Philanthropy in Switzerland: a systematic research approach

Paper for the 39th annual Conference of the Association for Research on Nonprofit Organization and Voluntary Action Alexandria, 17.-19. November 2010

Abstract

Though there is a number of empirical studies that analyze different forms of philanthropic behavior, research about philanthropy in Switzerland is lacking a consistent and systematic approach. Existing empirical findings coexist isolated from each other. Thus far, no attempt has been made to provide an exhaustive picture of philanthropy in Switzerland. To overcome this weakness we draw upon a broad conceptualization of philanthropy as voluntary action for the public good. This allows us to synthesize empirical findings on who acts how and why for the public good in the Swiss context. Even though this paper focuses on Swiss data the same approach can be used in different countries.

Authors: Steffen Bethmann Georg von Schnurbein Centre for Philanthropy Studies (CEPS) University of Basel Switzerland Contact: Steffen.Bethmann@unibas.ch

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1. Introduction The development of a shared definition of philanthropy within an extensive conceptual framework has not been marked. The term philanthropy is used to describe many forms of public beneficial behavior, with a recent strong bias towards large monetary donations by wealthy individuals or big foundations (Harrow 2010, Sulek 2010a). In Switzerland a similar development can be noticed. A recently published study called Strengthening Philanthropy in Switzerland (FONDATION1796, 2010) relates philanthropy exclusively to the activities and visibility of foundations. At the same time, studies that research voluntarism do not build on the concept of philanthropy. This is also due to a missing common definition of the term itself. No attempt has been made so far to research and combine the various forms of philanthropic behavior systematically. This paper addresses this weakness in the following manner. Firstly, we develop a conceptualization of philanthropy as research framework. To do so we build on Robert Payton`s (1988) definition of the term, as voluntary actions for the public good. Utilizing this definition allows to refine the research concept further and to identify relevant data and existing studies that can be synthesized. This section also includes a brief discussion about the role of nonprofit organizations and the influence of the state on philanthropic behavior. The second part of the paper provides an empirical based overview of philanthropy in Switzerland as defined above. Finally we discuss potential improvements of this research model and its application. 2. Philanthropy A growing attention of scholars around the world for philanthropy can be observed. Researchers from different disciplines look at the underlying incentives, facilitators and motivators of philanthropic behavior (Schuyt/Bekkers/Smit 2010). The term philanthropy is a commonly used expression in the English language. However many still relate philanthropy with names of extremely wealthy people such as Bill Gates or Stephan Schmidheiny who have created big foundations and donated millions of dollars to charitable causes. While these actions are indeed philanthropic, philanthropy is much more than just large monetary donations. Defined as any private voluntary action for the public good (Payton 1988), philanthropy includes formal and informal volunteering as much as donations of money, goods or ideas. Neighborhood help, unpaid counseling of children or helping an elderly woman to carry back her groceries all these actions are directed towards the benefit of third persons. Philanthropy in this sense is independent from private wealth. An encompassing understanding of philanthropy remains the link to its etymological meaning. The Greek word philanthropy can be translated as love of mankind, love meaning caring for or having a positive attitude towards other people. This implies that philanthropic actions aim to have positive effects for others who benefit from the outcomes. Any person acting that way can be called a philanthropist (Payton/Moody 2008).

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The meaning and interpretation of philanthropy however varied throughout history. Already the early philosophers argued what actions can be called philanthropic and who would be capable of such actions. Xenophon (426-355 BC) postulated that only few extraordinary humans possess philanthropic characters. Other philosophers saw philanthropy as a direct result of highest education and wisdom. This pedagogic component was taken up by the theologian Johann Bernhard Basedow in the 18th century, who believed in forming the capability of individuals to create positive benefits for the society at large (Brink, 2009). However, philanthropy was long seen as an action only pursuable by the elites of society. Even today this interpretation is widely spread. Philanthropic actions are sometimes seen as tools of the rich and mighty to ensure their position in society. Philanthropy should ensure the loyalty of the less privileged and serve as tool to create identity (Adloff, 2005). In his articles On the Modern Meaning of Philanthropy and On the classical meaning of Philanthrpia Sulek (2010) provides an extensive overview on how the meaning of the term has developed over time. He recognizes that most influential writers have stayed close to its etymological meaning. However, he also notes that scholars nowadays tend to explore various facets of philanthropy according to their particular interest, but without a comprehensive understanding of its full meaning. In order to describe our understanding of philanthropy more closely, a detailed explanation of the definition as any private voluntary action for the public good follows. Philanthropy is a private action Although the state is mainly responsible for the welfare of its citizens, philanthropy is driven by private persons. It is in the interest of a strong civil society that the government sets according rules and regulations which promote and support philanthropic behavior. Philanthropic engagement can take organizational forms through the creation of nonprofit organizations but it also encompasses unstructured and singular activities of individuals. Also private for profit corporations (legal person) can act philanthropically. Especially through corporate philanthropy programs, companies show an increasing consciousness to act as responsible citizens. Philanthropy is voluntary Philanthropic behavior is voluntary in the sense that it is not based on normative obligations. People decide for themselves whether their actions should benefit others or not. They have the free choice. It is important to acknowledge though that moral obligations or social expectations can lead to philanthropic behavior. Public pressure or religious obligations such as the zakat in Islam may drive donations. It is also debatable if corporate philanthropy is truly voluntary or due to public pressure. Voluntary in this sense means that no legal or economic sanctions can be exercised if a (legal) person is not acting philanthropically (Payton/Moody, 2008). For the public good The goal of philanthropic actions is the public good. Philanthropic actions address social needs and improve the quality of life of others. They are not restricted to just charitable causes but

