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.
«Transparency and dialog are system essential for operational organizations.»
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.
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.