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BRIDGING AN ECONOMIC GAP: A CASE STUDY OF AID TO ARTISANS IN HUNGARY, 1991-1995

The project commissioned designs from Hungarian ceramics designer Kinga Szabo

Funded by a grant from the Ford Foundation

September 2005

Beth Gottschling, Aid to Artisans Docey Lewis Mary Cockram, Aid to Artisans

Aid to Artisans 331 Wethersfield Ave Hartford, CT 06114 T (860) 947-3344 F (860) 947-3350 www.aidtoartisans.org Table of Contents

Hungary and Its Craft Traditions ...... 1 Project Origins, Activities, and Results...... 2 Project Results ...... 4 Cooperatives Disappear in the Early 2000s...... 5 Ceramic Folk Art Masters Also Struggle ...... 6 Artisan Livelihood ...... 7 Lessons Learned...... 7 Lessons Learned Already Incorporated into New Programs ...... 9 Enduring Questions and Future Challenges...... 10 Attachments...... 11 Attachment A: Project Timeline ...... 11 Attachment B: ATA Methodology...... 14 Attachment C: ATA Project Implementation Strategy ...... 15 Product development...... 15 Business training ...... 15 Sales & Marketing...... 16

In thinking back about the contribution the ATA project made to the Hungarian craft sector, importers Leve and Carole Karvazy remarked that the biggest impact of ATA’s project in Hungary was that “it gave people hope. So much enthusiasm, motivation. It made people feel they could accomplish something.”

Bridging an Economic Gap A Case Study of Aid to Artisans’ work in Hungary, 1991-1995

The introduction to Aid to Artisans’ (ATA) 1994 Buyer’s Guide to Hungarian Folk Art notes, “In April of 1991…a small team of ATA consultants embarked on a three-and-a-half year adventure to plug the hole in the leaking vessel of export sales of Hungarian folk art.” ATA did plug that hole— leveraging a million dollars in sales and forging links between Hungarian artisans and the US market that have provided nearly 250 artisans with more than a decade’s worth of steady sales and income. Then, in 2004, macro-economic changes forced both remaining cooperatives and master potters out of business. One import company continued to actively buy cut felt, but the plug in the vessel was leaking badly.

This case study reviews ATA’s experience in Export Enhancement Program Overview Hungary from 1991 through 1995 when its Funding history: USAID project 1991-1995 work was funded by an Export Enhancement (US$729,000) Program of United States Agency for Objective: To reduce employment loss in the craft International Development (USAID). It is part sector during Hungary’s transition to a market of a series of cases, funded by the Ford economy Foundation, which examine and draw lessons Activities: from ATA’s global experience. This case describes the activities, results, and lessons Marketing: Exhibition at 8 trade shows; 22 buyer- learned from ATA’s culture-based project designers visited, some two to four times; during Hungary’s difficult transition to a market publication of Buyer’s Guide to Hungary. economy. Two aspects of the project were Design: 163 days of product design (62% by lead different from previous projects. First, highly designer Docey Lewis) educated artisans were struggling to understand Business training for 30 small businesses: the free market economy, and ATA realized Mentoring, practicum opportunities and, as a mid-project that more formal training materials result of the mid-term evaluation, formal were required—training materials that the workshops and written Export Manual. organization regularly updates and still uses. Results: Second, there was a larger emphasis on cultural Cumulative sales surpass total project budget preservation than in most other ATA projects. during life of project. Sales: US$1.1 million at end of project. To write the case, ATA staff reviewed project Jobs: 233 jobs created and maintained for a records, interviewed artisan businesses, buyers, decade as a direct result of project activities and and staff. Field research was conducted in market links. March of 2004.

HUNGARY AND ITS CRAFT TRADITIONS

ATA began its work in Hungary in 1991, a time of major transition not only for Hungary, but for Central and Eastern Europe, which was reeling from the collapse of the Soviet Union and totalitarian regimes of the Eastern Bloc. This transition to democracy and a free market economy was marked by high unemployment and staggering inflation. At the time the project started, Hungary was struggling to take the first steps towards price and trade liberalization.

