[Code of Federal Regulations]
[Title 22, Volume 1]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 22CFR67.4]

[Page 340-343]
 
                       TITLE 22--FOREIGN RELATIONS
 
                     CHAPTER I--DEPARTMENT OF STATE
 
PART 67--ORGANIZATION OF THE NATIONAL ENDOWMENT FOR DEMOCRACY--Table of Contents
 
Sec. 67.4  Description of functions and procedures.

    (a) In accordance with the Statement of Principles and Objectives, 
NED is currently developing and funding programs in five substantive 
areas:
    (1) Pluralism. NED encourages the development of strong, independent 
private-sector organizations, especially trade unions and business 
associations. It also supports cooperatives, civic and women's 
organizations, and youth groups, among other organizations. Programs in 
the areas of labor and business are carried out, respectively, through 
the Free Trade Union Institute and the Center for International Private 
Enterprise.
    (2) Democratic governance and political processes. NED seeks to 
promote strong, stable political parties committed to the democratic 
process. It also supports programs in election administration and law, 
as well as programs that promote dialogue among different sectors of 
society and advance democratic solutions to national problems.
    (3) Education, culture and communications. NED funds programs that 
nourish a strong democratic civic culture, including support for 
publications and other communications media and training programs for 
journalists; the production and dissemination of books and other 
materials to strengthen popular understanding and intellectual advocacy 
of democracy; and programs of democratic education.
    (4) Research. A modest portion of NED's resources is reserved for 
research, including studies of particular regions or countries where NED 
has a special interest, and evaluations of previous or existing efforts 
to promote democracy.

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    (5) International cooperation. NED seeks to encourage regional and 
international cooperation in promoting democracy, including programs 
that strengthen cohesion among democracies and enhance coordination 
among democratic forces.
    (b) As a grantmaking organization, NED has certain responsibilities 
that govern its relationship with all potential and actual grantees. 
Briefly, these are:
    (1) Setting program priorities within the framework of the purposes 
outlined in NED's articles of incorporation and contained in the 
legislation, and guided by the general policy Statement of the Board of 
Directors;
    (2) Reviewing and vetting proposals, guided by the general 
guidelines and selection criteria adopted by the NED Board;
    (3) Coordinating among all grantees to avoid duplication and to 
assure maximum program effectiveness;
    (4) Negotiating a grant agreement which ensures a high standard of 
accountability on the part of each grantee;
    (5) Financial and programmatic monitoring following the approval and 
negotiation of a grant, and ongoing and/or follow-up evaluation of 
programs prior to any subsequent funding of either a particular grantee 
or a specific program. Grantees will also be expected to monitor 
projects, to provide regular reports to NED on the progress of programs, 
and to inform NED promptly of any significant problems that could affect 
the successful implementation of the project. NED grantees will also 
conduct their own evaluations of programs.
    (6) As a recipient of congressionally appropriated funds, NED has a 
special responsibility to:
    (i) Operate openly,
    (ii) Provide relevant information on programs and operations to the 
public, and
    (iii) Ensure that funds are spent wisely, efficiently, and in 
accordance with all relevant regulations.
    (c) Institutes representing business, labor, and the major political 
parties carry out programs which are central to NED's purposes. As a 
result of their unique relationship to NED, institute programs are an 
integral part of NED's priorities and the institutes themselves are 
``core'' grantees. As such, the institutes, while subject to all the 
normal procedures governing NED's relationships with grantees, will be 
treated differently in the following respects:
    (1) The institutes will have the mandate to carry out programs 
funded by NED in their respective sectors of business, labor and 
political parties.
    (2) As an integral part of the process of budgeting and setting 
program priorities, the NED Board will target a certain amount of its 
annual resources for institute programs in their respective fields of 
activity.
    (3) Unlike its practice for the majority of its grantees, NED will 
fund significant administrative costs for each of the core grantees.
    (4) Institute staff will assume responsibility for program 
development and preparation of proposals for the Board in each field of 
activity for which it has a special mandate.
    (5) NED will expect its core grantees to perform their monitoring/
evaluation function described in programmatic monitoring under Financial 
and programmatic monitoring above in a manner that will minimize the 
need to devote NED resources for these purposes. (Individual copies of 
the Grants Policy are available from the NED office.)
    (6) As stated above, in awarding grants the Board is guided by 
established grant selection critieria. In addition to evaluating how a 
program fits within NED's overall priorities, the Board considers 
factors such as the urgency of a program, its relevance to specific 
needs and conditions in a particular country, and the democratic 
commitment and experience of the applicant. NED is especially interested 
in proposals that originate with indigenous democratic groups. It is 
also interested in nonpartisan programs seeking to strengthen democratic 
values among all sectors of the democratic political spectrum.
    (d) Selection criteria. In determining the relative merit of a 
particular proposal NED considers whether the grant application:
    (1) Proposes a program that will make a concrete contribution to 
assisting foreign individuals or groups who

