feasibility study on funding arrangements for the ... · public health efforts of government, for...

DG Health and Consumers

Feasibility study on funding arrangements for the voluntary and not for profit public health activities at EU level

June 2010

DG Health and Consumers


June 2010

The research described in this report was prepared for the European Commission. The opinion expressed in this study are those of the authors and do not necessarily reflect the views of the European Commission.

COWI A/S

Parallelvej 2 2800 Kongens Lyngby Telefon 45 97 22 11 Telefax 45 97 22 12 www.cowi.dk


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Table of contents

1 Executive summary 2 1.1 Background 2 1.2 Review, inventory and analysis 4 1.3 Three options of a blind trust 7 1.4 Cost estimate of operating the blind trust options 11

2 Conclusion 13

Table of Appendixes

Appendix 1: Inventory, review and analysis Appendix 2: Options for voluntary and not for profit

foundations/arrangements Appendix 3: Roadmap and cost estimate related to the establishment of

a blind trust



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1 Executive summary

1.1 Background The not for profit and voluntary sectors, also referred to as the third sector, play an increasingly important role in public health and other fields, in many EU Member States and at EU level. However such organizations face a number of practical challenges to operations at a European level which are partly related to the different arrangements in place across the EU for making and receiving do-nations1.

Modern approaches to public health go beyond the traditional, medical inter-ventions. Increasingly, comprehensive strategies and approaches across tradi-tional policy boundaries, settings and target groups are developed. Concepts such as 'health for all policies' underline the potential for action in non-health areas to address health concerns more effectively. At the same time, new stake-holders take an interest in health issues and "public private partnerships" are increasingly being considered as a means to take forward public health objec-tives, projects and activities.

In terms of funding actions, enterprises and businesses – linked to processes such as Corporate Social Responsibility – are increasingly ready to support health-related activities. This might be in areas related to their business inter-ests (e.g. projects on drink driving funded by alcoholic beverage producers), in their local community (e.g. by the local supermarket), or at a broader scale, at regional/national level (cf food manufacturer's participation in an EPODE net-work.)

The voluntary sector Therefore, the voluntary sector has a role to play in the public health activity across Europe. As government budgets for health diminish, there is a greater possibility for non public contributions to support the public effort.

The private sector Within the voluntary sphere, there is the private sector (which might include wealthy individuals or companies). There is interest in this sector support the public health efforts of government, for example in terms of voluntary actions or financial contributions from private actors.

1 Communication from the Commission of 6 June 1997 on promoting the role of voluntary organisations and foundations in Europe [COM (1997) 241]



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It is important that non profit contributions to public health actions are in the public interest and free of commercial influence, so that governance issues are very important. Therefore such organizations face a number of practi-cal challenges to operate at a European level which are partly related to the difference arrangements in place across the EU for making and receiving donations.

Scarce public funding Many countries in the EU have under gone financing crises in the health sectors as a result of ageing populations, increasing expectations for health care services, and a growing number of treatments, and other technologies. As a result, public resources for funding public health actions are increasingly scarce. This is particularly true for cross-border and European projects, both in terms of the availability of Member States funds, and EU project funds. In terms of EU funding, projects would only receive co-funding which, for the health programme, would normally not exceed 60% of eligible costs).. The combination of increasing demands for activities in the voluntary sector and shortage of financial support constrains non-profit and voluntary organisations from pursuing their mandates. At the same time, there are is a perception that established boundaries between the non-profit and voluntary sector and the state and the private market are in flux. There are sensitivities and concerns in certain areas related to accepting private funds for public health projects. For example, there are concerns that private support to a project would link to the commercial interest of contributors (e.g. food industry support to nutrition pro-jects), and to the potential influence a sponsor could have on the content and operation of a project. There are also concerns about branding and advertising in particular when considering activities targeted to young people and schools. This indicates the importance of investigating and developing the funding ar-rangements for voluntary and not for profit public health activities at EU level.

The overall purpose The overall purpose of this study is to explore options to establish one or more pan European trusts to receive donations for public health activities. The study has focused on the following specific tasks:

1. An inventory, review and analysis of schemes across the EU Member States and in other countries, leading to the identification of a number of principles of good practice and "lessons" in establishing structures of this sort.

2. The development of three options for how a non-for-profit foundation, or trust, or other legal arrangement, established in one or more Member State could be established.

3. The discussion of options should include a cost-estimate and a roadmap towards establishing such a structure

The findings of each task are briefly summarised below, and fully presented in three annexes to this report.



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1.2 Inventory, review and analysis Purpose The purpose of the inventory is to explore existing kinds of trusts whereas the

review looks at the macro-economic context for voluntary activity in the differ-ent parts of the EU, to see whether historical and cultural contexts play a role. This will enable us to understand why acceptance of voluntary action varies across member states.

Why a blind trust? Despite the dramatically changes in health and demography the public funding in health is scarce. This situation challenges the public health systems in all Eu-ropean countries. Therefore, the voluntary public health sector has an important role to play in the public health care sectors across Europe.

Various funding arrangements are available for both voluntary actors and trusts, respectively. According to voluntary actors the aim is to receive money for be-ing able to run public health activities. Whereas according to a trust the aim is to be able to run a trust which among others fund actors to run their activities. In both cases funding can derive from various sources:

Government support: revenues from state and municipalities – grants con-tracts and reimbursement schemes (public contribution)

Earned income: revenues from sales of services and goods, membership dues and investment income

Philanthropy: donations from individuals, foundations and private companies (non-public contribution e.g. industries).

If voluntary actors are directly funded a risk of conflict of interest arise. This claims for establishing a blind trust.

A high number of trusts and foundations are present in Europe. None of them are the same; they have different visions, missions, objectives, economical situations etc. They provide services to donors, beneficiaries, make grants, and undertake leadership and partnership activities to address a wide variety of need. Every trust or fund is dependent on donors. The income from donations decide the activity the trust are able to run and the number and amount of grants which can be distributed. The type of donations (government support, earned income, philanthropy) is of special interest when founding a new trust because it reflects the viability of the trust. The review presents the comparative data on the scope, composition and struc-ture of the non-profit, voluntary sector in Europe which have been generated through the Johns Hopkins University Comparative Nonprofit Sector Project (JHU project) covering about 40 countries. The review elucidate among others the types of voluntary, non-profit organisations, the type of voluntary activities and the impact of the organized civil society and of the organisation of the wel-fare system, respectively.

Ways to obtain fund-ing for voluntary ac-tors and trusts, re-spectively

Inventory of differ-ent trusts across the EU and other rele-vant countries

Income from donors

Review of the macro-economic context for voluntary activity in the differ-ent parts of the EU



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Voluntary activities are all kinds of voluntary engagement. In general, the vol-untary sector and activities are well described in social contexts whereas the description of the public health orientated voluntary sector is lacking in the European context. Most voluntary activity takes place at local level. Modern approaches to public health go beyond traditional, medical interventions. Increasingly, comprehensive strategies and approaches across traditional policy boundaries, settings and target groups are developed. Concepts such as 'Health in All Policies' underline the potential of action in non-health ar-eas to address health concerns more effectively. In other words, the popula-tion's health is not an issue for health policy alone, therefore a goal is to in-tegrate health in all policies.

The analysis of the voluntary non-profit organisations includes three different sectors: health, social services and culture and recreation. In all three sectors some type of health-related and preventive activities takes place. In research on non-profit organisations focus has primarily been on participation and non-profit institutions meaning the formal aspects of civil society. However, the in-formal social networks and social contacts in local communities and friendship circles are just as important for the cohesion of the society and the integration of individuals but these types of activities are normally not included in studies of the non-profit sector.

The impact of the organized civil society, its labour force (unpaid and paid) and its economic impact on the national economies focusing on the formal net-works and organizations might partly explain why the non-profit sector / the organized civil society are significant lower in the Southern and Central / East-ern parts of Europe. This is countries where the informal support systems through family, social networks and local community are more widespread compared to Western Europe and especially in the Scandinavian countries.

The amount of voluntary activity and the prosperity of the non-profit sector seem to be stimulated rather than restricted by highly developed and formalised public welfare organisations, and the formal organisational basis for non-profit activities seems to grow as a result of public support. The Scandinavian coun-tries and the Netherlands score high on both dimensions. These countries have a highly developed social welfare system and a high level of membership in associative organisations combined with widespread volunteering.

Furthermore, a relatively high level of publicly financed social services in Bel-gium, France and Austria was found, but in all three countries the level of vol-untary activity is restricted. A large number of non-profit organisations in these countries as well as in the UK and Germany are involved in the production of social services – elderly care and institutions for children – but the costs of pro-viding these services are financed by the state. Moreover, these social services are primarily provided by paid labour employed by the non-profit organiza-tions, and the involvement of voluntary, unpaid labour is restricted.

Types of voluntary, non-profit organisa-tions in the field of health and preven-tion

Voluntary activities defined in three sec-tors

The impact of the organized civil soci-ety, its labour force (unpaid and paid) and its economic im-pact on the national economies

Level of voluntary action and prosperity at national level



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Another important health dimension in determining the level of voluntary in-volvement (and therefore the acceptability of a Trust or foundation) seems thus to be the organisation of the welfare system. A highly organised and institu-tionalised health system tends to stimulate voluntary involvement and to in-crease the role of the non-profit sector. It may be organised through the state apparatus as in the Social Democratic system or through the corporative organi-sations as in the continental system. These dimensions describing the welfare system concern primarily voluntary work performed in the institutional frame-work of a non-profit organisation.

Voluntarism performed as informal care for friends and family members out-side the household is high both in countries characterized by equalized, social structures such as Social Democratic welfare systems where the equal social structure stimulate social networking and close contact in the local community and in countries with a less developed system of social protection but character-ized by a strong familialism and patronage in the system of social network, which also stimulate the informal support system but make it highly segregated.

The review, inventory and analysis indicate that

• The context for voluntary action is varies considerably from Member State to Member State within the EU.

• A high number of trusts and foundations are present in Europe. None of them are the same; they have different visions, missions, objectives, eco-nomical situations etc. They provide services to donors, beneficiaries, make grants, and undertake leadership and partnership activities to address a wide variety of need.

• The activity level within voluntary public health activities (measured as the amount of expenditures in the non-profit sector as percentage of the total GDP) could be a result of a possible lack of and/or further need of finan-cial support

• The strategy and objectives, decided by the Trust Board, should reflect which type of voluntary activities and target groups will be able to obtain funding

• Review of trusts/foundations across the EU and beyond, indicate that there are essentially three types of donations: fees (e.g. memberships), govern-mental donations, and philanthropy (private one-time donations) which de-scribe the level and type of financial donations

• There is no legislation at EU level relating to the regulation and govern-ance of voluntary and non-profit organisations. One solution for facilitat-ing non-profits that operate on a pan-European basis could be the enact-ment of a 'European Statute for Foundations and a European Statute for Associations'.

Impact of the organi-sation of the welfare system on voluntary involvement

Outcome of the re-view and inventory



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The inventory, review and analysis of existing Trust/Foundation design forms the basis for developing the following three options.

1.3 Three options of a blind trust The three options for a voluntary and not for profit public health blind trust are primarily based on aspects of organising a pan-European blind trust. Further-more, elements such as trust objectives, Board structure, trust domicile, market-ing & public awareness and foundations in European law are taken into consid-eration.

All three options of a blind trust presented below are established to capture both public contribution (financial support from e.g. the EU budget, individual Member States, regional governments, etc.) and philanthropy (non-public con-tribution) such as financial support from individuals, foundations, private com-panies, etc. Additionally, all options will also have the possibility to create their own direct income in respect to reinvestment of capital, membership fees, products/logos, etc.

The set up of a blind trust involves many different elements. The generic organ-isational structure of a blind trust arrangement includes a governing body, con-sisting of the Board, advisory committee(s), and a secretariat including a per-formance and financial controlling system. Furthermore, marketing & public awareness, voluntary actors (potential beneficiaries) and potential donors are important external elements (Figure 1.1). All elements are necessary regardless of the type of the blind trust. Many of the elements are similar as e.g. nominat-ing advisory committees or the financial performance controlling. The differ-ences occur primarily as a consequence of the selected organisation. These similarities/differences can at the same time appear positive/negative depending on the organisation.

Background

Attraction of finan-cial contribution

Establishing a blind trust - similarities and differences



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Figure 1.1. A generic model

Finally, the analysis showed that there is no legislation at EU level relating to the regulation and governance of voluntary and non-profit organisations. There-fore, voluntary activities are subject to the national legislation of the country in which the organisation is legally created and undertaking its activities. Volun-tary organisations that desire to work across Member States are subject to dif-ferent legislation.

With this in mind the three following options are suggested:

• Option A: The blind trust is fully under the direction of the European Commission. The blind trust is fully controlled by the Commission.

• Option B: The blind trust is in any way independent of the Commission or any other political system. The governing body of the blind trust operates without directions from the Commission.

• Option C: The blind trust is organised with satellite offices in a number of or all EU Member States. This option can both be under the direction of the Commission or independent of any political systems in various de-grees.

The table below provides an overview of the differences of the essential aspects of the three options of a blind trust analysed in this study.



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Table 1-1 Overviews of fundamentals and differences between the options

Blind trust fundamentals

Option A - EU directed trust Option B - Independent

Trust Option C - Satellite Trust

Aim/ objective of the trust

Vision, mission, and strategy corresponding to EU policy in the field.

Vision, mission, and strategy independent from political in-fluence. Trust self-governing in relation to needs in the field.

Depend on EU directed or independent trust.

Potential donations Co-donation from the EU budget. Donors could be unwilling to donate to "political" trust.

More willingness to donate to independent trust.


Potential recipients (voluntary actors)

Attract voluntary organisations above a certain size.

Attract voluntary organisations above a certain size.

Could attract smaller voluntary actors - however the distance from either a region to a capi-tal or the region to a trust in Brussels is considered to be the same.

Legislative issues Apply legislation at national level (location of trust) taking into consideration the EU fi-nancial principles. Various EU tools regulate the extent of donors' involvement with a trust as a tool of market-ing.

Apply legislation at national level (location of trust).

In legislative terms, this is a complicated matter. The trust will be subject to numerous regimes. Apply legislation at national levels in respect to both the central trust and the satellite units (location of trust).

Marketing/ public awareness

EU a well-known "brand" to use in marketing - could attract donations. EU will be associated with the trust and its donors in the gen-eral public. High needs for transparency - trust could be seen as spend-ing tax payers' money.

Need to establish a new brand/name. Marketing with fewer restric-tions than Option A.


Domicile Could be hosted by the Com-mission. This could affect the administrative costs, see be-low.

Need own domicile and loca-tion. This will affect the admin-istrative costs, see below.

Need a number of local of-fices. This will affect the ad-ministrative costs, see below.

Cost estimate Same as for Option B. How-ever could have lower admin-istrative costs, if hosted by the

Same as Option A Substantial higher cost than Option A and Option B



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Blind trust fundamentals

Option A - EU directed trust Option B - Independent

Trust Option C - Satellite Trust

Commission.

Secretariat Same as for Option B. Could have few staff members, if hosted and co-administration with Commission.

Same as for Option A. Larger secretariat

Here beneath the three options are illustrated according to their organisa-tional set-up.

Figure 1.2. Option A: EU directed trust - this option is under the full direction of the Commission (e.g. board majority). On this basis, the aim of the trust is coher-ent with EU policy in the field. The internal organisational set-up and procedures of the blind trust is dealt with in Task 3 of the study.

Option A



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Figure 1.3.Option B: Independent trust - this option is independent in relation to any political system or interest. On this basis, the independent board of the trust is free to manage the trust in the direction of its aim. The internal organisational set-up and procedures of the blind trust is dealt with in Task 3 of the study.

Figure 1.4. Option C: Trust with local satellite unit - the organisation of this trust in-cludes a number satellite units located in the European countries. This option can be both under the direction of the Commission or an independent trust. The map of Europe illustrate satellites in relation to a Commission directed trust or an independ-ent trust, respectively. The internal organisational set-up and procedures of the blind trust is dealt with in Task 3 of the study.

1.4 Cost estimate of operating the blind trust options The cost estimate includes the following cost elements:

• Salaries and costs of meetings (costs according to tasks performed in the establishment/implementation and operation phases)

Option B

Option C



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• Overhead costs (costs of operating the blind trust including office facili-ties/ offices)

• Marketing and public awareness (costs of marketing and public awareness activities targeted to the EU population, prospective applicants and do-nors).

To this end, it should be kept in mind that the options presented above are two ends of the scale, and therefore a blind trust can be created in a variety of ways which will naturally influence the costs of running a trust. Therefore, the cost estimate should be considered as an overview of costs incurred in relation to the three options and as a tool to be used when deciding on the final structure of the trust. Furthermore, a number of assumptions in the cost estimates have been invented, e.g. the sum of the annual distribution of funds. This is a fictive fig-ure, and the adjustment of that figure to actual conditions will naturally affect costs estimate (for more on this see appendix 3).

Based on the cost estimates, the below table shows that the total cost estimate for operating Option A and Option B is expected to be the same whereas the cost of operating Option C is significantly higher.

Cost element Option A Option B Option C

Cost - board of directors, secretariat and committees 2,503,500 2,503,500

3,703,500

Office/facilities/rent and overhead 880,000 880,000

1,320,000

Marketing and public awareness 2,000,000 2,000,000

2,000,000

Total 5,383,500 5,383,500 7,023,500

Option C with satellite offices in several EU Member States naturally increases the costs of establishing/implementing and operating the blind trust. Option C has higher overhead costs compared to Options A and B as more offices are envisaged. Furthermore, the salary costs are also expected to be higher for Op-tion C as more secretariat staff is needed due to a higher number of offices in the EU Member States.

A costly Option C



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2 Conclusion The three options for a voluntary and not for profit public health blind trust are primarily based on aspects of organising a pan-European blind trust. Regardless of option chosen, special attention must be given to election of Board members to avoid conflict of interest. Furthermore, focus on marketing and public awareness - and especially attraction of donors - claims a well-researched strat-egy.

To explore attitudes to the options, stakeholder interviews have been performed as well as SWOT analysis for each option. The number of interviews is less than anticipated due to limited willingness of stakeholders to participate in in-terviews. Interviews were carried out with an expert, a voluntary actor and a potential donor reflecting different angles regarding the workability of the op-tions.

The following pros and cons according to each option are primarily based on the SWOT analysis.