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also include humanitarian, health promoting, ecological, pedagogic, scientific or cultural actions. The definition of what is the public good differs among nations. Categories of public good are often defined on the governmental level and presented in tax regulations. The principal aim of philanthropic behavior though is primarily to promote the quality of life of third persons. Payton and Moody (2008: p. 60) even provide a converse argument in stating the philanthropy makes the public good. An ongoing discussion exists on how much self-interest can be part of public beneficial behavior to be called philanthropic. The key measure here is whether the action is seen by the actor as for the public good, even if there is also some self-interest involved. (Payton/Moody 2008: p. 59) Having explained the different aspects of the definition of philanthropy a further step has to be made to allow to operationalize the term for empirical research. As will be described later philanthropic behavior can be seen as variations of donations. People or legal persons donate time, money or other valuables for a public purpose, without receiving anything of the same or higher value. However, before getting into detail we need to look at the different actors within society that either pursue or influence philanthropic behavior. 2.1. Actors and agents of Philanthropy The chosen definition of philanthropy means to concentrate on specific aspects. The actual activities of nonprofit organizations or the influence of the state on philanthropy cannot be analyzed in detail. Nevertheless it is important to shortly discuss their role in relation to philanthropic behavior to confine the scope of this paper. 2.1.1 The State and Philanthropy By definition the state itself cannot act philanthropically. However the state executes political decisions, laws and regulation that have an effect on philanthropic behavior within a society. The state also runs welfare services and provides an important source of income for many nonprofit organizations. To understand the influence of the state on philanthropy an in depth looks at the specific welfare regime, the underlying state ideology and its perception of its citizen is important. The social origin theory provides a conceptual framework to do so (Salamon/Sokolwski/Anheier, 2000). A liberal welfare state that puts emphasis on private (market) solutions to social problems does have a different effect on philanthropy as an encompassing social-democratic welfare regime. The state sets the framework by incentivizing private voluntary action through laws and regulations as well as through public campaigns. A predominance of liberal ideas such as self-responsibility, paired with comparatively low welfare services may lead to increased philanthropic actions as observed in the United States. High income taxes and redistribution policies can have a negative effect on philanthropy. High social spending by the government has shown to have a crowding-out impact on private donations (Brooks 2004). These examples illustrate that philanthropic research has to take the role of the state into account to explain why and how philanthropy is pursued. Studies that ask for motives behind

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giving lack an important explanatory variable if they do not relate to the context in which public beneficial behavior actually takes place. There is a general need to explore the relationship in between governmental policies, social spending and state ideology with philanthropy more deeply, which is beyond the scope of this paper. However, for a better conceptualization of philanthropy as research framework this will be a necessary step. 2.1.2. Nonprofit Organizations and Philanthropy Nonprofit organizations are the most prevalent recipients of philanthropic behavior. People either volunteer in NPO or donate goods or money to them. Philanthropy is one form of income of private nonprofit organizations (Salamon 1992). Many depend on private support and would not be able to continue their activities if that source of income ceased. Most NPO that do not provide services for their own account pursue public beneficial causes. Their primary goal is to promote the welfare of others, by e.g. providing social services, supporting cultural activities or promoting human rights. The status of being a public beneficial organization is often related to tax regulations. Public administration have developed different criteria to assess NPO and to allow tax deductions for donors to incentivize support of their operations. The Johns Hopkins Comparative Nonprofit Sector Project provides a structural operational definition of NPO (Salamon/Anheier, 1992). Nonprofit organizations are: Organized Private Self-governing Non-profit-distributing Voluntary

The definition above shows many resemblances with the definition of philanthropy. The close relation becomes evident. NPO do not only act philanthropically but also provide the platform for philanthropic behavior. The predominant institutional form for philanthropic actions that is at the centre of attention by scholars are foundations (Harrow 2010). In recent years a number of publications dealing with methods and strategies of foundations to serve the public good have been published. Even some regard them only as catchwords, new concepts such as catalytic (Kramer 2009) or creative (Anheier/Leat 2006) philanthropy have attracted scholarly attention. They refer to the power of foundations to develop granting schemes or operational programs that can test out different assumptions and innovative solutions to social problems. New methods are supposed to create more social impact. In regards to the aim of this paper a comprehensive discussion on the diversity and complex roles of NPO for philanthropy is not possible. Here, we will concentrate on voluntary giving in forms of donations of time, money or goods. In that sense we will only include foundations as active agents of philanthropy from within the NPO sector.

