Here is an update on Friends of Democracy. The original project description is here.

In October 2004 when we launched the Friends of Democracy project, we wrote: “We have an ambitious goal for this project: $2 million. This reflects the high stakes of the Iraqi election and that we now have in place the relationships in Iraq to put these funds to good use. We're already 25% to that goal as we'll be using for this project $500,000 in funds previously donated to Spirit of America.”

As of May 20, 2005 we had raised $179,665 for the project. Direct project expenses were $204,300, leading to a project deficit of about $25,000. We are making up that difference with funds from our Project Fund (people make donations to the project fund to be used for direct expenses of any SoA project).

So, what happened to $500,000 that we had earmarked for the project from prior donations? In Iraq things change frequently and we do our best to adjust accordingly to apply our donors’ funds in the most effective way possible based on the donors’ intent. In this case our original plans changed based on new information as the project proceeded, more detail follows below. Nonetheless, we have fulfilled the specific commitments we made to groups inside Iraq. We have fulfilled all funding requests from Friends of Democracy and Iraq’s Ministry of Women’s Affairs. And, we have fulfilled our obligations to Civil Pillar.

In October we had planned to allocate virtually all of our discretionary Project Fund (funds that can be used in support of any SoA project or request) and a substantial portion of our unrestricted funds to Friends of Democracy. Three things had us scale back those plans.

1. As the project proceeded and implementation began, we realized we could not put all the planned funding to good use. Our assessment was that expenditures above those we actually made would lead to considerable wasted funds. For example, the escalating terrorist violence leading up to the elections meant that NGOs like Friends of Democracy had to keep a low profile so a high level of advertising for the organization was not viable.
2. We learned that others, such as the United Nations and the Iraqi government , were funding large-scale voter education and election promotion projects. This made our funding less necessary and we focused on areas where we could add unique value.
3. When donor response was not what we had hoped we realized that it was not the intent of our donors to support Friends of Democracy at the high level we had planned.

What happened to the $500,000? The funds have been, and still are being, used according to donor intent. Approximately $400,000 of the planned $500,000 was to come from our Project Fund. The Project Fund is used for a range of projects – recently including School Partners and support for orphans in Iraq. Approximately $100,000 was to come from our Unrestricted Fund and those funds are typically being used for the ongoing operations and administration of Spirit of America.

You can review our expenditures and financials at: http://www.spiritofamerica.net/site/financials