Pros in relation to Option A:

• Co-donation from the EU budget • The EU is a well-known 'brand' - which could be an advantage in attracting

donations • Objectives/strategy known and coherent with EU policy • Organisational support from the Commission • Lower administrative cost, if hosted by the Commission Cons in relation to Option A:

• Lack of freedom to act in line with objectives and focus areas during EU programming period

• Conflicts of interest in relation to Commission board members • Private donors could be unwilling to donate to 'a political system' (EU) • Challenge to manage which donors/products the EU will become associ-

ated with • Distance to potential recipients (voluntary actors) Pros in relation to Option B:

• Independent to act both in terms of objectives and donors

Option A:

Option B:



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• Likely to attract private donors • Direct communication with donors Cons in relation to Option B:

• No financial or organisational back-up from e.g. the Commission • Difficult to establish a brand/name • Distanced to potential recipients (voluntary actors)

Pros in relation to Option C:

• Knowledge about needs at regional, national, and local levels • Linguistic skills • Closer relationship to recipients of donations

Cons in relation to Option C:

• High administrative costs • Legislative complications • Distribution according to geographical balance in contrast to reel needs. • Less pan-European knowledge sharing • Distance to potential recipients (voluntary actors) are secondary The background of the three options is described in details in the following ap-pendixes.

Option C:



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Appendix 1: Inventory, review and analysis

Feasibility study on funding arrangements for the voluntary and not for profit public health activities at EU level Report on Task 1: Review, inventory and analysis European Commission Health and Consumers Directorate-General September 2009

COWI A/S Parallelvej 2 DK-2800 Kongens Lyngby Denmark Tel +45 45 97 22 11 Fax +45 45 97 22 12 www.cowi.com

Document no.

Version

Date of issue

Prepared

Checked

Approved

Report on Task 1: Review and inventory

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Table of Contents

1 Introduction 3 1.1 Purpose of Task 1 3 1.2 Contribution to the Study 4 1.3 Structure of the report 4

2 Why a blind trust? 6

3 Inventory of different trusts across the EU and other relevant countries 8

4 Methodology and data of the review 11 4.1 Approach 11 4.1.1 Forms of voluntary, non-profit organisations 12 4.1.2 Types of voluntary, non-profit organisations in the

field of health and prevention 13 4.2 Data description and availability 15

5 Presentation of data based on literature review and inventory 17

5.1 The size of the Non-profit Voluntary Labour Force – Voluntary, unpaid work and paid work 18

5.1.1 Type of activities and composition of work force in the non-profit sector 22

5.2 The composition of the non-profit sector by sector – the economic impact of the sector 24

5.2.1 The financial importance of the non-profit sector – expenditure and revenue 24

5.2.2 Type of activities and distribution of revenue in the non-profit sector 26

6 Comparative analysis of regions 33 6.1 Denmark 33 6.1.1 Portugal 35 6.1.2 Germany 37 6.1.3 Belgium 39 6.1.4 Hungary 40



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6.1.5 The United Kingdom 42

7 EU legal framework 45 7.1 EU regulation of voluntary and non-profit

organisations 45

8 Conclusions and the further work of the study 47 8.1 Conclusions 47 8.2 Results of Task 1 to feed into the following tasks of the

study 49

9 Literature 51



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1 Introduction 1.1 Purpose of Task 1 The purpose of the inventory is to explore existing kinds of trusts whereas the review looks at the macro-economic context for voluntary activity in the differ-ent parts of the EU, to see whether historical and cultural contexts play a role. This will enable us to understand why acceptance of voluntary action varies across member states.

The report will discuss the following questions:

• Why establish a blind trust?

• Which type of activities are voluntary public health activities?

• How is voluntary public health activities financed?

• How is voluntary public health activities organised?

• Can Member States be grouped by characteristics as regard voluntary pub-lic health activities (e.g. types and level activities)

• What are the legal challenges of establishing a European blind trust?

This will be elucidated by performing the following tasks:

An inventory of different trust based in and outside Europe will elucidate the high diversity in the purpose of establishing a trust and especially the type of donations the different trusts receive.

Based on a literature review and a feasibility study, funding arrangements for voluntary and not for profit public health activities at EU level have been ana-lysed as well as an examination of the structures for the private sector and state funding of voluntary and not for profit public health activities is performed.

On that basis, the overall aim of the study is to provide an assessment (based on experiences inside and outside the EU) leading to at least three options for how a blind trust/foundation for donations to voluntary and not for profit public

Purpose

Task 1: Inventory of different trusts

Task 1: Literature review and a feasi-bility study

Task 2: Structure of a blind trust/foundation



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health organisations may be structured. Based on that, this report on Task 1 in-cludes assessments and analysis of the following elements:

• Overview of and experience with voluntary activities

• Overview of the organisation of the voluntary work

• Likely flows of funds

• Formulation of public health areas suitable for the general use of a com-mon donation source and for the specific use of the proposed options

• Outline of the criteria for a legal structure of a blind trust

• EU regulation on related areas

• EU health strategies.

The present report is the output of Task 1, dealing with the above-mentioned areas.

1.2 Contribution to the Study This report will build the foundation of task 2 and 3. Therefore, the three op-tions of a blind trust within voluntary and not for profit public health activities will be formulated in the context of the empirical evidence presented in this report. This means that the differences between the options will mainly be based on differences in voluntary and not for profit health activities, organisa-tions and legislation.

1.3 Structure of the report The report includes the following chapters:

• Chapter two discuss the need of a blind trust

• Chapter three gives an overview of different trusts across the EU and other relevant countries and the type of donations they receive.

• Chapter four describes the methodology and data; and explains our data sources, and analytical approach

• Chapter five presents the data deriving from the literature review

• Chapter six elucidates comparative analysis of selected regions

• Chapter seven presents the legal framework of EU according to volun-tary and non-profit organisations and possible legal regulation.

Output

Empirical evidence



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• Chapter eight elaborates conclusions on the present report based on the literature review and the feasibility study. Furthermore, the results of Task 1 which obviously feed into Task 2 and 3 are demonstrated.



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2 Why a blind trust? In recent years the focus on health in Europe has increased due to a higher number of persons suffering from a poor health condition. Simultaneously, the demographic changes show a huge increase in the amount of elderly citizens. The main health determinants are smoking, physical inactivity, nutrition, alco-hol e.g. According to WHO 70% of all deaths in 2020 are due to an inactive lifestyle in the western countries. Furthermore, the inequality in health across Europe is obvious e.g. life expectancy varies from 65.3 years in Lithuania to 79.5 years in Iceland. Even in Europe where most countries offer universal health care systems, large groups face significant barriers to equal access to healthcare. Among those who face the lowest access to health care are disad-vantaged communities and vulnerable population groups such as low-income groups, migrants and children. Despite these dramatically changes in health and demography the public funding in health is scarce. This situation challenges the public health systems in all European countries. Therefore, the voluntary public health sector has an important role to play in the public health care sectors across Europe. This indicates the importance of investigating and developing the funding arrangements for voluntary and not for profit public health activi-ties at EU level.

Various funding arrangements are available for both voluntary actors and trusts, respectively. According to voluntary actors the aim is to receive money for be-ing able to run public health activities. Whereas according to a trust the aim is to be able to run a trust which among others fund actors to run their activities. In both cases funding can derive from various sources, later in this report three main categories of revenues are categorized:




If voluntary actors are directly funded a risk of conflict of interest arise. This claims for establishing a blind trust.

The need for funding arrangements for vo-luntary and not for profit public health activities

Ways to obtain fund-ing for voluntary ac-tors and trusts, re-spectively



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To avoid conflict of interest between the beneficiaries and the investments a blind trust is recommended. Donors in sensitive positions often place their per-sonal assets or investment income into blind trusts, to avoid public scrutiny and accusations of conflicts of interest when directing funds to specific areas. In a blind trust the trust board (fiduciaries) have been given power of attorney, they have full discretion over the assets, and the beneficiaries have no knowledge of the holdings of the trust and no right to intervene in their handling. In general, the beneficiaries are unaware of the specific assets in the trust.

Blind trusts It is therefore the interest of both voluntary actors and trusts to establish a blind trust to increase the envelope in the voluntary public health sector. Blind trusts exist in many variations which create experiences for establishing a blind trust within the area of public health at EU level.

Conflict of interest



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3 Inventory of different trusts across the EU and other relevant countries

A high number of trusts and foundations are present in Europe. None of them are the same; they have different visions, missions, objectives, economical situations etc. They provide services to donors, beneficiaries, make grants, and undertake leadership and partnership activities to address a wide variety of need. Every trust or fund is dependent on donors. The income from donations decide the activity the trust are able to run and the number and amount of grants which can be distributed. The type of donations is of special interest when founding a new trust because it reflects the viability of the trust. Table 5-1 shows a selection of trusts across Europe and other relevant countries and the type of donations they receive. It is evident that most of the trusts re-ceive Earned income as the most important income source. This primarily de-rives from investment income and partly income from sales. About half of the trusts' receive income from at least two different sources e.g. Earned income and Philanthropy and one even receives income from all three economical sources. In one case (Vårdal Fonden) the trust received Government support for the establishment of the trust; thereafter the primary source derives from Earned income. It is notable that only two trusts' receive income from only phi-lanthropy. Though, this is in agreement with the findings in chapter 3 showing that the lowest share of revenues derives from philanthropy. In Appendix 1.1 the 32 trusts mentioned in Table 5-1 are further described ac-cording to their area of interest, goal, mission, vision and grants as far as it is possible to obtain this information. The trusts described represent different ar-eas, some covering several countries, and they obtain income from different sources as also shown in Table 5-1.

Different trusts have different aims

Income from donors

Type of donations



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Trust /foundation Type of donations Trust /foundation Type of donations

Aga Khan Foundation (Switzerland)

Government sup-port/Philanthropy/Earned income

Lilly Endowment (US)

Philanthropy/Earned income

Barnardos (Australia) Earned income Mott Foundation (US) Philanthropy/Earned income

Berantungstelle für Unfallverhütung (Switzwerland)

Earned in-come/Philanthropy

Pew Charitable Trusts Philanthropy/Earned income)

Bertelsmann Founda-tion (Germany)

Earned income Nuffield Foundation (UK)

Earned income

Bill and Melinda Gates Foundation (US)

Earned income Robert Woods John-son Foundation (US)

Earned income

Calouste Gulbenkian Foundation (Portugal)

Earned income Rockefeller Founda-tion (US)

Earned income

Carnegie Endowment (US)

Government sup-port/philanthropy

Roi Baudouin Foun-dation (Belgium)


Ditchley Foundation (UK)

Philanthropy Sasakawa Peace Foundation (Japan)


Esmee Fairbairn Foundation (UK)

Earned income Schwab Foundation for Social entrepre-neuership (Switzer-land)


Forebyggelsesfonden (The Prevention Fund) (Denmark)

Government support Skoll Foundation (US) Earned income

Foundation ONCE (SPAIN)

Earned income Soros (Open Society) Foundation (US)


Friedrich-Ebert-Stiftung (Germany)

Government support Trygfonden (Den-mark)

Earned income

Heinrich-Boell-Stiftung (Germany)

Government support Vårdal Fonden (Swe-den)

Government support/ Earned income

Joseph Rowntree Foundation (UK)

Earned income Wakfs (Muslim Chari-table Foundation)

Philanthropy

Knut och Alice Wallenbergs Stiftelse (Sweden)

Earned income Welcome Trust (UK) Earned income



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Table 5-1 Selected trusts and their type of don

Laerdal fonden (Nor-way)

Earned income W. K. Kellogg Foun-dation (US)




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4 Methodology and data of the review Review The following review clarifies and analyses the voluntary and non-profit

activities in the field of public health across Member States and Anglo-America. Furthermore, the level of funding followed by practices for the opera-tions and the role of not for profit and voluntary organisations in the different types of societies is identified.

The following analysis are based on a review of literature generated by scholars related to the research network around the John Hopkins University Compara-tive Nonprofit Sector Project (JHU project).The analysis partly derives from a number of comparative analyses based on the JHU-data base on organisation of and volunteering in the non-profit voluntary sector; and partly the national case studies performed in connection to the JHU project of the European countries selected for detailed description in chapter 4 of this report.

The comparative data on the scope, composition and structure of the non-profit, voluntary sector in Europe used in this report have been generated through the Johns Hopkins University Comparative Nonprofit Sector Project (JHU project) covering about 40 countries. Consequently, the definitions and terminology de-veloped in the JHU project are used. For some of the countries, the survey of the non-profit sector took place already in the early 1990s – e.g. the UK, Ger-many and Hungary. For other countries the survey has first been carried out in recent years – e.g. Portugal, Belgium and Denmark. Furthermore, for some of the frontrunner countries the non-profit sector project has been repeated, and for these countries a longitudinal database exists – e.g. Sweden, Norway, and Italy.

4.1 Approach According to the criteria used in the Johns Hopkins University Comparative Nonprofit Sector Project (JHU project), the voluntary sector (non-profit sector) can be defined by five characteristics:

Firstly, the sector consists of organisations - i.e. the entity is an 'institutional-ised reality'. This may take the form of legal status, or of organisational perma-nency, with ongoing activities, formal objects, structures and procedures (e.g. written statutes), frequent meetings, an address or meeting place, as well as meaningful cut-off points from the activities of the rest of society. As a result, ad hoc groups and temporary unions and gatherings do not comply with this definition.

Literature review

Analysis - based on the Johns Hopkins University Compara-tive Nonprofit Sector Project

Five characteristics of the voluntary sec-tor



12

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Secondly, the organisation is to be private/non-governmental, i.e. the organisa-tion is not part of or controlled by the public sector, and the organisation is in-stitutionally separate. This criterion does not, however, prevent the organisation from taking on work on behalf of the public sector or deriving the majority of their finances from the public sector.

Thirdly, the organisation is to work not-for profit, i.e. generating a profit, either directly or indirectly, is not a primary objective and commercial targets and considerations do not guide the organisation. Any form of accumulated surplus must be used for the objectives of the organisation and not be distributed among the owners, members or board of directors.

Fourthly, the organisation is to be self-governing, i.e. be in charge of its own affairs and not controlled by other organisations. This part of the definition is similar to point 2, but also includes the possible control over an association or institution by an establishment or a national organisation. Even though no or-ganisation is totally independent of others, the organisation must control its own management and operations. This does not, of course, prevent national organisations and other organisations from making demands on the organisa-tion, for example, but in principle it has decided for itself whether it wants to be member of a national organisation, which activities it wants to be involved in, who the members of the board are to be, the nature of its statutes, etc. The self-governing principle, however, does not concern the way the organisation was formed, the degree of public regulation of activities or dominant external sources of income.

Fifthly, participation in the organisation is non-compulsory, i.e. member-ship/participation and any financial contributions or work are voluntary, and that voluntary, unpaid work is also performed in the organisation. This does not stop voluntary organisations undertaking tasks that make membership in them necessary in order to practise a profession; but as long as membership is not a condition for citizenship the organisation is still considered voluntary.

4.1.1 Forms of voluntary, non-profit organisations The voluntary, non-profit sector consists of two main types of organisations:

An association is normally defined as a union of people - or a union of organi-sations - with a common aim or common interests, organised and managed by ordinary democratic rules and procedures (sometimes also named clubs and societies). This organisation form emerged in the beginning of the 1800s and differed from pre-modern associations by

being formalised (typically with written rules),

having members

being a defined interest community,

being open to everybody (in principle)

Association



13

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having voluntary work

having a democratic structure of decision.

In many countries, the legal basis for associations is formed by the Constitution Act. Associations account for the majority of non-profit organisations. Common to a 'private foundation', a 'self-governing institution', a 'public benefit corporation' and a 'charitable trust' is the fact that, unlike associations, they do not have members. Common to these types of organisations is that

the organisation owns itself so to speak (it has no owner)

there is no other owner than the 'purpose', which has to be of public utility (or charity)

foundations have an asset designed for at specific purpose

any surplus is earmarked for the purpose, and in case the institution is dis-solved, the property is also owned by the 'purpose'

In many countries, these non-profit organisations or institutions are typically regulated by special legislation and have to be entered in a separate database.

4.1.2 Types of voluntary, non-profit organisations in the field of health and prevention

In this report, activities related to the field of health and prevention are broadly defined. The analysis of the voluntary non-profit organisations includes three different sectors: health, social services and culture and recreation. In all three sectors some type of health-related and preventive activities takes place. In the overview to follow, a detailed description of the different types of activi-ties taking place in these sectors is provided. Due to restrictions in available data, it is not possible to obtain data on such a detailed level at the cross-national level. Most available data are simply overall figures for the three main sectors. Organisations involved in health and health promotion.

The primary goal of these organisations is treatment and care, health promotion and dis‐ease‐fighting activities (representing and working for people with specific diseases).

Hospitals and re‐habilitation cen‐tres

Non‐profit private hospitals, nursing homes etc. Voluntary associations supporting private and public hospitals, nurs‐

ing homes etc. Associations and non‐profit institutions involved in therapeutic care

(nature cure centres, yoga clinics, etc.)

Nursing homes, homes for dis‐abled

Voluntary associations supporting nursing homes, homes for disabled people etc.

Mental health and Associations and non‐profit institutions for treatment of mentally ill

Private foundation and self-governing institution

Voluntary activities defined in three sec-tors



14

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crisis intervention patients Associations and non‐profit institutions for crises intervention (in‐

cludes suicide prevention and support to victims of assault and abuse)

Other health ser‐vices

Associations for public health promotion and health education (in‐cludes first aid training, family planning services etc)

Disease‐fighting associations (e.g. Cancer association, the Association of Rheumatism, the Brain Association, the Association of Mental Illness)

Primary health organisations Associations for the disabled and handicapped Associations for donors (for instance blood donors) Relief work associations Adoption and Society Temperance societies Non‐profit institutions and organisations for emergency and medical

service (e.g. ambulatory services, paramedical emergency care, trauma programmes, lifeline programmes and ambulance ser‐vices).

Organisations involved in social services and activities.

The primary goal of these organisations is welfare, development, recreational activities etc. for specific groups in society (children, families, elderly people, refugees etc.).

