Charities are part of our society. Photo: Ferdinando Codenzi

«Every gene­ra­tion has their own way of working»

As one generation gives way to the next, digitalisation will also make its presence felt in the world of philanthropy, says Professor Georg von Schnurbein. At the same time, this change will also bring about the biggest challenge facing the sector – and no, it’s not about money.

The Philanthropist: How digi­tal is the phil­an­thro­pic sector in Switz­er­land

Georg von Schnur­bein: Chari­ties are part of our society, and they’ve deve­lo­ped in a simi­lar way. We’ve got an incre­di­ble amount of exper­tise in Switz­er­land, plus chari­ties like the Botnar Foun­da­tion who support this. We’ve laid the ground­work and we can go far, but the over­whel­ming majo­rity are not yet facing up to this issue.

It sounds like things aren’t really moving at all. You have led the Centre for Phil­an­thropy Studies (CEPS) at the Univer­sity of Basel since the Centre was foun­ded in 2008. Has the phil­an­thro­pic sector chan­ged at all since then?

If you’re right in the middle of it, you often don’t realise change is happe­ning – but a lot has chan­ged. I’ve been invol­ved with foun­da­ti­ons since 2003, and half of the chari­ties in exis­tence today were crea­ted during this period. We’ve got new forms like umbrella orga­ni­sa­ti­ons and non-perpe­tual trusts, which means that the sector looks comple­tely diffe­rent from how it was 15 years ago: there are new stake­hol­ders, new plat­forms and new magazines.

Why have there been all these changes?

Money plays a role, of course. The phil­an­thro­pic sector does best during peri­ods of strong econo­mic growth.

And then foun­da­ti­ons are estab­lished during those periods?

Yes. That was the case from 1890 to 1914, and has been since 1990. We compared the number of newly estab­lished foun­da­ti­ons with the deve­lo­p­ment of the SMI, and found that deve­lo­p­ments largely ran in paral­lel. The economy is shrin­king at the moment, meaning that the number of new foun­da­ti­ons being crea­ted is also diminishing.

So, does that mean that money is the major issue at play?

The ques­tion of where to invest money is a huge chall­enge that smal­ler foun­da­ti­ons, in parti­cu­lar, are facing at the moment. They are very vulnerable to risk: they cannot simply absorb losses. Howe­ver, most of the discus­sion in the media is about large chari­ties, giving the impres­sion that chari­ties have lots of money in the bank. That’s not the case – 80 percent of foun­da­ti­ons have less than three million Swiss francs at their dispo­sal. But bear in mind that they’re often only working with the money they receive as income. It has to cover all their admi­nis­tra­tive costs, which doesn’t leave much money for their projects. But there’s a much bigger problem, and that is the pipe­line of people to serve on boards of trus­tees. Lots of chari­ties were set up during the boom years from 1995 to 2010. They’ve now reached the stage where their foun­ders, and their friends, have got to an age where they want to step back, and we need people to replace them.

How many?

There are around 70,000 spots on boards of trus­tees across Switz­er­land, filled by around 63,000 people. This means that it’s not hugely common for someone sit on more than one board of trus­tees. We’d need around 5,000 new members of boards of trus­tees a year to replace those who step down. If that weren’t enough, the 300 newly formed chari­ties also create another 1,500 vacan­cies on their boards of trus­tees. Money isn’t the way to faci­li­tate the search for the volun­t­ary enga­ge­ment requi­red in this respect.

Can digi­ta­li­sa­tion help?

Of course, but it can only help with pairing people with chari­ties. Lots of people would be happy to get invol­ved, but they don’t know how or where to do so.

Of course, digi­ta­li­sa­tion can also be a problem, too. Young candi­da­tes are used to digi­tal ways of working, and tradi­tio­nal chari­ties might not yet be on the same page.

That’s not about digi­ta­li­sa­tion. Youn­ger gene­ra­ti­ons have their own ways of working, and that has always been the case. As one gene­ra­tion gives way to the next, digi­ta­li­sa­tion will follow in its wake.

But there are still foun­da­ti­ons that store all their docu­ments in boxes?

There are. And we’re also seeing that they’re natu­rally coming to an end, not because they’ve fulfil­led their purpose, but because they’re not in a posi­tion to succeed, from an orga­ni­sa­tio­nal perspective.

Digi­ta­li­sa­tion could help them become more efficient.

It could. Howe­ver, you’ve got to remem­ber that running a charity is now very diffe­rent from how it was 20 years ago. The super­vi­sory requi­re­ments are much more strin­gent, and they negate the bene­fits of any effi­ci­ency you manage to gene­rate. As a result, people running chari­ties need new solu­ti­ons as a matter of urgency – and we’re only at the start of our digi­tal jour­ney. That said, you’ve also got to bear in mind that there’s not one arche­typal charity. Some chari­ties, parti­cu­larly young ones, are really racing ahead in terms of digi­ta­li­sa­tion. I know of one that’s comple­tely closed its offices and only works with online tools now.