Hungary Case Study © 2005 Aid to Artisans 1 In the Hungarian craft sector, large folk art cooperatives had been formed by the state in the 1950s, based to some extent on the longstanding traditional European guild system. These folk art cooperatives were directed by OKISZ, the light industry division of the National Cooperative Council. They produced officially sanctioned folk art products for commercial sales. Throughout the Communist era, peasant life and culture was glorified and revered, and folk art was produced for captive markets throughout the Soviet Union and Eastern Bloc. However, when the Communist system was dismantled, so was the structure of the craft market. The fragile Hungarian economy was unable to absorb the output of its 80,000 producers, and those producers were ill equipped to survive in the free market. Hungary’s folk art tradition includes weaving and embroidery; diverse ceramics styles; wood carving; decorated eggs; and a unique tradition of cut felt.1

On May 1, 2004, Hungary joined the EU, a major milestone in its transformation. Among the conditions for membership in the EU was the acceptance of a higher minimum wage, which resulted in a migration of lower paying jobs to neighboring countries like Romania, or even further afield to places like China. The US State Department considered Hungary “one of Europe's fastest-growing and most open economies, deeply integrated into the European economy.”2 Hungary also faced new challenges including retaining jobs in a shifting job market, in some ways similar to the US, which shifted from manufacturing to a service economy.

PROJECT ORIGINS, ACTIVITIES, AND RESULTS

ATA’s 1991-95 program in Hungary was reflecting the evolving, informal nature and ATA’s program implementation (see Attachment B for ATA’s project implementation methodology). With no office space or long-term local staff in Hungary, ATA relied on project consultants to direct specific programmatic activities and a network of Hungarians who were hired to translate, to provide transportation, and to implement consultant directives. During this period, ATA’s home office staffing was also very lean. ATA emphasized the preservation of Hungarian cultural traditions and skills, unlike its current programs that have a stronger commercial focus. Buyer trips were a key element of success in Hungary, generating more than a million dollars of sales during the four years of the The goal of the project was to improve the livelihood of artisans project (the Karvazys of Sandor Collection, by bolstering export sales in the craft sector. The objectives were in center). to be achieved through business training, new product development, and the creation of US market links. Specifically, ATA worked to: retain jobs, especially for women both at home and in workshops, assist the transition to free enterprise, provide business management and export training to artisan groups and foreign trade organizations, develop market-sensitive products suitable for export, and introduce Hungarian crafts to the US market to stimulate export activity.

By 1992, due to

1 To make cut felt, two colors of felt are sewn together in a detailed pattern, then the top layer is cut partially away. 2 State Department Background Notes, http://www.state.gov/r/pa/ei/bgn/26566.htm

“the general business decline and unemployment generated by macro-economic conditions related to Hungary’s transition to a market economy, the project’s original goal of expanding employment in the artisan sector shifted to retaining employment within the artisans sector. New government policies inadvertently unfavorable to the Hungarian artisan sector seriously undermined the viability of cooperatives, jeopardizing employment” for the thousands of workers who in 1989 were employed in the artisan sector.3

The project started inauspiciously in 1991 due to misunderstandings with Hungarocoop, originally planned as the key implementation partner. Hungarocoop could not provide the agreed-upon project support just as a group of Yale University business students arrived for a three-month assessment. So, ATA set up a stream of consultant visits supported by a network of local entrepreneurs who managed logistics and monitored activities resulting from the consultant visits (see Attachment A for details on project timeline).

ATA’s work consisted of product development in pottery and textiles, buyer visits, and marketing primarily through the New York International Gift Fair (NYIGF).4 The Yale students returned twice to Hungary and were accurate in identifying entrepreneurial cooperative leadership. Several formal business training seminars were offered in the second half of the program, including formal training programs in the US, following ATA’s realization that Hungarians preferred a more formal learning style in addition to the hands-on practicum that was ATA’s norm. ATA hired Hungarian designers, including well-known ceramics designer Kinga Szabo, to develop lines that were picked up by US buyers. Attachment A provides a detailed timeline of specific project activities and inputs.