Associations and non‐profit institutions for Child welfare, child services and day care Youth welfare and youth services (including youth centres, pregnancy

prevention services, job programmes for young people Family services. Includes family violence shelters and services, family

care, family education etc. Elderly. Provision of geriatric care, meal programmes etc, Red Cross

visitors etc. Marginalised groups (poor people, homeless people, refugees) Income support Self‐help Other personal social services

Organisations involved in recreation and sports

The primary goal is typically to practice and to promote a specific leisure and sports activ‐ity. These organisations typically consist of members with an interest in a particular activity that is cultivated jointly by the members. They are not usually concerned with other activi‐ties or goals. Health and health promotion are in most of these activities side effects.



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Sports and physi‐cal exercise National organisations or local associations

Different kinds of sports (football, gymnastic, rowing, tennis, horse riding, roller‐skating etc.)

Physical fitness (including non‐profit fitness centres) Dance (folk dance, modern dance, ethnic dance etc). Walking, hiking, marching etc. Handicap sport Workplace sport and exercise Sport and training facilities Financial support to a sports club

Other recreational and social clubs

Organisations, associations and non‐profit institutions for Leisure and recreation for children (including YMCA, YWCA, boy

scouts and girl scouts) Recreation and leisure activities for adults Facilities for recreational and leisure activities (including playground

associations, country clubs, touring clubs and leisure clubs)

4.2 Data description and availability The data used in this report on the scope, structure, financing and role of the non-profit, voluntary sector in Europe are taken from The Johns Hopkins Com-parative Nonprofit Sector Project (CNP). This project has been carried out in more than 40 countries worldwide, and in Europe nearly all countries are in-cluded.

In the report, the latest data from the included European countries are applied. For most countries, data are from 1995, but in Denmark (2004), Portugal (2002) and Belgium (1999) data collection took place later. The data used only represent selected aspects of the total CNP survey. Focus is on

the size and composition of the non-profit, voluntary labour force. The propor-tion of the non-profit labour force employed in health, social services and culture & recreation and how this labour force is divided in paid and un-paid labour. All labour force figures are calculated in Full-Time Equiva-lents (FTE) meaning that part-time employees are transferred to full-time units – in Denmark 1650 hours per year.

the size and composition of the revenue received by the non-profit, voluntary sector. The amount of the total revenue available for health, social services and culture & recreation and the relative importance of different income sources: government transfers, earned income and philanthropy.

A general overview of the non-profit, voluntary sector in a comparative per-spective, most European countries have been included. The comparison made in the report is structured into clusters of countries. The classification of coun-tries into clusters are inspired by the prevailing literature on welfare typologies where the Scandinavian countries represent a group of countries with universal and free access to social services and the Continental European countries repre-

Data from the Johns Hopkins University Comparative Non-profit Sector Project

Focus of the data

A general overview by regions and se-lected countries



16

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sent a dual system with both private and public organised social services and the conditions for access are defined based on labour market affiliation. The Continental European countries are in our analysis divided into two groups, mainly because of a marked difference in the importance of volunteering in so-cial services, which are significantly higher in the Benelux countries compared to Germany, France and Austria. In addition to these two systems the Southern European countries can be separated due to the fact that the private provision of social services are dominant, and the welfare system can be characterised as ‘sub-protective’ meaning that the system is fractured and highly restricted in coverage. The Central European countries which previously were assigned to a universal system for social service have been forced to demolish this system due to economical constraints. Today the system in many Central European countries is highly fractured and poorly financed reflecting limited access to services. Finally, the Anglo-American1 countries are characterised by a market-oriented approach to the welfare system embedded on individual insurance based organisation of the welfare provision. For each cluster of countries a number of countries representing a typical configuration of the non-profit vol-untary sector in the region have been selected (see e. g. Boje 2008; Esping-Andersen 1990 & 1999; Gallie & Paugam 2000). In the comparison, marked differences were found between the regions, both in the level of non-profit in-volvement in society as such but also in the way non-profit activities are sup-ported by citizen involvement and by the government. Furthermore, a more detailed analysis of six countries representing the selected European regions is presented. For each of the countries concerned – Denmark, Portugal, Germany, Belgium, Hungary and the United Kingdom –the non-profit, voluntary sector is analysed in a historical perspective, within the present legal framework and according to the organisational structure of the sector, the financing of the sector and the level of professionalisation. In the country-level analysis the focus is on information related to the three sectors covering health and prevention

1 The term Anglo-american is in this context the cultural sphere shared by the UK, the US, and sometimes English Canada.

A detailed analysis of the selected coun-tries



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5 Presentation of data based on literature review and inventory

The aim of this chapter is to discuss the importance of non-profit institutions and volunteering in the provision of welfare – in particular social services and health. The complementarity between public welfare institutions and non-profit institutions in providing social welfare is important in understanding the forma-tion of the welfare system. In the comparison data from the Johns Hopkins University Comparative Nonprofit Sector Project was used.

The decisive dimension in determining the composition of the workforce in the non-profit and voluntary sector in paid and voluntary unpaid work seems to be the level of involvement of non-profit organisations in the provision of welfare services. The more involved the non-profit sector is in providing welfare ser-vices in a given country, the higher is the proportion of paid work compared to the unpaid, voluntary workforce, and the more professionalised and formalised the non-profit organisations tend to be. The Nordic countries can illustrate this assumption. Here the majority of the non-profit labour force is voluntary un-paid work. In Norway and especially Sweden the public sector – government and municipalities –provide welfare services, while it is primarily in culture and recreation, in advocacy organisation and other non-service producing sec-tors that the non-profit and voluntary organisations play a significant role. The picture is completely different in countries like the Netherlands, Portugal and Germany where the provision of welfare services – health, education and social services – plays a significant role in the non-profit and voluntary sector – and where paid work dominates.

The comparison of a selected number of European countries includes a com-parison with the Anglo-American countries – the US and Canada. The chapter firstly looks at the size of the non-profit sector, the composition of the non-profit workforce and the importance of the non-profit welfare services in the European countries. Next, the size of non-profit expenditure is described in re-lation to the total national product, the non-profit sector revenue and its compo-sition. Finally, the sectoral composition of non-profit, voluntary organisations is explored in terms of both work force and revenue.

The importance of the non-profit sector in provision of wel-fare

Structure of the chapter



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5.1 The size of the Non-profit Voluntary Labour Force – Voluntary, unpaid work and paid work

Non-profit labour differs widely in the selected countries. It ranges from more than 15 per cent of the total economically active population in the Netherlands to less than 1 per cent in Hungary. Looking at the four represented regions, the total non-profit labour force is biggest in the Anglo-American countries, fol-lowed by the Continental European countries and Scandinavia. The non-profit labour force represents the lowest proportion of the total, active population in Central Europe. However, the composition of the non-profit sector differs markedly between the countries. In the Anglo-American countries, the pre-dominant proportion of the non-profit labour force is paid employees while voluntary, unpaid work plays a minor role. The same is even more pronounced in continental Europe, while the opposite situation occurs in the Scandinavian countries where voluntary, unpaid work dominates. These differences in the division of the labour force between paid and unpaid work indicate variations among the countries in two respects. First, the importance of the non-profit sec-tor in the production of welfare services, which typically requires a large-scale paid labour force, secondly the level of professionalization in the non-profit sector.

Significant differ-ences in the level of non-profit labour in the selected regions and countries



19

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Table 5-1 The workforce in the non-profit sector for selected countries as a per-centage of the economically active population – divided into paid work unpaid voluntary work and calculated in Full-Time Equivalents (FTE)

Country Paid workforce (FTE)

Unpaid Voluntary Workforce (FTE)

Total workforce in the non‐profit sector

Scandinavia

Denmark (2004) 3.9 3.1 7.1

Sweden (2002) 2.6 7.4 10.0

Norway (2004) 30 5.1 8.1

Continental Europe

Germany (1995) 3.5 2.3 5.9

France (1995) 3.7 3.7 7.6

Austria (1995) 3.8 1.1 4.9

Benelux

Belgium (2001) 8.6 2.3 10.9

Netherlands (2002)

9.3 5.8 15.1

Southern Europe

Italy (1999) 2.3 1.5 3.8

Portugal (2002) 2.8 1.1 4.0

Central Europe

Hungary (1995) 0.9 0.2 0.8

Czech Republic (1995)

1.3 0.7 2.0

Anglo‐American

The UK (1995) 4.8 3.6 8.5

The US (1995) 6.3 3.5 9.8

Canada (2002) 8.4 2.7 11.1

Scandinavian countries

2.7 3.7 6.5

Continental Europe

5.5 2.3 7.8

Central Europe 0.8 0.4 1.1

Anglo‐American 5.2 3.0 8.2

Source: The Danish figures are calculated based on figures provided from the national population survey 2004, SFI and Statistics Denmark: Survey of National Account 2003. For other countries figures are from the John Hopkins Non-profit Sector project Note: All workforce figures are excluding religious worship organisations and estimated in Full-Time Equivalents (Denmark 1650 hours)



20

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A closer look at the composition of the voluntary workforce in the different countries reveals differences between the Nordic countries. In both Sweden and Norway, the large majority of work done in the non-profit organisations is vol-untary, while the paid work dominates in the Danish non-profit sector. The composition of the non-profit, voluntary workforce in Denmark is thus more similar to that of Germany and the Netherlands than that of the Nordic coun-tries. The non-profit sector in Denmark is more professionalised than in the other Nordic countries but less so compared to countries such as the Nether-lands, Germany, and Portugal. Professionalization is in this context defined by the amount of paid labour in relation to the voluntary, unpaid workforce active in the country – see Table 5-2.

Table 5-2 Level of professionalization in the non-profit voluntary sector in selected European countries – ranked according to the degree of professionaliza-tion.

Person in paid labour (FTE)

Persons in unpaid voluntary work (FTE)

Level of professionalisation Paid labour/Total la-

bour force (FTE)

Sweden (2002) 99,000 351,000 22

Norway (1997) 66,243 115,229 37

France 974,867 1,114,816 47

UK (1995) 1,473,443 1,664,003 47

Germany 1,480,850 1,211,474 55

Denmark (2004) 140,620 110,041 56

Netherlands (1995) 669,122 425,554 61

Czech Republic 78,200 45,400 63

Spain 475,179 253,599 65

Portugal (2003) 159,950 67,342 70

Belgium 358,853 100,686 78

Austria 150,425 40,686 79

Hungary 45,101 10,187 82Source: Danish figures have been calculated based on data from the national population survey as well as from the Statistics Denmark's National Account Survey of Non-profit Institutions (2003). For other countries figures are from the John Hopkins Non-profit Sector project, and Michael H. Hall, Cathy W. Barr et al., 2005; Raquel Campos Franco et al., 2005).

The decisive dimension in determining the composition of the workforce in the non-profit and voluntary sector in paid and voluntary unpaid work seems to be the level of involvement of non-profit organisations in provision of welfare ser-vices. The more involved the non-profit sector is in providing welfare services in a given country, the higher is the proportion of paid work compared to the

Differences between Scandinavian coun-tries

The more involved non-profit sector; the higher proportion of paid work in the Nordic countries



21

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unpaid, voluntary workforce, and the more professionalised and formalised the non-profit organisations tend to be. This assumption is true for the Nordic countries. In Norway and especially in Sweden the public sector – government and municipalities –provide the welfare services, while it is primarily in culture and recreation, in advocacy organisation and other non-service producing sec-tors that the non-profit and voluntary organisations play a significant role – see Table 5-3.

Table 5-3 Labour force composition in the non-profit welfare sector in selected countries

Country Non‐profit welfare labour force in % of total national

labour (FTE)

Paid work in % of total non‐profit welfare labour force

(FTE) Scandinavia Denmark (2004) 14 85 Sweden (2002) 4 68 Norway (2004) 6 74 Continental Europe Germany (1995) 25 85 France (1995) 20 72 Austria (1995) 24 64 Benelux Belgium (2001) 41 65 The Netherlands 45 76 Southern Europe Italy (1999) 16 39 Portugal (2002) 18 43 Anglo‐America The UK (1995) 19 67 The US (1995) 32 69

Source: JHU Database and ILO Labour Statistics Database. Sivesind data for Norway and national reports for Sweden,, Portugal and Belgium. Note: The welfare sector consists of health, education and social services The picture is completely different in countries such as the Netherlands, Ger-many and France or the Anglo-American countries where a significantly larger proportion of the production of welfare services – health, education and social services – is undertaken by organisations in the non-profit, voluntary sector. The Danish welfare sector is also characterised by a relatively large proportion of self-owner, non-profit organisations primarily in the provision of educational and social services. In Denmark, the workforce composition thus resembles that of the Continental European countries rather than that of the other Nordic coun-tries.



22

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The assumption of a higher level of professionalization in non-profit organisa-tions producing welfare services is substantiated by looking at the composition of the workforce in the non-profit, voluntary welfare sector – health, education and social services. In the non-profit welfare sector, all countries display a higher level of professionalization than the rest of the non-profit sector – see Table 5-2 and Table 5-3. In Denmark, the non-profit voluntary workforce as a whole is divided into 56 per cent paid voluntary work and 44 per cent unpaid, voluntary work. In the non-profit welfare sector, the distribution is 85 and 15 per cent respectively. For the Netherlands, corresponding figures are 61 per cent involved in paid and 39 per cent in unpaid, voluntary work for the total non-profit sector, but 76 and 24 per cent respectively, in the non-profit welfare sector.

5.1.1 Type of activities and composition of work force in the non-profit sector

The non-profit workforce performs many different functions. In the John Hop-kins Nonprofit Sector Project these functions are divided in two main groups: Service activities involve the delivery of direct services such as education,

health, housing, economic development promotion etc. Most of these ser-vices are provided by the three welfare sectors – education, health and so-cial services.

Expressive activities involve those activities that provide cultural, spiritual profession or policy values, interests, and beliefs. Here, cultural institu-tions, recreation groups, professional association, advocacy groups, human rights groups, social movements, and political organisations etc are in-cluded.

As can be seen from Table 5-4, there are vast differences in the composition of the voluntary unpaid labour force among the selected countries. In the Scandi-navian countries, about half of the voluntary work is done in the culture and recreation sector while the welfare sectors only represent 10-15 per cent of the voluntary work. In the continental European countries, the welfare sectors, ac-count for the majority of the voluntary, unpaid work while the expressive ac-tivities represent about one-third of the voluntary, unpaid work. Germany devi-ates from the pattern with a large proportion of voluntary work performed by religious institutions, but the overwhelming proportion of religious, voluntary activities are related to service production. The same is the case for the two Anglo-American countries where welfare services also account for the majority of voluntary activities. For the other types of activities only voluntary work among Scandinavians through professional organisations and unions plays a significant role.

All countries show higher level of pro-fessionalization in health, education, and social than the rest of the non-profit sector

The non-profit work-force holds different work occupations

Significant differ-ences in the compo-sition of unpaid la-bour force in se-lected countries



23

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Table 5-4 The composition of the non-profit work force by sector in the selected European countries in per cent (%)

A: Voluntary Unpaid work

B: The Paid workforce

Denmark Sweden Norway Germany Netherlands Belgium Italy Portugal Hungary Czech

Republic United Kingdom

United States

Culture and recreation

7 27 12 5 4 5 12 9 38 29 24 7

Education and Research

36 21 23 11 27 39 20 9 10 14 40 22

Health 2 3 9 30 42 30 21 3 5 13 4 46

Social services 28 18 24 38 19 14 27 50 11 11 13 13

Environment 0 2 0 1 1 1 0 0 2 4 1 ‐

Development and Housing

7 6 2 6 3 10 5 2 13 7 7 6

Civic activities and Advocacy

1 4 3 2 1 0 2 10 1 3 1 2

Philanthropy 0 1 0 0 0 0 0 ‐ 3 2 1 0

International activities

1 3 2 1 1 0 0 ‐ 1 1 4 ‐

Religion 1 ‐ 9 3 1 0 2 5 0 5 4 0

Professional org. and Unions

14 15 15 4 2 1 9 6 16 12 3 3

Not Classified 2 1 0 ‐ ‐ ‐ 2 6 ‐ ‐ ‐ ‐

Total 100 100 100 100 100 100 100 100 1000 100 100 100

Source: The JHU-database and country reports from the individual countries: Denmark, Sweden, Portugal and the Netherlands.

Denmark Sweden Norway Germany Netherlands Belgium Italy Portugal Hungary Czech

Republic United Kingdom

United States

Culture and recreation

49 51 51 33 36 33 37 12 30 40 21 8

Education and Research

5

2

2

1

14

1

6

3

4

3

3

9

Health 3 0 3 7 7 0 11 1 5 8 9 9

Social services 8 8 6 8 21 55 21 38 32 15 13 25

Environment 1 2 1 5 4 1 2 ‐ 3 9 3 2

Development and Housing

6 4 5 2 0 3 1 1 3 5 13 ‐

Civic activities and Advocacy

5

12

7

5

6

1

4

‐

8

4

2

7

Philanthropy ‐ ‐ 0 2 0 1 2 ‐ 5 2 1 1

International activities

4 2 3 2 2 1 1 ‐ 2 2 0 1

Religion 6 ‐ 11 19 8 2 11 7 3 10 33 31

Professional org. and Unions

6

16

10

4

1

3

3

8

4

2

‐

4

Not Classified 7 2 0 13 ‐ ‐ 0 32 ‐ ‐ 2 2

Total 100 100 100 100 100 100 100 100 100 100



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Turning towards the paid work done in the non-profit sector, the provision of welfare services plays an even more dominating role. In the Scandinavian countries, about half of the paid workforce is employed in the welfare sectors – mostly in education and social services while the Scandinavian non-profit health sector is very small measured in paid and unpaid activities. In addition to the non-profit welfare sectors, paid work in Scandinavia plays an important role in the sector of professional organisations and unions – a corresponding trend is found in the Central European countries.

Among the continental European countries, the non-profit welfare sectors are completely dominated by a paid labour force. In these countries, health and so-cial services alone account for more than 50 per cent of the paid workforce. If education is added to these sectors, the figure is close to 80 per cent or more. The same pattern is found in the US, where the health sector alone nearly repre-sents half of the paid labour force. In the UK, the pattern is different in that, the health sector is public with universal access to health services. The non-profit sector has only marginal impact on healthcare as is the case in the Scandinavian countries. Instead, it is the British school system, which constitutes a dominant factor in the non-profit sector.

5.2 The composition of the non-profit sector by sector – the economic impact of the sector

So far, the cross-country comparison has focused on the size and composition of the labour force in the non-profit sector. In the following, a more detailed description of the economic importance of the non-profit sector is provided, including an overview of the sector's methods of attracting financial resources.

