1. European Perspectives on Philanthropy
René Bekkers
VU University Amsterdam
The Netherlands
Understanding Philanthropy Conference
University of Kent
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3. Wall Street is an early example of Dutch Philanthropy.
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Stuyvesant called upon the 43 richest residents of New Amsterdam to provide funding to fix up the ailing Fort Amsterdam and to construct a stockade across the island to prevent attacks from the north, while it took New Amsterdam's most oppressed inhabitants -- slave labor from the Dutch West India Company -- to actually build the wall.
Russell Shorto – The Island at the Center of the World
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This is the ‘Giving house’ in the city of
‘s-Hertogenbosch. In the middle ages, the poor in the city received food and clothing at this house. Funds for the service were obtained through bequests, legacies and other donations from citizens, but also from the city council.
Today, the building serves as the city’s library and an arts center.
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The ‘Sweet Mary’ Fraternity was founded in Its first members were clergy. The fraternity engaged in charity and cultural activities. Ghisbertus van der Poorten donated his house in 1483. The acceptance of Protestants, including members of the Royal House of Orange, helped resolve religious conflicts that had dominated the city since the Spanish occupation in the 17th century. The current building in neogothic style dates back to 1846.
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The ‘Sweet Mary’ Fraternity was founded in Its first members were clergy. The fraternity engaged in charity and cultural activities. Ghisbertus van der Poorten donated his house in 1483. The acceptance of Protestants, including members of the Royal House of Orange, helped resolve religious conflicts that had dominated the city since the Spanish occupation in the 17th century. The current building in neogothic style dates back to 1846.
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8. Amsterdam Concert Hall
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9. Amsterdam Concert Hall
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The Rijksmuseum (1885)
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11. 1880: VU University founded
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Willem Hovy ( ), owner of brewery The Crowned Falcon, donated guilders for the foundation of the ‘Vrije Universiteit’.
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13. This is all history. We have ‘lost’ the philanthropic tradition.
Since World War II, state subsidies dominate funding for nonprofit organizations.
Philanthropy is in our culture – but institutions have discouraged it.
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14. The Societal Significance of Philanthropy
The societal destination of philanthropy
How much time and money do citizens in Europe contribute to which causes?
Social origins
Who gives what and why?
The societal impact of philanthropy
What does philanthropy achieve?
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If only we knew…
1. How much time and money?
We do not know.
2. How many people give and volunteer?
It depends on the data; ‘methodology is destiny’.
What does philanthropy achieve?
We do not know - it depends on many societal conditions.
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Data from the Gallup World Poll. Map available at
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17. Research Questions for ‘Giving Europe’
Which is the most generous country
in Europe and why?
How large are differences in philanthropy (incidence, amounts, causes supported) between nations in Europe?
How can these differences be explained?
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18. Giving Prevalence in Europe
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19. Why may countries differ?
Because of population composition differences: some countries are populated with more generous citizens (Who gives?)
Because of country differences: some countries make citizens living there more generous.
(When do people give?)
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20. ‘Theories’: clusters of variables
Political: ‘Worlds of Welfare Capitalism’, democracy, civic engagement, inequality
Economic: ‘Crowding-out’, price of giving, wealth
Cultural: religious traditions, social norms
Legal: freedom for nonprofit organizations
Psychological: trust, guilt, perceived need
Communication: news consumption
Biological: DNA, signalling, nutrition
Thermoclimatic: adversity in weather
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21. ‘Theories’: clusters of variables
Economic: ‘Crowding-out’, price of giving, the wealth of nations
Political: ‘Worlds of Welfare Capitalism’, democracy, civic engagement, inequality
Cultural: religious traditions, social norms
Legal: freedom for nonprofit organizations
Psychological: trust, guilt, perceived need
Communication: news consumption
Biological: DNA, signalling, nutrition
Thermoclimatic: adversity in weather
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23. Mechanisms driving philanthropy
Awareness of need
Being asked to give
Costs and benefits
Altruism: how much others are giving
Reputation: social pressure and rewards
Psychological costs and rewards
Values
Efficacy
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Why do people give?
