The future of philanthropy in Central Europe is bright, as was its past. Though reconnecting to the rich philanthropic culture of the past and securing its future has been a daunting task for many leaders and organizations in and outside the region in the last 15 years, a variety of philanthropic institutions have emerged, initiated principally with a view to overcoming people’s passivity and reliance on state provision – a legacy of the totalitarian regimes that dominated the region.
Programmes for philanthropy development, mostly with foreign donor support, promoted a new concept of philanthropy as an individual and collective free expression of care and responsibility for the well-being of individuals and communities.
Initiating a conversation on the future of philanthropy in Central Europe with my colleagues in the field was an exciting but also a challenging experience. We felt unable to transform our intuitions and fragmented extrapolations into reliable projections in the way our US colleagues have, mainly because of the paralysing lack of consistent data on the state of philanthropy in Central Europe.
Looking back 20 years
Until 1985, the region was dominated by totalitarian political regimes and planned centralized economies where the state was the biggest (in many areas, the only) employer, service provider and development agent. Not only did real philanthropy not exist, the notion was misused and discredited by the totalitarian regimes through repeated acts of ‘forced volunteering’ on public projects or centrally imposed collections of money for solidarity causes with people in Africa and Cuba. Since the 1990s, a new view of philanthropy has emerged, mostly promoted through projects funded by foreign donors, which sees it as an individual and collective free expression of care and responsibility for the well-being of individuals and communities.
Gradually, legislation on charitable giving, public collections, volunteering, and foundation financing was introduced and had a mostly stimulating effect in these areas. Some specific measures for increasing giving were introduced, such as the opportunity for every taxpayer to assign 1 per cent of her/his income tax to a charity. The role of the media increased, and it became truly instrumental in humanitarian and relief work. The infrastructure of the philanthropic sector also began to develop. Strong donors’ associations developed in the Czech Republic and Slovakia and began to emerge in Poland and Hungary, while university programmes, journals and projects fostering research and education in the field of philanthropy began to appear in some countries.
Looking forward to 2025
Looking forward to 2025, the most important achievement in philanthropy is the expansion of individual giving and volunteering as a result of the changed values and attitudes in all the societies of the region. The new generation have been brought up to feel their responsibility for the state of the world. Innovative methods and new communication technologies have increased individual giving. They have also changed its nature, often increasing the distance between the philanthropist and the need. The growth in individual giving and volunteering is leading to increased pressure for small but effective and transparent philanthropic intermediary institutions to interact between givers and receivers. Operating mostly at community and regional level, these provide independent input into public policy processes, and nurture the further development of philanthropy. Community foundations are one example of such institutions. They rely on small contributions from large numbers of permanent donors. Large gifts at community level are rare.
There are also a few strong and visible indigenous endowed foundations that provide resources to independent non-profit initiatives at local, national and international levels, as well as engaging in broader policy dialogue with governments and EU institutions. They are active in promoting philanthropy and attracting other rich individuals to the field. Though there is some responsible corporate philanthropy, the limitations of market responses to social needs have not been fully overcome.
The sector is larger and more professional. More associations with an active membership exist, which allows for better coordinated philanthropic action. There is more and better information available and a learning infrastructure for stakeholders that helps to expand further knowledge about the sector. There is more diversity in foundations’ management and more women in leadership positions.
The rebirth of philanthropy
After the collapse of the totalitarian regimes in 1989, countries in Central Europe began a massive transition to democratic political systems, competitive market economies, and strong civil societies. An important part of this effort was to overcome the totalitarian legacy and to reconnect with democratic forms and values that existed in these countries before the Second World War. It was in this context that the development of modern philanthropy in the region began.
