Given the global pandemic, the policy focus in Germany is the survival of the nonprofit sector as an important provider of social services. Traditionally, the sector has acted on the principle of subsidiarity, fulfilling services of the welfare state as an alternative to direct government activity. Other pressing issues – for example, the limits on political activism that are tied to nonprofit status and the accompanying tax advantages, or the legal barriers towards professionalization and commercial activity of nonprofits, or questions of liability for volunteer boards – have taken a back seat for now. COVID-19 has underscored the fragile nature of government-funding schemes for nonprofits that provide services of the welfare state.

Early in the pandemic, the German government implemented legislation to guarantee a steady source of funding. However, this financial rescue ended. Even nonprofits falling into the category of “welfare-state service provider” may soon struggle to survive financially. Nonprofits falling outside that category are hit even harder.

Many nonprofits may soon not be able to provide important services for their beneficiaries. This isn’t acceptable, given the significance of the sector in meeting people’s needs and its role as a social-service provider. New legislation is needed to ensure permanent, financial support for nonprofit providers of welfare-state services, as well as for other nonprofits serving marginalized groups.

Only after such legislation is in place and regulatory issues are solved can the policy focus shift towards the other pressing questions. Policy experts in nonprofit organizations should make themselves heard at all government levels and push towards a solution for the common good.

is a Professor at the Department of Social Economics in the Faculty of Economics and Social Sciences, University of Hamburg. Boenigk is on . Photo of Hamburg, Germany, courtesy of Robert Bye & Unsplash.

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Switzerland offers a favourable policy and legal environment for philanthropy. However, some issues could be improved, particularly in the field of tax law (). First, there’s no clear policy message about the goal of tax incentives for charitable giving. In practice, it appears that those incentives are structured to maximize total giving, poten­tially undermining distributional (equality) concerns. However, the legislator never specified such a goal.

Secondly, Switzerland should reassess the current restrictions on its tax support for cross-border philanthropy. Considering our global chal­lenges, such as the pandemic or climate change, an insular perspective on philanthropic action and its benefits seems outdated.

Finally, Switzerland lags behind in data collection and reporting on tax incentives for charitable giving. Improving this would enhance transparency and allow all stakeholders to better under­stand the relationship between philanthropy and taxes. This could also enhance the general trust in philanthropic initiatives, which is often lacking because of opacities in the philan­thropic sector.

To address these shortcomings, the Swiss legislator should provide a clear message defining the goal of tax incentives for philanthropic giving, as well as reassess the rationale for restricting the tax support for cross-border giving. Both the legislator and the government should seek to collect and report better data on tax incentives for charitable giving and their efficiency. In addition, researchers outside the area of law could clarify a number of current knowledge gaps concerning the response of taxpayers to incentives for giving

Transparency and public trust

Beyond the tax framework, the Swiss philanthropic sector is seen as . In addition, studies based on the canton of Geneva indicate that people holding leadership positions in foundations are, as a whole, neither diverse nor equipped with the right skills. Those studies have also observed the need to publicize and align the work of regulatory authorities.

Foundations need to become more transparent and accessible in order to maintain public trust, as well as to introduce measures to increase the diversity of board members and to develop the skills of their personnel.

is a Senior Lecturer at the Faculty of Law, University of Geneva. Lideikyte-Huber is on and . Photo of Geneva, Switzerland, courtesy of Jack Ward and Unsplash.��

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Charities in the UK are facing an existential crisis due to the COVID-19 pandemic. Estimates suggest £4.3 billion (CAD$7.5 billion) in lost income and one in ten charities closing, as well as mass staff layoffs and assets being sold off. Therefore, the top policy issue is the need for a comprehensive emergency funding package, rapidly distributed, that reaches all parts of the sector.

Income from both fundraising and trading have been severely affected during lockdown conditions. The biggest fundraising events include marathons, bike rides, group coffee mornings and events held in schools and workplaces, none of which can happen when people aren’t allowed to gather in public. The cancellation of the London Marathon alone resulted in the loss of £50 million ($87 million) in fundraised income. There are many other important changes needed to create an enabling environment for charities and their donors, but ensuring the sector survives the current crisis must be the priority for now.

