Philanthropy in Switzerland

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Philanthropy in Switzerland: a systematic research approach

Paper for the 39th annual Conference of theAssociation 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 SchnurbeinCentre for Philanthropy Studies (CEPS)

University of BaselSwitzerland

Contact:[email protected]



Philanthropy in Switzerland: a systematic research approach Page 2 of 22

1. Introduction

The development of a shared definition of philanthropy within an extensive conceptualframework has not been marked. The term philanthropy is used to describe many forms ofpublic beneficial behavior, with a recent strong bias towards large monetary donations bywealthy individuals or big foundations (Harrow 2010, Sulek 2010a). In Switzerland a similardevelopment can be noticed. A recently published study called “Strengthening Philanthropy inSwitzerland” (FONDATION1796, 2010) relates philanthropy exclusively to the activities andvisibility of foundations. At the same time, studies that research voluntarism do not build on theconcept of philanthropy. This is also due to a missing common definition of the term itself. Noattempt has been made so far to research and combine the various forms of philanthropicbehavior systematically.

This paper addresses this weakness in the following manner. Firstly, we develop aconceptualization 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 definitionallows to refine the research concept further and to identify relevant data and existing studiesthat can be synthesized. This section also includes a brief discussion about the role of nonprofitorganizations and the influence of the state on philanthropic behavior. The second part of thepaper 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 andmotivators of philanthropic behavior (Schuyt/Bekkers/Smit 2010).

The term philanthropy is a commonly used expression in the English language. However manystill relate philanthropy with names of extremely wealthy people such as Bill Gates or StephanSchmidheiny who have created big foundations and donated millions of dollars to charitablecauses. While these actions are indeed philanthropic, philanthropy is much more than just largemonetary 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, goodsor ideas. Neighborhood help, unpaid counseling of children or helping an elderly woman to carryback 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 orhaving a positive attitude towards other people. This implies that philanthropic actions aim tohave positive effects for others who benefit from the outcomes. Any person acting that waycan be called a philanthropist (Payton/Moody 2008).






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 areoften defined on the governmental level and presented in tax regulations. The principal aim ofphilanthropic behavior though is primarily to promote the quality of life of third persons. Paytonand Moody (2008: p. 60) even provide a converse argument in stating the “philanthropy makesthe public good”. An ongoing discussion exists on how much self-interest can be part of publicbeneficial behavior to be called philanthropic. The key measure here is whether the action isseen 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 bemade to allow to operationalize the term for empirical research. As will be described laterphilanthropic behavior can be seen as variations of donations. People or legal persons donatetime, money or other valuables for a public purpose, without receiving anything of the same orhigher value. However, before getting into detail we need to look at the different actors withinsociety 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 actualactivities of nonprofit organizations or the influence of the state on philanthropy cannot beanalyzed in detail. Nevertheless it is important to shortly discuss their role in relation tophilanthropic 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 politicaldecisions, 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 manynonprofit organizations.

To understand the influence of the state on philanthropy an in depth looks at the specificwelfare regime, the underlying state ideology and its perception of its citizen is important. Thesocial 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 socialproblems does have a different effect on philanthropy as an encompassing social-democraticwelfare regime. The state sets the framework by incentivizing private voluntary action throughlaws and regulations as well as through public campaigns. A predominance of liberal ideas suchas self-responsibility, paired with comparatively low welfare services may lead to increasedphilanthropic actions as observed in the United States. High income taxes and redistributionpolicies can have a negative effect on philanthropy. High social spending by the governmenthas 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 intoaccount to explain why and how philanthropy is pursued. Studies that ask for motives behind




giving lack an important explanatory variable if they do not relate to the context in which publicbeneficial behavior actually takes place. There is a general need to explore the relationship inbetween governmental policies, social spending and state ideology with philanthropy moredeeply, which is beyond the scope of this paper. However, for a better conceptualization ofphilanthropy 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. Peopleeither volunteer in NPO or donate goods or money to them. Philanthropy is one form of incomeof private nonprofit organizations (Salamon 1992). Many depend on private support and wouldnot 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 beneficialorganization is often related to tax regulations. Public administration have developed differentcriteria to assess NPO and to allow tax deductions for donors to incentivize support of theiroperations. The Johns Hopkins Comparative Nonprofit Sector Project provides a structuraloperational 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 closerelation becomes evident. NPO do not only act philanthropically but also provide the platformfor philanthropic behavior.