5.2.1 The financial importance of the non-profit sector – expenditure and revenue

The economic impact of the non-profit and voluntary sector can be measured in many ways. In the following, two measures will be reviewed (1) the amount of expenditure in the non-profit sector as a percentage of the total Gross Domestic Product (GDP) and (2) the non-profit sector revenue and its sources indicating the importance of the different actors in supporting the non-profit and voluntary organisations. With respect to the economic importance of the non-profit sector to the national economy, almost the same pattern can be identified as was the case with the size of the non-profit labour force. The Netherlands and Belgium rank highest followed by the Anglo-American countries and then the Scandina-vian countries – see Table 5-5.

Paid work in the non-profit sector plays a dominate role

The economic im-pact of the non-profit sector

Measuring the eco-nomic impact



25

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Table 5-5 Expenditure in the non-profit sector as a percentage of the Gross Na-tional Product in selected countries.

Source: The JHU-database and country reports from the individual countries: Denmark, Sweden, Portugal, and the Netherlands. The economic importance of the non-profit sector tends to be strong in coun-tries where it runs a significant proportion of the welfare services. In the Neth-erlands and Belgium, the non-profit sector dominates in the provision of elderly care and care for pre-school children. In the US, it is primarily in provision of health care that the non-profit sector plays a major role. The economic size of the non-profit sector in Scandinavia is similar to the Continental European countries but with a different composition. Again, the Danish non-profit and voluntary sector differs from the other Scandinavian countries and is in size more similar to the Anglo-American countries.

The main reason for the relatively high level of expenditure in the Danish non-profit and voluntary sector is the strong involvement in the provision of welfare services. The two sub-sectors of welfare provision – education and social ser-vices – account for about half of the total expenditure in the non-profit sector. In Danish education and social services non-profit organisations – the self-governing institutions – the activities of providing services play a major role. In Norway and Sweden, these types of non-profit organisations barely exist, and

Country Total Non‐profit Expenditure as % of GDP

Scandinavia

Denmark (2004) 6.6

Sweden (2002) 4.1

Norway (2004) 3.7

Continental Europe

Germany (1995) 4.0

France (1995) 3.8

Austria (1995) 3.0

Benelux

Belgium (2001) 8.4

Netherlands (2002) 15.5

Southern Europe

Italy (1999) 3.1

Portugal (2002) 4.2

Central Europe

Hungary (1995) 2.8

Czech Republic (1995) 1.7

Anglo‐American

The UK (1995) 6.8

The US (1995) 7.5

Economic impor-tance of the non-profit is usually pro-portionate with the size of the sector



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the overwhelming proportion of welfare services is, as mentioned above, pro-vided through the public welfare sector.

5.2.2 Type of activities and distribution of revenue in the non-profit sector

The revenue of the non-profit and voluntary organisations comes from many different sources – such as sales of goods and services, membership dues, in-vestment income, donations from individuals, foundations and companies and government support, which includes grants, contracts and reimbursement of services provided.

In this chapter, revenue is divided into three main categories:




In terms of total revenues in the non-profit sector, income from sales of ser-vices and membership dues is the dominant source of revenue in most coun-tries. It is only in the continental European countries and in Benelux that gov-ernment subsidies account for more than half of the total income. In the Scan-dinavian countries, more than half of the revenue comes from self-generated income, while the public support accounts for 40 per cent of the total revenue. Philanthropy only plays an insignificant role in generating income. Public re-sources constitute an even lower proportion in the South and Central European countries. Not surprisingly, the same pattern applies to the US where philan-thropy instead represents a significant proportion of the revenue.

A comparison of the Danish welfare system with foreign welfare systems re-veals that the Danish nonprofit sector relies more on government support than in the other Nordic countries but less so compared with the continental Euro-pean welfare systems – Germany, the Netherlands and France. Denmark's posi-tion is in between these welfare systems, primarily because of the important role of the self-governing institutions in providing education and welfare ser-vices.

Various sources for the non-profit sector revenue

Most revenue comes from earned income



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Table 5-6 Composition of revenue in the non-profit sector in selected countries by categories

Country Total revenue in millions

Total revenue inper cent

Composition of revenue sources in per centGovernment Philanthropy Earned Income

Scandinavia Denmark 2004 Health 1,833 1.7 13 41 46Culture etc. 11,797 11.2 25 20 55Social Services 15,204 14.5 75 4 21Total 105.162 100.0 40 7 53Sweden 1992 Health 1,702 2.7 87 1 12Culture etc. 14.487 23.1 25 12 63Social Services 4,859 7,7 71 10 20Total 62,716 100.0 29 9 62Norway 1997 Health 3,230 7.4 82 4 14Culture etc. 7,693 17.5 29 13 58Social Services 5,292 12.1 66 2 32Total 43,875 100.0 35 9 56Continental Europe

Germany 1995 Health 47,566 34.6 94 0 6Culture etc. 12,232 8.9 20 13 66Social Services 35,929 26.1 65 5 30Total 137,567 100.0 65 3 32France 1995 Health 41.675 14.4 80 6 13Culture etc. 44.356 15.3 30 5 65Social Services 94.089 32.4 58 5 36Total 290.080 100.0 57 8 34Austria 1995 Health 11.279 16.5 76 0 24Culture etc. 7.024 10.3 33 0 67Social Services 32.478 47.6 44 8 47Total 68.252 100.0 47 6 47



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Benelux Belgium 1995 Health 292,423 38.6 81 1 17Culture etc. 56,109 7.4 41 12 47Social Services 92,450 12.2 66 12 22Total 758,052 100.0 76 5 19Netherlands 1995

Health 27,318 27.8 96 1 3Culture etc. 5,976 6.1 27 8 65Social Services 13,082 13.3 66 3 31Total 98,110 100.0 58 3 38Southern Europe Italy 1999 Health 13,752,333 18.8 71 2 27Culture etc. 12,718,207 17.4 25 2 73Social Services 14,631,395 20.0 42 5 53Total 73,116,866 100.0 36 3 61Portugal 2002 Health 974 17.2 82 3 16Culture etc. 304 5.4 25 2 73Social Services 2,240 39.5 42 5 53Total 5,672 100.0 36 3 61Central Europe Hungary 1995 Health 5,791 3.2 31 41 28Culture etc. 53,791 29.6 23 20 57Social Services 21,654 11.9 46 23 31Total 181,917 100.0 27 19 54Czech Republic Health 3,236 13.4 57 14 29Culture etc. 6,938 28.7 42 13 45Social Services 2,321 9.6 50 19 31Total 24,175 100.0 39 15 46



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Anglo‐America The UK 1995 Health 1,661 3.2 38 23 40Culture etc. 7,135 13.9 14 2 84Social Services 5,006 9.7 39 31 30Total 51,351 100.0 45 11 43The US 1995 Health 297,525 47.1 41 5 54Culture etc. 26,146 4.1 7 50 42Social Services 39,686 6.3 37 20 43Total 631,599 100.0 27 21 51

Looking at the EU countries as a whole, revenues from public sources represent nearly 60 per cent of the total revenues of the non-profit sector. This indicates the important role that non-profit institutions have in the continental European countries as the provider of welfare services. Among the three sectors repre-sented in Table 5-5 – health, culture and recreation, and social services, public resources are especially important in the non-profit health services. In this sec-tor, 80 per cent or more of the revenues comes from all Continental European countries including the Benelux countries. The same pattern is found in Central Europe and Norway and Sweden, but in these countries the heath sector only represents a small proportion of the total non-profit economy.

In the international Johns Hopkins Study, activities classified under philan-thropy are donations from individuals, foundations and private companies. Ex-cept in the US, this type of revenues only account for an insignificant part of the total non-profit revenue in all countries. In Central Europe philanthropy also represents a relatively high proportion, but again overall figures are small.

In the continental European countries enjoying an extended welfare system, non-profit institutions play a major role and their provision of services is heav-ily subsidised by the government. In the Nordic countries, excluding Denmark, welfare services are provided through public institutions, and non-profit institu-tions do not play a significant role. In the Anglo-American countries, such as the UK and Canada, with a relatively large welfare sector, a significant propor-tion of the non-profit revenue originates from the government to education and health – while the US non-profit sector has the lowest proportion of its revenue from government, but strongly relies on self-generated income and philan-thropy. Philanthropy plays a minor role in all developed countries except in the US where more than one fifth of the revenue comes from philanthropy. In Scandinavia, philanthropy accounts for about 7-9 per cent, and its significance is even lower in the welfare partnership countries – Netherlands and Germany.

60 per cent of reve-nues to non-profit sectors come from public sources in the EU

Overall, philanthropy plays a minor role



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The structural organisation of the welfare systems are roughly the same as the organisation of health system and services, except for the US and England where a marked difference exists. In the Anglo-American countries – repre-sented by the UK and The US we find a similar pattern in the size of the non-profit, voluntary sector and its composition, the importance of paid work in the non-profit sector etc. However, when it comes to the structuring of the health sector the two Anglo-American countries differ radically. In the UK the health sector is primarily public organised while it in the US is characterised by a high proportion of private organisation. The access to health services also differs between the two countries. In the UK we find universal access to health ser-vices relatively low-cost while access to qualified health services in the US is determined by individually based protection via health insurance. This differ-ence between the organisations of the health sector can also be registered in the economic importance of the non-profit health sector in the US which is much bigger than in the UK.

Figure 3-1shows an overview of how the non-profit and voluntary organisa-tions obtain their funding from Government support, earned income and philan-thropy, respectively. The percentage demonstrates weighted averages2 in rela-tion to population size. It is evident that philanthropy represents the lowest per cent of revenues in each sample of countries. There is no clear picture of which source is representing the highest revenue. In Continental Europe and Benelux it is government support whereas it is earned income in Scandinavia, Southern Europe, Central Europe and Anglo-America.

2 The distribution of the various revenue sources in the country groups is estimated based on weighted averages. The countries have different population sizes (number of inhabi-tants) and are therefore weighted according to the number of inhabitants in the calculation of the weighted averages.

The share of funding deriving from earned income, government support and philan-thropy in the different country groups, respec-tively.



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Fig. 3-1 The share of funding deriving from earned income, government support and philanthropy in the different country groups, respectively.

In the US most of revenues derive from philanthropy compared to Europe (74 % vs. 26 %; Fig. 3-2). In contrast most revenues in Europe derive from gov-ernment support compared to the US (68 % vs. 32 %; Fig. 3-2). Comparing the US and Europe according to revenues deriving from earned income it presents about half of the revenues (51 % vs. 49 %; Fig. 3-2).

Fig. 3-2 Government support, philanthropy and earned income in the US compared to Europe

Government support, philanthropy and earned income in the US compared to Europe



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The highest share of revenues derives from earned income in the US (52 %) whereas it derives from government support in Europe (50 %). In both the US and Europe the smallest share of revenues derives from philanthropy (Fig. 3-3). Though, in the US 21 % of the revenues derives from philanthropy which is three times more than the share of philanthropy in Europe (7 %).

Fig. 3-3 Sources of revenues in the US and Europe, respectively.

Source of revenues in the US and Europe, respectively



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6 Comparative analysis of regions The aim of this chapter is present and to compare the voluntary, non-profit sec-tor in five regions in Europe represented by five countries. Scandinavia: Denmark Continental Europe: Germany Benelux: Belgium South Europe: Portugal East / Central Europe: Hungary Anglo-American: UK. For each country, the following elements have been included: - a brief description of the history of the voluntary sector

- organisational features of the voluntary sector with focus on the public health activities

- financing of the voluntary sector with focus on the public health activities.

6.1 Denmark3 4 5 Three factors have formed the voluntary sector in Denmark. The adoption of a democratic constitution adopted in 1849 that made it possible for a civil society to flower. Now, citizens could freely join organisations, unions and associations and new communities gradually replaced the traditional networks, bonds and safety nets, and it became possible to distinguish between the public and private sectors. The 1849 Constitution guaranteed citizens rights, and associations were formed in almost every sphere of society.

The emergence of the popular movements in the late 19th century, e.g. the farmers' movement, the labour movement, the mission movement, the temper-ance movement and the popular sports movement increased.

3 Ibsen, Bjarne and Habermann, Ulla (2005). Definition af den frivillige sektor i Danmark. www.frivillighedsus.dk 4 Boje, Thomas P.; Fridberg, Torben and Bjarne Ibsen. Den frivillige sektor i Danmark – omfang og betydning. Socialforskningsinstituttet (SFI). 2006 5 Ibsen, Bjarne; Boje, Thomas P. and Fridberg, Torben (ed.). Det frivillige Danmark. Syd-dansk Universitetsforlag.

History and legal framework



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Finally, the formation of the welfare state has influenced the voluntary sector. From the early 1930s the public sector gradually assumed responsibility for so-cial work, and relations between the two sectors were either distant or closely integrated. This differs from the culture and leisure areas, where the voluntary organisations retained the initiative and responsibility and, despite growing public-sector funding, associations and organisations managed to retain a great deal of autonomy and an independent identity. The welfare project has created a form of welfare identity, which for decades has had a tendency to obscure the fact that co-operation between the state and the voluntary sector was relatively close throughout the 20th century. The voluntary sector has developed in paral-lel and apace with the rest of society and is, in addition, still engaged in dia-logue with the welfare state. Roughly speaking, involvement has progressed from charity and education, to promoting particular interests, to participation in civil society. The process has not been without its battles, however, and the voluntary organisations have sometimes had difficulty identifying their roles.

Since 1980, the number of voluntary associations and organisations increased massively in Denmark. Concurrently with the change of government in the early 1980s, this also meant that political interest in the area increased, and ideological and financial doubts began to arise about whether the welfare state was able to take care of everything. At one stroke, the voluntary sector was en-dowed with greater ideological legitimacy and therefore greater public-sector support but also greater public-sector scrutiny and control. Various forms of co-operation, as well as experimental and development programmes, were estab-lished to support co-operation between the public and voluntary sectors. In the late 1990s, this resulted in social legislation (the Danish Social Service Act, 1998), under which local authorities were instructed to co-operate with volun-tary organisations. In many cases, this resulted in an 'instrumentalisation' of the associations, which became more and more involved in the production of wel-fare and were expected to fill the role of trustworthy partner.

In a study from 2004, the number of non-profit institutions and organisations in Denmark was estimated to approximately 101,000. Of these, local and regional organisations comprise the vast majority, with more than 83,000 entities. It is estimated that there are approximately 6,200 public utility funds; just fewer than 8,000 self-governing institutions; and approximately 3,000 national or-ganisations.

Compared with the other areas of the voluntary sector, organisations involved health activities are –- centralised with relatively many organisations at the na-tional level and few organisations at the local level. The local associations and the self-governing institutions constitute only 3 per cent of the total number of locally oriented voluntary organisations. Among the national organisations they comprise approximately 10 per cent. Among the national organisations there are many small organisations devoted to the health of people with less common diseases and few big organisations (for instance the Cancer Association and the Association of Rheumatism).

Number of voluntary actors increased since the 1980s

Organisational fea-tures of the voluntary sector with focus on the public health ac-tivities



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Organisations involved in social work and assistance have a stronger position at the local level accounting for 6 per cent of the total number of local associa-tions and 30 per cent of the total number of self-governing institutions. At the national level, these organisations make up 4 per cent of all national organisa-tions.

Organisations involved in recreation and sports also have a strong position at the local level. At this level, sports associations and leisure and hobby organisa-tions make up 25 per cent, and 18 per cent respectively of the total number of local associations. Among the self-governing institutions, these organisations account for a smaller part (13 and 3 per cent respectively). At the national level the voluntary sector constitutes a smaller part of the total number of organisa-tions than at the local level, but some of the organisations are very big (first of all sports organisations).

Income from sales of services and membership fees is the dominant source of revenue for the Danish non-profit and voluntary sector at large as it is for most other countries included in the JHU study. More than half of the revenue comes from self-generated income, while public support accounts for 40 per cent of the total revenue and philanthropy only plays a minor role in generating income in the Danish non-profit sector. The Danish non-profit health sector is very small as it accounts for less than 2 per cent of the total non-profit income, and a significant proportion of its income originates from philanthropy – nation-wide collections and gifts – while government transfers are small.

The non-profit sector in Denmark is thus more professionalized than in the other Nordic countries mainly due to the large number of self-governing institu-tions in social services – childcare and special care institutions – and educa-tional establishments – private primary schools and adult education. Still the Danish non-profit sector is less professionalised compared to countries such as the Netherlands, Portugal and Germany, countries which are all characterised by a large non-profit care sector.

6.1.1 Portugal6 The size of the voluntary sector is on the same level as in Italy and Spain (ap-proximately 4 per cent of the economically active population). One of the ex-planations to the small voluntary sector in Portugal (compared with northern European countries) is the relatively recent transition from authoritarian re-gimes, which were hostile to civil society.

The composition of the voluntary sector also diverges from the average volun-tary sector (among the countries in The Johns Hopkins Comparative Non-profit Sector study). The social service component of the voluntary sector in Portugal is twice the average in all other countries studied. The health service compo-

6 Franco, Raquel Campos; Sokolowski, S. Wojciech; Hairel, Eileen M. H.; Salamon, Lester M. The Portuguese Nonprofit Sector in Comparative Perspective. Johns Hopkins Universi-ty.

Organisations in-volved in social work and assistance

Organisations in-volved in recreation and sports

The financing of the non-profit voluntary sector with focus on health activities

Professionalization of the non-profit sec-tor




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nent is, however, of minor importance. This is explained by the fact that health-care is almost exclusively provided by the public sector.

Analyses of the Portuguese voluntary sector explain these features with four impulses through history:

First, the Roman Catholic Church has had an enormous impact on the devel-opment of the voluntary sector in Portugal – spiritual (embraced in the doctrine of 'works of mercy') as well as institutional (among others hostels, houses for poor, children's hospitals for abandoned children and ‘Holy Houses for Mercy’ founded in the 15th century).

Second, a tradition for mutualism, cooperation and solidarity has existed since the 12th and 13th centuries. For instance, craft co-operations designed to pre-serve the interests of the members of a particular profession, self-help organisa-tions to assist people (by disasters) and later also workers' associations safe-guarding workers' interests and rights. ‘Mutualism, historically evolved around the principles of democracy (one man, one vote), freedom (according to which anyone is free to join the mutualism movement or leave it), independence (each organisation must maintain its autonomy) and solidarity (promoting the well-being of the members without the individual profit motive)’ 7.

