Following the collapse of the Soviet Union, countries in this part of the world experienced rapid
proliferation of civil society organizations (CSOs), their development aided in part by international
development agencies. In the 1990s, previously well-funded NGOs and CSOs began to confront
resource scarcity due to transitional economies and shifting funder priorities, coupled with the slower
than expected private sector growth, thus creating a funding gap.
Market forces galvanized practitioners to explore alternative financing approaches, recognizing that
their organizations' survival rested on the ability to augment or replace grants by other means.
Development agencies in the region, as well as in other transitional economies such as Latin American
countries, have supported this shift toward establishing an independent means of financing. NESsT, an
early player in employing social enterprise as a means of self-financing social service organizations,
adapted and replicated REDF's venture philanthropy approach and applied it to CBOs and NGOs in
Latin America and Eastern Europe.
In addition to the establishment of income-earned ventures (social enterprise), CBO and NGO
sustainability strategies include: the cultivation of local philanthropy; commercialization of NGO social