The product development work was led by consultant Chris Costello in pottery and Docey Lewis in textiles, including embroidered linens, felt Christmas ornaments, cut felt pillows, and apparel. Much of the product development was carried out with the major folk art cooperatives in Debrecen, Gyula, Heves, Hodmezovarsarhely, Kapsovar, and the Matyo cooperative in Mezokovesd. These cooperatives had lingered after the demise of the socialist system.

To supplement the consultant-led work, ATA placed heavy Learning styles were structured in Hungary and artisans emphasis on recruiting buyers who would spend up to two expected formal workshops, whereas ATA offered more weeks per visit on-site in Hungary developing proprietary practicum opportunities until mid-way through the project. In 2004, Docey Lewis (far right) reviewed current US product. This now-standard ATA concept of buyer-led market trends and gathered information for this case study. product development was pioneered by the Hungary project. Over the four-year project, buyers from 22 companies visited Hungary, including representatives from AMC (Associated Merchandising Corporation), AMS Imports, Boston Museum of Fine Arts, Ceramica, Chandler Four Corners, EEE Group (later Synergos), Mariska, Mesa International, Midwest of Cannon Falls, Samii, and the Sandor Collection.

The most notable long-term partnerships that resulted from the project included: The Sandor Collection, a Connecticut-based import/wholesale company, started by an émigré Leve Karvazy from Hungary and his wife Carole in 1990, and nurtured by ATA at its inception.

3 Kerr, Kate, Mari Clark, and Denise Wilbur, 1992. “Mid-Term Evaluation Report, Aid to Artisans in Hungary.” p. 2 4 The New York International Gift Fair is the premier show in the US for the gift and decorative accessories industries, and a focus of ATA’s marketing activities.

The company wholesales cut felt, embroidery, painted eggs, wood carving, and ceramics. In 2004, 95% of sales were of Hungarian products, providing work to an estimated 50 small handcraft businesses throughout the country. The Karvazys travel to Hungary annually to meet with producers and work on product (see sidebar, Émigré Runs Successful Craft Import Company). Samii, a Vermont-based apparel company that later branched into home furnishing sales started by Gay Ellis. After meeting ATA at the NYIGF and traveling to Hungary for ATA, Ellis began to source product from cut felt producers in eastern Hungary. At the peak of her business, Ellis estimates that she provided work to 23 women (see sidebar, Designer Uses Unique Hungarian Technique). Synergos, a California-based ceramic import/wholesale company owned by Maggie Nugent. The company began importing ceramics from a factory in southern Hungary following an introduction from ATA. In 2004, the factory employed 110 people, an increase from 65 employees in 1993.

Project Results In addition to the buyer visits mentioned above, a Buyer’s Guide to Hungarian Crafts was written during the project and distributed as a marketing tool. Perhaps more significantly, the ATA Export Manual: A Guide to Exporting Crafts from Hungary was also written by Docey Lewis during the project in response to the training needs of program participants. The manual, now called the ATA Export Manual, has proven to be an enduring outcome of the project. It has been updated twice, translated into French, Portuguese, Russian, Spanish, and Swahili, and is used as a reference guide by thousands of artisans around the world. The manual has remained a centerpiece of ATA’s training curriculum for the past ten years.

It was noted in a project evaluation, conducted in June 1995, that the project met or exceeded its goals. The project “achieved remarkable successes in terms of generating new business opportunities for a broad cross-section of artisan enterprises, most of which employed women in

Émigré Runs Successful Craft Import Company Leve Karvazy escaped from Soviet-dominated Hungary as a young adult, and made his way to the US. He first returned to Hungary in the late 1980s, and brought back samples of handwork with the goal of selling handcrafts in the US to help Hungarian artisans. Karvazy showed the work to store owners, one of whom recommended he contact Aid to Artisans. After reviewing the product, ATA advised Karvazy to visit the New York International Gift Fair to better understand the US market. He and his wife Carole established the Sandor Collection in 1990.

The following year, with funding secured for Hungary, ATA contracted the Karvazys to serve as initial tour guides to the country. The Sandor Collection began importing cut felt, embroidery and painted eggs and later imported wood carving and ceramics. Fourteen years later, the Sandor Collection conducts 95% of its business with Hungary, with the remaining A 1998 Smith & Hawken catalog cover 5% coming from Bosnia, Macedonia, and Romania. Sandor features Hungarian cut-felt from the Sandor provides work to an estimated 50 small Hungarian businesses.