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The interdependencies of state legislations, the third sector and private giving should be analyzed in depth through to further elaborate philanthropy as research model. Especially the dual role of NPO in enabling and engaging in philanthropic actions is of particular interest. 2.1.3. Corporate Philanthropy The principal aim of corporations is to generate profits through economic activities (Friedmann, 1970). In a market economy these organizations generally behave investor oriented. However, many for profit organizations also pursue philanthropic activities. A distinction has to be made in between corporate social responsibility and corporate philanthropy. As Caroll (2004) and others have pointed out, even not legally forced to do so, corporations should act as responsible citizen within society. To fulfill labor standards, treat worker with dignity and to limit negative effects on the environment should be seen as normal (social) responsibility of corporations. They have to comply with the moral obligation to do what is right and fair. Ethical or corporate social responsibility means to do what is expected by global stakeholders, and philanthropic responsibility means to do what is desired by global stakeholders (Caroll 2004: p. 116) Corporate philanthropy thus is closely connected with the concept of corporate citizenship (Habisch 2004). The most common forms of corporate philanthropy are donations of money or products but also donation of time. Some companies have developed corporate volunteering programs. Usually those are organized as volunteer days, where all employees assist in the operation of a nonprofit organization. Other possibilities are that the company is providing its services for free or that employees are allowed to volunteer in the organization of their choice for up to five days during their regular working time. Consultancy firms often have some pro bono clients that are not charged. Lately, a strong emphasis is put on the term strategic philanthropy (Porter/Kramer 2002). The case is made that through philanthropy competitive advantages can be gained. Indeed there are examples where companies promote their philanthropic activities in the general public offensively. Not only are they striving to increase their reputation but, in some cases, also want to develop new markets. To draw a clear distinction of what kind of public beneficial activities by corporations are purely driven by a sense of responsibility and which are aimed primarily to benefit the corporation seems difficult. In our understanding of the term philanthropy as described above, the main aim has to be to increase the welfare of third parties. The underlying motive cannot be selfish. No return on investment of same of higher value can be expected. But just as with individual forms of philanthropy, such as volunteering, benefits that arise out of working for public good cannot be precluded. For the goal of this paper, to provide a systematic overview about philanthropy in Switzerland, we focus our analysis on money, time and goods donations. A more elaborated theoretical

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framework of philanthropy would have to include a more extensive discussion on the underlying goals of corporate philanthropy. 2.1.4. Philanthropy as intersection of the different sectors of society The provided explanation of philanthropy has shown that all sectors of society influence or pursue philanthropic behavior. Individuals are the natural agents of philanthropy. But also for profit organizations and nonprofit organizations may act for the public good. The state can set incentives to support philanthropy by offering tax deductions. Social spending and the welfare regime in place influence donation behavior. In this sense philanthropy can be seen as intersection of all sectors of society. As umbrella concept the different activities and roles of the sectors are taken into account. Philanthropy touches all sectors as illustrated below. To provide an exhaustive picture of philanthropy within a nation first the historical background has to be set. The dominant ideology of the role of the state in providing welfare, supporting cultural, scientific, social or humanitarian causes has to be explained. Only then can we systematically look at individual and corporate philanthropic behavior.

Illustration 1: Philanthropy as sectoral intersection (own illustration)

2.2. Forms of philanthropic behavior Philanthropic actions can be carried out in different ways. However, one can regard each philanthropic action as variation of a donation. A (legal) person gives or shares something without receiving anything of same or higher value. From an action oriented viewpoint one can differentiate in between time, money or goods donation. The decision on how to act philanthropic depends on the resources and capabilities one possesses as well as the options organizations provide for formal volunteering or other forms of donations. Donations can be further subdivided by their specific occurrence. Monetary donations range from singular contributions to setting up foundations. In the case of volunteering the most common differentiation is made in between formal and informal volunteering. Following

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illustration shows different forms of donations. Each will be explained shortly. It is important to note that philanthropic behavior often is a mix of monetary, time and in kind donations.
Philanthropic action

Monetary donation

Time donation

In kind donation

Single donation

Periodic donation

Legacy

Social Investment

Foundation

Informal

Formal

Illustration 2: Action oriented perspective on philanthropy (own illustration)

2.2.1 Monetary donations For most nonprofits, private donations constitute an important source of income. Products and services that they provide may not be marketable for prices that cover the costs of their operations. Fundraising remains a critical duty for many nonprofits. The competition for funds leads to even more sophisticated communication strategies which in return mean that the costs for each dollar raised increase (Purtschert, 2006). In the illustration above forms of monetary donations are sequenced according to the complexity of their implementation. A single donation can be done spontaneously and on the spot, establishing a foundation though needs deliberate steps and the involvement of a lawyer. Single donations are one of the most common forms of philanthropic action. Often they are triggered by fundraising activities of nonprofits (e.g. direct mail). Peaks in donations can be observed around religious holidays or after natural disasters (Stadelmann-Steffen et al., 2007). But also spontaneous and on the spot donations for poor or homeless people in need are quite common. Periodic donations show a sign of commitment to a specific cause. By choosing a certain organization or problem field, one expresses a degree of sensitivity about the issue to be encountered. Periodic or regular donations allow planning security for the recipients. Membership schemes can include additional benefits such as receiving journals or reduced fees for services to make periodic donations more compelling. In societies where older generations have accumulated great wealth, large amounts of money will be inherited within the next years. Estimations in Switzerland have calculated a mind breaking sum of 900 billion Swiss Francs to be passed on within the next decade (Mder/Streuli, 2002). It is not surprising though that many NPO expand their legacy marketing in order to cap a part of this wealth (Purtschert, 2002). Social investments constitute a special type of donation. The donor rather than just giving away money invests in a social cause, expecting reports of tangible outcomes. Social investments

