individuals and not as representatives of interest groups, serving above all to advance and support the objectives of EFJ. The members of the Board must be chosen in accordance with their personal leadership capacities, and not as formal or informal representatives of sectors or interest groups. The process of financing projects has been developing continuously since 1997. However, there are still bureaucratic issues that must be modified. The limits on sizes of grants for different types of projects must be updated. Due to continuing devaluation of the Jamaican currency and the time required for EFJ to review and approve proposals, resources sometimes are no longer sufficient to cover the real costs by the time the project is approved. • • • • • Contact The Environmental Foundation of Jamaica Selena Tapper, Executive Director Address: 1b Norwood Avenue, Kingston 5, Jamaica W.I. Tel: (876) 960 6744, Fax: (876) 920 8999 E-mail: efj.ja@cwjamaica.com Website: www.efj.org.jm Bibliography Global Environment Facility. Evaluation of Experience with Conservation Trust Funds. Washington D.C. 1999. Global Environment Facility. Building Strategic Focus in a Conservation Trust Fund. GEF Lessons Notes No. 6. February 1999. Ecofondo. Regional Consultation on Environmental Funds in Latin America and the Caribbean, Final Report. Cartagena, Colombia. 1996. IUCN, The Nature Conservancy, WWF. First Global Forum on Environmental Funds, Santa Cruz, Bolivia. Washington D.C. 1994. John Pielemeier, Margaret Jones Williams. Evaluation of the Environmental Foundation of Jamaica. USAID. 2001. Norris, Ruth, ed. The IPG Handbook on Environmental Funds: A Resource Book for the Design and Operation of Environmental Funds. Pact Publications. New York, NY. 2000. UNDP. Report of the Workshop on Strengthening Environmental Funds in Latin America and the Caribbean. Yucatán, México. 1997. USAID Global Environment Center. Update on USAID-Supported Environmental Endowments. Environmental Information Clearinghouse (EIC) Project. 1999.