Hungary Case Study © 2005 Aid to Artisans 4 rural regions.” The following accomplishments were highlighted: over one million dollars in direct revenues generated for small and micro-enterprises in Hungary, business training programs provided to 30 small businesses, 28 microenterprises, and 5 foreign trade companies and independent export agents, participating enterprises helped to stay in business and stabilize their employment levels, a local NGO, the Hungarian Folk Art Association, strengthened and long-term, committed business relationships fostered between US and Hungarian companies which contribute to sustainable development.

Cooperatives Disappear in the Early 2000s In March of 2004, ATA revisited project participants in Hungary and talked to US buyers involved with the project to reassess the project’s impact nine years after. Three of the major partnerships (Sandor, Samii, and Synergos), that were formed or nurtured as a result of the project, were operational for more than a decade. The Sandor Collection continued to buy from Hungary (see sidebar). However, 2003 proved to be a turning point for both Samii and Synergos. In the winter of 2003, as the dollar continued its decline against the Euro, Gay Ellis of Samii and Maggie Nugent of Synergos independently closed their wholesale businesses. When Nugent closed her business, she projected price increases of 30%, making the product too expensive to sell in the US market. At the time Synergos closed, it bought about 25% to 30% of the Hungarian factory’s production, according to the factory director. Ellis complained that the weak dollar made it too expensive to do business in Hungary. Despite closing the wholesale side of their businesses, both Ellis and Nugent had plans to continue doing special projects for specific clients and hoped to maintain links to Hungarian producers.

The Hungarian Folk Art Association and many of the large folk art cooperatives that participated in the ATA program dissolved in the intervening years. The Folk Art Association closed its doors in 2000, and the library that ATA had left to the Association was disbursed. Janos Toth, the former Association director, commented that the business climate had changed with individual artisans gaining importance, decreasing the role of cooperatives. The country- wide government network of about 60 craft shops was also privatized, but the buyer then sold the property, and the network dissolved. Another organization with the similar English name, the The Heves Cooperative, one of the few still operating in 2004, Association of Hungarian Folk Artists, existed and employed 200 people, mostly women. organized fairs and conferences. Although the Association of Hungarian Folk Artists existed at the time of the project, ATA did not work with it.

The Debrecen Cooperative folded in 2001, though several of its key personnel had since formed private companies. The Matyo Cooperative was in the process of disbanding during ATA’s March 2004 visit.

The Gyula Cooperative of Folk Art and Handicrafts privatized in 1998, becoming Gyulai Folkart Cooperative KFT. It was co-owned by 12 people (including some former employees). They

“Folk art is definitely on its last commercial legs in Hungary, though there will always be a place for folk art in Hungary’s cultural history and perhaps, the best of the best will survive indefinitely—as long as the remaining masters are alive and practicing their craft and a few young people continue to learn.” --Doocey Lewis, ATA’s primary consultant in Hungary, after visiting in 2004 employed 130 workers, 25 of whom were weavers. Their handcraft business sharply declined in the face of competition from India and other Asian countries. The majority of their work was contract labor for clothing assembly, though they found it difficult to compete with countries like Romania, which had even cheaper labor costs. Until 2003, they sold to Stark Carpet in the US. As the dollar dropped against the forint, causing a 30% increase in prices, a 30-year relationship between Gyula and Stark came to an end. Gyula closed in 2005 after an Italian buyer also went bankrupt.

The Heves Cooperative continued to employ 200 artisans and exported 70% of its product, with the remaining 30% sold domestically. The cooperative did cut-and-sew work for clients in Austria and Germany and sold handcrafts to France, Japan, and the US. Vera Bader, director of the Heves Cooperative, commented that ATA consultant Docey Lewis helped them to create “classic” products, which had been successful on the market for a long time. The Heves Cooperative had recently created a foundation that focused on folk art of the Heves region. At the time of ATA’s visit, they were applying for grants and working to create a museum and restore a historical landmark, which would be surrounded by handcraft workshops where skills could also be taught.