People give more (often) when
There is a clear need need
They are being asked solicitation
Costs are lower, and benefits are higher costs/benefits
They care about the recipients altruism
They receive social benefits reputation
They receive psychological benefits self-rewards
The cause matches their values values
Donations are perceived to be efficient efficacy
Source: Bekkers, R. & Wiepking, P. (2011). ‘A Literature Review of Empirical Studies of Philanthropy: Eight Mechanisms that Drive Charitable Giving’. Nonprofit and Voluntary Sector Quarterly, 40(5): Available at
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Not today
How much are monozygotic twins alike with respect to their giving?
Why do people prefer charities with names similar to their own names?
Why do men and women give differently?
How is political affiliation related to giving?
How much altruism is there in individual giving decisions?
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27. Mechanisms driving philanthropy
Awareness of need
Being asked to give
Costs and benefits
Altruism: how much others are giving
Reputation: social pressure and rewards
Psychological costs and rewards
Values
Efficacy
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28. The ‘Crowding-out Effect’
Occurs when a decrease in government funding leads to an increase in philanthropic funding for a cause.
Or vice versa, when an increase in philanthropy reduces government funding.
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29. The Big Society / Participation State
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30. The ‘Waterbed Effect’ Private donations Government grants
Friedman (1962) called this the crowding-out effect.
The metaphor assumes the water mass is constant & contained, as if philanthropy and government funding are a ‘zero-sum game’.
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31. Questioning the metaphor
The metaphor is not born out of research.
For a researcher, it is a testable hypothesis.
Empirical tests may as well reveal the reverse effect of ‘crowding-in’: when an increase in government funding increases philanthropic activity.
The research question is: when and where occurs how much crowding-out?
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A meta-analysis
UK studies
Crowding-out 
 Crowding-in
De Wit, A. & Bekkers, R. (2014). Government support and charitable donations: A meta-analysis of the crowding-out hypothesis. Paper presented at the 43d ARNOVA Conference, Denver, November 20-22, 2014.
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‘A severe cut in government funding to nonprofit organisations is not likely, on average, to be made up by donations from private donors.’ Abigail Payne (1998) Across all the published studies, a $1 increase in government support is associated with a $0.18 decrease in private charitable donations on average.
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Contingencies
US-based studies tend to find more crowding-out than studies from elsewhere, including Europe. Experiments in controlled environments (mostly with students) find more crowding-out than studies analyzing archival data from nonprofit organizations.
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35. The ‘crowding-out effect’ varies
Between
World regions and societies (macro-level)
Organizations (meso-level)
Citizens (micro-level)
These three levels, and over time.
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36. It’s not as simple as rocket science
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Data from the Gallup World Poll show that citizens in countries in which the tax burden is higher are more likely to give to charity, suggesting a crowding-in effect
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Outside Europe, there is no relationship between tax burden and the prevalence of giving
N = 111,
r = .011
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41. EU investments in innovation
In the European Foundations for Research and Innovation (EUFORI) Study, a consortium of 34 national experts documented ~12,000 foundations supporting R&I in Europe.
In which countries are foundations most active?
How do foundations view their relationship with government?
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 Remarkably similar to the average ‘crowding-out effect’
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43. Country characteristics
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Countries above the diagonal rank higher in corporate investments than in foundation spending on R&I
N = 27
r = 0.567
A strongly positive relation
The UK is one of the countries that rank higher in foundation than corporate spending on R&I
Scandinavia wins (again)
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45. Flexibility is the rule
The ‘crowding-out’ effect is flexible, open to modification – and may even become a crowding-in effect.
Governments, nonprofit organizations, philanthropists and the public at large can influence it.
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Source: Gouwenberg et al., (2015). EUFORI Study
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47. Four models of collaboration
Competitive: try to do better than government or make government do better
Initiating: start a program, and export it into government policy
Substituting: take over government tasks
Complementary: work towards similar goals and strengthen each other as partners
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Source: Gouwenberg et al., (2015). EUFORI Study
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49. Recreating a ‘Giving Culture’
Overcome the modesty: “Do not let your left hand know what your right hand is doing” (Matthew 6:3).
