{"id":68290,"date":"2017-03-21T11:17:29","date_gmt":"2017-03-21T10:17:29","guid":{"rendered":"http:\/\/www.erasmusmagazine.nl\/?p=68290\/"},"modified":"2025-12-19T11:22:40","modified_gmt":"2025-12-19T10:22:40","slug":"is-geven-aan-goede-doelen-gevaarlijk-2","status":"publish","type":"post","link":"https:\/\/www.erasmusmagazine.nl\/en\/2017\/03\/21\/is-geven-aan-goede-doelen-gevaarlijk-2\/","title":{"rendered":"Is giving to good causes dangerous?"},"content":{"rendered":"
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\"KarenKaren Maas is an economist and the academic director of the Impact Centre Erasmus (ICE). She studies sustainability and social value creation. Maas specialises in measuring social and societal impact and in measures aimed at achieving social and societal impact.<\/p>\n\n\t<\/div>\n

The immensely wealthy Van der Vorm family of entrepreneurs\n(HAL Investments) has a philanthropic\nfoundation, De Verre Bergen, which focuses on\nsocial and societal issues in Rotterdam. It became\nknown in January that HAL will also invest in arts\nand culture through Droom en Daad. Is that good\nnews?<\/strong><\/p>\n

\u201cI think so. De Verre Bergen is a rather rare kind of club in the Netherlands. Whereas other donor-advised funds focus on a specific sector, such as education or care, De Verre Bergen focuses on a region. What\u2019s also special is that the foundation seriously considers the impact. Many philanthropic institutions hardly do that. Moreover, De Verre Bergen has played a major role in Rotterdam in the past five years. It bought two hundred houses for Syrian refugee families in the past year, for example. The fact that it recruited Wim Pijbes, former director of the Rijksmuseum, for Droom en Daad shows you how serious De Verre Bergen is about what it does.\u201d<\/p>\n

Pijbes has stated that funding for projects is more\nlikely to be in the hundred thousand Euros range\nrather than the ten thousand Euros range. Is this a\nsensible approach?<\/strong><\/p>\n

\u201cIt\u2019s smart to focus on the large trunks because they are easier to monitor. Major donors of this kind often find it difficult to give strategic shape to their portfolios, because although the scope and mission of a donor-advised fund is laid down in the fund\u2019s articles, such articles are often so vaguely formulated as to allow every kind of interpretation. As a result, philanthropists sometimes appear to be playing Father Christmas. The danger is that one friend helps the other friend without thinking about the social impact. Giving rationally is difficult, but De Verre Bergen is one of the few funds that does so fairly well.\u201d<\/p>\n

It\u2019s very normal for billionaires in the US to donate\na large part of their fortunes to a good cause. Those\nwho have done so include Warren Buffet, Bill Gates\nand Mark Zuckerberg. Such giving is virtually unknown\nin the Netherlands. Why?<\/strong><\/p>\n

\u201cUnlike Americans, Dutch people usually do not disclose the fact that they are donors and the amounts donated. A change is occurring, however. In the past, wealthy individuals tended to make arrangements for their money to be donated only after their deaths. According to the organisation that supports the interests of Dutch donor-advised funds, wealthy individuals are now donating during their lifetimes. Perhaps they are doing so because of the retreating state. It could also simply be that the number of wealthy individuals is increasing and more money is therefore available for philanthropy.\u201d<\/p>\n

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Are Dutch people generous donors?<\/strong><\/p>\n

\u201cA 2016 study by ABN AMRO MeesPierson shows that wealthy Dutch individuals are becoming more willing to give. On average, wealthy private clients of this asset management company donate over 11 thousand Euros a year to social causes. That is almost twice as much as the amount stated in a study carried out in 2013. Moreover, rich people give more. Twenty percent of the 1.5 billion Euros that Dutch households give to charities each year comes from millionaires. A Movisie study shows that people who have capital in excess of 50 thousand Euros account for 80 percent of the total. In addition, according to a conservative estimate, a further 184 million Euros is available through donor-advised funds of philanthropists.\u201d<\/p>\n

