generosity Archives - Défis Humanitaires

State of play between 2019 and 2022 [1]

Viatique for association leaders and fund raisers.

An article by Antoine Vaccaro

Action de Solidarités international in partnership with ECHO (European Civil Protection and Humanitarian Aid Operations) in Ukraine. February, 2024. © Solidarités International

In recent years, we have had an aggregate for total generosity in France, which for 2019 amounts to 8.5 billion euros. This amount is divided between individuals (59%) and businesses (41%). This aggregate includes individual philanthropy, which includes declared donations, undeclared donations and bequests, as well as corporate generosity, which is manifested through both declared and undeclared philanthropy.

The annual evolution of generosity shows a significant increase in 2020, marked by exceptional momentum related to the Covid-19 crisis, with an increase in donations of 13.7% compared to 2019. In 2021, there was an increase in donations of 4.5%, in contrast to a very small increase in 2022 that does not offset the effect of inflation.

Donor behaviours reveal a concentration of generosity among donors supporting multiple organizations, an economic concentration where a small fraction of donors contribute a significant portion of the collection, and a marked geographical disparity.

Medical research and the fight against diseases remain the preferred causes of the French (39%), ahead of the protection of children (35%) and animals (31%)[2]

The digitization of donations has been accelerating since 2020, with an increasing share of online donations, representing a significant increase in digital collection.

On the balance sheet, what are the main trends and points of attention?

Growth of middle and large donors. In 2021, 1% of the most generous donors represent 22% of the collection, while half of the donors contribute only 12% of the annual collection. Highlight: low arrival of new donors and especially drop-out from low-income households.
The number of direct debit (PAD) donors stabilized at a high level, with 41.5% of donations in 2022 (compared to 34.7% in 2013). The conquest and/or transformation of one-time donors into AP becomes increasingly difficult with a longer ROI to obtain, but AP remains a strategic resource for NPOs (Non-profit Organization).
Donations and legacies are the logical outcome of a strategy of conquest and loyalty of regular or punctual donors. They are the most promising and robust growth resource. Today, 2/3 of the major advertising campaigns of non-profit organizations: TV, radio, press, even display, are oriented liberalities. It is a medium and long term resource that requires a quality fiduciary offer, because the very large legacies and donations are increasingly accompanied by requests for the creation of funds or sheltered foundations.
Corporate philanthropy in France It represents a relatively high share of overall generosity, compared to other countries with a strong philanthropic tradition. Competition is fierce on this target, with a top three in assignments: Sport at 46% in 2021 (-10 points compared to 2019), Culture/Wealth at 37% (+ 11 points) and Social at 32% (+10 points). With a characteristic of territorial decentralization more marked.
Rise of the digital collection of a multitude of donors unified by the NTIC (New Information and Communication Technology) according to the topics that mobilize them.

Logo of the fundraising agency Force for Good, directed by Antoine Vaccaro

The generous crowd prefers to finance projects that institutions and supports all kinds of beneficiaries who carry these projects: large, medium and small structures, even organizations in the making. Various French and English studies predict a multitude of donors mobilized thanks to Artificial Intelligence tools made available to organizations that will solicit them: data, targeted messages, design, etc., with donor rates, not more than 40% but 70% or 80% of the population.

Generous crowds, both donors, but also collectors, mobilizers or even operatives, eager to co-construct with their peers, but also with non-profits solutions to the societal problems they are tackling.

1- FOCUS COLLECTION DEVELOPMENT STRATEGIES ON DIVERSIFICATION AND DECENTRALIZATION

Major Philanthropy Target:
- Propose, when the statutes of the organization allow it (RUP Foundations and Endowment Funds), to shelter philanthropic wishes in foundations or funds under the aegis of «sheltering» to attract individuals with high philanthropic potential who do not wish to take over all the support functions offered by a “shelter” and want to devote themselves, above all, to the cause that mobilizes them.
- Launch tri-annual campaigns of ambitious major donors backed by a powerful support committee (Cf. Capital Campaign)

