Public Policy, Philanthropy, and Governance: Conditions for Effective Cooperation Theo Schuyt, René Bekkers, Leo Huberts & Willem Trommel VU University Amsterdam November 19, th Arnova Conference, Toronto

The paper Aims to introduce philanthropy to a continental governance and public policy audience that knows little about it. Is authored by Theo Schuyt, myself, and two professors from the Department of Governance Studies at VU University Amsterdam. Let me tell you something about the situation in which the paper will land. November 19, th Arnova Conference, Toronto2

November 19, th Arnova Conference, Toronto3

Wall Street is an early example of Dutch Philanthropy. November 19, th Arnova Conference, Toronto4

November 19, th Arnova Conference, Toronto5 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

November 19, th Arnova Conference, Toronto6 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.

November 19, th Arnova Conference, Toronto7 The ‘Sweet Mary’ Fraternity was founded in Its first members were clergy. The fraternity engaged in charity and cultural activities. Ghisbertus van der Poorten donated his house in 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.

November 19, th Arnova Conference, Toronto8 The ‘Sweet Mary’ Fraternity was founded in Its first members were clergy. The fraternity engaged in charity and cultural activities. Ghisbertus van der Poorten donated his house in 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.

Amsterdam Concert Hall November 19, th Arnova Conference, Toronto9

November 19, th Arnova Conference, Toronto10 This is all history. We have ‘lost’ the philanthropic tradition. Since World War II, state subsidies dominate funding for nonprofit organizations. Philanthropy is in our culture – but institutions have discouraged it.

Giving USA November 19, th Arnova Conference, Toronto11 Total giving, 2009: $304 billion (2.1% GDP)

Giving in the Netherlands November 19, th Arnova Conference, Toronto12 Total giving, 2009: $6.4 billion (0.8% GDP)

Giving in the Netherlands today Compared to the US, very low levels of giving to the arts and culture, to hospitals and universities. In culture, health and education many institutions are now entering the fundraising market. Established fundraising charities now target the high net worth households. November 19, th Arnova Conference, Toronto13

The current situation November 19, th Arnova Conference, Toronto14

Wall Street may revive philanthropy in the Netherlands. The economic crisis and the budget deficit resulting from the bail out of several national banks in the Netherlands has increased the necessity to cut government expenditure. The charitable deduction in the income tax was on the list of potential budget cuts. November 19, th Arnova Conference, Toronto15

November 19, th Arnova Conference, Toronto16 “Sports clubs increase resilience and autonomy of neighborhoods!” “Cutting subsidies increases the resilience and autonomy of sports clubs!” A social worker and a city council member, debating a cut of subsidies for local sports clubs

Times ahead Problems such as the aging population and an increasing health care burden, lower economic competitiveness and - who knows - mass unemployment and poverty, not just in the Netherlands but across Europe, provide opportunities and challenges for the philanthropic sector. November 19, th Arnova Conference, Toronto17

Lack of Vision The EU, the national government as well as political parties lack a clear view on the role of philanthropy in public policy. The new government has proposed a new charity law. The charitable deduction has been retained, but now includes a ‘multiplier’ for donations to arts and culture. November 19, th Arnova Conference, Toronto18

A ‘Big Society’? The current government is trying to establish a ‘crowd out’. Tax incentives to give are hardly changing. Charities are asked to advertise the deduction more actively. Competition for donors will increase. Societal need will increase as well. November 19, th Arnova Conference, Toronto19

What Dutch citizens (say they) will do when the government cuts… Giving in the Netherlands Panel Survey 2010 (n=1,866)

How much more or less? Giving in the Netherlands Panel Survey (n=1,692)

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. November 19, th Arnova Conference, Toronto22

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. November 19, th Arnova Conference, Toronto23

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. November 19, th Arnova Conference, Toronto24

This… November 19, th Arnova Conference, Toronto25

Rather than this. November 19, th Arnova Conference, Toronto26

Tools for governance 1.Measure impact and effectiveness. Thank you, ECSP. 2.Impose financial reporting requirements. 3.Establish nonprofit management education programs. 4.Amplify the signal that accreditation gives to donors. November 19, th Arnova Conference, Toronto27

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. November 19, th Arnova Conference, Toronto28

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. November 19, th Arnova Conference, Toronto29

Thanks, says René Bekkers, Blog: renebekkers.wordpress.comrenebekkers.wordpress.com ‘Giving in the Netherlands’, Center for Philanthropic Studies, Faculty of Social Sciences, VU University Amsterdam: November 19, th Arnova Conference, Toronto