Giving in Europe
Current Trends
René Bekkers
VU University Amsterdam
The Netherlands
May 23, 2013
Cross-Border Giving: Changes and
Trends in the 21st Century
Center for the Study of Philanthropy
in Israel
Boy, we are in big trouble.
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To mention just a few things...
• The housing bubble burst.
• Unemployment is high, especially among
young people.
• Public debts have increased.
• Pension payments are reduced.
• Consumer spending and confidence are
down.
• The banking crisis is not over yet.
3
It’s not just the money, stupid!
• The economic crisis not only reduces
people’s resources to do good, it also makes
them uncertain.
• People are uncertain about their jobs, their
savings, their pensions.
• Uncertainty lowers giving and volunteering.
4
Social psychological effects
•
•
•
•
More insecurity.
More anxiety, more stress.
Lower subjective well-being.
Lower trust in fellow citizens and
institutions.
• Polarization along political and ethnic
cleavages.
• More demand for religion.
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Some sociological trends
•
•
•
•
•
•
Families become smaller.
Increasing inequality.
Ongoing secularization.
Educational expansion: diploma inflation.
Immigration continues.
Ethnic heterogeneity increases.
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The need for philanthropy
• Poverty increases.
• Social and emotional needs increase.
• Cohesion and tolerance are under threat.
• And governments do less.
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The Waterbed Effect
Private donations
Government grants
Friedman (1962) called this the
crowding-out effect.
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60%
55%
51%
50%
55%
48%
44%
41%
40%
30%
20%
10%
0%
Change in subsidies
after increase in
donations
Change in donations
after increase in
subsidies
no increase
increase
Change in fundraising
effort after increase in
subsidies
Bron: CBF. 2005-2010
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‘A severe cut in government funding to
nonprofit organisations is not likely, on
average, to be made up by donations from
private donors.’
Abigail Payne (1998)
This statement applies to the US. In the UK and
the Netherlands the evidence supports the
conclusion that government cuts reduce giving.
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The ‘Big Society’
• UK prime minister David Cameron called
for increased civic responsibility, before the
Big Cuts.
• Evidence from the Third Sector Research
Center in the UK shows that the capacity to
compensate cuts is lowest in areas where
the needs are at a maximum.
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A ‘Big Society’ in the Netherlands?
• A similar call was made by the previous
conservative/Christian coalition when
budget cuts were announced for Arts &
Culture (€200 mln).
• Recently the conservative/labor coalition
announced a cut of €1 bln in international
assistance, calling for more corporate
activity.
• More cuts will follow – bracing for impact.
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We’ve been there before.
• This is not the first time in history that we
go through an economic and social crisis.
• We’ve been through worse periods in
history.
• Periods in which philanthropy was a much
more important force in society.
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“Stuyvesant called upon the 43 richest residents of New Amsterdam to
provide funding to fix up the ailing Fort Amsterdam and to construct a
stockade across the island to prevent attacks from the north, while it took
New Amsterdam's most oppressed inhabitants -- slave labor from the
Dutch West India Company -- to actually build the wall.”
Russell Shorto – The Island at the Center of the World
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This is the ‘Giving
house’ in the city of
‘s-Hertogenbosch. In
the middle ages, the
poor in the city received
food and clothing at this
house. Funds for the
service were obtained
through bequests,
legacies and other
donations from citizens,
but also from the city
council.
Today, the building
serves as the city’s
library and an arts
center.
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The ‘Sweet Mary’ Fraternity was
founded in 1318. Its first
members were clergy. The
fraternity engaged in charity
and cultural activities.
Ghisbertus van der Poorten
donated his house in 1483. The
acceptance of Protestants,
including members of the Royal
House of Orange, helped
resolve religious conflicts that
had dominated the city since
the spanish occupation in the
17th century. The current
building in neogothic style dates
back to 1846.
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The ‘Sweet Mary’ Fraternity was
founded in 1318. Its first
members were clergy. The
fraternity engaged in charity
and cultural activities.
Ghisbertus van der Poorten
donated his house in 1483. The
acceptance of Protestants,
including members of the Royal
House of Orange, helped
resolve religious conflicts that
had dominated the city since
the spanish occupation in the
17th century. The current
building in neogothic style dates
back to 1846.
