Like any geography, Europe has its specificity when it comes to fundraising. Indeed, international fundraising involves navigating legalities, regulations, cultural and social nuances specific to each targeted country. From abroad, Europe is seen as one continent, but even though there are strong links between the Member Countries, there is no such thing as a one-pronged approach to fundraising in Europe.
This article, and the webinar that was proposed by Chapel & York Foundation on the topic, aim at guiding you through these complexities and provide crucial insights for a successful campaign.
1- General insights at the European level
a. Consider the local economic and social context
If the European Union has been quite stable these past years, it is important to consider that the context evolves and great changes happen that will directly or indirectly impact fundraising. As an example, after the COVID crisis, then the Ukraine war, we have seen a dramatic rise in the cost of living in Europe. As a result, the amount of money donated by individuals, at the European level, decreased by 32% in 2022 compared to 2021, which directly impacted fundraising activities.
Considering these crises, the cost of living and inflation might be important. For instance in 2022, in Ireland, 48% of nonprofits have seen an increase of the demand for their services, while donations decreased by 38%, thus creating more difficult conditions for nonprofits to fundraise.
b. Have an understanding of local fundraising challenges and strategies
In the 2022 Nonprofit Pulse Report by EFA (European Fundraising Association), out of 658 survey participants, 47% say that raising sufficient funds remains a major challenge. In response, 31% said they have increased investment in communication and marketing. In that survey, we also learn that close to a third of respondents (31%) said they had decreased the number of events they organize. While nonprofits reported a decrease in individual giving income and supporter numbers, there was also an increase in funding from grants and foundations.
Fundraising strategies thus evolve to adapt to these new trends and it is crucial for a foreign organization to have an overview of these trends. In 2023, the main areas of focus in fundraising strategies are digital development, supporter care, regular giving and channel diversification.
If we look at channels for fundraising and engagement, in 2022, emailing and social media campaigns continue to be the most used channels.
c. Have a clear overview of the big trends
Though it is difficult to make accurate comparisons of charitable giving across Europe, due to the differences in data available from each nation, we can access estimates and big trends. If we look at foundations, it is estimated that there are 147,000 foundations in Europe. These foundations manage 511 billion euros in assets and endowments and give an estimated 60 billion euros annually (source: DAFNE, Candid).
In a recent Giving in Europe study from ERNOP (the European Research Network on Philanthropy), the UK and Germany were seen to be the biggest givers, with the UK donating an estimated EUR 25.3 billion, and Germany EUR 23.8 billion.
Behind the UK, the top nations for individual giving are Italy (EUR 7.2 billion), and Germany (EUR 6.3 billion) and for bequests are Switzerland (EUR 660 million) and France (EUR 600 million).
In its 2017 Fundraising in Europe report, EFA (European Fundraising Association) was forecasting that the number of donors could be stabilizing in the future. Despite some growth in the European population, less than half of the nations surveyed reported a rise in donor numbers. The majority of associations indicated either that donor numbers were static or fell during the past five years. However, associations also referenced new groups of donors and younger supporters who are increasingly accessible to the sector with the development of online donation platforms, growth of peer-to-peer giving and with new entrants to the fundraising marketplace attracting a different supporter base.
Now if we look at the top charitable causes, we learn that:
- Children and young people is a top cause in 9 European nations
- Healthcare and medical research in 7 European nations;
- International development in 5 countries
- Poverty, emergency services and social care come next in 4 European countries.
d. Get information about the legislation
In May 2018, the general data protection regulation (GDPR) came into effect. It is the biggest overhaul of data protection legislation for over 25 years. Most national fundraising associations indicated that charities in their nation were under-prepared for the new regulations. This is a complex legislation to navigate for European nonprofits and clearly a challenge to consider for foreign organizations.
2- Differences within Europe
a. Giving trends at national level
Europe is not to be considered as one big market, but as multiple markets with their own specificities. If we zoom in on giving trends at national level, a comparative report by StiftungSchweiz exploring charitable giving trends in six European nations reveals distinctive differences in the way that nonprofits raise funds across the continent.
Below are four examples taken from the summary made by EFA:
- Germany: With voluntary income of €22 billion, Germany is the second largest philanthropic market in the study. Corporate giving is particularly prevalent, with companies giving 43% of fundraised income – as much as donations from private individuals (23%) and foundations (20%) combined (excluding church foundations).
- France: The charitable sector in France raises €9.62 billion and is more reliant on donations from private donors (36%) than any other country in the report. This is closely followed by income from foundations (29%), which the report describes as ‘surprising’ since foundations are relatively new to the market. Bequests are also very strong, raising 11% of donated income.
- Switzerland: The smallest market in the study, foundations contribute more than half (53%) of the total amount given in Switzerland (€3.45 billion). In general, despite the disparity in the overall size of the market, the UK and Switzerland are very similar in their donation trends.
- Spain: Raising €3.77 billion across all channels, Spain’s nonprofits rely heavily on income from foundations, at 62%. In comparison, corporate donations are marginal (8%). Almost a quarter (23%) of donations are given from individuals.
b. Legal environment
In Comparative Highlights of Foundation Laws by Philea, two principal trends concerning the general tax law framework applicable to foundation in Europe are revealed:
- all countries grant tax concessions for philanthropic foundation;
- nearly all countries have tax incentives or similar subsidies to encourage donations by individual and corporate donors.
Philea has listed 4 categories of tax systems:
- Tax deduction: a reduction in the growth amount on which tax is calculated;
- Tax credit: an amount that can be deducted from the actual tax to be paid;
- Hybrid: a combination of both tax deduction and tax credit;
- No tax system in place.
However, each country has a very specific tax law framework. In its 2022 Comparative Highlights of Foundation Laws, Philea highlights that “tax law is under constant review with new tax incentives related to the Covid pandemic in 2020 being introduced in several countries with the aim to stimulate more giving and the creation of more public-benefit work. Governments seem to be using the tax law as a way to stimulate more investments and activities in certain policy areas.” These constant changes thus require continual monitoring from foreign organization. A comparative chart can be found in the same report for a complete overview of the tax law framework in each European country.
c. Cultural differences
The history of philanthropy and, thus, cultural differences are also to be considered. Each ecosystem works differently and people are not necessarily to be approached in the same manner. As an example, many French nonprofits encounter lots of challenges in raising funds in Switzerland, and they don’t even understand why. There is a common mistake to consider that neighboring countries are very similar when they actually are not. Relationship to money, mindset of the inhabitants, their knowledge and interest of the nonprofit sector and philanthropy, their social, economic or religious origins are some key elements to take into account.
Conclusion
Despite these challenges, Europe remains a market full of opportunities for foreign nonprofits. Moreover, we see a constant increase in cross-border and transnational giving within the EU and beyond.
A good understanding of this market combined with professional support from people with expertise and knowledge in the country you are targeting is essential to ensure the success of your fundraising campaign on the European market.
Do you need expertise and support for your organization? Let’s talk about it!
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