The European Philanthropy Manifesto, a new roadmap for European foundations
The 2024 European elections are just around the corner. The events that we have experienced in the last four years were hardly predictable: a planetary pandemic, a war on European territory, and the resulting social and economic consequences.
These events have tried all of us, including foundations and philanthropic organisations. Once again, foundations reacted promptly and flexibly to respond to the challenges that arose: the isolation and loneliness in which many Europeans live, the consequences of an ageing population and the fragility of our system due to strong social and political polarisation.
Infrastructure organisations, such as Philea, as well as national associations of foundations and donors, were also challenged and had to be innovative in their support of their members: from dealing with regulatory proliferation and protecting civil society space, to advocating for NPOs to be considered by governments adopting post-COVID recovery measures.
None of this has been in vain. The sector has been strengthened, the trend of donors is progressive, and foundations have been able to develop their agendas. Not exactly as planned, but with great progress at the European level. During these years, since the launch of Philanthropy Manifesto in 2019, we have seen how the European Economic and Social Committee positioned itself through its opinion on philanthropy, how the Social Economy Action Plan recognised philanthropic capital and its potential within the broader notion of the social economy, and how through different instances came to recognise the need to eliminate barriers to cross-border philanthropy.
In recent years and months, Philea has firmly defended the position of foundations regarding the regulation that constricts philanthropic flows – in a difficult balance between security and free flow of capital – with unintended effects that put at risk the space of civil society in some countries. Although not everything can be achieved, it has been possible to gain a recognition of the singularity of foundations and NPOs in the regulation of financial flows. Philea has achieved a particular consideration for foundations regarding OECD Common Reporting Standards, differentiating them from investment and financial entities.
In the last year, we have seen how the Commission, following the European Parliament’s initiative, proposed a statute for the European cross-border association. An instrument that can become a tool for foundations to establish alliances and formal networks around different countries. An initiative that recognises the transnational nature of civil society and can serve as inspiration to provide foundations with a similar instrument in the near future.
So, the time has come to consider what we expect as a sector from the European institutions in the next five years. Aspirations that we must be able to capture in an updated European Philanthropy Manifesto, which should set the roadmap and agenda for the sector in the next period.
It´s still difficult to predict results regarding the future composition of the European Parliament. Majority parties will continue but possibly with less weight, so achieving a stable majority will be difficult. What is sure is that in the coming years there will be a return to pre-pandemic fiscal discipline and that foundations have important challenges: migration, the ageing population, the increase in inequality, digitalisation as an opportunity and risk for vulnerable people, AI and citizens’ rights, social polarisation and its threat to European civic and cultural values, and the fight against climate change and for sustainable energy transition.
With an eye on this ambitious agenda, the new manifesto renews its four recommendations that foundations need to be more effective and achieve a greater impact in Europe. In addition, they will help support the role of philanthropy in the different Member States and a ensure a level playing field, which inevitably tends towards more harmonisation.
Under these four recommendations – Empower philanthropy; Facilitate cross-border philanthropy; Engage with philanthropy; and Partner with philanthropy for public good – it´s necessary to build an agenda that allows a more structured dialogue with European institutions. To develop these four recommendations the sector proposes very concrete tools:
- a directive on mutual recognition of NPO for Member States
- guidelines and guidance to Member States for implementing the non-discrimination principle and comparability test
- create a Philanthropy Year
- a swift adoption of the current European Cross-Border Association (ECBA) proposal and consideration of a similar national legal form for foundations as well as a supranational legal form for organised philanthropy
There should be continued monitoring by the European Commission and Fundamental Rights Agency to ensure that EU and national legislation impacting the philanthropy sector is compatible with EU law and fundamental rights and that infringement proceedings are launched in case they are not. Philea also calls on EU and national policymakers to work towards a fairer VAT deal for charities and allow for compensation schemes to recover irrevocable VAT costs.
The EU should review their financial rules to enable more partnerships and co-funding opportunities with philanthropic organisations and consider more flexible support to those civil society organisations receiving EU funding. The EU must ensure that resources are available for civil society organisations to develop medium- to long-term plans to promote fundamental rights, rule of law and democracy beyond specific time-bound EU-related projects.
Although some of these requests are addressed to the European institutions, others must be carried out and appeal to at Member State level, and to reach them it´s necessary to rely on the formidable network that Philea represents bringing foundations and national associations of foundations together.