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often include time donations. The investor offers knowledge and consulting to help reach a predefined goal. Not monetary - but social return on investment is expected. The creation of a foundation is another special type of money donation. The founder usually has to dedicate (donate) a large amount of money in order to set up a foundation. He or she does not have any personal access to the money afterwards. Theoretically this money or the interest the money generates is tied to a specific cause for eternity. Many foundations have to keep their endowment stable. Foundations are subject to supervision by government authorities that have to certify that the foundation is using the dividends from the endowment as specified in their bylaws (von Schnurbein, 2009). 1.3.2 Time donations As mentioned earlier, philanthropy does not depend on the private wealth of a person. Monetary donations only constitute one part of philanthropic actions. Without all the volunteers that donate their time for public beneficial causes, many nonprofit organizations would not be able to operate. Putnam (1993), and long before de Tocqueville (1840), have shown the relevance of volunteerism for democracy and the creation of social capital. Volunteerism is the kit that welds society together. A common differentiation is the distinction in between formal and informal voluntarism. While the former is carried out in formal settings (NPO like Greenpeace or the Red Cross), informal volunteering includes all the gestures and services outside formal organizations. Examples for informal volunteering include neighborhood help or the young man that carries home groceries for an elderly lady (Stadelmann-Steffen et al. 2007). Informal voluntarism was only included into research a short while ago. It does not encompass any help or support directed towards family members or just any unpaid activity. To qualify as a philanthropic action the beneficiaries need to be third persons. A special case of formal voluntarism is the acceptance of an honorary position. With a formal position regular and accountable commitment is expected. Additional responsibilities and decision making power might be attached. 1.3.3 In-kind donations In-kind donations constitute another form of philanthropic action. Under this category all forms of donations that cannot be attributed to money or time donations can be subsumed. The range and diversity of goods that are being donated for the public good makes it hard to really measure their actual value. Companies can give away products for free or subsidized prices. They may also offer the use of their infrastructure or transport vehicles to support the operations of NPO. Individuals and companies donate real estate to foundations or art collections to museums. Blood and organ donations might be the most valuable contribution one can make for seriously sick people. But also the more common cloth collection or soup kitchens are forms of in kind donations.

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One can argue that all these goods do have a market price and hence should be labeled as monetary donations. This is possible in some cases. On the other hand there are many goods whose value is difficult to calculate. Knowledge transfer being another good example. Research has yet to refine the methodical instruments that can measure the value of in-kind donations in a reasonable way. There is a lack of empirical knowledge about value and motives of in-kind donations. 2. Motives of philanthropic actions Many potential motivators of philanthropic action exist (Sulek 2001b). Theories about giving can be found in many scientific disciplines (Bekkers/Wiepking 2010). Micro perspectives look at individuals and their decisions to donate. Macro perspectives look at the environment of philanthropic behavior and the relation in between structure and action. Especially research from economics, sociology, anthropology and psychology has added to our understanding of philanthropic behavior (Nadai, 1996). A general discussion that is prevalent in all disciplines is the relation of self interest and public benefit. An absolute altruistic action would mean that the donor sacrifices his or her own well being (or time/wealth) in order to improve the well being of others (Monroe, 1994). The donor does not gain anything from his action. Altruism therefore is an expression of a deeply embedded inner morality often based on religious beliefs (even though not necessarily). In contrast to altruism, purely selfish actions can be regarded. These can per se not be called philanthropic. Philanthropic motives include altruistic but also selfish components. A monetary donation surely is a good act but also may lead to tax reductions for the donor. Arts donations to museums also mean an increased reputation for the donor, a high donation to an opera house may bring the privilege of access to the best seats in the house. Volunteering may lead to an increase of social capital and skill development and hence includes benefits for the volunteer. To draw a clear distinction of how much self-interest can be part of philanthropic actions seems difficult. However, to be called philanthropic the main motive behind such an action must be the betterment of the public good. To be attractive philanthropy does and should include some benefits for the donor (may it just be the cognitive reward of feeling better or increased reputation) but at no means constitute its main reason. Generally speaking, giving is a mix of altruism and self-interest (Adloff, 2005). Research about reciprocity (e.g. Kolm, 2006), has added to our understanding of the reasons for giving. Philanthropic behavior is rarely based on just one motive. Bekkers and Wiepking (2010), by reviewing more than 500 articles of different disciplines, identified eight mechanisms as the most important drivers of monetary donations. However, when looking at the reasons for philanthropic behavior it is more appropriate to speak of motive bundles. Bhle (2001) differentiates in between five main groups of motives:

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Altruistic motives (moral obligation and public beneficial responsibility) Gemeinschaft orientation (communication and social integration) Designing/shaping society (active/representative participation, decision making) Problem orientation (dedication to a specific social problem) Self-development (skill development, self fulfillment)

