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The institute was founded by the Estonian government in 1995 and is located in the Southern Estonian town of Võru. The directors of the institute have been Enn Kasak, Kaido Kama and Külli Eichenbaum. The present director of the institute is Rainer Kuuba. Researchers at the Institute include the toponymist Evar Saar and the lexicographer Sulev Iva.
The Institute is engaged in a wide range of activities to meet the challenges facing lesser-spoken languages, including establishing school programs, conducting linguistic and regional research, preserving place-names and their corresponding stories (mostly by Evar Saar), publishing Võro-language scholarship and school textbooks, and organizing annual language conferences. The aim of these activities is to encourage the Võro people to speak their own language and to preserve their characteristic life-style.