Third, both the Church and mutualist organisations had to take shape within an environment characterised by governmental dominance. This dominance was particularly strong between 1926 and 1974 under the Salazar corporative (fas-cist) regime based on the idea of a society organised into interest-based pillars supporting the political regime (only one organisation for each pillar/interest). The creation of other – free – associations and federations was prohibited. As a consequence, the fascist regime resulted in a decline of non-profit organisations in general and mutualism in general.

Finally, the democratisation of Portugal since the beginning of 1970s unleashed a revival and strengthening of civil society and the voluntary sector, and the remnants of earlier civil society organisations played an important role in this development. The adoption of the Constitution of the Portuguese society in 1976 re-established the freedom of speech and association. This led to an ex-plosion of associative movements concerned with every aspect of social life. The new democracy, however, also led to the imposition of a legal standard that favoured certain sectors of civil society over others, and the organisation the Holy Houses of Mercy lost the management of their hospital in favour of the state, which integrated them into the public health network. But in 1981 legisla-tion was passed allowing the devolution to the Holy Houses of Mercy of the hospitals that had been taken from them. At the same time the state promoted the strengthening of private welfare associations (includes health, education, professional training and housing). Recently, the state has begun to rely on pri-vate institutions for social welfare for the delivery of state-financed social wel-fare services (according the subsidarity-principles). 7 Franco, Sokolowski, Hairel and Salamon: The Portuguese non-profit Sector in Compara-tive Perspective. Johns Hopkins University.

Four historical im-pulses



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The analyses of the voluntary sector in Portugal lack analyses of the number of voluntary organisations – total and in different fields of society. This part of the description of the voluntary sector in Portugal is therefore based on the analy-ses of the figures of the workforce in the voluntary sector.

The analyses indicate that the social service part of the voluntary sector in Por-tugal is proportionately larger than elsewhere in Europe (60 per cent of the total workforce in the voluntary sector); the healthcare part is very small and was almost excluded by the absorption of the non-profit hospitals in the mid-1970s (2 per cent of the total workforce); and that the share of recreational organisa-tions and institutions is also proportionally small compared with other Euro-pean countries (25 per cent of the total workforce).

The Portuguese non-profit sector generates most of its revenue from earned in-come – fees and services - and very little from philanthropy. This is similar to the Danish case. In addition to this, both countries have a relatively small non-profit health sector, but when it comes to financing of health services the two countries differ radically. The Portuguese non-profit health sector accounts for nearly one-fifth of the total non-profit revenue, and the health sector generates the majority of its revenue from government transfer.

Portugal ranks relatively high in terms of professionalization in the non-profit sector as such, but low in terms of professionalization in the welfare sector. The explanation might be that a lot of welfare services are provided through the Catholic Church and on a voluntary basis.

6.1.2 Germany8 In Germany, the voluntary sector or non-profit sector is not understood as a single institutional sector or entity – neither in legal and economic discourse nor in everyday language. Different terms are used to refer to the organisations located between the state and the market: 'Vereine' and 'Verbände' (= associa-tions), 'gemeinnützige Organisation' (public benefit organisations), 'gemein-wirtschaftliche Unternehmen' (communal economic corporations) and 'Organi-sationen ohne Erwerbszweck' (non-profit organisations).

According the Constitution, all Germans have the right to found associations and societies. Associations may be registered or not registered. The registered associations become a legal personality endowed with its own legal rights. To register, an association must pursue a non-commercial objective, and have at least seven members, a charter and a board.

The voluntary sector in Germany is a result of three crucial principles that shaped the modern voluntary and non-profit sector in Germany.

8 Anheir, Helmut K and Seibel, Wolfgang (1993): Defining the Non-profit Sector: Germa-ny. The Johns Hopkins University.



Level of profession-alization




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The principle of self-administration that originated from the 19th century con-flict between the state and the citizenry and allowed the development of non-profit organisations in a state that had only a partially granted freedom of asso-ciation.

The principle of subsidiarity assigns priority to private, non-profit provision of welfare over the public provision of welfare and social services. Under this principle, the state acknowledges the self-administration and self-governance of non-profit organisations while at the same time guaranteeing these organisa-tions financial support.

The principle of Gemeinwirtschaft (communal economics), which was based on the search for an alternative to both capitalism and socialism led to the de-velopment of a cooperative movement as well as mutual associations in the banking and housing industries.

Since the unification in 1990, the number of registered voluntary associations in Germany has expanded 9 from approximately 286,000 to approximately 450,000 in 1995. In the mid 1990s, approximately 40 per cent of the workforce in the voluntary sector worked for organisations and institutions involved in social work and assistance (27 per cent if voluntary work is included). Com-pared with other European countries, employment in the healthcare sector con-stitutes a large share of the total workforce in the voluntary sector, approxi-mately 30 per cent (22 per cent if voluntary employment is included), but has decreased since 1990 where the employment in the voluntary sector accounted for 35 per cent. In several areas of welfare services, the voluntary 'production' makes up at significant part of the total production, including 42 per cent of all hospital days and 60 per cent of nursing homes. The most prominent non-profit areas are residential care and homes for infants, children, youth, elderly etc., where church-related welfare activities have a prominent position present. Non-profit welfare institutions are often perceived as quasi-public rather than truly independent institutions with a high degree of public funding.

Compared with the Scandinavian countries, the voluntary sector in culture, rec-reation and sports is small. Employment in culture and recreation only accounts for 5 per cent of the total workforce in the voluntary sector (20 per cent if vol-untary employment, which largely is due to volunteering in sports (25 per cent of the population is a member of a sports club), is included) 10.

9 Anheir, Helmut K. and Seippel, Wolfang: The Nonprofit Sector in Germany. Johns Hopkins Nonprofit Sector Studies. 10 Priller, Eckhard; Zimmer, Annette; Anheir, Helmuth K.; Toepler, Stefan and Salamon, Lester (1999): Germany: Unification and Change. in Salamon, Lester M.; Anheir, Helmuth K.; List, Regina; Toepler, Stefan; Sokolowski, S. Wojciech and Associates. Global Civil Society: Dimensions of the Nonprofit Sector. Johns Hopkins Center for Civil Society Stu-dies.




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Together with Belgium, Germany has the largest non-profit health sector among the European countries included in this study. More than one-third of the total revenue created in the non-profit sector goes to health, and this reve-nue is almost entirely provided through government transfers – 94 per cent. To-tally, the German non-profit sector receives two thirds of its income from the government with the health sector as the most extreme case. A significant pro-portion of German healthcare is provided through non-profit institutions but paid in full by the government. The public sector is the dominant provider of funding for non-profit organisations. It includes 'grants and subsidies', reim-bursement schemes and indirect support (tax exemption and use of public of publicly owned facilities free of charge).

As long as an organisation meets certain standards as prescribed in the relevant legislation, it has a legal claim for public funding. However, this kind of fund-ing restricts the governments' ability to control the implementation of policies. The trend is therefore towards more flexible forms of support (contracts, pro-ject support). In Germany, support from the public sector through intermediary organisations also takes place. Such organisations receive funding from gov-ernment resources but the distributive decisions are made in relative independ-ence of the funding agency.

The level of professionalization in the German non-profit sector is similar to the Danish level – 55 per cent of the workforce is remunerated. This indicates both that a significant level of professional staff in the non-profit welfare sector but also that the voluntary element is large in other parts of the non-profit sec-tor – religion, which to some extent is mixed with social services, and culture & recreation, in which one third of the total unpaid work takes place.

6.1.3 Belgium11 Compared with other European countries, Belgium has a large voluntary, non-profit sector. Only the Netherlands has a bigger non-profit sector. Researchers explain that by

1 the development of the welfare state with centralized public action and in-stitutions

2 the principle of subsidiarity that implies a delegation of public services to non-profit organisations

3 the division of the country in socio-political 'pillars'. On the one hand, as-sociations connected to the socialist movement supported the establish-ment of public institutions, and on the other hand, Christian organisations that have defended the right to provide collective services outside the pub-lic sector.

11 Mertens, Sybille; Adam, Sophie; Defourny, Jacques; Marée, Michel; Pacolet, Jozef; Van de Putte, Ilse: Belgium. In in Salamon, Lester M.; Anheir, Helmuth K.; List, Regina; Toep-ler, Stefan; Sokolowski, S. Wojciech and Associates. Global Civil Society: Dimensions of the Nonprofit Sector. Johns Hopkins Center for Civil Society Studies.






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In 1995, it was estimated that approximately. 50,000 voluntary associations op-erated in Belgium. This figure only includes formally registered associations and organisations. 41 per cent of the non-profit associations were primarily ac-tive in culture and recreation. Only 12 per cent were active in social services and 4 per cent in health.

One third of these associations employed paid staff. The paid workforce in the non-profit sector was estimated to 359,000 full-time jobs, and the voluntary work was estimated to 101,000 full-time equivalents. Approximately 50,000 of the paid jobs are in the health area. There are only approximately 450 voluntary jobs in the area. Volunteering has almost no importance in the healthcare sector in Belgium. In the field of social services, the corresponding figures are ap-proximately 50,000 and 55,000. Volunteering in the social sector constitutes 55 per cent of all voluntary work in the country. In culture and recreation, the ma-jority of the work is done by volunteers: There are approximately 17,000 paid full-time (equivalent) jobs and 33,000 voluntary full-time (equivalent) jobs in culture and recreation. In 1995, the non-profit hospitals covered 66 per cent of 'days at hospital' and 23 per cent of numbers of homes for elderly.

While volunteering in Belgium is low in the health sector, the sector disposes of nearly 40 per cent of the total non-profit revenue which is primarily govern-ment transfers for managing care of the elderly and significant parts of the hos-pitals. As in Germany, these services are provided by non-profit organisations but paid by the government, and the organisations are staffed by paid employ-ees.

In Belgium, the level of professionalization is for the total non-profit organisa-tions at level with most other continental European countries due to the large involvement of non-profit institutions in the provision of welfare services. On closer scrutiny, the Belgian welfare sector has a high proportion of profes-sional staff and a tradition for social services where voluntary activities are much more widespread which displays differences in comparison with other continental European countries. In fact, Belgium has the highest proportion of volunteer workers in social services of all the countries included in the study.

6.1.4 Hungary12 13 Despite a long-standing Communist regime, Hungary has a developed volun-tary sector as a product of a long tradition for voluntary institutions before the Communist party took over.

The communist regime halted the development of the voluntary sector by ban-ning most of the voluntary organisations. The right of associations and founda- 12 Sebestény, István; Kuti, Éva; Toepler, Stefan and Salamon, Lester: Hungary. in in Sala-mon, Lester M.; Anheir, Helmuth K.; List, Regina; Toepler, Stefan; Sokolowski, S. Woj-ciech and Associates. Global Civil Society: Dimensions of the Nonprofit Sector. Johns Hopkins Center for Civil Society Studies. 13 Kuti, Éva: The nonprofit sector in Hungary. Johns Hopkins Nonprofit Sector Studies.







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tions was denied. In 1956, the revolution failed, but it was followed by a more flexible system of state-socialism with more freedom, reforms, gradual changes and a more tolerant government attitude towards voluntary organisations and civic initiatives. The rehabilitation of the civil society was long underway be-fore the collapse of the communist regime. One of these steps was the rehabili-tation of foundations in 1987. In 1989, the voluntary organisations were nu-merous and widespread enough to become important actors of the political change. The same year the Parliament passed the Law on Association, which guarantees the freedom of association.

During the 1990s, the number of organisations tripled, and new legal forms of organisation created: public foundations, public benefit companies, public law associations and voluntary mutual insurance funds. In 2006, 52 per cent of the voluntary organisations were membership organisations, and 36 per cent were foundations.

Compared with Scandinavian and continental Europe the size of the voluntary sector in Hungary is small, but compared with other countries in Central and Eastern Europe it is relatively large. In 1995, employment in the voluntary sec-tor corresponded to 1.6 per cent of the total employment force in Hungary.

In 1995, the total number of associations in Hungary was estimated to ap-proximately 27,000 and the number of foundations to approximately 16,000. Eleven years later, in 2006, the number of membership organisations and foun-dations had increased to approximately 36,000 and 22,000 respectively.

Culture, recreation and sports account for the largest share of the non-profit ac-tivities, with approximately 40 per cent of the non-profit employment in 2006. Sports accounts for 12 per cent, which is a decrease from 22 per cent in 1993; culture accounts for 11 per cent (10 per cent in 1993) and recreation and hobby for 17 per cent (13 per cent in 1993). This field of the non-profit sector was among the few areas that were tolerated and even encouraged by the Commu-nist state. Before 1990, these organisations accounted for about two third of the employment. At that time, the non-profit organisations accounted for 75 per cent of the employment in the sports area and 84 per cent in the area of recrea-tion and other leisure activities.

In contradiction to culture and recreation, the field of social services and health activities makes up a only a small part, one fourth of the voluntary, non-profit employment in Hungary. This reflects – perhaps – a general greater willingness of Hungarians, and other Eastern and Central Europeans to rely on the state to provide social and health services. In 1993, four per cent of the associations were health associations and eight per cent social activity organisations. In 2006, the share was five and nine per cent respectively.

In Hungary, as in all the Central and East European countries, the non-profit sector is very small and does not have much impact on social life as such. Within the non-profit sector, the health services only accounts for three per cent of the total revenue. Most of this revenue originates from philanthropy in the


Financing of the non-profit voluntary sector with focus on health activities



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form of gifts and funding from foreign donors. Less than one third comes from the government and earned income respectively.

Just as the size of the non-profit sector is limited in Hungary, so is the level of volunteering. Only 0.2 per cent of the economically active population are in-volved in voluntary work. It also means that the predominant proportion of work in the non-profit sector is done by paid employees, and Hungary has the highest level of professionalization of all the selected European countries. Non-profit activities are paid by foreign donors and done by professionals. In the post-communist period, the civic organisations have encountered major trouble because they were considered the extended arm of the former regime.

6.1.5 The United Kingdom14 15 The history of the voluntary, non-profit sector in the UK is described as one of gradual secularisation and formalisation of traditions of philanthropy and mu-tual aid. The formalisation and secularisation of philanthropy began in the be-ginning of the 1600s in the wake of the religious upheaval of the Reformation and a response of the economic and social change in the same period. Acceler-ating industrialisation in the eighteenth and nineteenth centuries, rapid popula-tion growth and the movement of a large part of the population from the land to the cities increased the demands on both philanthropy and the State. During this period philanthropic organisations were formed by members of the middle class focusing on new needs and bringing injustices to public attention. Many of the fields of activity, developed in this period, remain important today, including social care provision, public health, schools and adult educations, culture, envi-ronment etc.

Mutual aid organisations for working class people were particularly established in the latter part of the 19th century: bodies of people who pooled their re-sources to create a fund for sickness, old age etc. Trade unions, consumer co-operatives, building societies and housing societies were also part of this trend. The profile of the non-profit sector was high in the nineteenth century as a bul-wark against poverty – combining the direct provision of resources with its ad-vocacy role.

In the twentieth century, many parts of voluntary actions were increasingly be-ing coordinated by umbrella groups such as local and national councils for vol-untary service, while State action was growing in importance. During the Sec-ond World War a strong partnership of the State and voluntary organisations developed. After the war, the adoption of the social legislation in the 1940s changed the relation between the non-profit sector and the public sector, which came to dominate the funding and provision of education, health, social welfare

14 Kendall, Jeremy and Knapp, Martin (1993): Defining the Nonprofit Sector: The United Kingdom. The Johns Hopkins Comparative Nonprofit Sector Project. 15 Kendall, Jeremy and Almond, Stephen. United Kingdom. in Salamon, Lester M.; Anheir, Helmuth K.; List, Regina; Toepler, Stefan; Sokolowski, S. Wojciech and Associates. Glob-al Civil Society: Dimensions of the Nonprofit Sector. Johns Hopkins Center for Civil So-ciety Studies.





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etc. Most voluntary sector hospitals were absorbed into the State sector. Many voluntary sector schools maintained their voluntary status retaining distinct identities and some autonomy, but nevertheless regarded as State schools. But in each of these new fields of public activity, a small but significant number of providers survived fully outside the mainstream government system, funded mainly through private fees, and the voluntary sector continued to be a key player in most social care activities, particularly child care and care for elderly people. The welfare state pioneers saw the non-profit sector in a role of com-plementing and supplementing the universal welfare schemes.

The takeover from the State of the responsibility of welfare tasks did, however, not marginalise the non-profit sector and parts of the sector were invigorated by the reforms. In the 1950s and 1960s many new organisations were formed, in-cluding self-help groups, aid agencies and lots of sports and leisure associa-tions. During the 1960s and 1970s, the voluntary organisations continued to be at the forefront of social change. New emerging problems, enhanced expecta-tions of the public and the awareness of the limitations of the public sector led to augmented funding of community-based groups, service user organisations etc.

Into the 1990s, John Major’s Government continued to promote the sector with the implementation of the Charities Act 1992, the introduction of further meas-ures to facilitate charitable giving and through the encouragement of contract-ing-out in fields where voluntary sector providers co-exist with other sectors which has allowed both for-profit and voluntary sector bodies to increase their shares in some industries.

The voluntary, non-profit sector in UK consists of three types of organisations: The professional non-profit organisations with employed staff which are pro-

viders of professional services. Local offices are typically run by the na-tional organisations, which also raise funds.

Voluntary service organisations have professionally organised national head-quarters, but autonomous local groups which raise their own funds and use volunteers.

Independent local community groups are self-standing bodies with no head of-fice to provide support and the most important resources are voluntary work done by the members.

There are no figures indications the number of the three types of organisations as well as voluntary organisations in the different fields of society (culture, so-cial service, health etc.).

Studies from mid 1990s estimated the contribution of the voluntary, non-profit sector in UK to the economy to approximately 9 per cent of the GNP (including the value of volunteering). The largest field for voluntary action is culture and recreation, where the total employment of professional and voluntary work rep-resented 22 per cent of the total employment in the sector. Number two was




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education with 21 per cent of the total employment, and number three was so-cial services, which represented 13 per cent of the total employment. The em-ployment in the field of health represented 7 per cent.