The predominant institutional form for philanthropic actions that is at the centre of attention byscholars are foundations (Harrow 2010). In recent years a number of publications dealing withmethods 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) orcreative (Anheier/Leat 2006) philanthropy have attracted scholarly attention. They refer to thepower of foundations to develop granting schemes or operational programs that can test outdifferent assumptions and innovative solutions to social problems. New methods are supposedto create more social impact.

In regards to the aim of this paper a comprehensive discussion on the diversity and complexroles of NPO for philanthropy is not possible. Here, we will concentrate on voluntary giving informs of donations of time, money or goods. In that sense we will only include foundations asactive agents of philanthropy from within the NPO sector.




The interdependencies of state legislations, the third sector and private giving should beanalyzed in depth through to further elaborate philanthropy as research model. Especially thedual 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 corporatephilanthropy. 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, treatworker 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 whatis right and fair. Ethical or corporate social responsibility means to “do what is expected byglobal stakeholders”, and philanthropic responsibility means to “do what is desired by globalstakeholders” (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 orproducts but also donation of time. Some companies have developed corporate volunteeringprograms. Usually those are organized as volunteer days, where all employees assist in theoperation 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 choicefor up to five days during their regular working time. Consultancy firms often have some probono clients that are not charged.

Lately, a strong emphasis is put on the term “strategic philanthropy” (Porter/Kramer 2002). Thecase is made that through philanthropy competitive advantages can be gained. Indeed there areexamples where companies promote their philanthropic activities in the general publicoffensively. Not only are they striving to increase their reputation but, in some cases, also wantto develop new markets.

To draw a clear distinction of what kind of public beneficial activities by corporations are purelydriven by a sense of responsibility and which are aimed primarily to benefit the corporationseems difficult. In our understanding of the term philanthropy as described above, the main aimhas to be to increase the welfare of third parties. The underlying motive cannot be selfish. Noreturn on investment of same of higher value can be expected. But just as with individual formsof philanthropy, such as volunteering, benefits that arise out of working for public good cannotbe 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




framework of philanthropy would have to include a more extensive discussion on theunderlying 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 orpursue philanthropic behavior. Individuals are the natural agents of philanthropy. But also forprofit organizations and nonprofit organizations may act for the public good. The state can setincentives to support philanthropy by offering tax deductions. Social spending and the welfareregime in place influence donation behavior.

In this sense philanthropy can be seen as intersection of all sectors of society. As umbrellaconcept the different activities and roles of the sectors are taken into account. Philanthropytouches 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 thestate in providing welfare, supporting cultural, scientific, social or humanitarian causes has to beexplained. Only then can we systematically look at individual and corporate philanthropicbehavior.

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 eachphilanthropic action as variation of a donation. A (legal) person gives or shares somethingwithout receiving anything of same or higher value. From an action oriented viewpoint one candifferentiate in between time, money or goods donation. The decision on how to actphilanthropic depends on the resources and capabilities one possesses as well as the optionsorganizations provide for formal volunteering or other forms of donations.

Donations can be further subdivided by their specific occurrence. Monetary donations rangefrom singular contributions to setting up foundations. In the case of volunteering the mostcommon differentiation is made in between formal and informal volunteering. Following




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

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 andservices that they provide may not be marketable for prices that cover the costs of theiroperations. Fundraising remains a critical duty for many nonprofits. The competition for fundsleads to even more sophisticated communication strategies which in return mean that thecosts for each dollar raised increase (Purtschert, 2006). In the illustration above forms ofmonetary donations are sequenced according to the complexity of their implementation. Asingle donation can be done spontaneously and on the spot, establishing a foundation thoughneeds deliberate steps and the involvement of a lawyer.

Single donations are one of the most common forms of philanthropic action. Often they aretriggered by fundraising activities of nonprofits (e.g. direct mail). Peaks in donations can beobserved 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 quitecommon.

Periodic donations show a sign of commitment to a specific cause. By choosing a certainorganization or problem field, one expresses a degree of sensitivity about the issue to beencountered. Periodic or regular donations allow planning security for the recipients.