Since the early 1990s, a variety of philanthropic institutions have developed – relief and humanitarian aid organizations, community foundations, faith-based charitable organizations, endowed foundations, issue-based foundations and corporate foundations. Many of them were supported by foreign donors. Both foreign donors and local activists were preoccupied with democratization and the strengthening of civil society, focusing on building the capacity of individual NGOs to monitor elections, develop public policies and defend human rights, as well as building the infrastructure of the non-profit sector. Philanthropy was thus ‘rediscovered’ as a potential means to overcome the passivity and disconnectedness of citizens from the political process and to increase civic participation. In the early 1990s, therefore – and even probably today – philanthropy did not constitute a separate field but was closely related to civil society development.
This close link became – and continues to be – one distinctive feature of philanthropy in Central Europe and to a certain extent explains why the discussion about the future of philanthropy revolves more around people’s participation than about the size of philanthropic assets.
But modern philanthropy was also seen as a ‘rebirth’ and ‘revitalizing’ of an older phenomenon, not as the introduction of something new like the many other new political, economic and social phenomena introduced from the more developed Western democracies. It was seen as a return to the normal state of societies and communities when compassion, active participation and responsibility for one’s own life were strong in the relationships of people.
However, these two features of philanthropy in Central Europe – the link to civil society development and to pre-Second World War experience – have created certain tensions in the field. Some leaders and organizations wanted to bring back the values and forms of traditional philanthropy, while others wanted to see these things transformed to respond more effectively to the challenges of the modern world. A third source of pressure on the field of philanthropy was produced by the new institutional landscape, created after Central European countries’ accession to the European Union (EU).
The triple challenge
Given the shortness of this article, we will not look at the changes in the political, economic, social and technological context that might affect the development of philanthropy in the next 20 years. Rather, we will look at the challenges inside the sector and how these might develop. We believe that if philanthropic values, processes and structures are in place and doing well, philanthropy itself will find ways to adapt to changes in the environment.
There appear to be three main challenges. One is how to undo the damage caused by the totalitarian regimes and revive philanthropic culture. The second is how to expand the capacities of traditional philanthropy to be able to respond to the needs of modern times. The third concerns the question of the role of philanthropy in the context of the EU.
Reviving a philanthropic culture
More than 15 years after the changes, the process of reviving the culture of philanthropy is still in its early stages, but some positive changes are noticeable. There is a very strong volunteer movement in Poland; individual giving is substantial in Slovakia at both national and community levels; responsible corporate giving is developing in the Czech Republic; positive examples of public-private partnerships exist in Hungary. There are a number of capable and active philanthropic institutions committed to rebuilding philanthropic values and attitudes.
However, we believe that it will take an entire generation to complete this process and to develop philanthropic activity on a massive scale. The hope is that in 10 to 20 years philanthropy development will not be a separate task for specific infrastructure organizations but will be a process owned and supported broadly by individuals and institutions alike.
Responding to modern needs
While there is consensus about the need to re-establish philanthropic values and behaviour, there is less agreement on what objectives, forms and functions philanthropic institutions should have. Local leaders and foreign donors who worked on reviving philanthropy felt that it needed to expand its traditional role and to address strategic development tasks. Thus the concept of strategic (or transformational) philanthropy was introduced and institutions were created that adopt a long-term approach to removing the structural causes of problems rather than meeting the immediate needs of disadvantaged individuals.
In the meantime, traditional (or welfarist) philanthropy developed in a more organic way – local businesses, families and individuals engaged in small-scale philanthropic activities exactly as in the past. Typically these philanthropists operate within the limits of their own resources, which makes it unfeasible for them to make long-term strategic plans or form cooperative relationships with other philanthropists.
While both approaches can make a positive contribution, there are some fundamental differences between them that could create tensions when one approach undermines the other. Traditional philanthropists, for example, continue to provide assistance to residential childcare institutions while development agencies are lobbying to close them down and offer alternative community-based services for children. The more recent appearance of corporate foundations with their more or less explicit focus on PR and marketing for their companies adds to these tensions, making it difficult for the different types of philanthropic institution to communicate and interact successfully, especially as the infrastructure of the philanthropic sector in Central Europe is still quite weak.