Among the Anglo-American countries, the UK deviates in terms of organisa-tion and financing of the health sector. Where this sector in the UK is primarily run by the public through the National Health Services (NHS) with universal access to health services, the health sectors in the US, New Zealand etc. are di-vided into a public sector and a non-profit/private sector. This difference can also be seen from the proportion of finances allocated to the health sector in the UK and the US, which is 3.2 and 47.1 respectively of the total revenues allo-cated to the non-profit sector. The revenue in the UK non-profit health sector is split on about 40 per cent from both government transfers and from earned in-come and on 23 per cent from philanthropy. The last figure indicates that a sig-nificant part of the UK non-profit health sector is related to interest groups – patient organisations, research centre etc.

In the UK, the non-profit sector is less professionalised than in most other European countries outside Scandinavia. The voluntary unpaid labour is higher than the amount of paid labour in the sector, which is only the case in the Scan-dinavian counties – except for Denmark. Religion, culture & recreation fol-lowed by social services are the areas where most voluntary work takes place in the UK. For the paid work, the dominating sector is clearly education. The health sector only represents a tiny proportion of both the unpaid and paid la-bour force.





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7 EU legal framework 7.1 EU regulation of voluntary and non-profit

organisations Instead of enacting a legal framework, the EU has adopted a laissez-faire ap-proach towards the regulation and governance of voluntary and non-profit or-ganisations. Thus, the legal enablement of these bodies occurs in the national legislation of Member States. This means that the regulation of voluntary or-ganisations that wish to work across a number of European Member States is subject to different legislation. In some instances (e.g. in the area of direct taxa-tion), the EU lacks the competence to harmonise national laws. In other areas, such as company law, the EU has legislative competence to harmonise national laws but has chosen to exclude non-profit organisations from the scope of its regulatory efforts. This means that the current European legal regime prevents non-profit organisations from fully enjoying the benefits of the common mar-ket.16

The Treaty basis for Council or Commission competence over non-profit or-ganisations is limited. Notably, the right for non-profit organisations to enjoy freedom of establishment in the territory of another Member State is limited (cf. Articles 43 and 48 para. 2 EU Treaty17, see also Case C-70/95 Sodemare SA and Others v. Regione Lombardia [1997] 3 C.M.L.R. 591, 604).

The following Articles of the EU Treaty18 have been referred to as the legal ba-sis for Community competence over voluntary organisations:

Article 12 on the prohibition of discrimination on grounds of nationality has applied in several cases (see, e.g., Case C-172/98, Commission of the European Communities v Belgium [1999] ECR I-3999);

16 Oonagh B. Breen, EU Regulation of Charitable Organizations: The Politics of Legally Enabling Civil Society The International Journal of Not-for-Profit Law, Volume 10, Issue 3, June 2008 17 Consolidated version of the Treaty of the European Union 18 Ibid.

Laissez-faire ap-proach

Treaty basis for Community compe-tence over voluntary organisations



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Article 95 that uses the co-decision procedure with the European Parliament and requires only a qualified majority vote within the Council;

- Article 308 that allow the Council of Ministers to take action to achieve the Treaty's objectives where the Treaty has not provided the Council with the necessary powers.19

Although the Treaty basis for Council or Commission competence over non-profit organisations is limited, the ECJ has found non-profits to be subject to Community law, in particular in the context of:

competition and state aid (see e.g. European Antitrust Review (2006) at 77);- labour law.

In those two cases the non-profit organisations must apply EU law.20

One solution for facilitating non-profits that operate on a pan-European basis could be the enactment of a 'European Statute for Foundations and a European Statute for Associations'. These instruments would have transparent and uni-form requirements in each Member State and thereby cut down on the legal and administrative bureaucracy that non-profits endure in attempting to open new branches or deal in Member States other than their founding Member State. On 16 February 2009, the European Commission launched a consultation process in order to seek views from interested parties on a possible European Founda-tion Statute (EFS).21

19 See, e.g., European Foundation Centre, Proposal for a Euroepan Foundation Statute, January 2005, which remains open to either Article 95 or Article 308 as potential legal bases for the legal instrument

20 Oonagh B. Breen, EU Regulation of Charitable Organizations: The Politics of Legally Enabling Civil Society, The International Journal of Not-for-Profit Law Volume 10, Issue 3, June 2008

21 European Council of Associations of General Interest http://www.cedag-eu.org/index.php?page=european-statute-of-association&hl=en_US

European Statute for Foundations and a European Statute for Associations



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8 Conclusions and the further work of the study

In this report activities related to the field of health and prevention is defined broadly, and includes in the analysis of the voluntary non-profit organisations three different sectors: health, social services and culture and recreation. In all three sectors some type of health related and preventive activities takes place. In research on nonprofit organisations focus has primarily been on participation and non-profit institutions meaning the formal aspects of civil society. How-ever, the informal social networks and social contacts in local communities and friendship circles are just as important for the cohesion of the society and the integration of individuals but these types of activities are normally not included in studies of the nonprofit sector.

This paper primarily relies on data from the Johns Hopkins University Com-parative Nonprofit Sector Project (JHU project). The main focus has been on the organized civil society, its labour force (unpaid and paid) and its economic impact on the national economies. The focus on the formal networks and organ-izations might partly explain why the nonprofit sector / the organized civil so-ciety are significant lower in the Southern and Central / Eastern parts of Eu-rope. This is countries where the informal support systems through family, so-cial networks and local community are more widespread compared to Western Europe and especially in the Scandinavian countries.

8.1 Conclusions The size of the non-profit, voluntary workforce among the Euro-pean/Western countries varies from a large non-profit workforce – paid and unpaid work – in the Netherlands of 15.1 per cent of the economically ac-tive population to a small non-profit workforce of less than 1 per cent in several of the Central and East European countries. The variation across the countries not only concerns the size of the non-profit workforce but also its distribution on paid and unpaid labour.

In the Scandinavian countries, the total non-profit labour force is relatively large, but it is composed by a small paid non-profit staff and a large number of voluntary activities. For nearly all other European countries, the relation is the opposite. Denmark represents a slightly deviant case. In Denmark, there is a higher level of non-profit involvement in the production of social services – social services and education – than in the other Scandinavian countries. To some extent, this pattern is resembles the situation in the con-

Activities deriving from three different sectors: health, social services and culture and recreation

The organized civil society, its labour force (unpaid and paid) and its eco-nomic impact on the national economies

The size of the non-profit, voluntary workforce



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tinental European countries, which are all characterized by a non-profit workforce dominated by paid labour. This is most obvious in Benelux and Austria where the voluntary work account for less than one third of activi-ties in the non-profit sector.

The decisive dimension in determining the composition of the workforce in the nonprofit sector in paid and unpaid, voluntary work seems to be the lev-el of non-profit involvement in provision of welfare services. The more in-volved the non-profit sector is in providing health services in a given coun-try, the higher is the proportion of paid work compared to the unpaid, volun-tary workforce, and the more professional and formalized the nonprofit or-ganizations tend to be.

The relationship between the level of volunteering in non-profit organizations and publicly financed welfare services confirms the thesis that societies with a high degree of universalism in the provision of social services and high social equality are also characterized by extensive social networks, a high level of in-stitutional trust and a significant level of voluntary involvement. This thesis seems to be confirmed by the present study.

The amount of volunteering and the prosperity of the non-profit sector seem to be stimulated rather than restricted by highly developed and formalized public welfare organizations, and the formal organizational basis for non-profit activi-ties seems to grow as a result of public support. The Scandinavian countries and the Netherlands score high on both dimensions. These countries have a highly developed social welfare system and a high level of membership in as-sociative organizations combined with widespread volunteering. Furthermore, a relatively high level of publicly financed social services in Belgium, France and Austria was found, but in all three countries the level of volunteering is re-stricted. In these countries the rate of membership in non-profit organizations is low but those who are members have a high level of volunteering. A large number of non-profit organizations in these countries as well as in the UK and Germany are involved in the production of social services – elderly care and institutions for children – but the costs of providing these services are financed by the state. Furthermore, these social services are primarily provided by paid labour employed by the non-profit organizations, and the involvement of volun-tary, unpaid labour is restricted.

Another important health dimension in determining the level of voluntary in-volvement seems thus to be the organization of the welfare system. A highly organised and institutionalised health system tends to stimulate voluntary in-volvement and to increase the role of the non-profit sector. It may be organised through the state apparatus as in the Social Democratic system or through the corporative organisations as in the continental system. These dimensions de-scribing the welfare system concern primarily voluntary work performed in the institutional framework of a non-profit organization. Voluntarism performed as informal care for friends and family members outside the household is high both in countries characterized by equalized, social structures such as Social Democratic welfare systems where the equal social structure stimulate social

The composition and the involvement

The publicly financ-ing

Volunteering and prosperity

The organization



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networking and close contact in the local community and in countries with a less developed system of social protection but characterized by a strong fami-lialism and patronage in the system of social network, which also stimulate the informal support system but make it highly segregated.

There is not a clear picture of the sources from which the revenues originate. Taking into account population size in the different countries most revenues derives from government support in Continental Europe and Benelux whereas it derives from earned income in Scandinavia and Southern Europe. In Central Europe and Anglo America half of the revenues derive from earned income. In all country samples philanthropy represent the smallest share of the total reve-nues. In the US 21 % revenues derives from philanthropy which reflect three times the share deriving form philanthropy in Europe.

8.2 Results of Task 1 to feed into the following tasks of the study

The following five points represent the main elements extracted from Task 1 which we will build upon in the creation of different options of blind trust/foundations in the field of voluntary and not for profit voluntary public health activities:

• The activity level within the nonprofit and voluntary public health sector for example measured in terms of the amount of expenditures in the non-profit sector as percentage of the total GDP indicates possible lack or fur-ther need of financial support to given nonprofit and voluntary activities, and is therefore an essential element to include in the creation of a blind trust/ foundation.

This should be taken into account when looking into the particularly aim as well as geographical coverage of the foundation, e.g. it could be an objec-tive of a foundations to support a particular voluntary public health activity in a geographical region with a historical low level of such activity.

• The type of organisations carrying out public health activities related to particular target groups are also vital knowledge to use in building options of trust founds. Such organisations are for example on-profit private hospi-tals, nursing homes, voluntary associations to support private and public hospitals, nursing homes, or associations and non-profit institutions for therapeutic care (nature cure centres, yoga clinics, etc.).

In relation to establishing a trust fund the particular type of organisations and their target group, the fund is supposed to support will for example re-late to the fund's application criteria as well as their criteria for distributing funds.

• The composition of unpaid and paid workforce in the different voluntary

public health sectors and countries is also important information to have in mind in establishing the possible foundations' aim and selection criteria for

Revenues according to population sizes

Activity level

Type of organisation

The composition of unpaid and paid workforce



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the distribution of fund. The support of organisations based on unpaid or paid workforce relates to not only the type of organisation but also the type and size of target groups which are to be supported.

• The level and type of financial donations presented in this report provides

a background of understanding the likely types of donations. This under-standing can be used in the creation of a foundation. Basically, there are three types of donations, earned income (e.g. memberships), governmental support, and philanthropy (private donations). The smallest share of dona-tions derives from philanthropy in all countries. In the US the share of phi-lanthropy are three the size of the share in Europe.

• It is also of importance in relation to the establishment of the blind trust to

acknowledge that there is no legislation on EU level towards regulation and governance of voluntary and non-profit organisations. Therefore, vol-untary activities are subject to the national legislation of the country in which the organisation is legally created and undertaking its activities. Voluntary organisations that desire to work across Member States are sub-ject to different legislation. This legal issue will be incorporated in our creation of different trust funds.

Likely types of dona-tions

Legislation on EU level



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9 Literature Anheier, HK and Seibel, W (1993): Defining the Non-profit Sector: Ger-

many. The Johns Hopkins University.

Anheier, HK and Seippel, W (2001): The Nonprofit Sector in Germany. Johns Hopkins Nonprofit Sector Studies.

Boje, TP (2008) Den danske frivillige nonprofit sektor i komparativt per-

spektiv. In Boje, Friberg & Ibsen (red.) Det frivillige Danmark. Odense: Syddansk Universitets Forlag

Boje, TP; Fridberg, T and Ibsen, B (2006): Den frivillige sektor i Dan-

mark – omfang og betydning. Socialforskningsinstituttet (SFI). (in Danish)

Esping Andersen, G (1990): The Three World of Welfare Capitalism. Lon-

don: Polity Press Esping-Andersen, G (1999): The Social-economic Foundation of Post-

Industrial Economies. Cambridge: Polity Press European Council of Associations of General Interest http://www.cedag-eu.org/index.php?page=european-statute-of-

association&hl=en_US European Foundation Centre, Proposal for a European Foundation Stat-

ute, January 2005, which remains open to either Article 95 or Article 308 as potential legal bases for the legal instrument.

Franco, RC; Sokolowski, SW; Hairel, EM.H; Salamon, LM (2005): The

Portuguese Nonprofit Sector in Comparative Perspective. Johns Hopkins University

Gallie, D and Paugam S (2000): Welfare Regimes and the Experience of Un-

employment in Europe. Oxford: Oxford University Press Ibsen, B and Habermann, U (2005): Definition af den frivillige sektor i

Danmark. www.frivillighedsus.dk (In Danish).



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Ibsen, B; Boje, TP and Fridberg, T (ed.).(2008): Det frivillige Danmark. Syddansk Universitetsforlag (In Danish).

Hall MH; Barr, CW; Easwaramoorthy, M; Sokolowski, SW & Salamon,

LM (2005): The Canadian Nonprofit and Voluntary Sector in Com-parative Perspective Montreal: Statistics Canada

Measuring Civil Society and Volunteering, Initial Findings from Imple-

menting of The UN Handbook on Nonprofit Institutions, Johns Hopkins University 2007

Kendall, J and Knapp, M (1993): Defining the Nonprofit Sector: The United Kingdom. The Johns Hopkins Comparative Nonprofit Sector Project.

Kendall, J and Almond, S (2004): United Kingdom. in Salamon, Lester

M.; Anheir, Helmuth K.; List, Regina; Toepler, Stefan; Sokolowski, S. Wojciech and Associates. Global Civil Society: Dimensions of the Nonprofit Sector. Johns Hopkins Center for Civil Society Studies.

Kuti, É (1996): The nonprofit sector in Hungary. Johns Hopkins Nonprof-it Sector Serie:4.

Mertens, S; Adam, S; Defourny, J; Marée, M; Pacolet, J; Van de Putte, I (2004): Belgium. In Salamon, Lester M.; Anheir, Helmuth K.; List, Regina; Toepler, Stefan; Sokolowski, S. Wojciech and Associates. Global Civil Society: Dimensions of the Nonprofit Sector. Johns Hopkins Center for Civil Society Studies.

Oonagh B. B (2008): EU Regulation of Charitable Organizations: The

Politics of Legally Enabling Civil Society. The International Journal of Not-for-Profit Law Volume 10, Issue 3.

Priller, E; Zimmer, A; Anheir, HK.; Toepler, S and Salamon, L (1999): Germany: Unification and Change. in Salamon, Lester M.; Anheir, Helmuth K.; List, Regina; Toepler, Stefan; Sokolowski, S. Wojciech and Associates. Global Civil Society: Dimensions of the Nonprofit Sector. Johns Hopkins Center for Civil Society Studies.

Sebestény, I; Kuti, É; Toepler, S and Salamon, L (2004): Hungary. in in Salamon, Lester M.; Anheir, Helmuth K.; List, Regina; Toepler, Ste-fan; Sokolowski, S. Wojciech and Associates. Global Civil Society: Dimensions of the Nonprofit Sector. Johns Hopkins Center for Civil Society Studies.

Socialforskningsinstituttet, the national population survey 2004.

Statistics Denmark: Survey of National Account 2003.



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Treaty of the European Union (Consolidated version)

European Commission Health and Consumers Directorate-General

Feasibility study on funding arrangements for voluntary and not for profit public health activities at EU level Appendix 1.1

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Table of Contents

1 Appendix - blind trusts 3 1.1 Aga Khan Foundation (Switzerland) 3 1.2 Barnardos (Australia) 4 1.3 Berantungstelle für Unfallverhütung (Switzerland) 5 1.4 Bertelsmann Stiftung (Germany) 5 1.5 Bill and Melinda Gates Foundation (USA) 6 1.6 Calouste Gulbenkian Foundation (Portugal) 7 1.7 Carnegie Endowment (USA) 7 1.8 Ditchley Foundation (United Kingdom) 9 1.9 Esmee Fairbairn Foundation (United Kingdom) 9 1.10 The Prevention Fund (Denmark) 10 1.11 Foundation ONCE (Spain) 11 1.12 Friderich-Ebert-Stiftung (Germany) 11 1.13 Heinrich-Boell-Stiftung (Germany) 13 1.14 Joseph Rowntree Foundation (United Kingdom) 14 1.15 Knut och Alice Wallenbergs Stiftelse (Sweden) 15 1.16 Laerdal fonden (Norway) 15 1.17 Lilly Endowment (United States) 16 1.18 Mott Foundation (United States) 17 1.19 Pew Charitable Trusts (United States) 17 1.20 Nuffield Foundation (United Kingdom) 18 1.21 Robert Woods Johnson Foundation (USA) 19 1.22 The Rockefeller Foundation (USA) 20 1.23 Roi Baudouin Foundation (Belgium) 20 1.24 Russell Sage Foundation (United States) 21 1.25 Sasakawa Peace Foundation (Japan) 22 1.26 Schwab Foundation for Social Entrepreneurship

(Switzerland) 23 1.27 Skoll Foundation (United States) 24 1.28 Soros (Open Society Foundation) (United States) 24 1.29 Trygfonden (Denmark) 25 1.30 Vårdal Fonden (Sweden) 25


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1.31 Welcome Trust (United Kingdom) 26 1.32 W.K. Kellogg Foundation (United States) 27


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1 Appendix 1.1 - blind trusts

1.1 Aga Khan Foundation (Switzerland) Areas of interest

The Aga Khan Foundation focus is on a small number of specific development problems. The foundation forms intellectual and financial partnerships with organisations sharing the foundations objectives. The following are the founda-tions focus areas:

• Architecture

• Civil society

• Culture

• Economic development

• Education

• Health

• Historic cities

• Humanitarian assistance

• Microfinance

• Music

• Planning and building

• Rural development.

Mission/vision

No vision or mission is clearly stated.


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Grants

Most Foundation grants are made to grassroots organisations testing innovative approaches in the field.