Membership schemes can include additional benefits such as receiving journals or reducedfees for services to make periodic donations more compelling.

In societies where older generations have accumulated great wealth, large amounts of moneywill be inherited within the next years. Estimations in Switzerland have calculated a mindbreaking sum of 900 billion Swiss Francs to be passed on within the next decade(Mäder/Streuli, 2002). It is not surprising though that many NPO expand their legacy marketingin 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

Philanthropic action

Monetary donation

Single

donation

Periodic

donationLegacy

Social

InvestmentFoundation

Time donation

Informal Formal

In kind

donation




often include time donations. The investor offers knowledge and consulting to help reach apredefined 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 doesnot have any personal access to the money afterwards. Theoretically this money or the interestthe money generates is tied to a specific cause “for eternity”. Many foundations have to keeptheir endowment stable. Foundations are subject to supervision by government authorities thathave to certify that the foundation is using the dividends from the endowment as specified intheir 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 volunteersthat donate their time for public beneficial causes, many nonprofit organizations would not beable to operate. Putnam (1993), and long before de Tocqueville (1840), have shown therelevance of volunteerism for democracy and the creation of social capital. Volunteerism is thekit that welds society together.

A common differentiation is the distinction in between formal and informal voluntarism. Whilethe former is carried out in formal settings (NPO like Greenpeace or the Red Cross), informalvolunteering includes all the gestures and services outside formal organizations. Examples forinformal 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 encompassany help or support directed towards family members or just any unpaid activity. To qualify as aphilanthropic action the beneficiaries need to be third persons.

A special case of formal voluntarism is the acceptance of an honorary position. With a formalposition regular and accountable commitment is expected. Additional responsibilities anddecision making power might be attached.

1.3.3 In-kind donations

In-kind donations constitute another form of philanthropic action. Under this category all formsof donations that cannot be attributed to money or time donations can be subsumed. The rangeand diversity of goods that are being donated for the public good makes it hard to reallymeasure 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 theoperations of NPO. Individuals and companies donate real estate to foundations or artcollections to museums. Blood and organ donations might be the most valuable contributionone can make for seriously sick people. But also the more common cloth collection or soupkitchens are forms of in kind donations.




One can argue that all these goods do have a market price and hence should be labeled asmonetary donations. This is possible in some cases. On the other hand there are many goodswhose value is difficult to calculate. Knowledge transfer being another good example. Researchhas yet to refine the methodical instruments that can measure the value of in-kind donations ina reasonable way. There is a lack of empirical knowledge about value and motives of in-kinddonations.

2. Motives of philanthropic actions

Many potential motivators of philanthropic action exist (Sulek 2001b). Theories about giving canbe found in many scientific disciplines (Bekkers/Wiepking 2010). Micro perspectives look atindividuals and their decisions to donate. Macro perspectives look at the environment ofphilanthropic behavior and the relation in between structure and action. Especially researchfrom 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 publicbenefit. An absolute altruistic action would mean that the donor sacrifices his or her own wellbeing (or time/wealth) in order to improve the well being of others (Monroe, 1994). The donordoes not gain anything from his action. Altruism therefore is an expression of a deeplyembedded inner morality often based on religious beliefs (even though not necessarily). Incontrast to altruism, purely selfish actions can be regarded. These can per se not be calledphilanthropic.

Philanthropic motives include altruistic but also selfish components. A monetary donationsurely is a good act but also may lead to tax reductions for the donor. Arts donations tomuseums also mean an increased reputation for the donor, a high donation to an opera housemay bring the privilege of access to the best seats in the house. Volunteering may lead to anincrease 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 seemsdifficult. However, to be called philanthropic the main motive behind such an action must bethe betterment of the public good. To be attractive philanthropy does and should include somebenefits 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 ofaltruism and self-interest (Adloff, 2005). Research about reciprocity (e.g. Kolm, 2006), hasadded to our understanding of the reasons for giving.