What does change look like?

The government provided extensive, uncapped support for the private sector and needs to take a similar approach to the charity sector, using existing knowledge and channels to get the money out swiftly and fairly. Larger sums have been distributed to the culture sector in a £1.6 billion ($2.8 billion) rescue package, but the entire charity sector, comprising over 100,000 fundraising charities and 500,000 small community organizations, received only £750 million ($1.3 billion) in April 2020. Not only was half that money essentially paying for new work, rather than a rescue to plug lockdown-induced gaps, the funding was slow to be distributed and included a £1.4 million ($2.4 million) contract to a private-sector accountancy firm to oversee the scheme.

A new package needs to be more generous, related to the scale of need in the sector, rather than a figure pulled out of the air by policymakers, and it must be distributed efficiently and effectively by collaborating with nonprofit grant-makers and infrastructure bodies who know and understand the sector. Charities are playing a key role in providing essential relief during lockdowns, and they need and deserve support to survive and rebuild.

is a Reader in Social Policy and Director of both the Global Challenges Doctoral Centre and the Centre for Philanthropy, University of Kent, the UK. Breeze is on and . Photo of Bakewell, the UK, is courtesy of Tom Podmore & Unsplash.

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France enjoys one of the most enabling environments in the world for charitable activities and now counts 1.3 million associations. It’s relatively easy to create nonprofits, there are tax incentives for donations, and philanthropy has flourished since the 2003 Patronage Act.

However, restrictions are in the offing. As of February 2021, Parliament has discussed a new Act “consolidating the respect of republican principles” (inaccurately referred to as the “law against Islamic separatism”), which has sparked heated public debate. Beyond the asserted objectives targeting radical religious groups, observers fear ripple effects.

The law would broaden the justification for dissolving associations by government decree. Nonprofits seeking public grants would be required to sign a “pledge of republican adherence” (“contrat d’engagement républicain”), binding themselves without reciprocity. This is a pledge that nonprofit leaders from the and the deem unnecessary, both because existing laws and protocols already require the foreswearing of anti-republican behaviour, and because “separatists” are unlikely to apply for grants. The law could discourage whistleblowing, critical voices, and peaceful civic disobedience. The Défenseur des Droits (ombuds) and the have both expressed concerns over the risks of arbitrary decisions and ambiguous interpretations. Public funding could be abruptly suspended, reimbursements demanded, and access to public services barred, thereby threatening nonprofits’ already fragile resources. the umbrella organization for fundraising associations and foundations, has called for greater transparency in the planned administrative and fiscal control procedures, including the annual publication of anonymized decisions.

What should be done, and by whom?

Public authorities and decision-makers from across the political spectrum regularly and unanimously praise associations and foundations for their contribution to the public good, whether as public-service providers or as subcontractors of government services. In addition to heeding the recommendations listed above to improve the Act, they need to reiterate and act on their trust in nonprofits that leverage civic engagement, and to reaffirm the stability of the overarching legal framework – thereby quelling public apprehension and calming inflammatory discourse.

Local elected officials would benefit from specific training about the nonprofit sector to better understand its impact on civic life and social cohesion. Politicians must also accept that grassroots entities can be counterweights to centralized decision-making – thus contributing a healthy component of democracy. There have also been calls to end political cronyism towards associations.

Scholars have a role to play – taking their lead from the team of social scientists who in 2020 released a report documenting 100 infractions of nonprofit freedoms and offering to better protect them.

Nonprofit leaders also need to act. Attempts to introduce additional regulations in the recent past have inspired sector-wide coalitions of those leaders (see examples here and here), enabling organizations to find unity despite their great diversity, and collectively helping to reinforce the value perception of a sector that employs over 10% of the country’s workforce.

is a Fulbright Laureate in the NGO Leaders program and the inaugural “Global Philanthropy Fellow” at the Lilly Family School of Philanthropy, Indiana University, USA. Sellen is on . Photo from France is courtesy Reuben Mcfeeters & Unsplash.