This relatively rough differentiation serves as a conceptual tool to look at the motives behind philanthropic behavior. Most of the times, two or more motives complement each other. Selfdevelopment and public beneficial actions might come hand in hand. The motive bundles may even contain conflicting elements. The integration into social networks, skill development or the ability to actively take part in finding solutions for social problems often constitute more powerful drivers of engagement than social obligations or symbolic rewards. It is important to mention though, that the actual tipping point to engage in philanthropy is often triggered by a personal request from the person`s existing social network (Stadelmann-Steffen et al. 2007). A prerequisite of philanthropic behavior is the awareness of need (Bekkers/Wiepking 2010) 3. Summary To conceptualize philanthropy as research framework the following steps are suggested. First, a clear definition of philanthropy has to be presented. Many scholars take the term for given. Some equal philanthropy with charitable donations. Others concentrate on foundational strategies to create social impact. Even though these are aspects of philanthropy, without setting the stage by explaining the actual meaning of philanthropy, no clarity how findings relate to the overall understanding of philanthropy can be achieved. In our case we build on the definition by Payton as voluntary action for the public good, emphasizing their private nature. This allows us to identify the relevant agents of society that influence or pursue philanthropy. The roles of the state and nonprofit organizations were briefly discussed. It could be shown that philanthropy can be seen as intersection of all sectors of society. The state influences public beneficial behavior and can set incentives for individuals and private companies to act in the interest of the public. Social spending and the underlying ideology of the welfare regime do have an impact on giving, which needs to be explored further. Corporations are also agents of philanthropy, even though the underlying motives can be targeted to benefit the companies themselves. In order to operationalize philanthropy, voluntary action for the public good was further subdivided into forms of donations. Giving of time, money or goods can be seen as variations of philanthropic behavior. Bhle`s differentiation of groups of motives was proposed to examine the reasons for public beneficial behavior. Applying this conceptualization allows to synthesize empirical studies about philanthropic actions and to answer the question who acts how and why for the public good. The theoretical and methodic framework of the research model described is yet to be fully developed. As noted above, this is the first attempt in Switzerland to do so after all. An upcoming challenge will be to refine this model while trying to keep its conceptualization open enough to allow

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comparative research. A more detailed discussion about the utility of this research framework, its application and necessary improvements will be provided at the end of this paper.

4. Philanthropy in Switzerland The German term Philanthropie has yet not found its proper place in academic discourse. As mentioned, studies that look at different facets of public beneficial behaviors, such as volunteering or monetary donations, do not relate to the concept of philanthropy. This may also be due to the general trend, that terms that are coined and already widely applied in the United States and the UK, only find its way in the academic discourse in Switzerland with a time lag. The only exception so far is the study called Philanthropy in Switzerland by the authors of this paper. There, all relevant empirical data on philanthropic behavior is systematically combined and analyzed to show an exhaustive picture of private voluntary action for the public good. As mentioned, the conceptual framework still needs some refinement. However, given that this is the first systematic approach the presented results can already been seen as a substantial advancement. Following table shows the empirical studies that were integrated into the study. 1

Name Volunteering Volunteer-Monitor Switzerland 2007 Volunteers in Switzerland: Influencing factors and typical profiles Voluntarism as social capital of society. A comparison of the Swiss cantons A mutual relationship in a double sense Voluntary work in Switzerland. Basic data Public spirit and selfinterest. Volunteering in the social sector

Authors

Year

Method

StadelmannSteffen/ Freitag/ Bhlmann Nollert/ Huser

2007

Descriptive Analysis based on telephone interviews (guided interview, randomrandom sample) Multivariate data analysis from the module unpaid work of the Swiss labor force survey 2000 Multivariate data analysis from the module unpaid work of the Swiss labor force survey 2000 Multivariate data analysis from the module unpaid work of the Swiss labor force survey 2000 Descriptive analysis from the module unpaid work of the Swiss labor force survey 2000 Structural analysis of: 1. Expert interviews with NPO staff that work with volunteers 2. Problem focused interviews with 25 volunteers 3. Standardized written survey

7410

2007

17800

Bhlmann/ Freitag

2007

17800

Schulz/ Hfliger Musgrove Mnzel et al.

2007

17800

2004

17800

Nadai

1996

593

For the benefit of the reader, the titles were translated into English. Original titles can be found at the end of the document.

Philanthropy in Switzerland: a systematic research approach

Determinants of voluntary work Unpaid but still work. Expenditure of time for house and family work, honorary position, voluntary work and neighborhood help Monetary donation The Swiss Donation Market 2008 Volunteering Monitor Switzerland 2007 Donation Monitor The economy of donations Nonprofit Organizations Income sources of NPO with ZEWO certificate The Third Sector in Switzerland Foundation The Swiss Foundation Sector About the business orientation of Swiss foundations Payments to members of foundational boards Starting a foundation in Switzerland Swiss Foundations An analysis of the Swiss foundation landscape Corporate Philanthropy Corporations in Switzerland assume social responsibility Charity-Gala or collecting box? Swiss corporations take volunteering seriously Wehner/ Lorenz/ Gentile Purtschert/ von Schnurbein/ Bittel Amman 2009 Descriptive data analysis based on online surveys von Schnurbein 2009 ZEWO-Statistik 2008 Helmig/Gmr/ Lichtsteiner (eds.) 2008 2010 Wagner/ Beccarelli StadelmannSteffen/ Freitag/ Bhlmann Gfs-Zrich Gssow 2008 2007 Descriptive analysis based on structured telephone interviews Descriptive analysis based on structured telephone interviews Schmid 2000

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n.a.

