Soros Foundation Cuts EU Funding as Nationalist Groups Surge

Michael Winfrey
·6 min read
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(Bloomberg) -- The decision by George Soros’s massive philanthropy to cut funding to European Union-based initiatives deals a significant blow to liberal democratic institutions as nationalist and populist forces surge across the continent.

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Open Society Foundations, which controls most of the assets in Soros’s $25 billion family office, is preparing for a “radical shift” that will largely terminate funding in the EU and switch focus to areas outside the 27-member bloc, according to a letter sent to grantees that was seen by Bloomberg this week.

The move follows more than a decade of attacks from right-wing groups against Soros, a 93-year-old Hungarian-born Jew who survived the Holocaust and fled the Communists before becoming an American citizen. It was made by his son, Alexander, who took over management of OSF in December.

The extent of the cuts came as a shock to the organization’s staff and grant recipients, especially in light of a recent decision to reduce employee headcount by 40%. It hit particularly hard in former communist countries within the EU, where OSF has consistently funded an array of initiatives that include fighting for the rights of immigrants and the Roma minority and defending media freedom. Following the fall of the Iron Curtain, OSF became the region’s most influential non-governmental organization.

The retooling has left its European staff demotivated, with many worrying that the decision could be catastrophic for civil society in Europe, according to an OSF employee who didn’t want to be identified because staff have been instructed not to speak with media. While OSF staffers aren’t optimistic that leadership will reverse course, they are trying to soften the transition so the impact won’t be felt until 2024, the person said.

Part of the rationale behind the shift is to cut costs and streamline an organization with overlapping programs, according to the staff member. In the letter sent to OSF grantees, the organization wrote that leadership decided on the move because EU governments and institutions “were already allocating significant resources to human rights, freedom and pluralism” inside the bloc.

Yet EU financing in support of civil society and human rights is scarce and highly bureaucratic, said a second person familiar with the concerns of OSF staff. Moreover, OSF is increasingly competing with right-wing governments in EU member states that funnel cash to domestic groups which promote nationalist or hard-right ideologies that don’t align with the bloc’s liberal, multi-cultural values.

“It’s sort of strange that at this point when this civil society that OSF supported has finally materialized, it would defect from this battle when faced with groups funded by nationalist and far-right forces,” said Jiri Pehe, the director of New York University in Prague, who sat on the Board of OSF Czech Republic during the 2000s. “These groups will become even more influential because there won’t be any opposition to them in terms of financial support.”

OSF has spent more than $19 billion on its philanthropic commitments over the past three decades. In 2021, it gave out $209 million in funding in Europe and Central Asia, almost 14% of its global expenditure, according to the organization’s website. In a statement on Tuesday, a spokesperson said that OSF will continue to fund initiatives promoting human rights, democracy and accountable government across eastern Europe and central Asia, and particularly in Ukraine, Moldova, Kyrgyzstan, and the Western Balkans.

At the same time, funding for groups that promote nationalist and ultra-conservative platforms has risen across Europe.

Campaigns aimed at preventing gay marriage and bolstering anti-abortion initiatives received $707 million between 2009 and 2018, according to a 2021 report published by the European Parliamentary Forum for Sexual and Reproductive Rights. The biggest donors, contributing about $430 million, came from Europe.

Another issue is that over the past decade, Hungarian Prime Minister Viktor Orban has pioneered a strategy that has since been adopted by nationalist political parties across Europe to fire up supporters — accusing Soros and OSF, without evidence, of interfering in elections and backing causes that they claim fly in the face what they regard as Europe’s traditional Christian values.

Orban, who has modeled his illiberal governing style on that of Russian President Vladimir Putin, has launched media campaigns linking Soros to opposition politicians who the prime minister claims are bent on imposing a so-called LGTBQ+ lifestyle on Hungary and flooding the country with Middle Eastern immigrants.

This has accompanied a broader crackdown on Soros’s organization in Hungary. In 2019, Orban effectively barred the Soros-backed Central European University from operating in the country, forcing it to move to Vienna in 2018. The same year, OSF left its headquarters in Budapest, citing an “increasingly repressive political and legal environment” and saying it had become “impossible to protect the security” of its operations and staff. That followed the passage of the so-called “Stop Soros” law, which criminalized helping asylum seekers.

In recent years, euroskeptic political parties have followed in the footsteps of Hungary and its regional partner Poland to make gains across the bloc.

In Italy, Premier Georgia Meloni is pushing ahead with an ultra-conservative social agenda. Former Slovak Prime Minister Robert Fico is running to return to power on an anti-immigrant, anti-LGBTQ+ platform that includes criticizing the EU for sanctioning Russia for its invasion of Ukraine.

OSF’s shift in focus is happening just as such governments are ramping up funding for illiberal causes, the person familiar with OSF’s operations said.

Orban’s government, for instance, has dramatically increased funding for the Mathias Corvinus Collegium, the flagship foundation of an array of civic groups led by the prime minister’s political director. It has received $1.3 billion in state funding.

In Poland, where the ruling Law & Justice party has effectively banned legal abortion, the state-run National Freedom Institute funds projects led by anti-abortion activists and patriotic groups that support the government’s agenda.

The outsize role the OSF has played in countering such groups is irreplaceable, said Alberto Alemanno, the Jean Monnet Professor of EU Law at HEC Paris. Pivoting away from the EU will threaten the survival of many NGOs that rely on OSF grants to act as democratic watchdogs at a time of growing authoritarianism and market abuses, he said.

“The decision by the Open Society Foundation to cut its EU funding couldn’t come at worse time for the EU and its civil society,” Alemanno said. “OSF’s sudden departure may embolden the Orbans and Melonis of the world, who will soon find themselves free from the close scrutiny that many OSF-funded organizations strived to exercise on these regimes.”

--With assistance from Kevin Whitelaw, Zselyke Csaky, Piotr Bujnicki and Marton Kasnyik.

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