Might it be the case that we don’t need certain chari­ties anymore? Crowd­fun­ding, for exam­ple, means there are alter­na­tive forms of funding available.

We shouldn’t see new forms of phil­an­thropy as compe­ti­tion! It’s no problem at all if some requests for assis­tance are no longer direc­ted at chari­ties. Quite the oppo­site, in fact: it’s good if there’s more money available to them.

Could chari­ties use crowd­fun­ding themselves?

There have alre­ady been some attempts where a charity has said ‘if you raise 15,000 Swiss francs, we’ll double it’. That’s a win-win scena­rio. Or they offer top-up funding after crowd­fun­ding has got the ball rolling. Foun­da­ti­ons are open to new things, but big chari­ties, in parti­cu­lar, find that requests for assis­tance far exceed the funds available. That’s why they’re not keen to get mixed up in addi­tio­nal decis­ion-making processes.

But turning to the wider public could help with selec­ting a broa­der range of projects.

The demo­cra­tis­a­tion of phil­an­thropy is an exci­ting topic. It can offer oppor­tu­ni­ties, but it is proble­ma­tic in terms of respon­si­bi­lity, and we have to abide by the limits at play here. Ulti­m­ately, a charity’s board of trus­tees remains respon­si­ble for all its decis­i­ons, whether the wider public votes for them or not: they’ve got to have the last word. But there are some chari­ties who are open to new things and allow public votes on the members of their boards of trustees.

But isn’t trans­pa­rency some­thing that chari­ties should be aiming for, in any case?

Before trans­pa­rency is propa­ga­ted as an end in itself, we should clarify what the stan­dard for this is. I think it would be an exag­ge­ra­tion to suggest that they are suppo­sed to be as trans­pa­rent as a listed company. Compared to medium-sized compa­nies, their requi­re­ments really aren’t all that bad. There’s no doubt that their work has a connec­tion to the public owing to its chari­ta­ble aims, but that’s why they are covered by the Super­vi­sory Autho­rity for Foun­da­ti­ons. Trans­pa­rency is important for the deve­lo­p­ment of the sector, and we’re contri­bu­ting to this with our research.

At least trans­pa­rency would have a posi­tive impact on how people saw them?

In fact, being seen as legi­ti­mate and having a good repu­ta­tion are major chal­lenges. This is some­thing we can see in France at the moment, with the large dona­ti­ons made in the wake of the Notre-Dame fire. People have always been rather criti­cal of these mega-donors. In fact, setting up a charity was forbidden in France until 1983 on the basis that it contra­dic­ted the prin­ci­ple of equality if someone with a lot of money was able to affect someone else’s life.

But people just want to do good?

But the ques­tion of what it means when we ask about the bene­fits of phil­an­thropy is gene­rally answe­red with anec­do­tes, some­thing along the lines of ‘that would be a nice project’. In fact, the majo­rity of phil­an­thro­pic achie­ve­ments are not visi­ble enough, and I think that is an area that we can rese­arch. We need to use data and high­light the funding streams to show what the sector actually does and where its succes­ses are. And then, of course, we need to talk about fail­ure. Measu­ring impact will mean that we can’t present ever­y­thing as a success just because we’ve done good things. But that’s what normally happens today: chari­ties’ annual reports only mention the posi­tive aspects. The problems lie with society, but it’s rare for a charity to come out and say that society’s broken.

Should chari­ties get invol­ved in social discourse, then?

Chari­ties, like any other insti­tu­tion, are part of society. Why shouldn’t they be allo­wed to get invol­ved? Previously, people really did see them as taking a back seat, but some of them are more active now. Chari­ties no longer want to simply provide the means: they want to be part of the discourse, too, and I think that’s a legi­ti­mate desire.

Prof Georg von Schnur­bein is Asso­ciate Profes­sor of Foun­da­tion Manage­ment and Direc­tor of the Centre for Phil­an­thropy Studies (CEPS) at the Univer­sity of Basel, which he estab­lished and has led since 2008. The CEPS was laun­ched by Swiss­Foun­da­ti­ons, the asso­cia­tion for Swiss chari­ties. Von Schnur­bein has published on chari­ties, gover­nance, non-profit manage­ment, marke­ting and phil­an­thropy. He studied busi­ness admi­nis­tra­tion with a minor in poli­ti­cal scien­ces at the univer­si­ties of Bamberg, Fribourg and Bern. He was a board member of the Euro­pean Rese­arch Network on Phil­an­thropy (ENROP) from 2011 to 2017.

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