Bhlmann/ Schmid

1997

Multivariate data analysis from the module unpaid work of the Swiss labor force survey 1997 Multivariate data analysis from the module unpaid work of the Swiss labor force survey 1997

n.a.

2000 7410

2008 2007

Descriptive analysis based on face-to-face interviews Written-, Online- and face-to-face interviews (98% from German speaking part) Multivariate analysis

1530 1231

Descriptive analysis based on questionnaires sent to member organizations Country study for John Hopkins Comparative Nonprofit Sector Project

431 n.a.

Michalski et al.

2008

Descriptive analysis based on data from the commercial register, the foundation oversight office and own data bank Descriptive data analysis based on written surveys Descriptive data analysis based on written surveys Descriptive data analysis based on face-toface interviews Descriptive data analysis based on data from the national and cantonal foundation oversight offices

12000

209

Lichtsteiner/ Lutz Helmig/ Hunziker Steinert

2008 2007 2000

279 148 ~9700

2000

2007 2004

Descriptive data analysis based on written surveys (SME in Zurich region) Descriptive data analysis based on written surveys

263 641

Philanthropy in Switzerland: a systematic research approach

Cultivating and supporting voluntarism by Swiss corporations Schaller/ Bachmann 2004

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72

Qualitative data analysis based on telephone interviews

4.1. Philanthropic tradition and welfare state The Swiss welfare system is heavily influenced by liberal ideas and the notion of self-aid. Switzerlands social system is based on the values of independence, individual responsibility and is following a subsidiary principle. The state however, is seeking positive relationships with NPO and depends on their service provision to a large extend. Social spending or subsidies for public beneficial NPO are limited though. The state supports NPO through incentives such as tax exemptions and the possibilities of donors to deduct donations from the income tax (20% 100% depending on the canton). However some services are directly funded through mandates or so called service agreements. Many NPO try to tap the state budget as a source of funding. Cooperations with NPO tend to be strong on a regional level. Switzerland has a strong civil society where much of the power is in the hands of the people. NPO and citizens also have an influential role in the law making process. However, self serving NPO or lobby groups have far more influence on public policy than public beneficial NPO (Nollert/Budowski, 2009). The federalist political structure of Switzerland has lead to different laws and regulations in the cantons. Attempts are being made to harmonize the relationships in between the governments and NPO on a national level. On national and local level volunteering is supported through internet platforms and the public promotion of volunteering as an important pillar of society. There is also a parliamentary working group about voluntarism. Philanthropy has a long tradition in Switzerland. The notion of self aid and a relatively weak state have led to numerous institutions that were founded to benefit the poor or disadvantaged. Even before the state set up similar institutions, numerous private initiatives with social purposes were started (Armingeon, 1996). Some look back to a history of more than 500 years. The standard example in Swiss literature is the hospital Inselspital in Bern. In 1354 Anna Seiler dedicated her legacy to create a hospital for bedridden and people of narrow circumstances. The hospital has developed to one of the most outstanding hospitals in Switzerland and is still organized as a foundation (von Schnurbein, 2009) Even differences in welfare politics are perceivable among the political parties in Switzerland, none is seriously challenging the idea of a liberal welfare regime. Private solutions and initiatives are preferred over state interventions. 4.2. Monetary Donations Monetary donations have to be seen in this context. A deeply embedded liberal ideology in Switzerland emphasizes citizens responsibility to act philanthropic. Swiss citizens donate relatively much. The income/donations ratio is the second highest in the world, right after the Unites States. About three quarters of the population above 15 years of age donate at least once a year. Over 80% of the citizens above 50 years of age donate regularly. The total sum of