The foundation is the principal grant-making agency for social development within the Shia Ismaili Imamat. His Highness the Aga Khan is its founder and chairman. The founder provides the Foundation with regular funding for ad-ministration, new programme initiatives and contributions to its endowment. Funding sources also include income from investments and grants from gov-ernment, institutional and private sector partners - as well as donations from individuals around the world.

1.2 Barnardos (Australia)

Areas of interest

The Barnado's foundation works in the following areas:

• Child poverty

• Education

• Children in trouble

• Sexual abuse

• Sexual exploitation

• Substance misuse

• Homelessness

• Children in care

• Young carers

• Advocacy

• Domestic violence

• Disability and inclusion

• Fostering, adoption and short break care

• Parenting support

• Black.


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Vision

Barnardo’s vision today is that the lives of all children and young people should be free from poverty, abuse and discrimination. Barnardo’s believe in the abused, the vulnerable, the forgotten and the neglected. The foundation pledge to support them, stand up for them and bring out the best in each and every child.

Grants

The total amounts spend on charitable activities are £174.3 million in 2008.

1.3 Berantungstelle für Unfallverhütung (Switzerland) Areas of interest

The main areas of interest for the Berantungstelle für Unfallverhütung founda-tion is Accident Prevention in the sectors of road traffic, sport, home and lei-sure. The areas of interest and activities:

• Road traffic. The foundation promotes a safe traffic infrastructure and in-fluences general legal conditions. It campaigns to reduce drink driving, for the observation of speed limits and wearing of safety belts.

• Sport. The foundation is engaged in ensuring safer sports areas and sports equipment, a responsible individual approach to risk and the wearing of protective gear.

• Home and leisure. The foundations campaigns for safety inside buildings (e.g. non-slip floors, balustrades) as well as outside (e.g. playgrounds). It promotes product safety by regular market checks and the award of the bfu safety label.

Mission

By means of accident prevention, the bfu wants to prevent deaths and injuries and reduce the annual effective cost of 13 billion Swiss francs caused by non-occupational accidents.

Grants

Information not found.

1.4 Bertelsmann Stiftung (Germany) Areas of interest

The Bertelsmann Stiftung is a private operating foundation and award grants to projects that conceives, initiates and implements itself. The areas of interests in


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the foundation are listed below, and the areas of interest are elaborated into several programs at the foundation's website.

• Politics

• Society

• Economy

• Education

• Health

• Culture.

Objective

The Bertelsmann Stiftung is working to promote steady development that leads to a sustainable society.

Grants

The Bertelsmann Stiftung functions as a private operating foundation and it car-ries out its own project work and does not make grants or support third-party projects.

In 2008 the Bertalsmann Stiftung program expenditures were at 57,490,000 €.

1.5 Bill and Melinda Gates Foundation (USA)

Areas of interest

The Bill and Melinda gates Foundation make grants in three main areas: Global Health Program, Global Development Program, and United States Program. Each program includes a policy and advocacy team dedicated to raising aware-ness of problems and solutions to motivate change. Their work includes public affairs, to increase interest in the issues and strengthen the voice of the public; grantmaking to organisations that support our mission; and public education, to provide policymakers and others with information on issues.

The three main areas of interest are as stated above:

• Global Health Program

• Global Development Program

• United States Program.


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Mission

Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In develop-ing countries, we focus on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, we seek to ensure that all people—especially those with the fewest re-sources—have access to the opportunities they need to succeed in school and life.

Grants

Total grant commitments since inception: $20.5 billion. Total 2008 grant pay-ments: $2.8 billion. For the three main areas of interest the Global Health grants paid in 2008 was $1.8 billion, Global Development grants paid in 2008 was $462 million, and U.S. Program grants paid in 2008 was $170 million.

1.6 Calouste Gulbenkian Foundation (Portugal) Areas of interest

The Calouste Gulbenkian Foundation provides grants in several areas. The ac-tivities are exercised not only in Portugal, but also in any other country where its administrators deem it expedient. The areas of interest are:

• Charity

• Art

• Education

• Science.

Purpose

The purposes of the Foundation are charitable, artistic, educational and scien-tific.

Grants

Grants, scholarships and prizes were at 23,583,133 € in 2007. The foundations own initiatives amounted to 26,028,133 € in 2007.

1.7 Carnegie Endowment (USA) Areas of interest

The Carnegie Endowment for International Peace is a private, non-profit or-ganisation dedicated to advancing cooperation between nations and promoting


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active international engagement by the United States. The foundation has the following program areas:

• China

• Russia Eurasia

• South Asia

• Middle East

• Nonprofileration

• Democracy and the rule of law

• Energy and climate

• International economics

• Trade, equity and development

• US role in the world.

Goals (vision)

The Carnegie Endowment has three overarching goals:

1 To develop improved understanding in the United States of thinking in other countries and regions, thereby affecting American policy. Equally, to develop deeper understanding abroad of U.S. thinking and to derive, on both sides, a critical mass of research-based insights on vital issues.

2 To model and demonstrate - in microcosm - the approach we believe the United States should be taking in its international relations and thereby help develop a sustainable American role in the world, successful for itself and for the world community.

3 To provide a model of how to do first-rate, independent policy research - even in constrained political circumstances - and demonstrate how such in-stitutions can contribute to the strengthening of their governments and so-cieties.

Grants

It is not clearly stated how many projects the foundation has supported or by which amount in total.


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1.8 Ditchley Foundation (United Kingdom) Areas of interest

The Foundation convenes private and highly focussed conferences, gathering senior international experts together to address issues of transatlantic and in-deed global interest. There are approximately twelve conferences a year.

Furthermore, the foundation promotes support through legacies as a long-term strategy to secure continuing financial health.

Thus, the above areas of interests are:

• Conferences

• Legacies.

Mission

No mission or vision is stated at the foundations website.

Grants (number of conferences)

Approximately twelve conferences are held per year. One conference is held in the United States or Canada. The rest is held in United Kingdom.

1.9 Esmee Fairbairn Foundation (United Kingdom) Areas of interest

The primary interests are in the United Kingdoms cultural life, education and learning, the natural environment and enabling disadvantaged people to partici-pate more fully in society. The Esmee Fairbairn Foundation supported projects in Scotland, Northern Ireland, Wales, England and UK-wide in 2008. The fol-lowing areas have received grants from the Main Fund (based on the Annual Report 2008):

• Arts, culture, heritage

• Citizenship or community development

• Education

• Environment

• Human rights, conflict resolution

• Prevention or relief of poverty.


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Aim

The aim of the foundation is to improve the quality of life for people and com-munities in the United Kingdom both now and in the future.

The foundation funds the charitable activities of organisations that have the ideas and ability to achieve change for the better.

Grants

In 2008 the Main Fund granted 267 projects in total £17,223,000.

1.10 The Prevention Fund (Denmark) Areas of interest

The Danish Prevention Fund provides grants to projects in Denmark that con-tribute in the following health areas:

• Routines and working practices in workplaces that wears down the staff in especially threatened industries and occupations as well as retention of employees with poor health. Development of new technology is included as well

• Rehabilitation in municipalities

• Health promotion at work.

Vision

The Board of Directors visions for the fund are:

• that the number of people affected by wearing-down, absence from work due to illness and awarded early retirement pension are decreased

• more people experience good working conditions so that remain in work rather than choosing early retirement

• absence at work due to illness is reduced in companies

• those who suffer from illness, an accident or work injury receive better conditions and opportunities to get back in work faster.

Grants

In 2008 the foundation awarded 115 projects grants, and 238 million was granted in support of programs and projects in the above presented areas of ac-tivities.


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1.11 Foundation ONCE (Spain) Areas of interest

All of the Fundación ONCE's activities are aimed at contributing to improving the quality of life of the disabled.

The Fundación ONCE encourages other organisations and administrations to take part in specific programmes aimed at providing equal opportunities for the disabled. Hence, the foundation is actively taking part in the management of the European Union's "Combat Poverty" action programme for the period encom-passing 2000-2006.

At least sixty per cent of the Fundación ONCE's resources are allocated to pro-moting stable employment and training for the disabled, while the remaining per cent is dedicated to programmes designed to achieve full accessibility.

Mission and aim

All of the Fundación ONCE's activities are aimed at contributing to improving the quality of life of the disabled by providing them with stable employment, improving their training and promoting the creation of environments, products and services that are accessible by all.

The Fundación ONCE's mission is four-fold:

1 Achieving the full integration and normalisation of the disabled in Spanish and European society.

2 Helping to improve the quality of life of the disabled through the develop-ment of work integration, training and employment programmes.

3 Seeking global accessibility -understood as more than just the elimination of architectural barriers for people with limited mobility- by incorporating the viewpoints of Global Accessibility, Design for All and Self-Sufficiency.

4 Achieving effective equal opportunities to make the integration of the dis-abled into society a reality.

Grants


1.12 Friderich-Ebert-Stiftung (Germany) Areas of interest

The Friedrich-Ebert-Stiftung maintains its own representations in 70 countries of Africa, Asia, the Middle East and Latin America.


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The Friedrich-Ebert-Stiftung sees its activities in the developing countries as a contribution to:

• promoting peace and understanding between peoples and inside its partner countries,

• supporting the democratisation of the State and society and strengthening civil society,

• improving general political, economic and social conditions,

• reinforcing free trade unions,

• developing independent media structures,

• facilitating regional and worldwide cooperation between states and differ-ent interest groups and

• gaining recognition for human rights.

The focus in Germany is:

• Focusing on a fair society, on innovation and the future, and creating an active democracy

• Public educational programs in Germany

• Research on and scientific analysis of central policy areas

• Dialogue and interchange between social and political actors

• Scholarship programs for students and Ph.D. Candidates.

Aims

The Friedrich-Ebert-Stiftung is a non-profit German political foundation com-mitted to the advancement of public policy issues in the spirit of the basic val-ues of social democracy through education, research, and international coopera-tion.

The foundation has the following aims:

• Furthering political and social education of individuals from all walks of life in the spirit of democracy and pluralism,

• Facilitating access to university education and research for gifted young people by providing scholarships,

• Contributing to international understanding and cooperation.


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The Friedrich-Ebert-Stiftung is a non-profit German political foundation com-mitted to the advancement of public policy issues in the spirit of the basic val-ues of social democracy through education, research, and international coopera-tion.

Grants

The budget is approximately 120 million € in 2008. The budget is mainly based on public funding.

1.13 Heinrich-Boell-Stiftung (Germany) Areas of interest

The foundations main areas of interest are as highlighted in the annual report for 2008:

• Globalisation and sustainability

• International democracy promotion

• Foreign and security policy

• Global gender policy

• European policy

• Promoting young talent - scholarship program

• Heinrich Böll House in Langenbroich

• Art and culture.

Mission statement

The Heinrich Böll Foundation is part of the Green political movement that has developed worldwide as a response to the traditional politics of socialism, lib-eralism, and conservatism. The foundation's main tenets are

• Ecology and sustainability

• Democracy and human rights

• Self-determination and justice.

The foundation place in particular emphasis on gender democracy, meaning social emancipation and equal rights for women and men. The foundation is also committed to equal rights for cultural and ethnic minorities and to the so-


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cietal and political participation of immigrants. Finally, the foundation pro-motes non-violence and proactive peace policies.

Grants


1.14 Joseph Rowntree Foundation (United Kingdom) Areas of interest

Most of the foundations work centres on the interconnected themes of poverty, place and empowerment. In 2009–2011 the foundation will also continue to look at some of the themes that emerged from the social evils programme, launched in 2007 to understand people's perceptions of social evil in the 21st century.

The foundation's main areas of interest are:

• Poverty

• Place

• Empowerment

• Themes emerged from the social evils programme.

Purpose and aim

Our purpose is to influence policy and practice by searching for evidence and demonstrating solutions to improve:

• the circumstances of people experiencing poverty and disadvantage;

• the quality of their homes and communities;

• the nature of the services and support that foster their well-being and citi-zenship.

The foundation aims to present evidence in a balanced, unbiased way and to stimulate debate on current and emerging issues.

In all the work, the foundation look to reflect the diversity of the UK popula-tion, learn from others and operate in a sustainable way - socially, environmen-tally and economically - finding practical and realistic solutions and focusing on the needs of disadvantaged people. Through housing, community and care services, the foundation aim to achieve the highest professional standards.


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Grants

In 2008 the Joseph Rowntree foundation had £3,519,000 in grant commitments, £3,572,000 in support costs and £44,000 in governance.

1.15 Knut och Alice Wallenbergs Stiftelse (Sweden) Areas of interest

The foundation awards grants to scientific research and education at Swedish universities, institutes and other academic units. Universities, academies and similar research and educational institutions are eligible for grants within the following fields:

• Expensive scientific equipment • Fellowship programs initiated by the Foundation • Selected research projects of significant potential • Larger educational research projects.

The Foundation gives priority to grants for equipment for scientifically out-standing projects that already attract support for personnel and running costs from other sources, and for equipment for national research facilities.

Purpose

The purpose of the Foundation is to: "promote scientific research, teaching and/or education beneficial to the Kingdom of Sweden".

Grants

According to the annual report SEK 1,017 million has been granted in 2008.

1.16 Laerdal fonden (Norway)

Areas of interest

Support practically oriented research and development in acute medicine. The support includes support to about 60 PhD research projects in the Scandinavian countries. The foundation has supported projects in Sweden, Norway, Den-mark, Finland, USA, other European countries outside Scandinavia. The re-search fields are listed at foundations website:

• Heart function

• Brain function

• Circulation/shock

• Treatment outside hospital


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• Breathing function

• CPR

• Other.

Goal

The goal of the Foundation is to be of maximum value relative to its mission of Helping save lives.

Grants

In 2009, the Foundation’s grant capacity amounts to NOK 25 mill (USD 3,6 mill). At the beginning of the year, about half of this amount has been allocated to continuation of previously awarded centre support, and for partial funding of chairs in acute medicine. The last three years the foundation has supported about 1,500 projects.

The Foundation has so far, together with a sister foundation in the US, sup-ported in excess of NOK 100 mill (USD 15 mill).

1.17 Lilly Endowment (United States) Areas of interest:

Lilly Endowment considers proposals in three program areas:

• community development

• education

• religion.

The foundation are also interested in initiatives that benefit youth, that foster philanthropic leadership education among non-profit institutions, and that pro-mote the causes of philanthropy and volunteerism.

As desired by its founders, Lilly Endowment concentrates its philanthropic ef-forts in community development in its home territory of Indianapolis and Indi-ana.

Mission

The mission for the Endowment is to support the causes of religion, education and community development.


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Grants

During 2008 the Endowment distributed grant payments of $330.9 million and approved $310.9 million in new grants.

1.18 Mott Foundation (United States) Areas of interest

The Mott foundation provides grants for projects within the following areas:

• Civil Society: To strengthen citizen and non-profit sector engagement in support of free and pluralistic democratic societies, with primary geo-graphic focus on the United States, Central/Eastern Europe and Russia, South Africa, and at the global level.

• Environment: To support the efforts of an engaged citizenry working to create accountable and responsive institutions, sound public policies, and appropriate models of development that protect the diversity and integrity of selected ecosystems in North America and around the world.

• Flint Area: To foster a well-functioning, connected community that is ca-pable of meeting the economic, social and racial challenges ahead.

• Pathways Out of Poverty: To identify, test and help sustain pathways out of poverty for low-income people and communities.

Mission and vision

To support efforts that promotes a just, equitable and sustainable society.

The Charles Stewart Mott Foundation affirms its founder’s vision of a world in which each of us is in partnership with the rest of the human race – where each individual’s quality of life is connected to the well-being of the community, both locally and globally.

Grants

In 2008 according to the annual financial report 2008 the foundation made 558 grants. In total $110,400,755.

1.19 Pew Charitable Trusts (United States) Areas of interest

The Pew Charitable Trusts is driven by the power of knowledge to solve today's most challenging problems. Pew applies a rigorous, analytical approach to im-prove public policy, inform the public and stimulate civic life.


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• Improving public policy. We study and promote nonpartisan policy so-lutions for pressing and emerging problems affecting the American public and the global community.

• Informing the public. The Pew Research Centre, a Washington-based subsidiary, is home to most of our information initiatives. It uses impar-tial, fact-based public-opinion polling and other research tools to track important issues and trends.

• Stimulating civic life. We support national initiatives that encourage civic participation. In our hometown of Philadelphia, we support or-ganizations that create a thriving arts and culture community and insti-tutions that enhance the well-being of the region’s neediest citizens.

Mission

The mission is to serve the public interest by "improving public policy, inform-ing the public, and stimulating civic life".

Grants

Information not found

1.20 Nuffield Foundation (United Kingdom) Areas of interest

The Foundation has wide objects. These include:

• the advancement of health

• the advancement of social well being

• the advancement of education

• the care and comfort of the aged poor

• the relief of handicaps

• the benefit of the Commonwealth and such other charitable purposes.

Aim

The foundation tries to 'advance social well being', particularly through re-search and practical experiment. The foundation aims to achieve this by sup-porting work which will bring about improvements in society, and which is founded on careful reflection and informed by objective and reliable evidence.


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Grants

According to the annual report 2008 the foundation used in total $10,643,000 on charitable activities.

1.21 Robert Woods Johnson Foundation (USA)

Areas of interest

The Robert Wood Johnson Foundation provides grants for projects in the United States and US territories that advance the mission to improve health and health care of all Americans.

As an independent philanthropy devoted to improving health policy and prac-tice, the Robert Wood Johnson Foundation works with a diverse group of dedicated people and organizations to address problems at their roots and to help make a difference on the widest scale—particularly for the most vulner-able among us. For projects to be eligible for funding they must address one of the following program areas.

• Building human capital

• Childhood obesity

• Coverage

• Pioneer

• Public health

• Quality/equality

• Vulnerable populations.

Mission

The Robert Wood Johnson Foundation seeks to improve the health and health care of all Americans. Our efforts focus on improving both the health of eve-ryone in America and their health care - how it's delivered, how it's paid for, and how well it does for patients and their families.

Grants

In 2008 the foundation awarded 1,043 grants and contracts, providing $523.26 million in support of programs and projects to improve health and health care in the United States.