Philanthropic behavior is rarely based on just one motive. Bekkers and Wiepking (2010), byreviewing more than 500 articles of different disciplines, identified eight mechanisms as themost important drivers of monetary donations. However, when looking at the reasons forphilanthropic behavior it is more appropriate to speak of motive bundles. Böhle (2001)differentiates in between five main groups of motives:




• 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 behindphilanthropic behavior. Most of the times, two or more motives complement each other. Self-development and public beneficial actions might come hand in hand. The motive bundles mayeven contain conflicting elements. The integration into social networks, skill development orthe ability to actively take part in finding solutions for social problems often constitute morepowerful drivers of engagement than social obligations or symbolic rewards. It is important tomention though, that the actual tipping point to engage in philanthropy is often triggered by apersonal request from the person`s existing social network (Stadelmann-Steffen et al. 2007). Aprerequisite 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 foundationalstrategies to create social impact. Even though these are aspects of philanthropy, withoutsetting the stage by explaining the actual meaning of philanthropy, no clarity how findings relateto 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 shownthat philanthropy can be seen as intersection of all sectors of society. The state influencespublic beneficial behavior and can set incentives for individuals and private companies to act inthe interest of the public. Social spending and the underlying ideology of the welfare regime dohave an impact on giving, which needs to be explored further. Corporations are also agents ofphilanthropy, even though the underlying motives can be targeted to benefit the companiesthemselves.

In order to operationalize philanthropy, voluntary action for the public good was furthersubdivided into forms of donations. Giving of time, money or goods can be seen as variationsof philanthropic behavior. Böhle`s differentiation of groups of motives was proposed to examinethe reasons for public beneficial behavior.

Applying this conceptualization allows to synthesize empirical studies about philanthropicactions and to answer the question who acts how and why for the public good. The theoreticaland methodic framework of the research model described is yet to be fully developed. Asnoted 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




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. Asmentioned, studies that look at different facets of public beneficial behaviors, such asvolunteering or monetary donations, do not relate to the concept of philanthropy. This may alsobe due to the general trend, that terms that are coined and already widely applied in the UnitedStates 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 systematicallycombined and analyzed to show an exhaustive picture of private voluntary action for the publicgood. As mentioned, the conceptual framework still needs some refinement. However, giventhat this is the first systematic approach the presented results can already been seen as asubstantial advancement. Following table shows the empirical studies that were integrated intothe study.1

Name Authors Year Method N

Volunteering

Volunteer-MonitorSwitzerland 2007

Stadelmann-Steffen/ Freitag/ Bühlmann

2007 Descriptive Analysis based on telephoneinterviews (guided interview, random-random sample)

7‘410

Volunteers inSwitzerland: Influencingfactors and typicalprofiles

Nollert/ Huser 2007 Multivariate data analysis from the module„unpaid work“ of the Swiss labor forcesurvey 2000

17‘800

Voluntarism as socialcapital of society. Acomparison of the Swisscantons

Bühlmann/ Freitag 2007 Multivariate data analysis from the module„unpaid work“ of the Swiss labor forcesurvey 2000

17‘800

A mutual relationship in a

double sense

Schulz/ Häfliger

Musgrove

2007 Multivariate data analysis from the module

„unpaid work“ of the Swiss labor forcesurvey 2000

17‘800

Voluntary work inSwitzerland. Basic data

Münzel et al. 2004 Descriptive analysis from the module„unpaid work“ of the Swiss labor forcesurvey 2000

17‘800

Public spirit and self-interest. Volunteering inthe social sector

Nadai 1996 Structural analysis of:1. Expert interviews with NPO staff thatwork with volunteers2. Problem focused interviews with 25volunteers3. Standardized written survey

593

1

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




Determinants ofvoluntary work

Schmid 2000 Multivariate data analysis from the module„unpaid work“ of the Swiss labor forcesurvey 1997

n.a.

Unpaid – but still work.Expenditure of time for

house and family work,honorary position,voluntary work andneighborhood help

Bühlmann/ Schmid

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

survey 1997

n.a.

Monetary donation

The Swiss DonationMarket 2008

Wagner/ Beccarelli

2008 Descriptive analysis based on structuredtelephone interviews

2‘000

Volunteering MonitorSwitzerland 2007

Stadelmann-Steffen/ Freitag/ Bühlmann

2007 Descriptive analysis based on structuredtelephone interviews

7‘410

Donation Monitor Gfs-Zürich 2008 Descriptive analysis based on face-to-face

interviews

1‘530

The economy ofdonations

Güssow 2007 Written-, Online- and face-to-face interviews(98% from German speaking part)Multivariate analysis

1‘231

Nonprofit Organizations

Income sources of NPOwith ZEWO certificate

ZEWO-Statistik2008

2008 Descriptive analysis based on questionnairessent to member organizations

431

The Third Sector inSwitzerland

Helmig/Gmür/ Lichtsteiner (eds.)