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donations from individuals is estimated to equal a sum of approximately 1,3 billion Swiss Francs per year. Another 300 million Swiss Francs per year are dedicated to charitable purposes by legacies. Factors that influence donation behavior positively are education and marital status. Citizens that hold a university degree, are married and have children are most likely to donate. There are strong regional differences in between donation behavior of the German speaking part of Switzerland and the French speaking part. Citizens living in French speaking cantons donate less than their German speaking counterparts. No empirical studies that can explain these differences are available but some suggest cultural differences as main reason. Most donations go to charitable organizations that provide social services followed by faith based organizations as well as human rights and environmental NPO (Stadelmann-Steffen et al., 2007). Sadly, no data about the reasons why donors choose to support a specific organization or social concern is available. Corporations in Switzerland donate around one billion Swiss Francs per year. The most recent study from Wehner et al. (2009) is based on a sample of 2.000 corporations. Three quarters of the sample donate regularly for public beneficial causes. Larger corporations with more than 250 employees tend to be more likely to donate (93%) than smaller companies. However the sample showed that also 75% of small and medium enterprises (SME) donate money. Regional difference could be observed. 79% of the companies based in the German speaking part of Switzerland donated while only 55% in the French speaking part and 45% in the Italian speaking part confirmed that they give money for charitable purposes. Smaller companies based in more rural areas are more likely to support regional NPO such as hospitals or services for people with disabilities. Larger corporations are more likely to donate for larger NPO (aiming at poverty reduction, global health, disaster relief, environmental protection). There are around 12.000 public beneficial foundations in Switzerland. The total amount of their assets is estimated to be worth 50 billion Swiss Francs. Approximately 10% of the foundations hold 80% of these assets. The majority of the foundations is of medium or small size. The sum of grants given by foundations equals around one billion Swiss Francs per year. Around 80% of all public beneficial foundations were founded in the last 20 years (von Schnurbein, 2009). Due to the liberal laws regarding the obligations to publish financial data or grant recipients, there is no adequate data and only few empirical studies exist. SwissFoundations members report to support social active NPO (41%), culture and arts (16%), science/education/innovation (33%) and other (10%) in 2009. The total amount of private giving can be estimated to equal 3 billion Swiss Francs (von Schnurbein/Bethmann 2009). 4.3. Volunteering The data availability about volunteering has steadily increased over the last years. The two major studies are the Volunteer Monitor and the module unpaid work of the Swiss Labor Force Survey (SLFS). Both calculate a sum of 700-750 million of hours donated by volunteers per year. The value of volunteering in formal organizations is estimated to be worth 31 billion

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Swiss Francs (Farago, 2006). Informal volunteering, outside of organizations is gaining more attention in research. First data is available. Around one quarter of the Swiss populations above 15 years of age volunteer in NPO. A gender difference can be observed. While men are more active in formal organizations (29.9% men, 20.9% women) it is the other way around in informal volunteering. Here women are more active (16.9% men, 20.9% women). Men still tend to have better access to leading honorary positions in the social sector organizations. Education, income and high professional status are positive factors for volunteering. Especially prestigious honorary positions in foundations and associations are mostly awarded to persons with higher social status. The relationship in between volunteering and age can be described as curve linear. While the amount of hours donated increases with age voluntary activities decline after retirement. Most active in formal volunteering is the age group of the 40-54 years old (Stadelmann-Steffen et al., 2007) Organizations that benefit the most from volunteering are sports clubs (14.6%) followed by leisure groups (12.1%) and faith based organizations (7.7%). Only 4.6% of all voluntary work takes place in social and charitable organizations, 1.4% in human rights and environmental organizations. Corporate Volunteering is not yet all too common in Swiss corporations. Only few corporations have started professional programs. However many companies support their employees in pursuing voluntary activities through flexible work hours. Small enterprises do have less flexibility in allowing their employees to pursue voluntary activities during work hours. However, especially consultancies, law firms and tax advisors often provide pro bono services for NPO. Larger corporations such as Novartis or KPMG organize voluntary days once a year where the majority of their employees work one day for a charitable cause in a NPO. 42% of the corporations in the sample from Wehner et al. (2009) answered that they try to incentivize their employees to participate in their corporate philanthropy activities. 4.4. In kind donations There is no empirical data about donations of goods in Switzerland. Cloth collections and donations of furniture to the Brockenhaus are quite common though. Also some companies provide their infrastructure or transportation means to support NPO. Some donate products. Especially the pharmaceutical industry in Switzerland has donated life saving vaccines to developing countries. Due to the lack of data no monetary values of goods donations could be calculated. Here a clear need for the new empirical research is given. 4.5. Motives of philanthropic behavior Earlier a distinction in between five basic groups of motives for philanthropic behavior was presented. Generally speaking altruistic and problem oriented motives are present in all forms of philanthropic behavior. Single monetary donations are mostly expressions of altruisms. They may have some elements of social integration when access to a group depends on a large

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donation but this is seldom the case. The Swiss surveys failed to ask why a person has chosen a certain cause or organizations over the other and what motive, thought or person actually triggered their decision to donate. Here more empirical data is necessary. Especially in regard to the perceived responsibility of citizens to support human welfare. As noted above, the underlying ideology that is dominant within a society in regards to the role of government versus other actors in society, on who is responsible in the provision of welfare and other public beneficial causes, influences donation behavior and therefore the motives behind giving. As no deliberate research results are available which include external factors, here only the discussed motives can be presented. For volunteering all motives can be found. Altruistic, egoistic and reciprocal motives are tied closely together. Asked for their reasons to volunteer over 85% of respondents in a Swiss survey affirmed that the joy and happiness volunteering brings motivates them to do so regularly. 76.6% affirmed that they want to bring social change in cooperation with others and 62.9% affirmed their will to be integrated into social networks through volunteering. Decision making power and active participation (52.4%) as well as self development (66.0%) were also dominant motives for volunteering (Stadelmann-Steffen, 2007) As foundations are supposed to exist for eternity it is especially interesting to know more about the motivation of the founders. Often founders are very active in the foundation in its first years. They do not only donate money but a large portion of their time to get the foundation running. Problem oriented motives are dominant. The actual decision to start a foundation is mostly related to the personal biography of the founder. A study from Helmig and Hunziker (2006) questioning 120 foundations showed that the founders had a sense of responsibility for humanity (81%). Most had been very fortunate in their own lives and felt that they need to pay back something to society. They also mentioned their will to help solving a concrete problem (72%). Religious beliefs (17%) or acting out of family tradition (11%) were by far less important motives. Philanthropic behavior of corporations in Switzerland seems to be largely motivated by a sense of responsibility as well. Only very few corporations in the sample from Wehner et al. (2009) combine their philanthropic activities with their business operations. Over 50% agreed though, that one reason for the public beneficial activities is increased company reputation (communication). However the will to contribute positively to society and to take on the role as responsible citizen are by far more important drivers for corporate philanthropy. Especially the SME, that constitute more than 80% of the Swiss private sector do not follow selfish but ethical reasons through their philanthropic activities. Altruistic and social integrative motives dominate. The following table shows the dominant motives for each form of philanthropic behavior in Switzerland. It also reaffirms that philanthropic behavior is based on motive bundles rather than single motives.

