A para­digm shift in philanthropy

Peter Buss, foun­der of the plat­form stiftungschweiz.ch, editor and publisher of The Philanthropist, has deci­ded to hand over manage­ment of Phil­an­thropy Services AG this year. It’s time to take a closer look at the phil­an­thro­pic sector toge­ther with him.

You’ve been invol­ved in Switzerland’s non-profit sector for around 40 years now, as a consul­tant and service provi­der. That proba­bly makes you one of the longest-serving workers in the sector. If you look back, where are the major chan­ges to be seen?

It’s a really long time, you’re quite right (smiles). If you’re on the outside looking it, it’s proba­bly hard to see if anything has chan­ged. But if you take a closer look, you’ll notice that the sector has under­gone amazing deve­lo­p­ments. The follo­wing three aspects alone exem­plify this. Marke­ting: 40 years ago, marke­ting was a dirty word in the sector, but now, every orga­ni­sa­tion has its own marke­ting team. Profes­sio­na­li­sa­tion: nowa­days, there’s an amazing range of educa­tion, trai­ning and CPD offers in the sector, leading to an array of very highly trai­ned specia­lists. As a consul­tant, you need to keep yours­elf much more up-to-date than before. Today, univer­si­ties and tech­ni­cal colleges are also carry­ing out valuable acade­mic work on phil­an­thropy. Forty years ago, I’d have been happy to find a single univer­sity thesis on non-profit manage­ment – foun­da­tion manage­ment didn’t exist back then. And the third aspect, digi­ta­li­sa­tion: compu­ters and the inter­net didn’t exist back then. We’re all aware of where we are today, and how quickly things are chan­ging. Of course, this doesn’t just have an impact on philanthropy.

And what’s the picture looking like in terms of donors?

Donors have much grea­ter levels of aware­ness now than they did before. They want to know what their dona­tion is going to achieve and what’s actually going to happen with the money. This has major conse­quen­ces: today, every orga­ni­sa­tion needs to have a very good idea of whom their work is bene­fiting, and why. And they need to be able to clearly state what they do, and, at the end of the day, actually do what they say they do. If they don’t, they lose their credi­bi­lity and, by exten­sion, their support­ers. Cutting corners doesn’t work anymore. Howe­ver, there’s one thing that, sadly, hasn’t yet chan­ged for good: donors’ unswer­ving loyalty to prin­ted direct mailings. What a waste, envi­ron­men­tally spea­king… But this last bastion will fall, too – and it’ll fall very soon.

How has the prac­tice of work chan­ged in this respect?

Forty years ago, I kitted out my office with the very latest tech: an elec­tro­nic type­wri­ter with a small display that showed no fewer than ten words at once! It made it so much easier to correct the text that was being typed. I was over the moon, and my wife and I felt like we were really at the cutting edge. Now, even spell-check is partly digi­ti­sed. Digi­ta­li­sa­tion has turned work proces­ses and commu­ni­ca­ti­ons upside down: it’s a revo­lu­tion akin to the crea­tion of the prin­ting press. Digi­ta­li­sa­tion is a mega­trend that’s having an irrever­si­ble impact on all of us. But one thing it – fort­u­na­tely – hasn’t chan­ged is people’s unti­ring, diverse and down­right unbe­lie­va­ble commit­ment. Today, the Swiss Red Cross alone has more than 50,000 volunteers!

The foun­da­tion sector is also beco­ming more digi­tal in nature.

And the digi­tal ecosys­tem offe­red by stiftung-schweiz.ch has played its own little part in this…

No doubt, but what’s the end goal for the digi­ta­li­sa­tion of the sector?

An all-new approach to phil­an­thropy. A more effi­ci­ent and more trans­pa­rent kind of phil­an­thropy, one that is, above all, more capa­ble of enga­ging in dialo­gue. This is alre­ady clear to see today. The readi­ness to trust digi­tal aids and commu­ni­ca­tion tools has skyro­cke­ted in recent years. That said, we’re still at the start of a major deve­lo­p­ment on this front. And the same goes for our platform.

What about grant-giving foundations? 