The development of donor platforms, associations and support organizations could enhance both diversity and cooperation in the sector. There are some promising signs of change in this respect, with donors’ association well-established in the Czech Republic and Slovakia and finding their feet in Poland and Hungary, but more needs to be done in this regard.
Finally, probably the biggest challenge for the Central European philanthropic sector is to define – and defend – its role in the context of EU membership. Unlike every other aspect of political, economic and social life in the region, philanthropy remained largely outside any ‘harmonization’ process with EU practice. To a great extent, it still follows either the pre-Second World War models or the new ideas brought by US public and private donors. This situation is likely to change, however.
American versus European models
Talking about models inevitably involves crude generalizations. However, there is commonly understood to be an American and a European model of social development and civil society which will provide a rough guide to the future of philanthropy in Central Europe.
Generally speaking, the US model, which has been influential in Central Europe in the past 15 years through the work of US public and private donors and their local partners, leaves a lot of space and resources to the business and non-profit sectors in the field of social development. Social improvement and change is delivered primarily through individual initiative and ad hoc self-organizing. Philanthropy is a separate field with substantial resources, institutions and infrastructure; it is itself the subject of policy and research. As US research shows, however, the biggest strength of US philanthropy – ‘that it is a moral choice freely made’ – could also be an obstacle to its efficiency and greater impact in securing permanent social benefit.
By contrast, the EU approaches social development through institutions and processes set up by governments. This secures permanence for, and inclusiveness of, the social development process. Individual philanthropy has a much smaller social mission and resources. It does not constitute a separate policy and action field and rarely attracts funding for systematic research. However, the recent crisis in the EU did show an alarming level of disconnectedness between citizens and their political leaders which could be attributed to the lack of an independent and agile philanthropic sector.
This dichotomy poses a certain identity dilemma for many philanthropic institutions in Central Europe. The EU is a powerful development agent on every level – development institutions that ignore it risk marginalization. But how close can one get to the EU framework and still have an independent voice and presence? Is the idea of an independent and influential philanthropic sector in any case too ‘American’ for an EU member country? And what do we do with the ‘American heritage’ after the US donors leave the region? Shall we leave it to melt down without trace? Or put it into hibernation until better times arrive?
Strength from participation, not financial assets
There is a feeling in Central Europe that the American heritage has to be preserved not because it is American but because it works and delivers. There are strong leaders and institutions in the field of philanthropy and their vision for 2025 is one of a large-scale independent philanthropic sector which takes its strength not from the size of its financial assets, but from the massive participation of people through giving and volunteering. These leaders and institutions have already invested a lot in this process but their work has been very much like constructing a bridge: work on the foundations is invisible because it is under water, but once they are in place, the support structure surfaces, the visible part is completed quickly and efficiently, and the facility becomes fully functional. It is this kind of philanthropy development process that we – philanthropic institutions in and outside the region – are committed to.
1 The observations in this article are based on experiences in the Czech Republic, Hungary, Poland and Slovakia. The question about the differences among these countries as well as about their common Central European identity is a complex one and goes far beyond the scope of this article.
2 For many of the ideas in this article – and certainly for the best ones – I am indebted to my colleagues in the field of philanthropy: Olga Alexeeva, Elitsa Barakova, Jiri Barta, Anna Iwinska, Tomas Krejci, Shannon Lawder, Francois Matarasso, Peter Medved, Alena Panikova, Miroslav Pospisil, Anna Rozicka, Tamas Sczaurszki, Boris Strecansky, Walter Veirs.
3 See Katherine Fulton and Gabriel Kasper’s article on p19.
4 This refers to the failure to adopt the European Constitution, following ‘No’ votes in France and the Netherlands, and the subsequent realization on the part of governments that citizens had been left behind.
Vera Dakova is a Program Officer at the C S Mott Foundation. She can be contacted at firstname.lastname@example.org