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are working for democratic ends and who need NED's assistance.
    (2) Proposes a program, project or activity which is consistent with 
current NED program priorities and contributes to overall program 
balance and effectiveness.
    (3) Proposes an activity that meets an especially urgent need.
    (4) Does not overlap with what others are doing well.
    (5) Proposes a program that will encourage an intellectual climate 
which is favorable to the growth of democratic institutions.
    (6) Proposes a program that is not only culturally or intellectually 
appealing, but will affect the education and the awareness of minorities 
and/or the less privileged members of a society.
    (7) Originates from an organization within a particular country 
representing the group whose needs are to be addressed.
    (8) Appears to be well thought out, avoiding imprudent activities 
and possibilities for negative repercussions.
    (9) Takes into consideration not only what objectively could be 
significant to a certain society, but how the cultural traditions and 
values of that society will react to the project.
    (10) Incorporates an analysis of the problem of democracy in the 
area in question and the method by which the proposed program will have 
a constructive impact on the problem.
    (11) Proposes a program that will enhance our understanding of what 
really helps in aiding democracy.
    (12) Creatively enlists supports for foreign democratic 
organizations.
    (13) Encourages democratic solutions and peaceful resolution of 
conflict in situations otherwise fraught with violence.
    (14) Proposes a program, project or activity that is clearly 
relevant to NED program objectives and not better funded by other 
government or private organizations. (Proposing organizations will be be 
referred to other funding organizations where substantial overlap 
exists.)
    (15) Proposes a program or strategy that is appropriate to the 
circumstances in the country concerned.
    (16) Proposes a program that can be expected to have a multiplier 
effect, hence having an impact broader than that of the specific project 
itself; or establishes a model that could be readily replicated in other 
countries or institutions.
    (17) Proposes appropriate, qualified staff who have a demonstrated 
ability to administer programs capably so as to accomplish stated goals 
and objectives.
    (18) Proposes an appropriate ratio of administrative to program 
funds.
    (19) Is responsive to NED suggestions with regard to program 
revisions.
    (20) Proposes a realistic budget that is consistent with NED 
perceptions of project value and is performed within a stated and 
realistic time frame; and
    (21) Proposes a program that has, as one of its principal aspects, a 
major impact on the role of women and/or minorities.
    (e) The following guidelines also apply to all projects funded by 
NED.
    (1) The proposing organization must be able to show that it is a 
responsible, credible organization or group that has a serious and 
demonstrable commitment to democratic values. (Various factors may be 
considered in this regard: recognized democratic orientation; 
established professional reputation; proven ability to perform; 
existence of organization charter, board of directors, regular audits, 
etc.);
    (2) The proposing organization must be willing to comply with all 
provisions of the National Endowment for Democracy Act as well as all 
provisions of current and subsequent agreements between the USIA and 
NED;
    (3) The proposing organization must agree not to use grant funds for 
the purpose of educating, training, or informing United States audiences 
of any U.S. political party's policy or practice, or candidate for 
office. (This condition does not exclude making grants or expenditures 
for the purpose of educating, training or informing audiences of other 
countries on the institutions and values of democracy that may 
incidentally educate, train, or inform American participants);
    (4) The proposing organization must agree that no NED funds will be 
used

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for lobbying or propaganda that is directed at influencing public policy 
decisions of the government of the United States or of any state or 
locality thereof;
    (5) The proposing organization must agree that there shall be no 
expenditure of NED funds for the purpose of supporting physical violence 
by individuals, groups or governments;
    (6) The proposing organization may not employ any person engaged in 
intelligence activity on behalf of the United States government or any 
other government;
    (7) NED will not normally reimburse grantees for expenses incurred 
prior to the signing of a grant agreement with NED;
    (8) Each grant made by NED will be an independent action implying no 
future commitment on NED's part to a project or program;
    (9) NED may, from time to time, fund feasibility studies. 
Applications for grants in this category should include, but not be 
limited to, the following: Scope, method and objective of the study; 
Calendar; Proposed administration of the study; and Detailed budget. The 
funding of a feasibility study by NED does not imply support for any 
project growing out of the study. It does, however, imply interest by 
NED in the area under study and a willingness to entertain a project 
proposal growing out of the study; and
    (10) The proposing organization may not use NED funds to finance the 
campaigns of candidates for public office.
    (f) All proposals received by NED are reviewed by the staff in order 
to determine their congruence with NED's purposes as stated in the 
organization's Articles of Incorporation and the NED Act.
    (g) Grant applications must contain the following information:
    (1) A one-page summary of the proposed program;
    (2) Organizational background and biographical information on staff 
and directors in the U.S. and abroad;
    (3) A complete project description, including a statement of 
objectives, a project calendar, and a description of anticipated 
results;
    (4) A statement describing how the project relates to NED's 
purposes;
    (5) A description of the methods to be used to evaluate the project 
in relation to its objectives;
    (6) A detailed budget, including an explanation of any counterpart 
support anticipated by the applicant, whether monetary or in-kind, 
domestic or foreign; and
    (7) The names and addresses of all other funding organizations to 
which the proposal has been submitted or will be submitted.
    (h) After an award determination has been made by the Board, NED 
enters into a grant agreement with the recipient. That agreement is made 
in accordance with NED policy, the terms of NED's grant agreement with 
USIA, and the terms of the Act, and the terms of NED's standard grant 
agreement as they apply to the specific project in question. The NED 
Board of Directors approved a revised Statement of General Procedures 
and Guidelines on September 12, 1986. The statement, outlined above, is 
available from the NED office.
    (i) NED Staff welcomes preliminary letters of inquiry prior to 
submission of a formal proposal. Letters of inquiry and formal proposals 
should be submitted to: Director of Program, National Endowment for 
Democracy 1101 15th Street, NW, Suite 700, Washington, DC 20005-5000.

[51 FR 40164, Nov. 5, 1986. Redesignated and amended at 64 FR 54541, 
Oct. 7, 1999]

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