The former Kaposvar Ceramics Cooperative was not yet privatized and in March of 2004 was managed by a crisis control team. It employed 35 people, a steady drop from 200 people ten years earlier. According to a member of the crisis control team, the last two to three years had been very difficult, though the previous six months had been better since the team had taken over. The real crisis began in 1999, but since then the situation had stabilized. Since the number of employees had dropped so dramatically, they closed off part of the building to reduce overhead expenses. Half of their production was in stove tiles and half was in dinnerware. They also produced terra cotta pots for outdoor garden use. Since company logos could be applied to the dinnerware, clients such as local restaurants and schools were attracted to the product.

Ceramic Folk Art Masters Also Struggle In addition to the large cooperatives, numerous independent master potters participated in the project, including taking part in a special exhibition-sale of master potters’ works at the US Ambassador’s residence in 1993. Seven of these potters (including two husband-wife teams) were interviewed in 2004, and they nearly unanimously reported a decline in sales and increasing difficulty in earning a living. Husband and wife potters Eva and Lajos Pozsar indicated that they had not been able to earn enough income from their pottery sales and were living from their savings. Another potter in the Kaposvar area also struggled to earn a living from his craft. He used to produce works for the state folk art shops, but since the collapse of that system, had trouble learning how to do accounting, management, marketing, and design. He feared that Hungarian pottery would go the way of German and Austrian ceramics: it would only be seen in museums. Without an increase in

income, he would have to sell his house and live off the proceeds. Further, he would make sure that neither of his two children continued the craft tradition.

Lajos Fazekas, a master potter producing traditional black pottery in Nadudvar told a similar story. His business was in severe decline. For generations, his family produced black pottery, including his grandparents, great grandparents, and ancesters dating back to the 1700s. Nadudvar used to be a showcase for the socialist government because of the model farming in the area. Visitors to the farms were also taken to Fazekas’ studio to buy pottery. In 2004, few visitors and tourists came, and a drop in land values decreased his property value to about a quarter of Fazekas’ original investment. His son managed a spa in Debrecen, and he was glad that his other children had not gone into the pottery business. Fazekas remarked, “Why should my children go into something that is dying out?” He was no longer able to employ three of his four workers in 2000.

These stories illustrate the plight of a generation of folk art masters who have been unable, and in some cases unwilling, to adapt to market changes. One exception to the declining family pottery businesses visited by ATA was Imre Szuchs in Tiszafured. Szuchs had the fortunate problem of keeping up With a few exceptions, Hungarian ceramicists encouraged their children to pursue other careers. with demand. He added one new building to his workshop and Master potter Lajos Fazekas, glad that his a new kiln. He also bought the house located behind his shop, children were in other fields, said “Why should my which he planned to turn into a larger showroom. Szuchs children go into something that is dying out?” worked with four family members, and others had expressed an interest in learning the business, but he was unable to find the time to teach them. Szuchs had one granddaughter, who showed interest in clay. The family hoped that she would go into the business. Szuchs’ success may be attributed to the commercial orientation of his work.

ARTISAN LIVELIHOOD

With a few bright exceptions, many of the Hungarian artisans who participated in the ATA project were still struggling in 2004 from the aftermath of the collapse of state structures and cooperatives. The remaining cooperatives searched for niches (handmade stove tiles, etc.) where they might still have a competitive edge despite higher labor costs. Individual artisans were still working to master skills in accounting, marketing, management and design in order to sell their craft in a market economy. Others were near retirement and spoke of giving up their craft after decades of successful work. Case study interviews were conducted with project participants who were mid- to late-career; there may be younger artisans who understand the market economy and have found success in it.

LESSONS LEARNED

Buyer visits result in sales: Perhaps the most successful strategy that ATA employed in Hungary, and a strategy that the Hungary project pioneered, was the use of buyer-designers. For example, Ingrid Liss of Midwest, Gay Ellis of Samii, Pamela Ferrari, Nitza Etra-Dagan, and the Sandor Collection commissioned their own designs and bought products in which they had a vested

interest. Increasing the role of buyer-designers, including hiring them as ATA consultants where appropriate will help ATA to leverage its assets and build long-term sustainable relationships—- always goals of ATA projects.

