Government Policy and the Nonprofit Sector: Switzerland - VMI

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Nollert and Budowski Government Policy and the Nonprofit Sector: Switzerland sensible construction projects. Development aid and the activities of welfare organizations generally are also coming under increasing scrutiny in the business‐friendly media, e.g. Neue Zürcher Zeitung or the Weltwoche. At the same time aid organizations lament the promotion of such economization in the social sector as it leads to the erosion of existing solidarity in the medium‐term. c) State Financial Support Many NPOs point out that the state has been less willing to support NPOs financially without restriction since the 1990’s. Indeed the state has been increasingly interested in output in form of service agreements rather than input. Furthermore, public bodies (e.g. the Swiss Agency for Development and Cooperation, SDC) have continually reduced the proportion of costs that they are prepared to cover in different projects. The most recent ZEWO Report on the Donation Market (2006), based on data obtained from the donation‐monitoring agency, provides evidence of the state’s reduced enthusiasm for such financial support. NPOs face this pressure by restricting costs, locating new sources of finance and/or reactivating existing ones. This state of affairs also indicates a trend towards commercializing the stagnating donation market, leading to strong competition between domestic and international NPOs, and from private organizations as well. Unfortunately for Swiss NPOs, the government has recently been considering offers from foreign NPOs as well as from private companies. According to experts not all NPOs in Switzerland have yet adapted to this new situation and are therefore being discriminated against when it comes to cost structure comparisons with foreign NPOs (such as World Vision), private organizations and NPOs with specific activities in certain regional areas. Finally, NPOs today appear to have the choice between two strategies with respect to the state: (i) they can seek proximity toward the state and thereby risk losing a certain degree of autonomy, or (ii) they can explicitly seek distance from the state, which implies complete reliance on private funding. d) Professionalization A key issue for NPOs is professionalization. This refers specifically to the efforts of NPOs to improve the management skills of their staff. Professional marketing devices are becoming necessary in order to raise funds and to motivate potential donors. Furthermore, the interviewees have identified a trend towards monetarizing volunteer work, i.e. documenting volunteer work in order to calculate its economic value and to make it comparable with other types of work (Farago et al. 2005). In order for NPOs to be certified by organizations such as ZEWO, their practices need to be professionalized. The increase both in efficiency and effectiveness of such professionalization however leads to higher costs, which has led to public criticism. The Swiss Cancer League experienced this when it chose a private company to produce a television advertisement for its 2007 donation campaign but had to utilize 400,000 CHF of donation funding to do so. Business practices in Pro Facile, serious (legal) conflicts between the interests of the Swiss Paraplegic Foundation and the personal interests of its founder and former president leading to conviction of 22
Nollert and Budowski Government Policy and the Nonprofit Sector: Switzerland the latter as well as discussions about misappropriation of donations to Swiss Solidarity 56 , have provided further reasons for public criticism. Expanding professional requirements for NPO positions also increases salary levels. Many organizations realize that when it comes to management positions the lack of financial incentive makes it difficult to compete with private organizations. It must be acknowledged, however, that intrinsic motivation in NPOs is still high and that this prevents mass migration to the private sector. The tendency towards professionalization becomes problematic when volunteers realize that they are performing the work of professionals, but are not being compensated financially for it. Due to this problem greater efforts are required to find volunteers to serve in positions of responsibility for longer periods of time, such as on supervisory committees. The controversy over the remuneration of strategic volunteer work on foundation boards and supervisory committees is moving in a similar direction. ProFonds among others, suggests, that work on such committees should become more professional following the trend at management level. This would justify a higher level of remuneration. For relief organizations in particular, periodic catastrophes such as the 2004 Indian Ocean tsunami are a problem due to lack of qualified personnel. This problem, however, is periodic and is part of the everyday work of an NPO. e) Legal Framework Another important change over the past 10‐15 years has been the development of the legal framework. First of all, it is important to recall that the Foundation and Fiscal Law for Nonprofit Organizations 57 in the Civil Code Book 58 has been revised. Although the revision was simple, it has been widely supported, especially since the state supports private volunteer work. The fiscal framework has therefore been substantially improved as the proportion of tax‐deductible donations has increased. The new Association’s Law 59 has also been well received, as it will no longer hold association members accountable for the association’s debts (in so far as the respective statute does not contain special regulations). V. SUMMARY Due to a long a tradition of co‐operative and voluntary associations and the importance of the principle of subsidiarity, the Swiss Federal government, the cantons and the municipalities have a generally positive stance toward the nonprofit sector. However, there exists a lack of explicit policies regarding NPOs. In addition, although the political parties emphasize different functions of NPOs, most of them support them. Even the Swiss People’s Party that criticizes the financial support of NPOs is itself well represented in the supervisory boards of NPOs in the sports and agricultural sector. The major areas where the Swiss government supports the 56 Die Glückskette 57 Stiftungs‐ und steuerliches Gemeinnützigkeitsrecht 58 Zivilgesetzbuch 59 Vereinsrecht 23
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Government Policy and the Nonprofit Sector: Switzerland - VMI

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