Foundations are always looking for the latest trends and the one societal challenge nobody else has identified yet. For years one of these trends in European countries, especially in Germany, has been the aging of society. The German Federal Statistical Office, foundations, research institutes and think-tanks publish studies on the issue regularly. All of them forecast a shortage in skills and succession for all sectors of society, with one study beating the other in terms of negative data. In Germany, for example, the group of the 65-year-olds and above is said to increase from the present 20% to 34% in 2060. If this comes true it is going to change the whole set-up of the country. The question, as so often, is whether the glass is half full or half empty.
Back to philanthropy: Asking the question ‘What does the demographic change mean for philanthropy?’ is actually the result of a longer process. This summer, our team at Active Philanthropy, together with the Berlin Network of Foundations, supported the research of a master student at the HTW University of Applied Sciences in Berlin, on the succession planning of small and mid-size foundations. The student conducted qualitative interviews with the board heads of Berlin-based foundations. A stunning result of the study was that all the interviewed board members asked themselves who will replace them and when. The question came up even though the legal aspect of the issue is very clearly defined in foundation statutes. This was especially true for foundations whose key decision-making body is a small volunteer board.
A look at the numbers: a country like Germany celebrates every year its growing number of foundations. The growth is reported in a way that reminds you of the latest news from the stock market. In 2010 Germany counted 18162 foundations: a growth of 4.5% from 2009. This number includes many foundations with hardly any endowment but great causes. Approximately 75% to 90% of all German foundations work with a volunteer board. At the time of foundation establishment, 61% of all donors are 60 years or older. (See research by Bundesverband Deutscher Stiftungen/KPMG and Sandberg/Mecking). In addition we experience that ‘giving while living’ often results in donors not thinking about how their philanthropic work will be continued.
These are just indicators. The numbers do not already speak for themselves. But they point out the need to start a discussion about how we want to manage the leadership gap evolving in the world of (volunteer) philanthropy. Strong families, community foundations and foundations with paid staff may not face this threat, but what about the many small foundations with no substantial endowment or weak family ties?Organizations like Stiftur für Stiftur already provide placement services for volunteer boards. This can only be the beginning. European foundations often are still set up for eternity. We all know that this is a very lo-o-ong time! Where are the studies that forecast and analyze the data of the demographic challenge in the world of philanthropy? When do we start the debate about the ‘roadmap’ for dealing with this leadership gap?
Michael Alberg-Seberich is managing partner at Active Philanthropy