Giving in Europe Current Trends

1. Giving in EuropeCurrent Trends René Bekkers VU University Amsterdam The Netherlands May 23, 2013 Cross-BorderGiving: Changes and Trends in the 21st Century Center for the Study of Philanthropy in Israel

2. Boy, we are in big trouble.

3. To mentionjust a few things... • The housingbubbleburst. • Unemployment is high, especiallyamongyoungpeople. • Public debts have increased. • Pension payments are reduced. • Consumerspending and confidence are down. • The banking crisis is not over yet.

4. It’s notjust the money, stupid! • The economic crisis notonlyreducespeople’s resources to do good, italsomakesthemuncertain. • People are uncertainabouttheir jobs, theirsavings, their pensions. • Uncertaintylowersgiving and volunteering.

5. Social psychologicaleffects • More insecurity. • More anxiety, more stress. • Lowersubjectivewell-being. • Lower trust in fellowcitizens and institutions. • Polarizationalongpolitical and ethniccleavages. • More demand for religion.

6. Somesociological trends • Families become smaller. • Increasinginequality. • Ongoingsecularization. • Educationalexpansion: diploma inflation. • Immigrationcontinues. • Ethnicheterogeneityincreases.

7. The need for philanthropy • Povertyincreases. • Social and emotionalneedsincrease. • Cohesion and tolerance are underthreat. • And governments do less.

8. The Waterbed Effect Private donations Governmentgrants Friedman (1962) calledthis the crowding-out effect.

9. Bron: CBF. 2005-2010

10. ‘A severecut in governmentfunding to nonprofitorganisations is notlikely, on average, to be made up bydonationsfrom private donors.’ Abigail Payne (1998) This statement applies to the US. In the UK and the Netherlands the evidence supports the conclusionthatgovernmentcutsreducegiving.

12. The ‘Big Society’ • UK prime minister David Cameron called for increasedcivicresponsibility, before the Big Cuts. • Evidencefrom the Third Sector Research Center in the UK shows that the capacity to compensatecuts is lowest in areas where the needs are at a maximum.

14. A ‘Big Society’ in the Netherlands? • A similarcall was made by the previousconservative/Christian coalitionwhen budget cutswereannounced for Arts & Culture (€200 mln). • Recently the conservative/laborcoalitionannounced a cut of €1 bln in international assistance, calling for more corporateactivity. • More cutswillfollow – bracing for impact.

15. We’ve been therebefore. • This is not the first time in historythat we go throughaneconomic and social crisis. • We’ve been throughworseperiods in history. • Periods in whichphilanthropy was a much more important force in society.

17. “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

18. This is the ‘Giving house’ in the city of ‘s-Hertogenbosch. In the middleages, the poor in the city receivedfood and clothing at this house. Fundsfor the service wereobtainedthroughbequests, legacies and otherdonationsfromcitizens, butalsofrom the city council. Today, the building serves as the city’s library and an arts center.

19. The ‘Sweet Mary’ Fraternity was founded in 1318. Itsfirstmemberswereclergy. The fraternityengaged in charity and culturalactivities. Ghisbertusvan der Poorten donatedhis house in 1483.The acceptance of Protestants, includingmembers of the Royal House of Orange, helpedresolvereligiousconflictsthat had dominated the city since the spanishoccupation in the 17th century. The current building in neogothicstyle dates back to 1846.

20. The ‘Sweet Mary’ Fraternity was founded in 1318. Itsfirstmemberswereclergy. The fraternityengaged in charity and culturalactivities. Ghisbertusvan der Poorten donatedhis house in 1483.The acceptance of Protestants, includingmembers of the Royal House of Orange, helpedresolvereligiousconflictsthat had dominated the city since the spanishoccupation in the 17th century. The current building in neogothicstyle dates back to 1846.

21. The Rijksmuseum (1885)

22. The Concert Hall (1886)

23. What do I meanby ‘philanthropy’? • The transfer of resources fromanindividual to a collective, without direct compensation at the marketprice. • Thisdefinitionavoids the problemsassociatedwithterms ‘voluntary’ and ‘public good’. • Itincludesmuch more than the donation of money.