Develop new forms of philanthropy, mixed with business.
Education could play a role in creating a giving culture, e.g. through service learning.
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The stubborn 2% in the UK: giving as a % of GDP doesn’t change much
Source: Perry (2013),
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The expanding pie in the UK: giving as a % of expenditure increased
Source: Cowley, McKenzie, Pharoah & Smith (2011)
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The changing pie in the Netherlands: giving as a % of expenditure
Sources: Statistics Netherlands; Bekkers, Schuyt & Gouwenberg, Giving in the Netherlands,
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Popular concerns
Under- or loss of coverage: the general level of service provision may suffer when the government retreats.
Inequality: philanthropy may fund specific causes, but not others; Matthew-effects will help those causes with an early advantage.
‘Too much’ influence on public policy for philanthropists leading to arbitrariness, nepotism and inequality.
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Giving USA
Total giving, 2013: $335 billion (2.0% GDP; tax burden: 25%)
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55. Giving in the Netherlands
Total giving, 2013: €4.4 billion (0.8% GDP; tax burden: 38%)
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What we need is…
A serious political discussion about the role of philanthropy in public policy.
Decent research informing policy decisions, paying attention to undesirable side-effects.
An Impact Philanthropy Lab (IPL): creation and evaluation of new philanthropic / business investment instruments.
Knowledge about what works in fundraising, and about failures.
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Unpublished?
Published
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These did not work.
Picture recipients on fundraising letters (-€40k).
Calling alumni by current fraternity members.
Reminding people of an event that made them feel grateful.
Reminding people of an event that made them feel happy.
Giving people more positive social information.
Giving students the names of charity ambassadors.
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59. Published - Unpublished
Picture recipients on fundraising letters (-€40k).
Calling alumni by current fraternity members.
Reminding people of an event that made them feel grateful.
Reminding people of an event that made them feel happy.
Giving people more positive social information.
Giving students the names of charity ambassadors.
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60. These did not work either.
Reducing the anonymity of donations.
Giving the option of forfeiting anonymity.
Switching the default from ‘giving’ to ‘keeping’.
Telling people they are a helpful person.
Telling people the government lowered its subsidy, increasing the need for donations.
Showing students stylized eyespots.
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61. But real watching eyes….
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62. Suggesting a €35 contribution
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63. Framing the incentive as a match
+90%
+46%
Proportion of the reward for participation in GINPS04 donated by participants
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And finally.
Good food…. And a drink.
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From my Blog,
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68. Grams of food required to yield an additional €1 donation
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References
Bekkers, R. (2015). The Analysis of Regional Differences in Philanthropy: Evidence from the European Social Survey, the Eurobarometer and the Giving in the Netherlands Panel Survey. Paper presented at the 5th ESS Workshop, The Hague, May 22,
Bekkers, R. (2015). ‘Regional Differences in Philanthropy’. In: Routledge Companion to Philanthropy, edited by J. Harrow, T. Jung & S. Phillips. Routledge.
Bekkers, R. (2015). When and Why Matches are More Effective Subsidies Than Rebates. Research in Experimental Economics, Volume 18: Replication in Economic Experiments. Edited by Deck, C. Fatas, E., & Rosenblat, T. Emerald Group Publishing.
Gouwenberg, B., Karamat Ali, D., Hoolwerf, B., Bekkers, R., Schuyt, T. & Smit, J. (2015). Synthesis Report EUFORI Study: European Foundations for Research and Innovation. Luxembourg: Publications Office of the European Union.
Bekkers, R. (2014). The Fishy Business of Philanthropy. December 17,
Bekkers, R. & Wiepking, P. (2011). ‘A Literature Review of Empirical Studies of Philanthropy: Eight Mechanisms that Drive Charitable Giving’. Nonprofit and Voluntary Sector Quarterly, 40(5): 924‐973.
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Thanks, says
René Bekkers Professor & Director Center for Philanthropic Studies VU University Amsterdam Blog: renebekkers.wordpress.com
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