20
The Rijksmuseum (1885)
21
The Concert Hall (1886)
22
What do I mean by ‘philanthropy’?
• The transfer of resources from an individual
to a collective, without direct compensation
at the market price.
• This definition avoids the problems
associated with terms ‘voluntary’ and
‘public good’.
• It includes much more than the donation of
money.
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Some examples
• Charitable giving to nonprofits helping
people in need.
• Venture philanthropy.
• Social entrepreneurship.
• Employee volunteering.
• Corporate sponsorships.
• In-kind donations.
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Some NOT examples
Charity:
• Almsgiving.
• Helping a friend.
• Informal care of family members.
Involuntary:
• Mandatory service learning.
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Questions we would like to answer
1. How large are differences in philanthropy
(incidence, amounts, allocation over
causes) between nations in Europe?
2. How can these differences be explained?
3. How has philanthropy changed as a result
of the economic downturn, government
cuts, and legal changes?
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What we have…
• Lots of data on volunteering, but much less
on charitable giving
• Several datasets on giving using
– Different definitions of philanthropy
– Different questionnaire modules to measure
philanthropy
– Different survey methods
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We’re in big research trouble.
• How many people report donations to
various causes varies from one dataset to
another.
• Even differences in giving within the same
country vary from one dataset to another.
• Finally, differences between countries are
explained by different variables in the two
datasets.
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What now?
• Let’s start all over again.
• And do it better.
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Prospects for Data Access
• Tax data: legal definitions, thresholds,
privacy issues
• Survey data on corporate philanthropy
difficult to gather
• Foundations even more difficult to get
access to
• Getting survey data on households least
problematic  let’s do this!
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What we need…
• New data on giving, using:
– A clear definition of philanthropy.
– A validated, cross-nationally adequate
instrument to measure philanthropy.
– One single method of data collection; online is
the only feasible option.
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Definitions
• Should be operationalized.
• Definitions should identify a clearly
delimited set of phenomena
• Easy way out:
– Exclude memberships and fees.
– Exclude informal giving.
– Avoid the word ‘voluntary’.
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Conceptual model
Source
Channel
Donor
Organization
Money
Households,
individuals,
corporations
Destination
Cause
Services
Churches,
charities,
foundations
Groups,
Ideals
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The questionnaire should identify
• Units of analysis: individuals, AND/OR
households, OR foundations, OR
corporations
• Channels: churches, charities, foundations,
other nonprofit organizations
• Destinations: causes and services
• Resources: money, goods, labor
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The fragmented pieces of evidence
• We know next to nothing on the sensitivity
of volunteering to recessions.
• Until 2008, philanthropy used to be fairly
‘recession proof’.
• Giving by households is less sensitive to
economic trends than corporate and
foundation giving.
• Religious giving is less sensitive to
economic trends than other types of giving.
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• In the UK, giving by households declined by
10% in 2008/09 – it is slowly recovering.
• In the Netherlands, giving by households
remained steady in 2009 but has declined
by almost 5% in 2011.
• Corporate giving is much more sensitive to
the economy, it declined by 19%
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Some positive new trends
•
•
•
•
•
•
Crowdfunding and crowdsourcing.
Micro-lending.
Remittances.
Friends’ societies.
Heart beating organ donations.
Social entrepreneurship.
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And some more
• Giving platforms for special events
fundraising, like giving.uk.
• Participatory philanthropy: sports events.
• Corporate social responsibility.
• Employee volunteering programs.
• High Net Worth Philanthropy.