You’re quite right: many grant-giving foun­da­ti­ons prefer to be rather more cautious. They assume that an increase in publi­city would impair their free­dom to make decis­i­ons and would also lead to more unsui­ta­ble grant requests. They’re also afraid of caus­ing more work for them­sel­ves and incur­ring more costs. There’s no doubt about where the trend is heading – and it’s in the oppo­site direc­tion. In my view, the sector will open up further, with this process acce­le­ra­ted by socie­tal pres­sure and digi­ta­li­sa­tion. Even today, digi­ta­li­sa­tion is provi­ding tools that enable this to occur with the mini­mum of fuss for all invol­ved, without incur­ring huge costs and while keeping the neces­sary discre­tion where it’s due. StiftungSchweiz is the best exam­ple of this. It’s only a matter of time before our digi­tal services become stan­dard. That said, we need to ensure we keep demons­t­ra­ting the value added by enhan­ced trans­pa­rency and open dialo­gue as we proceed along this jour­ney: digi­ta­li­sa­tion is not an end in itself. It should, and will, make foun­da­ti­ons’ work more effi­ci­ent and more effec­tive, ensu­ring ever­yone can under­stand it, giving it trans­pa­rency and posi­tio­ning it within a respectful dialogue.

And what’s the situa­tion with project owners?

Trans­pa­rency and dialo­gue are system-criti­cal, as it were, for opera­tio­nal orga­ni­sa­ti­ons. Nobody funds a shady-sound­ing charity – or at least, they don’t do so volun­t­a­rily. Digi­ta­li­sa­tion gives orga­ni­sa­ti­ons the oppor­tu­nity to effi­ci­ently provide the trans­pa­rency that’s called for. It’s no longer a ques­tion of money: it’s a ques­tion of moti­va­tion, at most.

Moti­va­tion is the key word here: where’s the entire NPO sector at in terms of digi­ta­li­sa­tion, compared to the private sector?

The non-profit sector is lagging behind the for-profit sector. Grant-giving foun­da­ti­ons, for exam­ple, are far from making the most of the digi­tal oppor­tu­ni­ties available for proces­sing grant requests. If they did, it would make their work so much easier. Digi­tal fund­rai­sing also needs to be deve­lo­ped further: merely popping a dona­tion form on your own website is a good start, but it’s not enough on its own. We need more: people still don’t have enough know­ledge of how to put these things into prac­tice, and they don’t have faith that they’re going to work, either. That’s because, as I mentio­ned, donors still really like recei­ving prin­ted fund­rai­sing letters. Digi­tal alter­na­ti­ves to prin­ted fund­rai­sing letters are alre­ady out there, and they’re getting more clever and more attrac­tive by the day, but no orga­ni­sa­tion wants to, and is able to, run the risk of impac­ting the income they gene­rate through direct mailings. We’re devo­ting a lot of energy to resol­ving this dilemma. And luckily, this attach­ment to hard-copy mailshots is slowly lessening. 

Funding models are also beco­ming more diverse, through impact inves­t­ing or crowd­fun­ding, say. Does this repre­sent a threat to the fund­rai­sing busi­ness – or is it an asset?

It’s defi­ni­tely an asset. Why? Because even the tradi­tio­nal fund­rai­sing busi­ness, as you put it, will change. There’s a very simple reason for this: on the one hand, we’ve got the socie­tal mega­trend towards increased respon­si­bi­lity for resol­ving problems in society, and on the other, there’s the mega­trend of digi­ta­li­sa­tion. And they’re not leaving fund­rai­sing untouched, either. Even today, orga­ni­sa­ti­ons are putting forward all-new dona­tion tools that donors them­sel­ves can use and operate. When taken toge­ther, these two mega­trends mean that the beha­viour we’re used to seeing from donors will have to change over the years to come and take on a more digi­tal guise. They’re turning the tables in the commu­ni­ca­tion process and will swap roles with the orga­ni­sa­ti­ons coll­ec­ting donations.

Meaning?

Donors are beco­ming the real drivers in fund­rai­sing: they won’t just wait for an orga­ni­sa­tion to cont­act them looking for support for a project. Instead, they’ll get invol­ved with a project or orga­ni­sa­tion them­sel­ves – at a point in time chosen by them. It’s all about making their own decis­i­ons and doing things them­sel­ves. And it’s all possi­ble thanks to digi­ta­li­sa­tion. Online peer-to-peer services give donors powerful leverage, enab­ling them to select orga­ni­sa­ti­ons and projects to donate to in colla­bo­ra­tion with others. Project owners will have to adapt to this. Grass-roots initia­ti­ves and corpo­rate initia­ti­ves, along with these compa­nies’ employees and custo­mers, will deve­lop into serious compe­ti­tion for project owners and tradi­tio­nal fund­rai­sing campaigns: it’s a para­digm shift.