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As elsewhere, the pandemic has triggered many issues for the nonprofit sector. The Austrian government established a nonprofit rescue fund early last year that has twice been extended and mainly covers the fixed costs of nonprofit organizations (NPOs). Austria is the only European country that supports her NPOs so generously. Still, many organizations, particularly in sports, culture and the arts, are terribly hit by the lockdown and will need more support for recovery.

One major issue, independent of the recent pandemic, concerns the overall regulatory framework for NPOs. In Austria, the regulations for receiving tax benefits are restrictive. To be exempt from corporate tax, NPOs must contribute exclusively and directly to the common good. The deductibility of donations and private giving is even more exacting and only granted to NPOs listed by the tax authorities. In addition to being among Europe’s strictest, Austria’s regulations aren’t predictable, as corporate tax exemptions are granted on only a yearly basis. The current administration plans to reform these issues with the aim to incentivize private philanthropy, social business, and to remedy fiscal obstacles for foundations.

What reforms are needed?

Moreover, although Austria is a small country, her NPOs suffer from excessive regulation; federal and provincial regulations for social-service funding need greater harmonization and less bureaucracy. Modernizing the overall regulation of philanthropy needs a legislative initiative by the government or by a majority in parliament. In practice, a joint effort by the conservative Volkspartei and their junior-partner, the Green Party, would be necessary. Also, third-sector representatives are ready to engage in this process, and I see strong political will to tackle these issues after the pandemic.

I’m less optimistic about other challenges. Harmonizing the regulatory framework for social-service providers (the most important segment of Austria’s nonprofit sector) would need stronger collaboration and consensus across nine provincial governments. The same is true in terms of helping NPOs to recover after the lockdown, as many nonprofit industries are the responsibility of provincial governments.

I’m still optimistic on other fronts. During the pandemic, the federal government realized and appreciated the enormous contributions of NPOs to health care, culture, education, and to society and the economy. Furthermore, self-representation has developed significantly and has overcome polarization between a few, big NPOs and thousands of smaller ones.

is a Professor and Head of the Institute for Nonprofit Management, Vienna University of Economics and Business. Meyer is on . Photo of Vienna, Austria, is courtesy of Leyre & Unsplash.

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Current concerns among politicians and members of parliament focus on foreign financing of religious organizations, money laundering, and the concentration of power among philanthro-capitalists. It’s hard to predict what their concerns will be after the March election. We had 37 political parties running this year, with 17 being elected, but the nonprofit sector didn’t feature in the various party manifestos.

Within the sector, concerns among organizations reliant on donations include:

• the public’s growing irritation around fundraising;
• declining level of confidence (i.e., trust in the charitable sector);
• limitations imposed on fundraising by telephone (‘do not call me’ policies);
• lower levels of giving among younger generations;
• increased competition tied to the entrance of new organizations; and
• increases in mutual aid and crowdfunding.

Concerns among foundations are about impact measurement and organizational effectiveness, and the lack of regulation of hybrid forms of philanthropic investments, such as impact investing.

A concern of the auditor of fundraising organizations is the low level of confidence or trust in the sector, and the lack of awareness among the general public of the new certification system (“Erkenning”) under which charitable organizations must disclose information about themselves on their websites.

Few people have mentioned the lack of standards for legacy or bequest fundraising, the lack of a payout rule for foundations, the failure to provide global open access to COVID-19 vaccine technology, or the looming cuts in government funding for nonprofit organizations that may be imposed in new austerity measures when the worst part of the COVID-19 pandemic is over.

Personally, amid all these concerns, I find it hard to determine which is the most important issue and who should do what.

is a Professor of Philanthropy at the Faculty of Social Sciences, Vrije Universiteit Amsterdam, The Netherlands. Bekkers is on and . Photo of Amsterdam is courtesy of Claudia Lorusso & Unsplash.

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