The EESC to call for legal recognition of philanthropic activities in the EU

Philanthropic activities in Europe have gained in importance and could be used to complement funding in many areas where public support is lacking, an EESC hearing reveals.

Contributions from philanthropic sources in Europe amount to almost EUR 90 billion annually, but unlike commercial companies, philanthropic foundations or private donors cannot enjoy the benefits of the European single market, making it difficult for them to extend their charitable work across borders.

Philanthropy and its as yet untapped potential in Europe was the topic of discussion at a hearing held by the European Economic and Social Committee (EESC) on 16 January. The hearing brought together a number of philanthropic organisations and individuals, whose views will provide valuable input into an opinion on European philanthropy being drawn up by the EESC at the request of the Romanian Presidency of the EU.

In the opinion, we will be calling for recognition of philanthropic activities, for a legal framework to cover the development of philanthropic activities and to give philanthropic organisations the same status as that enjoyed by commercial companies, said Petru Dandea, rapporteur for the EESC opinion on European Philanthropy. The opinion will be presented and submitted for adoption at the EESC plenary session in March.

The opinion will also contain a recommendation on boosting philanthropic activity across the EU and improving its final impact, especially given the fact that there are almost 150 000 public benefit foundations in Europe with a financial commitment of EUR 87 billion, which is more than the revenue budget of as many as 15 Member States.

This money could be used in an intelligent way to target niche issues that our welfare systems fail to address properly, if at all, said Mr Dandea.

In the opinion, the EESC will argue that philanthropy should by no means replace public welfare systems but complement them and "fill in the gaps". At the same time, public authorities need well-defined spending priorities to meet citizens' social needs properly.

The EESC members present at the hearing stressed that philanthropic activities should be transparent and clearly defined.

Philanthropy should not facilitate tax evasion and should not compensate for lack of public investment, Mr Jose Antonio Moreno Diaz said. He maintained that in countries with poor fiscal justice, rich and powerful people or companies could avoid paying taxes but still be perceived as generous because of their philanthropic work.

However, according to EESC member Ionut Sibian, with public funding cuts in in many countries and a lack of proper skills needed to apply for EU funds, the importance of philanthropy is growing. In many countries, philanthropy represents a hope for a community,he maintained.

Kerstin Jorna, Deputy Director-General at European Commission DG ECFIN, said that public authorities needed help to fill in all the gaps in delivering the common good, especially following the financial crisis and a rise in youth unemployment, poverty and migration.

The InvestEU Fund could be a good tool for NGOs engaged in philanthropic work, as social investments and skills are among the four policy areas that the Fund will support, said Ms Jorna.

However, while capital is moving freely around Europe, philanthropic organisations need to be registered in all the countries in which they want to establish their charitable activities, which seriously impedes their work as this has proven to be extremely difficult.

The lack of a single market for philanthropic activities also creates problems for transnational collaborations, which are sometimes indispensable for accessing know-how and even for saving lives, as it was illustrated at the hearing by Delphine Heenen, Managing Director of KickCancer, who set up this public benefit foundation with her family members and friends after her eldest son was diagnosed with cancer at a young age.

Over the last fifteen years, when most significant progress occurred in adult oncology, the cure rate hardly improved for children with cancer and for certain high-risk childhood cancers it remains shockingly low, Ms Heenen said.

Paediatric oncology is often forgotten by the pharmaceutical industry as there is no commercial interest in developing innovative drugs or conducting clinical trials that are often costly and complex as they need to be transnational and performed on a very small number of patients of different paediatric ages, she maintained.

KickCancer is therefore lobbying for the improvement of the legal framework in Belgium and in the EU, which would make it mandatory for pharmaceutical companies to come up with innovative solutions for childhood cancers, regardless of their commercial interest. It is also trying to set up a pan-European call for research projects on paediatric cancers.

Ludwig Forrest, philanthropy advisor at the King Baudouin Foundation, presented several examples of various types of philanthropic work in several organisations across Europe, showing that philanthropy can be innovative, accessible, entrepreneurial, both local and global and complementary to public sector work.

Philanthropy is still an untapped potential, he said. It is not only for the richest people among us; it is for everyone. It is about passion and about gratitude.

One such example is Romania's Community Card Programme which turns local shoppers and businesses into philanthropists. The Community Card is a customer reward card which allows users to make savings on their purchases, but unlike usual reward cards, the savings made by the consumer are matched with a donation that the participating company makes to the local development fund.

Philanthropic contributions are also of great importance for supporting artistic and cultural projects. Edilia Gänz, Director of FEDORA, the European Circle of Philanthropists of Opera and Ballet, outlined the work of her organisation, which is trying to make these two art forms more popular and more accessible to the general public.

FEDORA's work has been recognised by the European Commission, which selected it for its Creative Europe programme, enabling FEDORA to launch a European Platform that promotes innovative opera and ballet projects, appealing to new and younger audiences who are then allowed to vote for the creation of their choice and to participate in their funding through an online crowdfunding campaign.

Philanthropy is not only about donations, it is about being immersed in the journey. The value is not only monetary but also in the cultural exposure. It is about our humanity,Ms Gänz concluded.