2010 Country study for John Hopkins ComparativeNonprofit Sector Project

n.a.

Foundation

The Swiss FoundationSector

von Schnurbein 2009 Descriptive analysis based on data from thecommercial register, the foundationoversight office and own data bank

12‘000

About the businessorientation of Swissfoundations

Michalski et al. 2008 Descriptive data analysis based on writtensurveys

209

Payments to members offoundational boards

Lichtsteiner/ Lutz 2008 Descriptive data analysis based on writtensurveys

279

Starting a foundation inSwitzerland

Helmig/ Hunziker 2007 Descriptive data analysis based on face-to-face interviews

148

Swiss Foundations – Ananalysis of the Swissfoundation landscape

Steinert 2000 Descriptive data analysis based on data fromthe national and cantonal foundationoversight offices

~9‘700

Corporate Philanthropy

Corporations inSwitzerland assumesocial responsibility

Wehner/ Lorenz/ Gentile

2009 Descriptive data analysis based on onlinesurveys

2‘000

Charity-Gala or collectingbox?

Purtschert/ vonSchnurbein/ Bittel

2007 Descriptive data analysis based on writtensurveys (SME in Zurich region)

263

Swiss corporations takevolunteering seriously

Amman 2004 Descriptive data analysis based on writtensurveys

641




Cultivating andsupporting voluntarismby Swiss corporations

Schaller/ Bachmann

2004 Qualitative data analysis based on telephoneinterviews

72

4.1. Philanthropic tradition and welfare state

The Swiss welfare system is heavily influenced by liberal ideas and the notion of “self-aid”.Switzerland’s social system is based on the values of independence, individual responsibilityand is following a subsidiary principle. The state however, is seeking positive relationships withNPO and depends on their service provision to a large extend. Social spending or subsidies forpublic beneficial NPO are limited though. The state supports NPO through incentives such astax 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 sourceof funding. Cooperations with NPO tend to be strong on a regional level. Switzerland has astrong civil society where much of the power is in the hands of the people. NPO and citizensalso have an influential role in the law making process. However, self serving NPO or lobbygroups 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 regulationsin the cantons. Attempts are being made to harmonize the relationships in between thegovernments and NPO on a national level. On national and local level volunteering is supportedthrough internet platforms and the public promotion of volunteering as an important pillar ofsociety. There is also a parliamentary working group about voluntarism.

Philanthropy has a long tradition in Switzerland. The notion of self aid and a relatively weakstate 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 socialpurposes 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 Seilerdedicated 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 stillorganized 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 andinitiatives are preferred over state interventions.

4.2. Monetary Donations

Monetary donations have to be seen in this context. A deeply embedded liberal ideology inSwitzerland emphasizes citizens´ responsibility to act philanthropic. Swiss citizens donaterelatively much. The income/donations ratio is the second highest in the world, right after theUnites 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




donations from individuals is estimated to equal a sum of approximately 1,3 billion Swiss Francsper year. Another 300 million Swiss Francs per year are dedicated to charitable purposes bylegacies. 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 speakingpart of Switzerland and the French speaking part. Citizens living in French speaking cantonsdonate less than their German speaking counterparts. No empirical studies that can explainthese differences are available but some suggest cultural differences as main reason. Mostdonations go to charitable organizations that provide social services followed by faith basedorganizations 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 organizationor social concern is available.

Corporations in Switzerland donate around one billion Swiss Francs per year. The most recentstudy from Wehner et al. (2009) is based on a sample of 2.000 corporations. Three quarters ofthe sample donate regularly for public beneficial causes. Larger corporations with more than250 employees tend to be more likely to donate (93%) than smaller companies. However thesample showed that also 75% of small and medium enterprises (SME) donate money. Regionaldifference could be observed. 79% of the companies based in the German speaking part ofSwitzerland donated while only 55% in the French speaking part and 45% in the Italianspeaking part confirmed that they give money for charitable purposes. Smaller companiesbased in more rural areas are more likely to support regional NPO such as hospitals or servicesfor people with disabilities. Larger corporations are more likely to donate for larger NPO (aimingat poverty reduction, global health, disaster relief, environmental protection).