Flour is distributed by UNRWA in Gaza. © UNRWA

Consumer target:
- Digital collection. Even if the grammar of online fundraising is still to be written, it is foreseeable that the majority of fundraising will go through digital. Non-profit organizations must allocate financial resources and human resources to acquire skills, know-how and progress on an experience curve to take the wave that will outperform offline collection. Develop, in particular, peer to peer: propose to online communities to make collections for the benefit of associations and foundations during personal events (marriage, communion, death).
- Direct Marketing: Retain existing donors via direct marketing: maintain the same level of investment. Retain middle donors through a circle of benefactors.
- Direct Debit. Even if this form of donations is in a mature phase with longer and longer ROIs, it remains a strategic resource to retain donors, obtain high ROIs in the medium term and above all ensure a cash buffer.
- Involve local actors, make them “ambassadors” of the collection:
Sensitize them to the sponsorship process in order to be able to escalate their needs and create a catalogue of projects
The «equip» a minimum, to be able to communicate and collect in patronage. Depending on their location, they may have more or less a target audience in families.
Working with them a concept of territorial solidarity campaigns: how could this work? between which actors? on what type of project? in what time scale?
Engaging SMEs through the development of sponsorship, as seen above, the share of corporate sponsorship in private financing in France is significant. The fabric of SME-SMIs is obviously locally established and represents a privileged target to create real business clubs for the benefit of programs of this or that organization.
Develop legacy campaigns in general public prospecting. Amplify fiduciary communications on its own donors but also in prospecting, to raise legacies and donations, including life insurance. Eventually, a majority of the private resources of some NPOs will come from donations.
On the balance sheet, when we talk about private philanthropic resources and fund-raising, we have to make fire with everything, but strategically in the allocation of resources.

[1] Sources : France Générosité-Fondation de France-Amical

[2] Odoxa, october 2023.

Antoine Vaccaro

Antoine Vaccaro holds a PhD in Organizational Science – Management of Non-Executive Economies, Paris-Dauphine, 1985.

After a professional career in large non-governmental organizations and communication group: Fondation de France, Médecins du Monde, TBWA; he chairs the CerPhi and Force for Good. Director within associations and foundations.Co-Founder of several professional organizations: Association Française des Fundraisers, Committee of the Charter of ethics of organizations calling on public generosity, Euconsult, The Chair of Philanthropy at Essec. Heoh Investor, What Works? My Quick Win. He has published various books and articles on philanthropy and fund-raising.

Check out Force For Good: https://forceforgood.eu/agence/

A UNICEF-led cash transfer operation in Mauritania in 2021

“If the 20th century in France was the century of associations, the 21st will be the century of foundations”.[1]

The Fondation de France’s recent study [2] is a masterly illustration of this prophecy.

The results of this study speak for themselves, but let’s take a look back at the origins of this momentum. “This century was three years old…” as Victor Hugo might have written, when the so-called Aillagon law of August 2003 was enacted, giving new impetus to the associative sector that appeals to the public’s generosity. This law was a welcome addition to the law on foundations of July 1990.

I won’t go back over the improvements to the various tax measures it introduced to encourage donations and bequests to public-interest organizations, and refer you to the text of the law.[3].

As far as foundations are concerned, the law facilitates the creation of RUP (Reconnue d’Utilité Publique) foundations, and opens up the possibility of transforming them into sheltering foundations. The text also makes corporate foundations more agile, notably by facilitating access to manual donations for their stakeholders.

The acceleration of the legislative pace will complete the legal framework, making it one of the most advanced in the Western world.

Here are just a few of the milestones marking the beginning of this century:

2006: creation of the Fondation de Coopération Scientifique (with an expendable endowment)
2007, creation of partnership foundations and unincorporated university foundations.
2008: law on endowment funds, enabling the creation of quasi-foundations.
Finally, on July 21, 2009, the law on hospital reform and patients, health and territories introduced the creation of hospital foundations.

France, which had no law on foundations until 1990, is catching up with its northern neighbors with impressive momentum!

Leaving aside the plethora of static, not to say dormant, endowment funds, the Fondation de France counts almost 5400 endowment funds and foundations, including the 1742 sheltered foundations.

What does this picture tell us?

Recent legislation has led to the emergence of new vehicles favoured by philanthropists and patrons. i.e. philanthropists = individuals and patrons = companies.

Endowment Funds and Sheltered Foundations have been widely preferred to RUP Foundations and Corporate Foundations.

A wide variety of founders – individuals, companies, associations, hospitals, universities, local authorities, etc. – have opted for more flexible and less demanding endowment frameworks.