Participants seek continued connections after program ends: In Hungary, program participants wanted and needed information about trends, marketing, and sales opportunities after the project ended. It was hard to get that information on their own, due in part to language barriers. Participants would have liked to stay in closer contact with ATA after the program ended. From this experience ATA learned that formulating and implementing clearer exit strategies better prepares participants for the transition to self-sufficiency. Additional funds may be required to implement a small project or to conduct follow-up activities to soften an abrupt end to a major initiative and its accompanying support services; this was done in the subsequent project in Central Asia. The formation of an ATA “alumni network” and resource center may also further connectivity by providing past participants with information (such as trend reports and contact information) in multiple languages. Through website use, mailing lists and databases, and the promotion of successful groups as production resources, ATA can build connections.

Standardize exit evaluations: The final project report written by ATA project director Kate Kerr provided a snapshot from 1995 upon which to conduct a re-evaluation. Developing a standard internal final report format, in addition to specific donor-provided formats, will enable ATA to

Designer Succeeds Employing Unique Hungarian Technique In 1990, Gay Ellis saw a small cut felt coin purse from Hungary in ATA’s booth at a trade show, and wanted to experiment with cut felt in her own ethnic looking coat line. ATA brought her to Hungary as a consultant, and she found entrepreneurs in one of the cooperatives who formed their own company to supply Ellis’ company, Samii.

Ellis expanded from her successful clothing line into home furnishings. At the peak of its business, Samii employed about 23 women. However, inflation and the fall of the dollar against the Hungarian forint were nearly insurmountable, and Samii’s wholesale and distribution divisions closed in 2003. Ellis tried to reduce costs by simplifying designs, but acknowledged that only so much can be removed from a design “before the magic is lost.”

In 2004, Ellis expected to continue designing and importing for catalogs. Her Hungarian suppliers serviced other clients with five full-time employees and three to four part-time employees.

Entrepreneur Gay Ellis (left) imported cut-felt work from Hungary for more than a decade. She based her designs for clothing (right) and home accessories on Hungarian cut-felt techniques and traditional clothing (far right).

more accurately examine enterprise growth and health over time; simplify internal procedures; and better compare and spot trends across projects.

It is worth noting that in Hungary, most of the cooperatives no longer exist. Thus, to compete the study, ATA had to compare baseline data developed on large cooperatives with a study of small entrepreneurs who had survived, despite the demise of the cooperatives.

Lessons Learned Already Incorporated into New Programs Some of the lessons learned from the Hungary project have already been incorporated as standard practices at ATA, these include:

Bring the project partners together from the beginning to increase the likelihood of success: ATA did not bring all of the program participants together at the beginning of the program to explain the goals of the project, instead meeting with them each individually. Participants did not feel that they were part of a larger initiative. Groups were brought together near the end of the project for formal seminars. ATA has found in subsequent projects that bringing people from different parts of the country together can create: (1) synergy, (2) common understanding, and (3) a local support network.

Provide training and mentoring to local designers to enable them to adapt to changing market trends: Many of the program partners were still relying on the same product lines and same buyer connections that were introduced to them during the project. Unfortunately, some had now run their course after a decade. Yet people continued to earn a living ten years later based on the connections formed and training provided by ATA, which indicates that the inputs provided were successful in achieving the project goals. The fact that producers, with a few exceptions, had not been able to find and attract new buyers on their own, had not identified Hungary’s growing tourism market as a potential market, and had not created new product directions or line extensions indicates that they lacked the skills and knowledge to navigate markets on their own.