What do we spend that money on?<\/strong><\/p>\n

\u201cIt depends on the donations being considered. VU University Amsterdam conducts a considerable amount of research into the donation behaviour of private individuals. This research shows that over 20 percent of donations go to religious institutions, followed by international assistance, sports and public social projects. The culture sector has been at the bottom of the list for twenty years, even though drastic budget cuts were implemented in\u00a0the past two decades. It is interesting to note in this regard that the culture sector is actually the main area of focus of the major wealthy donors. In 2014, Dutch cultural institutions received almost 25 million Euros from private funds, 80 percent of which went to museums. If you look at what philanthropists like Gates and Buffet are doing worldwide, almost all of the money is going into health, education and women\u2019s rights.\u201d<\/p>\n\n\t

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\n\t\t\u2018Access to arts and culture is a major problem in Rotterdam\u2019\n\t<\/blockquote>\n\n\t<\/figure>\n\t\t<\/div>\n\t<\/div>\n

If you could do so, what advice would you give Wim\nPijbes in terms of Droom en Daad\u2019s spending?<\/strong><\/p>\n

\u201cThe first known recipient is the International Film Festival Rotterdam, and I wonder whether such a large institutional party actually needs the money the most, because access to arts and culture is a major problem in Rotterdam. There is for example an enormous gap between rich schools and schools that have limited resources. I would therefore like it if Pijbes made it possible for museums to grant free admission three days a week, for example, or made it possible for all school children to go to a concert or dance performance twice a year.\u201d<\/p>\n

De Verre Bergen and Droom en Daad spend considerable\namounts of money. To what extent can such\nspending have a negative effect?<\/strong><\/p>\n

\u201cDistributing a bit of money is nice for everyone. A fund with a serious budget can cause imbalance, however. De Verre Bergen has more money for social projects than the municipality, for example. Having that kind of financial clout comes with an enormous responsibility in that the fund concerned can end up hampering established parties. One must also ask whose main task it is to organise something. In addition, philanthropy can make a government lazy. If we started building roads in a developing country, for example, that country\u2019s government would probably stop taking responsibility for road infrastructure.\u201d<\/p>\n

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A key criticism of philanthropy concerns tax avoidance:\nas soon as someone sets up a foundation, he or she no longer has to pay wealth tax. Mark\nZuckerberg\u2019s foundation means that 45 billion dollars\nare basically not subject to tax. Is that really\nso bad?<\/strong><\/p>\n

\u201cWhat\u2019s rather strange in a legal context is that anyone can simply set up a foundation. Yes, you must have a website, be reachable and publish an annual report, but that\u2019s it. No one checks whether your organisation actually has an impact. If a charity makes the headlines, it\u2019s because a director is earning an excessive amount or because of some dodgy expense claim. As the Impact Centre Erasmus, we explain in consultation with the Tax and Customs Administration that social impact is a condition to qualify for the expenses scheme. That impact measurement can be extended to the portfolio of a donor-advised fund, because what if such a fund sends money to UNICEF that was earned by investing in an organisation that uses child labour? Possibilities of that kind are usually not checked.\u201d<\/p>\n

Droom en Daad thinks in terms of investments:\nmoney goes in and a social return comes out. Can\nthat kind of return actually be measured?<\/strong><\/p>\n

\u201cI believe that it can, and it makes sense to do so if you\u2019ve put so much money into something, though of course not everything can be expressed in figures. Doing this can actually be counterproductive. Lucas Meijs of the Rotterdam School of Management studies volunteer work, for example. He points out that you can very easily demotivate someone who has intrinsic motivation if you focus solely on figures. It is therefore important to make sure that a situation in which absolutely everything is determined by money does not arise. Historian Bas van Bavel describes the process well in his book The Invisible Hand? A market economy is initially very effective because people become increasingly affluent. A turning point is reached, however, and money starts to be the decisive factor in other domains as well, such as the political one. In America, the current government of millionaires and billionaires reflects that reality. In the Netherlands, we have to ensure that aldermen and women and council members do not only give ear to those who have a lot of money, because that would mean that such a fund has control of the entire sector.\u201d<\/p>\n\n\t

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