Does this also affect major donors, grant-giving foun­da­ti­ons and even compa­nies, too?

Yes, for sure. I think it’s a reali­stic deve­lo­p­ment. In the future, they’ll spend more time looking for projects them­sel­ves, rather than just waiting for the grant requests to roll in. And compa­nies will include their employees and custo­mers more in their dona­tion activities. 

Many sectors are seeing over­seas compa­nies flock to Switz­er­land owing to the high purcha­sing power there. Is this deve­lo­p­ment also occur­ring in terms of fundraising?

This deve­lo­p­ment has been under­way for a long time now. Switz­er­land is a very attrac­tive market for dona­ti­ons: a StiftungSchweiz study recently provi­ded a very good over­view of the Euro­pean dona­ti­ons market.

Major chal­lenges, like climate change, are global issues. Does this foster inter­na­tio­nal initia­ti­ves within the non-profit sector?

Inter­na­tio­nal initia­ti­ves can come about incre­di­bly quickly thanks to modern commu­ni­ca­ti­ons tools. Espe­ci­ally if it’s important that we take action soon – or as a matter of urgency. That said, a certain level of orga­ni­sa­tion is needed to ensure that these kinds of cross-border initia­ti­ves can have a sustainable impact. And that’s where many inter­na­tio­nal campaigns fail and disap­pear from view. 

In the media, we see the phil­an­thro­pic work of the ultra-wealthy, like Bill Gates or MacKen­zie Scott, being discus­sed time and again. Does their work have a decisive impact? Where’s the inter­na­tio­nal phil­an­thro­pic scene heading?

These people don’t neces­s­a­rily have a decisive impact, but they are defi­ni­tely moti­va­tio­nal. Lots of high-net-worth indi­vi­du­als say to them­sel­ves how great it is that they’re doing some­thing – and they realise that they can play their part, too. This makes wealthy people aware that they them­sel­ves bear grea­ter respon­si­bi­lity for our society, and that they can actually do some­thing about it. I think the future will see inter­na­tio­nal funding pools of wealthy indi­vi­du­als coming toge­ther to create even more leverage. Phil­an­thro­pic consul­tants will have more to do than they did before.

Where’s Switz­er­land, compared to other count­ries around the world?

Switz­er­land is doing really very well. That said, compa­nies in Switz­er­land are rather more cautious than, say, German compa­nies. Conver­sely, grant-giving foun­da­ti­ons have more of an impact in Switz­er­land than in almost any other coun­try. Another inter­na­tio­nal study has shown that, after Liech­ten­stein, Switz­er­land offers the most attrac­tive condi­ti­ons within which to estab­lish or manage a foun­da­tion. Switz­er­land is a very attrac­tive loca­tion, and it’s at the top of the tree for private dona­ti­ons, too. Other count­ries are more advan­ced when it comes to making use of digi­tal dona­tion oppor­tu­ni­ties. Conver­sely, a regis­ter like stiftungschweiz.ch that lists every foun­da­tion in a trans­pa­rent format is the stuff of dreams for many countries. 

Every sector needs good over­ar­ching condi­ti­ons. Foun­da­tion law is to be moder­nised, but at the same time, poli­ti­cal forays like the Noser motion are ques­tio­ning the role phil­an­thropy has to play. Are people failing to appre­ciate just how much of an impact it has in Switzerland?

We need to take a more nuan­ced view here. Every single indi­vi­dual volun­teers, and they see this work in many diffe­rent ways. If someone gives their free time to a sports club or nursing home, or helps out their neigh­bours, this is an exam­ple of them embo­dy­ing and expe­ri­en­cing volun­tee­ring. We reco­g­nise this and we’re very appre­cia­tive of it: hardly anyone ques­ti­ons it. Orga­ni­sa­ti­ons like Bene­vol are crucial cata­lysts in this regard. Conver­sely, insti­tu­tio­nal phil­an­thropy shied away from the spot­light for a very long time. It’s only over the past few years that it’s become more trans­pa­rent. But this trans­pa­rency also led to ques­ti­ons, legi­ti­m­ately enough. The Noser motion was one outcome of this. Switzerland’s grant-giving foun­da­ti­ons have a huge impact and do a lot of good: they deserve to receive even more reco­gni­tion and posi­tive support from society. But people need to be able to get to know them better, too. I’m so plea­sed that stiftung-schweiz.ch can play a role in this process.