While a few Hungarian designers, such as ceramics designer Kinga Szabo, participated in the project, ATA did not include training new Hungarian designers as a specific program strategy. Many of the artisans with strong technical skills have not been able to successfully develop designs on their own. They continue to rely on designs provided to them by US buyers and introduced to them

Broaden the market focus beyond US markets to reduce business risk: ATA succeeded in placing Hungarian product in the US market, but regional, local and tourist markets were not part of the project. Local sales were managed by FolkArt Centrum, one of the project partners, but local sales efforts are included in “It is as if the ATA effort pumped a good ten years many current projects. In the Hungarian market, when into keeping Hungarian crafts afloat, and now the the government folk art stores collapsed, a retail vacuum Hungarians themselves have run out of steam—with no was created. Real estate values rose so high that the cost energy, ideas or investment to revive craft,” remarked ATA consultant Docey Lewis, after visiting Hungary of retail space for crafts became prohibitive. In 2005, a in 2004. professionally organized folk art market in Heves drew 800 master artisans, but unfortunately sales were still slow. The class that once appreciated folk art can no longer afford to purchase it, and those who have the means do not have the taste or interest in traditional culture.

ENDURING QUESTIONS AND FUTURE CHALLENGES

Several overarching questions linger after analyzing the situation in Hungary. How long can handcraft production provide viable employment for people and in how much of the world? How can governments know when investment in a shrinking business sector is worthwhile? How much should cultural preservation matter, in the drive to create jobs and grow economies and in government’s conflicting priorities?

ATTACHMENTS

Attachment A: Project Timeline 1991 1992 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 May 12 - June 2: product survey Sept-Oct: 7-week visit (Clare Smith, product Docey Lewis, development Jane Griffiths, session (Docey Product Carole & Leve Lewis, Ed development Karvazy) Bohling)

Training Putomayo (Dan Samii (Gay Ellis), Storper & Gail Sandor Collection Baral), Cooper- (Karvazys), Chandler Four Corners, Dayton-Hudson, EEE Group (2x), Hewitt (Matt Ceramica (Carol Marian Clayden, Mariska, Mesa International, Samii, Sandor Buyer visits Hahn) Lewitt) Collection

May-Aug: 3- month YSOM market survey of Marketing Hungarian folkart Aug: NYIGF Feb: NYIGF Aug: NYIGF Sales $13,770 $ 128,082

Apr 26 - May 2: mid-term Monitoring & evaluation of Evaluation project

1993

Q1 Q2 Q3 Q4 Product development Jan: 3 artisans to US for SUNY Center for Private Enterprise Development's Fellows Oct: In-country Training Program seminar

AMS Imports, Chandler Four Corners, Dayton-Hudson, EEE Group (2x), Hemmeter, Mariska, Mesa International, Buyer visits Nitza Etra-Dagan, Samii, Sandor Collection

May 5: Exhibition of Hungarian master potters at US Marketing Feb: NYIGF Ambassador's residence Aug: NYIGF Sales $ 5,000 $ 306,388 Mar 20-30: Kate Kerr and Mari Clark: Monitoring & project Evaluation evaluation

1994 1995

Q1 Q2 Q3 Q4 Q1 Q2 Product development Handcraft Export Training (2 days, 40 artisans). Aug: 5 MRP Training participants Chandler Four Corners, Dayton- Chandler Four Corners, Dayton- Hudson, EEE Group (2x), Espirit, Hudson, EEE Group (2x), Expo Arts, Macy's (2x), Mariska, Mariska, Mesa International, Mesa International, Samii, Sandor, Midwest of Cannon Falls, Buyer visits Sundance Catalog The Gap Postscape, Sandor, Intex Group

Distributed Buyers Guide to Hungarian Crafts Feb: NYIGF. Kinga Szabo Aug: NYIGF (6 Marketing line debuts with EEE Group. importer contacts) Sales $ 507,503 $ 126,663 Nov 3-16: Evaluation by K. Kerr, Mary Lee Monitoring & McIntyre, Margaret Evaluation Powell

Attachment B: ATA Methodology

Field research for the Ford Foundation-funded project was conducted in Hungary in March 2004. The field research team was composed of Beth Gottschling, Senior Program Officer at Aid to Artisans and Docey Lewis, a long-time ATA consultant and the lead consultant on the Hungary project.

The team interviewed businesses owners, staff, artisans, former NGO leaders, and buyers. Interview subjects were selected purposefully; every major project participant who the interview team could locate was interviewed.