24. Someexamples • Charitablegiving to nonprofitshelpingpeople in need. • Venture philanthropy. • Social entrepreneurship. • Employee volunteering. • Corporatesponsorships. • In-kinddonations.

25. Some NOT examples Charity: • Almsgiving. • Helping a friend. • Informal care of familymembers. Involuntary: • Mandatory service learning.

26. Questions we wouldlike to answer • Howlarge are differences in philanthropy (incidence, amounts, allocation over causes) betweennations in Europe? • Howcan these differencesbeexplained? • How has philanthropychanged as a result of the economicdownturn, governmentcuts, and legalchanges?

27. 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

28. We’re in big researchtrouble. • Howmanypeople report donations to variouscausesvariesfromone dataset to another. • Even differences in givingwithin the same country varyfromone dataset to another. • Finally, differencesbetweencountries are explainedby different variables in the two datasets.

30. What now? • Let’s start all over again. • And do it better.

31. 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!

32. 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.

34. 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’.

35. Conceptual model

36. 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

37. The fragmentedpieces of evidence • We knownext to nothingon the sensitivity of volunteering to recessions. • Until 2008, philanthropyused to befairly ‘recessionproof’. • Givingbyhouseholds is less sensitive to economic trends thancorporate and foundation giving. • Religiousgiving is less sensitive to economic trends thanother types of giving.

38. In the UK, givingbyhouseholdsdeclinedby 10% in 2008/09 – it is slowlyrecovering. • In the Netherlands, givingbyhouseholdsremainedsteady in 2009 but has declinedbyalmost 5% in 2011. • Corporategiving is much more sensitive to the economy, itdeclinedby 19%

39. Somepositivenew trends • Crowdfunding and crowdsourcing. • Micro-lending. • Remittances. • Friends’ societies. • Heartbeatingorgandonations. • Social entrepreneurship.

40. And some more • Giving platforms for special events fundraising, likegiving.uk. • Participatoryphilanthropy: sportsevents. • Corporatesocialresponsibility. • Employee volunteering programs. • High Net Worth Philanthropy.

41. The “Golden Age” of Philantropy By 2059 €86 billionwillbetransferred to charitablecausesthroughbequests € millions Extrapolationbasedon data fromStatisticsNetherlands (CBS)

42. The GivingPledge

43. Modern philantropists in the Netherlands The Van den Ende foundation supports arts and culture The royalfamily and Johan Cruijff support youth and cohesion Pieter Geelencreated the Turing Foundation afterhesoldhiscompany

44. HNW 2013 Survey • 13% response ratefrommillionaires • Average giving: €5,200 = 1.9% of income • Heavilyskewed: 80/20 rule • Highestamountsdonatedbyyoungself-employed entrepreneurs • Increasefrom €2,300 in 2009

45. “If the governmentcuts, I willgive more”

46. Total givingper yearbywillingness to compensategovernmentcuts “If the governmentcuts, I willgive more”

47. Creating a ‘Giving Culture’ • Modesty: “Do not let yourleft hand knowwhatyour right hand is doing” (Matthew 6:3; Maimonidesseconddegree) • Philanthropy shouldnotbe a dirty word. • Social entrepreneurshipcouldbe the firstdegree (help a person help himself). • Educationcouldplay a role in creating a giving culture, e.g. through service learning.

48. Localcross-sectorcollaborations • Private foundations in the Netherlandswith a local focus receive more fundingrequestsfromnonprofits. • Interest increases in whatworks in cross-sectorcollaborations, alsofrom the government. • Community foundations are nowbeingestablished.

49. Four models • Initiating: start a program, and export itintogovernmentpolicy. • Complementary: worktowardssimilar goals and strengtheneachother as partners • Adversarial / competitive: try to do betterthangovernmentormakegovernment do better • Substitutive: take over governmenttasks

50. Concerns • Production of some public goodsbutnotothers. • Cancerbutnot mental illness research centers. • ‘Toomuch’ influenceon public policy for philanthropistsleading to arbitrariness, nepotism and inequality.