The second charity barometer shows the impact of the pandemic on the way foundations work and the challenges they face. The survey was carried out by StiftungSchweiz, the magazine Die Stiftung and Zürcher Kantonalbank.
During the pandemic, meetings and webinars held via MS Teams, Skype and Zoom permeated the charitable sector, with 64% of foundations surveyed mentioning that online communication is here to stay. Working from home has not met with quite the same resonance, although 36% have accepted this model. At 30%, document digitalisation has also advanced. However, one in four foundations still says that none of these changes applies to it. These are the findings of the recent charity barometer.
The potential of digital fundraising tools
After the barometer’s first iteration last year, foundations expressed their views on the latest developments for a second time. Once again, about 200 foundations participated and helped an interesting, up-to-date image of the foundation sector to take shape. For example, it is clear that developments in terms of working from home have not had a similar impact on more flexible working hours, with just 16% of foundations stating that they have put this into practice. Digital fundraising tools have fared even worse, with just 7% saying they had established these on a permanent basis. At the same time, 45% listed fundraising or financing as their biggest challenge. In total, 30% of the foundation respondents carry out regular fundraising. For special events such as Christmas or following a disaster, 13% launch additional fundraising activities, and 12% have plans to use fundraising to raise money in the future. The importance of fundraising is highlighted by Hansjörg Schmidt, a member of the management team at Zürcher Kantonalbank, who advises foundations and non-profit organisations. He says: ‘Fundraising pays off. Even the coronavirus crisis has not made the Swiss less willing to donate, and in some cases donation volumes have increased.’ However, fundraising is demanding and takes time. As far as challenges in terms of fundraising go, 41% listed the high demands of donors.
ʻThe foundation board is responsible for the investment strategy’
Hansjörg Schmidt, Zürcher Kantonalbank
‘By this, respondents mean primarily supporters’ expectations that their money will be used in a targeted way, with very little of it going to administration,’ says Schmidt. Competition and a shortage of time were listed as further challenges, each mentioned by 40% of respondents. Conversely, only 4% listed digitalisation as a challenge and 20% saw no difficulties in fundraising. An equal number of respondents said they lacked the specialist knowledge.
Managing their own funds
The significance of fundraising differs depending on the foundation: some are fully reliant on these funds, whereas for others they make up a fraction of their budget. The question of sustainable investment is gaining in importance for well-funded foundations. Schmidt sees this in his work: ‘Most charities handling capital investments at the moment, restructuring and realigning them, want to include sustainability aspects.’ Of respondents to the charity barometer, 59% stated that they observe sustainability criteria. These foundations deploy different strategies. Of the 118 foundations surveyed that invest sustainably, 61% rely on ESG criteria (environmental, social, governance), with 47% excluding certain categories or companies. Other methods, such as best-in-class or impact investing, trail some way behind, at 15% and 14% respectively. But who makes these decisions? Of those surveyed, 42% make investment decisions alone, 26% take advice, while 21% of foundations have recruited an asset manager. Furthermore, 28% of foundations take on external support for communications and 38% make use of the skills of external experts for digitalisation.
Digitalisation goes hand-in-hand with enhanced data protection requirements, with a new data protection act coming into force in 2022. Just 26% of the foundations surveyed stated that their preparations were on track, 30% believe they will not be affected by the new law, 11% did not give a response and 33% had not yet looked at it in detail.
The second charity barometer
The survey was carried out by StiftungSchweiz, the magazine Die Stiftung and Zürcher Kantonalbank, with the participation of 199 foundations from German-speaking Switzerland and French-speaking Switzerland between 30 August and 10 October 2021. Of these, 74 operate only their own projects, 77 are grant-making foundations and 48 stated that they run their own projects and issue grants to third parties. The survey captures the mood in the sector; it is not representative.