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The “Golden Age” of Philantropy
4000
By 2059 €86 billion will be transferred to
charitable causes through bequests
3500
3000
2500
2000
1500
1000
€ millions
Extrapolation based on data from
Statistics Netherlands (CBS)
500
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2046
2048
2050
2052
2054
2056
2058
0
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The Giving Pledge
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Modern philantropists in the
Netherlands
The Van den Ende foundation
supports arts and culture
The royal family
and Johan
Cruijff support
youth and
cohesion
Pieter Geelen created the
Turing Foundation after he
sold his company
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HNW 2013 Survey
•
•
•
•
13% response rate from millionaires
Average giving: €5,200 = 1.9% of income
Heavily skewed: 80/20 rule
Highest amounts donated by young selfemployed entrepreneurs
• Increase from €2,300 in 2009
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“If the government cuts, I will give more”
4
19
agree (completely)
37
38
neutral
disagree
(completely)
59
42
Dutch population
HNW sample
45
Total giving per year by willingness to
compensate government cuts
6,150
5,431
4,539
“If the
government
cuts, I will
give more”
disagree
(completely)
neutral
155
246
agree (completely)
452
Dutch population
HNW sample
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Creating a ‘Giving Culture’
• Modesty: “Do not let your left hand know
what your right hand is doing” (Matthew
6:3; Maimonides second degree)
• Philanthropy should not be a dirty word.
• Social entrepreneurship could be the first
degree (help a person help himself).
• Education could play a role in creating a
giving culture, e.g. through service learning.
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Local cross-sector collaborations
• Private foundations in the Netherlands with
a local focus receive more funding requests
from nonprofits.
• Interest increases in what works in crosssector collaborations, also from the
government.
• Community foundations are now being
established.
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Four models
• Initiating: start a program, and export it
into government policy.
• Complementary: work towards similar goals
and strengthen each other as partners
• Adversarial / competitive: try to do better
than government or make government do
better
• Substitutive: take over government tasks
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Concerns
• Production of some public goods but not
others.
• Cancer but not mental illness research
centers.
• ‘Too much’ influence on public policy for
philanthropists leading to arbitrariness,
nepotism and inequality.
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What we need is…
• A serious political discussion about the role
of philanthropy in public policy.
• Decent research informing policy decisions.
• Thorough evaluation of the results of any
changes that will be implemented.
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Ingredients
• People are longing for a more ‘caring
society’ and are prepared to contribute.
• People enjoy giving and volunteering more
than paying taxes.
• They dislike organizational inefficiency.
• People respond to tax incentives and
changes in government subsidies, but not
that much.
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Conditions for cooperation
• Meeting – Knowing – Strengthening each
other; mutual trust.
• Accountability and (some) regulation.
• Public confidence and transparancy.
• Self-organization of the sector; speaking
with one voice.
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Alternative visions
• Aiming for a substitution effect, the
resulting crowd out will be far from perfect.
• If nonprofit organizations are viewed as
partners in public policy, this would help.
• Think from a ‘crowding in’ hypothesis, even
if subsidies are not changing.
• Present subsidies as matching grants.
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This…
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Rather than this.
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Tools for governance
1. Measure impact and effectiveness. Thank
you, ECSP (Rotterdam).
2. Impose financial reporting requirements.
3. Establish nonprofit management
education programs.
4. Amplify the signal that accreditation gives
to donors.
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Tasks for the sector
• Nonprofit organizations will need to report
and improve their reporting standards.
• Raise standards by education in nonprofit
management.
• Adopt more stringent codes of conduct.
• Evaluate programs and show impact.
• Advertise tax incentives and engage donors
more in programs.
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Tasks for the government
• Get educated in nonprofit management.
• Measure and evaluate impact and
effectiveness of reforms.
• Check charity registrations.
• Give public access to the charity register, in
a user-friendly manner.
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Legal changes
• A European Foundation Statute should
allow cross-border philanthropy in Europe.
• Favorable tax treatment is important but
often ‘treasury inefficient’.
• Laws alone do not change behavior; people
have to know about them and see their
advantages.
• Framing is important.
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A price is not a price
35%
+90%
30%
+46%
25%
20%
15%
10%
5%
0%
control group
50% rebate:
price = 0,50
100% match:
price = 0,50
Proportion of the reward for participation in GINPS04 donated by participants
Bestemming - Herkomst - Effecten
Sociale invloed
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Thanks, says
René Bekkers
Professor & Head of Research
Center for Philanthropic Studies
VU University Amsterdam
r.bekkers@vu.nl
Twitter: @renebekkers
http://renebekkers.wordpress.com
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