These entities represent a growing economic weight in the third sector

The €14 billion in expenditure should be seen in the context of the €60 billion weight of the sector. In other words, 0.5% of the number of non-profit organizations now account for almost 25% of total expenditure.

It is, however, regrettable that this excellent study does not specify which expenses, mainly for operating foundations, come from the generosity of the public and companies, and which from day fees, agreements, subsidies or services.

This distinction would have made it possible to determine the proportion of funds raised by operating foundations and by redistributors.

To better understand the dynamics of the data presented in this report, let’s specify which type of structure we’re dealing with.

Operating and distributing foundations are two major types of foundation in the philanthropic landscape. These foundations have different characteristics in terms of structure, operation and mission.

An operational foundation, also known as a “full-service foundation”, carries out activities directly in pursuit of its corporate purpose. It develops its own programs and projects, and in the case of the most powerful, manages its own establishments.

Distributing foundations do not themselves carry out operational activities, but make grants to other organizations working in their field of interest. They are the fastest-growing group in terms of the number of foundations created.

It is important to note that some foundations may have a hybrid nature, i.e. they may both carry out their own actions and support other organizations. Such foundations are often referred to as “mixed foundations”.

It should also be noted that both types of foundation may be financed by an endowment or successive endowments from their founders. In this case, they do not require external support.

Outlook for these two types of foundation

Endowment funds and foundations

Endowment foundations, whether operational or distributing, clearly have considerable potential, given the increasing socialization of assets and fortunes, whether intergenerational or entrepreneurial. As indicated in the study, more than two-thirds of these are created by individuals and companies who will obviously not be appealing to public generosity.

If we had to name just a few[4], among the most powerful are the Pierre Fabre Shareholder Foundation, the Daniel and Nina Carasso Sheltered Foundation and the Anyama Endowment Fund.

Funds and collecting foundations, whether operational or distributing

The development of collecting foundations, whether operational or distributing, is less obvious. It is clear that the creation of this type of vehicle will be less dynamic, or even stagnant, given the strong competition for philanthropic euros.

For redistributing foundations, the path is virtually blocked, unless they are born of a novel fund-raising initiative, e.g. Ze Event.[5], solidarity lotteries, such as Novamedia[6] in the Netherlands, a cause championed by a star: cf. RED and Bono[7], or by a generous crowd mobilizing millions of donors, like Time for the Planet[8] even though it’s not a foundation.

For operational foundations, if they have not been involved in fund-raising for several years, the barrier to entry becomes prohibitive, as it requires an investment that ensures a distant return on investment.

So, what does this study tell us?

As already mentioned, the rise of foundations marks a real turning point.

It illustrates the concentration of resources in the hands of a few thousand wealthy individuals and powerful corporations.

This paradigm shift continues to raise questions about the democratic representativeness of these organizations and their ability to dictate choices on matters of general interest.

But just as the American philanthropist competes with the State and its satellites, so the philanthropist and patron of the arts in continental Europe complements the action of the welfare state.

In France, the generosity of individual and corporate donors, who have endowed their foundations, goes mainly to social causes and medical research, which gives us hope that the enlightened philanthropic despots will have less control over the general interest.

Antoine Vaccaro

Holder of a doctorate in organizational science, he has worked for a number of major non-governmental organizations and communications groups, including Fondation de France, Médecins du Monde and TBWA, and is Chairman of CerPhi and Force for Good. Co-founder of several professional bodies: Association Française des Fundraisers, Comité de la Charte de déontologie des organismes faisant appel à la générosité publique, Euconsult, La chaire de Philanthropie de l’Essec. Investor with Heoh, Qu’est ce qui tourne? My Quick Win. He has published several books and articles on philanthropy and fund-raising.

[1] Francis Charhon

[2] https://www.fondationdefrance.org/fr/les-fondations-et-fonds-de-dotation-en-france/etude-fondations-2023

[3] https://www.legifrance.gouv.fr/loda/id/JORFTEXT000000791289

[4] https://www.fondationpierrefabre.org/fr/

https://www.anyama.org/

[5] https://zevent.fr/

[6] https://www.novamedia.com/

[7] https://fr.red.org/

[8] https://team-planet.com/fr