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Altruistic motives Money/goods donation Volunteering Setting up foundations Corporate Philanthropy X X X

Gemeinschaft orientation (x) X

Designing/ shaping society

Problem orientation X

Selfdevelopment

X X

X X X

X X

Illustration 4: Motives for philanthropic behavior in Switzerland (own illustration)

5. Summary Due to a strong civil society based on liberal values, an affluent society and a relatively weak welfare state there is a strong philanthropic tradition in Switzerland. In sum monetary and time donations in formal organizations are estimated to have a value of 31 billion Swiss Francs. This number is to be seen as an approximate value that needs to be refined by further empirical research. The motivation behind philanthropic actions is mostly based on altruism, social inclusion and the will to take an active part in solving social problems. A strong and large nonprofit sector serves as a powerful philanthropic infrastructure for individuals willing to act philanthropically. Using philanthropy as research concept the study Philanthropy in Switzerland could for the first time aggregate empirical data about the numerous private public beneficial activities in Switzerland. However due to the different methodologies and missing conceptual standards of existing studies Philanthropy in Switzerland only represents a first step in displaying an encompassing picture of Swiss philanthropy. It did show though, that through synthesizing isolated studies of different forms of philanthropic behavior a more vivid and realistic view on private voluntary action for the public good is possible. 6. Discussion Theoretical progress in the literature in the study of philanthropy is limited (Bekkers/Wiepking 2010). The provided conceptual outline adds only little to improving this situation. It still lacks academic rigor and a deeper look at the complex relationships in between structural and individual factors that influence philanthropic behavior. However, we believe that we have taken a step in the right direction. Especially in Switzerland, where the concept of philanthropy is still relatively unknown, our efforts to put philanthropy on the landscape have already been proven successful. Additionally, we see it as absolutely necessary that the understanding of philanthropy has to resist the risk of being limited to monetary means, such as charitable donations or foundation spending.

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The approach we took can be described as an early form of applied theory testing, even though to speak of a theory is somewhat exaggerated. First we framed the conceptual outline of philanthropy to break down public beneficial behavior into different forms of giving. We then gathered all empirical studies available to synthesize findings in order to answer the question who acts how and why for the public good in Switzerland. By doing so, not only theoretical gaps but also the limits of existing empirical research became evident. To address these weaknesses following improvements are suggested. As noted, to neglect external factors that influence philanthropic behavior, means to leave out explanatory variables. Hence, the structural background and dominant perception about the role of the state in providing welfare and other services for the public good have to be included in the model. However, surveys almost never try to link findings to macro structural factors. Questions that allow evaluating the persons perceived role and responsibility as citizen within a welfare regime are merely asked. Most studies focus on single (often psychological) motives of giving but do not provide an adequate discussion of the role of the state in relation to philanthropic behavior. Also interdisciplinary approaches are rare. The philanthropy scale as proposed by Schyut, Bekkers and Smit (2010) can mean an important step forward but still is in its early development. Methodically it also seems advisable to draw on Third Sector research as conceptualized by the Johns Hopkins Comparative Nonprofit Sector Project (CNP). Here, the analysis of the role of the state and government policies in regard to institutional philanthropic organizations is already far developed. Findings may be used to explain the structural factors that influence individual philanthropic behavior as well. Also the complex roles of nonprofit organizations as providers and enablers of philanthropic activities need to conceptualized better. To allow international comparative research more challenges have to be met. Studies on philanthropy cannot be disconnected from the society in which they occur (Luhmann 1983). The same is true for groups within a society. Many ethnic minority groups have developed strong systems of mutual help within their communities that might not fall under the definition of voluntary action for public good. Reciprocal giving is targeted to advance the economic well being of a specific ethnic group and not the public in general. The challenge will be to find methodical tools that allow taking cultural variances into account while still enabling international comparisons. Efforts such as the Johns Hopkins comparative nonprofit sector project, the civil society index as well as efforts to standardize surveys about volunteering and donation behavior across countries will serve as starting points in this endeavor. However, scholars need to interact more closely to develop research designs that allow to integrate their findings, using philanthropy as common research framework.

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