There are around 12.000 public beneficial foundations in Switzerland. The total amount of theirassets is estimated to be worth 50 billion Swiss Francs. Approximately 10% of the foundationshold 80% of these assets. The majority of the foundations is of medium or small size. The sumof grants given by foundations equals around one billion Swiss Francs per year. Around 80% ofall public beneficial foundations were founded in the last 20 years (von Schnurbein, 2009). Dueto the liberal laws regarding the obligations to publish financial data or grant recipients, there isno adequate data and only few empirical studies exist. SwissFoundations´ members report tosupport 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 (vonSchnurbein/Bethmann 2009).

4.3. Volunteering

The data availability about volunteering has steadily increased over the last years. The twomajor studies are the Volunteer Monitor and the module “unpaid work” of the Swiss LaborForce Survey (SLFS). Both calculate a sum of 700-750 million of hours donated by volunteersper year. The value of volunteering in formal organizations is estimated to be worth 31 billion




Swiss Francs (Farago, 2006). Informal volunteering, outside of organizations is gaining moreattention 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 moreactive (16.9% men, 20.9% women). Men still tend to have better access to leading honorarypositions in the social sector organizations. Education, income and high professional status arepositive factors for volunteering. Especially prestigious honorary positions in foundations andassociations are mostly awarded to persons with higher social status. The relationship inbetween volunteering and age can be described as curve linear. While the amount of hoursdonated increases with age voluntary activities decline after retirement. Most active in formalvolunteering 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 byleisure groups (12.1%) and faith based organizations (7.7%). Only 4.6% of all voluntary worktakes place in social and charitable organizations, 1.4% in human rights and environmentalorganizations.

Corporate Volunteering is not yet all too common in Swiss corporations. Only few corporationshave started professional programs. However many companies support their employees inpursuing voluntary activities through flexible work hours. Small enterprises do have lessflexibility 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 yearwhere the majority of their employees work one day for a charitable cause in a NPO. 42% ofthe corporations in the sample from Wehner et al. (2009) answered that they try to incentivizetheir 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 anddonations of furniture to the “Brockenhaus” are quite common though. Also some companiesprovide their infrastructure or transportation means to support NPO. Some donate products.

Especially the pharmaceutical industry in Switzerland has donated life saving vaccines todeveloping countries.

Due to the lack of data no monetary values of goods donations could be calculated. Here a clearneed 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 waspresented. Generally speaking altruistic and problem oriented motives are present in all formsof 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




donation but this is seldom the case. The Swiss surveys failed to ask why a person has chosena certain cause or organizations over the other and what motive, thought or person actuallytriggered their decision to donate. Here more empirical data is necessary. Especially in regardto the perceived responsibility of citizens to support human welfare. As noted above, theunderlying ideology that is dominant within a society in regards to the role of governmentversus other actors in society, on who is responsible in the provision of welfare and otherpublic beneficial causes, influences donation behavior and therefore the motives behind giving.As no deliberate research results are available which include external factors, here only thediscussed motives can be presented.

For volunteering all motives can be found. Altruistic, egoistic and reciprocal motives are tiedclosely together. Asked for their reasons to volunteer over 85% of respondents in a Swisssurvey affirmed that the joy and happiness volunteering brings motivates them to do soregularly. 76.6% affirmed that they want to bring social change in cooperation with others and62.9% affirmed their will to be integrated into social networks through volunteering. Decisionmaking power and active participation (52.4%) as well as self development (66.0%) were alsodominant motives for volunteering (Stadelmann-Steffen, 2007)

As foundations are supposed to exist for “eternity” it is especially interesting to know moreabout the motivation of the founders. Often founders are very active in the foundation in its firstyears. They do not only donate money but a large portion of their time to get the foundationrunning. Problem oriented motives are dominant. The actual decision to start a foundation ismostly 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 payback 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 importantmotives.