The objectives of the one-week trip were: To understand and analyze ATA-associated inputs during the project, ATA project outputs during the project and since the project’s completion, To quantify the impact of the project on artisans’ lives, and To identify the lessons learned from ATA’s involvement in Hungary.

ATA started small, working with artisans who expressed interest in ATA. In all of the projects that are profiled in the case studies, ATA’s services were requested by artisan organizations, businesses, government officials, or a donor. ATA has a strong bias to select entrepreneurial outlook, whether that is in organizations, small or medium businesses, designers, microenterprises or individual artisans.

ATA’s craft sector development strategy took shape during the organization’s first major project in Honduras (1984-86) and has evolved based on opportunities that arise. It still fundamentally rests on three core services: product development, market links through buyer relationships, and business training.

Product development In most projects, ATA has started with product development. Experienced product design consultants work directly with artisan entrepreneurs. These consultants help artisans adapt, tweak, or overhaul the products they are already producing or develop new lines that will appeal to the U.S. and European markets. This process always begins by building on local traditions and materials to create functional and aesthetically desirable products. Consultants also work carefully to assist artisans in developing pricing structures which balance the need for a fair, productive wage and positioning within the marketplace that reflects the ATA’s technically competent consultants are often a key perceived value of the product. Throughout, however, the to success; they can introduce new techniques that speed production or allow innovation. Occasionally they are personal creativity and cultural traditions of artisans are challenged to prove their skills, as Docey Lewis proves to respected and encouraged. Often, in fact, the goal is to help Debrecen weavers that she can weave better and faster than the group revive traditional crafts or create new products they do. from local designs and innovations. ATA supports artisan development throughout the spectrum of capabilities – from inspirational artisans who can compete at the top of the market, to able artisans who supply developed country markets, to producers whose products meet local and regional tastes and needs. ATA takes care to ensure that the materials and processes are not environmentally damaging or harm human health.

Business training Training is an important component of both ATA marketing services and product design and development services, because business skills are the foundation that is required for product development and market links to work. Nearly every project involves some type of formal training or informal mentoring. Artisans participate in general business training, learning how to run and sustain a business. Among the many components of this training module are instruction in costing and pricing, production planning and management, distribution, quality control, packing and shipping, billing and collecting, customer service, export documentation, and US and international buying cycles and trends. The intense personal exchanges between fellow craftspeople, or between merchandising experts and producers, are powerful.

ATA’s original approach of mentoring nascent businesses with “just-in-time” information has shifted and matured to accommodate the participation of larger businesses and better educated

Bridging an Economic Gap Hungary © 2005 Aid to Artisans artisans in ATA projects. ATA’s market introduction at the New York International Gift Fair (NYIGF) gradually developed into a formal Market Readiness Program (MRP) for approximately 30 exporters, craft business owners, NGO leaders, and ATA staff. During the Hungary project, ATA developed formal training tools including the Export Manual and the Market Readiness Program, based on the demands of project participants for formal training. Ongoing improvements and extensions of ATA’s training materials and delivery are central to its efforts.

Sales & Marketing ATA links artisans to the marketplace, connecting them to customers, importers or businesses with whom they can develop lasting professional relationships. In seminars or one-on-one consulting sessions ATA explains sales and marketing concepts and systems with which artisans may not be familiar.

ATA’s roots are in the US market, but the organization expanded to European shows in the late 1990s and to the South African market in 2002. A central platform of ATA’s marketing activity is trade shows. Around the world, ATA displays artisan products at shows such as the New York International Gift Fair, the California Gift Show in Los Angeles, SARCDA in South Africa, and Ambiente and Tendence in Frankfurt, Germany. As part of the Market Readiness Program, seminars are hosted in which artisans meet face-to-face with ATA marketing experts who explain marketing concepts and systems such as price points, quality control, display principles, and “green” products. Artisans have an opportunity to review current catalogs, product information sheets, websites, and other marketing materials. ATA consultants analyze their products for export potential and document them with photographs.

After a project is completed, ATA seeks to continue helping artisans and their US and European clients solve problems which may arise in the pursuit of commerce and growth. In this way, ATA continues to play an active role in helping both sides realize the benefits of commercializing unique, innovative products from artisan resources all over the world.