Daniel

Daniel Ferrell-Schweppenstedde

Policy Manager

Charities Aid Foundation

What’s next for European philanthropy?

4 August 2020

The Covid-19 pandemic has seen unprecedented levels of activity amongst donors and philanthropic funders.  A recent McKinsey report put the response by the European philanthropic community at more than €1.1 billion by May 2020 in terms of funding that went to emergency relief for the pandemic as well as general grantee support to withstand the impact of the crisis.

This is probably underestimating the true scale of the response too, given that the Association of Charitable Foundations (ACF) thought that by the end of March 2020 around £500 million in funding had been already dedicated to tackle the crisis in the UK alone.

The crisis has brought to light new questions, as well as elevating existing discussions around the role of philanthropy and how it sits in the wider European framework of policy-making, as well as on the national level (inside and outside the EU).

At CAF we have been thinking about key questions for the future for philanthropy and civil society after COVID-19, and are involved in many conversations with colleagues at organisations like Dafne and the European Foundation Centre (EFC) about the future of European philanthropy in particular.

Below is a short summary and reflection on the points made by the speakers during a recent event by EFC, Dafne and the European Policy Centre, on how European policymakers and philanthropy can strengthen collaboration in the light of the COVID-19 crisis.

Space for an increased role for philanthropy

Funders work across a wide range of areas, but there are certain areas where philanthropy could have an elevated role:

  • Social economy: Up to 160 million people in Europe are members of social economy enterprises (SEEs) - including organisations across retail, banking and agricultural cooperatives, as well as mutual societies. It is a growing area and the UK Civil Society Strategy makes explicit reference to the topic. During the crisis, many SEEs have operated as anchors and hubs that worked as focal points for the local distribution of resources. Funders have been involved in this area from the get-go, and now they could have an important role in shaping the consolidation of a field.
  • Citizen engagement in policy-making: The widespread decline of trust in institutions by individuals across the globe is a well-documented phenomenon. Misinformation and disinformation are part of the problem, but the complexity of decision-making processes is also a factor. Funders can potentially help here by linking back to policy-making at different levels (national, international, supranational) and communicating it: including shaping processes that allows for real engagement and input in decisions.
  • Filling gaps in international collaboration: Multiple processes at the national level have started to undermine international collaboration (or make it more resource intense) in many areas, - for instance Brexit or the USA trying to withdraw from multilateral organisations such as the WHO. The current crisis may further reduce the options for international collaboration and many states will reassess where they will deploy minimised resources in light of massively reduced fiscal capabilities. The post-war era saw an expansion of organisations and programmes that were dedicated to international exchange. This is now de facto a shrinking space. Funders could help by assessing systematically which processes and institutions have been predominantly weakened and step in.
  •  Addressing the societal consequences of the crisis: There are many known (as well as unknown) socio-economic fallouts from the crisis, with upcoming political consequences and resulting shifts in landscapes on the national level. Funders will need to pay close attention and reassess their work in the light of these developments.
  •  Climate change and gender equality: One of the major frameworks to track positive change on social, economic, and environmental goals is the SDGs. Across the EU, progress on goals around climate action and gender equality is lagging behind progress on every other goal. The impact of the crisis is set to delay or even reverse progress in these areas. They are both issues that have been a crucial focus for funders in the past, and going forward there is a strong case for a renewed focus on these areas in the philanthropic community.
Future of EU philanthropy climate change sdgs

European philanthropy: a growing field despite persisting barriers

There is also the wider question of whether there is a need for more philanthropy with a European purpose and whether this needs a European legal form for foundations, or more agile foundations that work across borders. The development of a European foundation statute got stuck in recent years, due to differing national appetites for further integration. There could be more support from policy-makers for more collaborative civil society and the integration of legal frameworks and administrative processes across Europe. This could also help with easing the regulatory and administrative burden in the area of Anti Money-Laundering (AML) and Counter-Terrorism Financing (CTF), which is still presenting barriers to cross-border giving (and therefore to wider cross-border solidarity at a time of crisis where more of it is needed in Europe).

Governments broadly agreed on the beneficial role of philanthropy as a bridge maker between the market and the state, but want to keep the space in which it operates under national control. This ensures that national visions for the exact role that civil society could or should play prevail. For now civil society has found work-around solutions (for example Transnational Giving Europe for cross-border giving, which recently launched its first online platform. And there are increasingly examples of solution-oriented funder collaborations across borders.

    

Philanthropy and political debates

Another question is whether philanthropic funders need to become more active and outspoken on particular issues, for example on the idea of the European project. Whilst this could arguably be seen as in line with some organisations’ missions, the deeply political nature of such issues means that engaging with them could result in the perception of partisanship and diminish an organisations’ wider bridge-building function. Furthermore, there may be legal limits posed by charitable objectives and mission that organisations have adhered to.

However, when activities are based on values and objectives anchored in international systems and projects (which national governments are signed up to) this should (theoretically, at least) prove less controversial. We do have some relevant lessons from other countries here.

What do we want to see across European societies?

There are developments, some more aspirational and some pragmatic, that decision makers can affect right now:

  • Better recognition for the philanthropic sector and its importance as a cornerstone of societal dialogue, at both the national level and European level. Large philanthropic institutions contributed to the pledges made as part of the Coronavirus Global Response launched by the European Commission, and the role of philanthropy in the crisis response has been widely recognised. But there is still the need to go beyond an instrumental view of philanthropy as a mere contributor of funds.   
  • Alignment in priorities and further large scale funder collaborations beyond the ones that already exist; working across sectors and in particular with government (focussing on the biggest challenges such as climate change, democracy, inequality). There could also be a call to be bolder in promoting solutions and getting involved in conversations since the fallout from the consequences of the COVID-19 crisis will be severe and might demand deeper engagement and action. In particular philanthropy infrastructure organisations seem to be taking on a leading role in certain topics, such as climate change. But also other roles, such as advocate, unlocking funding, convenor, connector.

"be bolder in promoting solutions and getting involved in conversations,"

  • The shrinking space for civil society to gain more relevance in Europe. Experiences from Hungary seem to indicate that, depending on the national context, funders are no longer in a position to stay silent on topics of closing civic space, which also has implications. The discussion might have to be elevated and brought closer to other parts of society because it is part of a wider rule of law crisis across Europe, and a deeper crisis in effective participation of citizens in policy-making, as well as the protection against negative impacts of policy-making. Some funders are already active in this space, but they might face increased demands to expand their work. Their stance on providing core funding and funding for CSO advocacy will come into focus. If funders will see the support of civil society as a value in itself, then they might start to engage more with providing core funding to just keep CSOs afloat because their existence (also post-pandemic) is seen as important. Other European states increasingly see the advocacy function of CSOs as not relevant, and might even put it under attack. If funders see this function as relevant going forward, they might have to do more to preserve it, depending on the context.
  • More political pressure from the EU level to implement ECJ rulings and adjust national administrative frameworks that support cross-border giving. This concerns the free movement of foreign philanthropic capital and lifting restrictions on CSOs receiving foreign funds. Funders have a vested interest in this topic because it is an essential component of a flourishing philanthropic and giving ecosystem. If more action from EU Member States and other European states is needed to implement the changes they agree upon to enable citizens to make more use of these freedoms, what role can funders play in this process?

To read more on European policy responses to philanthropy and civil society in the light of the COVID-19 crisis download our recent paper.

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