Philanthropic behavior of corporations in Switzerland seems to be largely motivated by a senseof 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 theSME, that constitute more than 80% of the Swiss private sector do not follow selfish butethical reasons through their philanthropic activities. Altruistic and social integrative motivesdominate.

The following table shows the dominant motives for each form of philanthropic behavior inSwitzerland. It also reaffirms that philanthropic behavior is based on motive bundles rather thansingle motives.




Altruisticmotives

Gemeinschaftorientation

Designing/shaping society

Problemorientation

Self-development

Money/goodsdonation X (x) X

Volunteering X X X X X

Setting upfoundations X X X X

CorporatePhilanthropy 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 weakwelfare state there is a strong philanthropic tradition in Switzerland. In sum monetary and timedonations in formal organizations are estimated to have a value of 31 billion Swiss Francs. Thisnumber is to be seen as an approximate value that needs to be refined by further empiricalresearch. The motivation behind philanthropic actions is mostly based on altruism, socialinclusion and the will to take an active part in solving social problems. A strong and largenonprofit sector serves as a powerful philanthropic infrastructure for individuals willing to actphilanthropically.

Using philanthropy as research concept the study Philanthropy in Switzerland could for the firsttime aggregate empirical data about the numerous private public beneficial activities inSwitzerland. However due to the different methodologies and missing conceptual standards ofexisting studies Philanthropy in Switzerland only represents a first step in displaying anencompassing picture of Swiss philanthropy. It did show though, that through synthesizingisolated studies of different forms of philanthropic behavior a more vivid and realistic view onprivate voluntary action for the public good is possible.

6. Discussion

Theoretical progress in the literature in the study of philanthropy is limited (Bekkers/Wiepking2010). The provided conceptual outline adds only little to improving this situation. It still lacksacademic rigor and a deeper look at the complex relationships in between structural andindividual factors that influence philanthropic behavior. However, we believe that we havetaken a step in the right direction. Especially in Switzerland, where the concept of philanthropyis still relatively unknown, our efforts to put philanthropy on the landscape have already beenproven successful. Additionally, we see it as absolutely necessary that the understanding ofphilanthropy has to resist the risk of being limited to monetary means, such as charitabledonations or foundation spending.




The approach we took can be described as an early form of applied theory testing, even thoughto speak of a theory is somewhat exaggerated. First we framed the conceptual outline ofphilanthropy to break down public beneficial behavior into different forms of giving. We thengathered all empirical studies available to synthesize findings in order to answer the questionwho acts how and why for the public good in Switzerland. By doing so, not only theoreticalgaps but also the limits of existing empirical research became evident. To address theseweaknesses following improvements are suggested.

As noted, to neglect external factors that influence philanthropic behavior, means to leave outexplanatory variables. Hence, the structural background and dominant perception about the roleof the state in providing welfare and other services for the public good have to be included inthe model. However, surveys almost never try to link findings to macro structural factors.Questions that allow evaluating the person’s perceived role and responsibility as citizen within awelfare regime are merely asked. Most studies focus on single (often psychological) motives ofgiving but do not provide an adequate discussion of the role of the state in relation tophilanthropic behavior. Also interdisciplinary approaches are rare. The “philanthropy scale” asproposed by Schyut, Bekkers and Smit (2010) can mean an important step forward but still is inits early development. Methodically it also seems advisable to draw on Third Sector research asconceptualized by the Johns Hopkins Comparative Nonprofit Sector Project (CNP). Here, theanalysis of the role of the state and government policies in regard to institutional philanthropicorganizations is already far developed. Findings may be used to explain the structural factorsthat influence individual philanthropic behavior as well. Also the complex roles of nonprofitorganizations as providers and enablers of philanthropic activities need to conceptualized better.

To allow international comparative research more challenges have to be met. Studies onphilanthropy 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 developedstrong systems of mutual help within their communities that might not fall under the definitionof voluntary action for public good. Reciprocal giving is targeted to advance the economic wellbeing of a specific ethnic group and not the public in general. The challenge will be to findmethodical tools that allow taking cultural variances into account while still enablinginternational comparisons. Efforts such as the Johns Hopkins comparative nonprofit sectorproject, the civil society index as well as efforts to standardize surveys about volunteering anddonation 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 theirfindings, using philanthropy as common research framework.




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Philanthropy in Switzerland