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1.22 The Rockefeller Foundation (USA)

Areas of interest

The Rockefeller Foundation for the 21st Century focuses its resources and en-ergies on five interconnected - overlapping - issue areas, selected both because they are critical global challenges and because the Foundation is distinctively positioned to address them effectively and with measurable results. The issue areas are listed below:

• Repairing weak, outmoded health systems. Making modern health sys-tems stronger, more affordable, and more accessible in poor and vulnerable communities.

• Building resilience to environmental degradation and climate change. Developing plans and products to protect those with the fewest means from an imperilled environment and warming global climate.

• Addressing the risks of accelerating urbanization. Shaping efforts in planning, finance, infrastructure, and governance to manage a world in which, for the first time in history, more people live in urban communities than rural ones.

• Reweaving frayed social contracts. Reinforcing American workers’ so-cial and economic security, reimagining the regulatory framework that governs our economy, and reinvigorating the notion of citizenship.

• Easing basic survival insecurities. Supporting sustainable efforts to pro-vide the basic building blocks of increased labour and land productivity and economic growth: nutrition, water, health care, and shelter.

Mission

The Foundation’s mission is to expand opportunities for poor or vulnerable people and to help ensure that globalisation’s benefits are shared more widely.

Grants

Approximately $15 billion (2007 dollars) has been granted over the years.

1.23 Roi Baudouin Foundation (Belgium) Areas of interest

The activities of the King Baudouin Foundation are essentially aimed at every-one who lives in Belgium. The Foundation, however, also works at the Euro-pean and international levels. The Foundation focuses on specific themes and is based in Brussels, but also supports projects far beyond the borders of Belgium and Europe. By working together with a range of different organisations we


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aim to harmonise our own mission as effectively as possible with the efforts made by others.

The Foundation is active at the regional, federal and international level. The foundation carries out missions at the request of government bodies and institu-tions and formulates its own recommendations. By harmonising the efforts the foundation can be more effective in the areas of work both in Belgium and abroad.

The King Baudouin Foundation supports projects and citizens who are commit-ted to create a better society. In this way the foundation can make a lasting con-tribution towards greater justice, democracy and respect for diversity.

Mission

The mission of the King Baudouin Foundation is clear and at the same time wide-ranging: to help to improve living conditions for the population. In its 1976 Constitution the Foundation is described as "an independent structure that encourages original ideas and sets up new projects."

Grants

The King Baudouin Foundation operates in 2009 with a budget of 35 million €. Of this total the foundation spends 92% on projects and 8% on the day-to-day management of the hundreds of projects and Funds.

1.24 Russell Sage Foundation (United States) Areas of interest

The Foundation dedicates itself exclusively to strengthening the methods, data, and theoretical core of the social sciences as a means of improving social poli-cies.

The Russell Sage Foundation is an operating foundation directly involved in the conduct and dissemination of social science research. In its effort to improve the social effectiveness of social research, the Foundation:

• Invites individual scholars and collaborative groups working in areas of Foundation interest to participate in the Foundation's Visiting Scholar Pro-gram to pursue their research and writing projects;

• Provides support for scholars at other institutions to pursue research pro-jects that advance the Foundation's research programs;

• Assures widespread access to the research that the Foundation supports through its own book publishing program;


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• Sponsors special seminars and working groups aimed at developing new topics in social science;

• Participates in the planning of each study or program as an active partner and reserves the right to publish any resulting manuscripts;

• Collaborates with other granting agencies and academic institutions in studies of social problems.

Goal

The Russell Sage Foundation is an operating foundation directly involved in the conduct and dissemination of social science research. The goal is to improve the social effectiveness of social research.

Grants


1.25 Sasakawa Peace Foundation (Japan) Areas of interest

To undertake surveys and research, develop human resources, invite and dis-patch personnel, organise international conferences and other forums, and con-duct other activities fostering international understanding, exchange, and coop-eration, as well as to collect, disseminate, and propagate information in order to carry out these and other activities necessary to accomplish the Foundation's mission.

The areas of interest are:

• Surveys and research

• Develop human resources

• Invite and dispatch personnel

• Organise international conferences and other forums

• Conduct other activities fostering international understanding, exchange and cooperation as well as to collect, disseminate, and propagate informa-tion.

Mission

To contribute to the welfare of human kind and the sound development of the international community, and thus to world peace, by conducting activities fos-


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tering international understanding, exchange, and cooperation, as well as efforts to promote these activities.

Grants


1.26 Schwab Foundation for Social Entrepreneurship (Switzerland)

Areas of interest

The foundation's main activities include:

• Identifying the world's leading social entrepreneurs

• Community building

• Connecting social entrepreneurs

• Generating solutions in partnerships

• The next generation of social entrepreneurs

• Additional services (work with universities and leading academic institu-tions).

Mission and purpose

The Foundation provides unparalleled platforms at the national, regional and global levels for leading social innovators that highlight social entrepreneurship as a key element to address social and ecological problems in an innovative, sustainable and effective way.

The purpose of the Schwab Foundation for Social Entrepreneurship is to pro-mote entrepreneurial solutions and social commitment with a clear impact at the grassroots level.

Grants

The Schwab Foundation does not give grants. Rather, it invests its limited re-sources in creating unprecedented opportunities where social entrepreneurs who have successfully implemented and scaled their transformational idea, can fur-ther the legitimacy of their work, have access to usually inaccessible networks, and in consequence, mobilize the financial and in-kind resources that enable them to continue to strengthen and expand.


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1.27 Skoll Foundation (United States) Areas of interest

The Skoll Foundation invests in social entrepreneurs through the "Skoll Awards for Social Entrepreneurship". These three-year awards support the continuation, replication or extension of programs that have proved successful in addressing a broad array of critical social issues:

• tolerance and human rights

• health, environmental sustainability

• institutional responsibility

• peace and security

• economic and social equity.

Within these areas, the Foundation is particularly interested in innovators work-ing on climate change, water scarcity, pandemics, nuclear proliferation and Middle East conflict.

Mission and vision

Mission: The Skoll Foundation drives large-scale change by investing in, con-necting, and celebrating social entrepreneurs and other innovators dedicated to solving the world’s most pressing problems.

Vision: Our vision is to live in a world of peace and prosperity where all peo-ple, regardless of geography, background or economic status, enjoy and employ the full range of their talents and abilities.

Grants:


1.28 Soros (Open Society Foundation) (United States) Areas of interest

The Open Society Institute (OSI) seeks to shape public policies that assure greater fairness in political, legal, and economic systems and safeguard funda-mental rights. On a local level, OSI implements a range of initiatives to ad-vance justice, education, public health, and independent media.

Mission

The Open Society Institute works to build vibrant and tolerant democracies whose governments are accountable to their citizens. To achieve its mission,


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OSI seeks to shape public policies that assure greater fairness in political, legal, and economic systems and safeguard fundamental rights. On a local level, OSI implements a range of initiatives to advance justice, education, public health, and independent media. At the same time, OSI builds alliances across borders and continents on issues such as corruption and freedom of information. OSI places a high priority on protecting and improving the lives of people in mar-ginalised communities

Grants

The expenditure on grants are not clearly stated but the total expenditures by OSI and the Soros foundations network currently average between $400 million and $500 million a year.

1.29 Trygfonden (Denmark) Areas of interest

Trygfonden provides grants for projects in Denmark. Trygfonden has the fol-lowing focus areas where activities are initiated:

• Safety

• Health

• Well-being

Mission and vision

Mission: Trygfonden contributes so that everyone in Denmark can take respon-sibility for their own and others' safety.

Vision: TrygFonden will be the most professional and respected promoter to safety creating activities in Denmark.

Grants


1.30 Vårdal Fonden (Sweden) Areas of interest

The Swedish Foundation for Health Care Sciences and Allergy Research (The Vårdal Foundation) initiates and stimulates innovative, interdisciplinary Swed-ish health care science and allergy research of high international standard and clinical relevance. The foundations multidisciplinary review committees' award priority to project programs that:


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• Take an interdisciplinary approach

• Are clinically relevant

• Supports the recruitment and education of postgraduates.

Vision

The Foundation's vision is to contribute in a long-term perspective to an effec-tive and sustainable healthcare and social welfare system by providing support to research for the prevention and cure of disease, to strengthen health and to promote well-being, as well as to reduce human suffering through improved healthcare and medical treatment.

Grants

In 2008 the foundation has granted SEK 21 million to new projects. During 2008 a total of SEK 73 million (where SEK 12 million is external resources) was granted to projects.

1.31 Welcome Trust (United Kingdom)

Areas of interest

Welcome Trust support many different kinds of research and activities with the ultimate aim of protecting and improving human and animal health. This sup-port is not restricted to United Kingdom researchers and the foundation devotes significant funding to international research too. The foundations areas of in-terest are:

• Biomedical research funding

• Research funding programmes in the medical humanities

• Technology transfer funding

• International funding

• Funding of activities promoting public engagement with science

• Wellcome Trust Clinical Research Facilities

• Broadcast media

Mission

The Trust’s Strategic Plan for 2005–2010, Making a Difference, sets out the context and direction or the Wellcome Trust to achieve its overall mission to


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“foster and promote research with the aim of improving human and animal health” during this period. The Trust has six aims:

1 Advancing knowledge: To support research to increase understanding of health and disease, and its societal context.

2 Using knowledge: To support the development and use of knowledge to create health benefit.

3 Engaging society: To engage with society to foster an informed climate within which biomedical research can flourish.

4 Developing people: To foster a research community and individual re-searchers who can contribute to the advancement and use of knowledge.

5 Facilitating research: To promote the best conditions for research and the use of knowledge.

6 Developing our organisation: To use our resources efficiently and effec-tively.

Grants

The Welcome Trust total charitable expenditure for 2007/2008 increased to £701.6 million. The foundation also supports international projects outside the United Kingdom.

1.32 W.K. Kellogg Foundation (United States) Areas of interest

The W.K. Kellogg Foundation focuses its investments and grantmaking to help create conditions in communities for children and families to be successful. Teams are focusing on three key elements which are critical to impacting the success of children: Education and Learning; Food, Health and Well-Being; and Family Economic Security. The integration of these elements to help chil-dren learn, develop and stay healthy, and strengthen families all happen within the context of communities and places. Our work to improve the lives of chil-dren and families will connect to different stages of a young person's growth, with a core focus on the early years of a child's life.

Mission and vision

Mission: The W.K. Kellogg Foundation supports children, families, and com-munities as they strengthen and create conditions that propel vulnerable chil-dren to achieve success as individuals and as contributors to the larger commu-nity and society.


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Vision: We envision a nation that marshals its resources to assure that all chil-dren have an equitable and promising future – a nation in which all children thrive.

Grants

In 2006/2007 the Kellogg Foundation made grant expenditures of $334,763,816 to 827 of its 2,653 active projects.



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Appendix 2: Options for voluntary and not for profit foundations/arrangements


Feasibility study on funding arrangements for voluntary and not for profit public health activities at EU level Report on TASK 2: Options for voluntary and not for profit foundations/arrangements

SANCO/2008/C4/05

January 2010


Feasibility study on funding arrangements for voluntary and not for profit public Draft report on fund and trust options Report on TASK 2: Options for voluntary and not for profit foundations/arrangements

SANCO/2008/C4/05

January 2010


Document no. 1

Version 1.0

Date of issue 16.12.2009

Prepared LWAN, LIPU

Checked

Approved


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Table of Contents

1 Summary 2

2 Introduction 5

3 Methodology 7 3.1 Approach 7

4 Generic model for a voluntary and not for profit public health blind trust 9

4.1 Introduction 9 4.2 Organisational structure and elements in a blind trust 10

5 Three blind trust options 13 5.1 Option A - fully under the direction of the European

Commission 15 5.2 Option B - independency of EU and the European

Commission 26 5.3 Option C - satellite organisational structure 30


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1 Summary In this task three options for a voluntary and not for profit public health blind trust have been developed. The options are primarily based on aspects of organ-ising a pan-European blind trust. To ensure usability of the options interviews of stakeholders have been performed as well as SWOT analysis for each option.

Figure 1-1 Option A: EU directed trust - this option is under the full direction of the Commission (e.g. board majority). On this basis, the aim of the trust is coherent with EU policy in the field. The internal organisational set-up and procedures of the blind trust is dealt with in Task 3 of the study.

Pros in relation to Option A:

• Co-donation from the EU budget • The EU is a well-known 'brand' - which could be an advantage in attracting

donations • Objectives/strategy known and coherent with EU policy • Organisational support from the Commission • Lower administrative cost, if hosted by the Commission Cons in relation to Option A:

• Lack of freedom to act in line with objectives and focus areas during EU programming period

Option A


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• Conflicts of interest in relation to Commission board members • Private donors could be unwilling to donate to 'a political system' (EU) • Challenge to manage which donors/products the EU will become associ-

ated with • Distance to potential recipients (voluntary actors)

Figure 1-2 Option B: Independent trust - this option is independent in relation to any political system or interest. On this basis, the independent board of the trust is free to manage the trust in the direction of its aim. The internal organisational set-up and procedures of the blind trust is dealt with in Task 3 of the study.

Pros in relation to Option B:

• Independent to act both in terms of objectives and donors • Likely to attract private donors • Direct communication with donors Cons in relation to Option B:

• No financial or organisational back-up from e.g. the Commission • Difficult to establish a brand/name • Distanced to potential recipients (voluntary actors)

Option B


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Figure 1-3 Option C: Trust with local satellite unit - the organisation of this trust in-cludes a number satellite units located in the European countries. This option can be both under the direction of the Commission or an independent trust. The map of Europe illustrate satellites in relation to a Commission directed trust or an independent trust, respectively. The internal organisational set-up and procedures of the blind trust is dealt with in Task 3 of the study.

Pros in relation to Option C:

• Knowledge about needs at regional, national, and local levels • Linguistic skills • Closer relationship to recipients of donations

Cons in relation to Option C:

• High administrative costs • Legislative complications • Distribution according to geographical balance in contrast to reel needs. • Less pan-European knowledge sharing • Distance to potential recipients (voluntary actors) are secondary

Option C


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2 Introduction In Task 1 we analysed the voluntary and non-profit activities in the field of public health across Member States and Anglo-America. Furthermore, the level of funding followed by practices for the operations and the role of not for profit and voluntary organisations in the different types of societies was identified. These analyses revealed that voluntary activities are needed and that funding is scarce. Important elements which must be taken into consideration when devel-oping options for voluntary and not for profit foundations/arrangements are the type of organisation, the type and size of the target group, likely types of dona-tions and legislation.

The purpose of Task 2 is to outline options for voluntary and not for profit trusts based on the review and inventory. The results and the findings of the inventory (Task 1) will naturally elaborate on potential models for a structure of a trust, (foundation or other body), and on that basis three models of pan-European blind trust in the field of voluntary and not for profit public health activities will be suggested.

When searching for a model for how to organise the funding of voluntary pub-lic health activities in a Pan European setting, a number of issues have to be investigated as practices and legislation across Europe differ. The organisa-tional set-up models that are described in this study will rest on best practice uncovered in the public health field inside or outside Europe.

The description of each option for the organisational set-up will include details of the issues that need to be addressed when developing a blind trust. These issues are:

• Trust objectives/alignment with EU public health policy

• Board structure

• Trust domicile

• Marketing and public awareness

• Foundations in European law

In chapter 3, the methodology and data used in Task 2 will be described. Chap-ter 4 introduces a generic model for a blind trust, whereas chapter 5 presents


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three options for a blind trust discussing issues of relevance to a blind trust. A SWOT analysis will be used to assess strengths, weaknesses, opportunities and threats.


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3 Methodology 3.1 Approach The options suggested in Task 2 are based on the analysis made as part of Task 1 with specific focus on type of donations and legal and organisational frame-works. The main conclusions from Task 1 in terms of organisation and legisla-tive advantages/disadvantageous will be assessed for the different options. To ensure the utility and applicability of the options, relevant expert and stake-holders (voluntary actors and prospective donors) will be interviewed as well as a SWOT analysis will be made.

The interviews will be conducted by COWI consultants, and the interviewed experts will be stakeholders in the area of voluntary and not for profit public health activities. The relevant interviewees will be identified through our pro-fessional network.

The interview guide is designed with the aim to discuss and verify the usability of the different options (Annex 1). The interviews will in particular be based on the SWOT analysis of the three different options.

Four interviews were conducted with the following stakeholders:

• Kirsten Grønbjerg, professor, Center on Philanthropy at Indiana University

The Center on Philanthropy at Indiana University is a leading academic centre dedicated to increasing the understanding of philanthropy and im-proving its practice through research, teaching, public service and public affairs. Founded in 1987, the Center is a part of the Indiana University School of Liberal Arts at Indiana University-Purdue University Indianapo-lis.1

• Morgens Kirkeby, president, International Sport and Culture Association

The International Sport and Culture Association (ISCA) is an organisation bringing together sport, culture and youth organisations from across the globe. ISCA believes that everyone should have the chance to participate

1 http://www.philanthropy.iupui.edu/About/

Interviewees identi-fied through network

Interview guide


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in international activities such as festivals, exchanges and sports tourna-ments. ISCA calls this Sport and Culture for All.2

• Kjeld Juel Petersen, Managing director of Villum Kann Rasmussen Fon-den and Velux Fonden.

Villum Kann Rasmussen Fonden and Velux Fonden are both non-profit foundations which provide funding for projects with scientific, cultural, ar-tistic and social objectives. Each of the foundations also pursues different priorities within its statutory purposes3.

• Jesper Jæger, Senior Project Manager at Arla Foods

Arla are sponsor for the Danish National soccer team. Furthermore, Arla want to contribute to a healthier lifestyle among Danish children and youth. Therefore, Arla are funding activities which motivate the youngest generation to healthy food and drink and more physical activity.

The number of interviews is less than anticipated due to willingness of partici-pating in interviews. It has been agreed, that SANCO will proceed in respect to the consultative process of the findings of the study. This could be undertaken by for example consulting the Alcohol Forum.

3.1.1 Strengths, weaknesses, opportunities, and threats (SWOT) A SWOT analysis will be conducted to assess the strengths, weaknesses, oppor-tunities, and threats of the three options for a blind trust. The analysis is a stra-tegic planning method involving internal and external factors that are favour-able and unfavourable to achieving the objective of the blind trust. The strengths and weaknesses are internal factors to the blind trust and opportunities and threats are the external factors to the blind trust. A SWOT analysis is a use-ful method for understanding and for making informed decisions in various situations, e.g. such as establishment of a blind trust.

A SWOT analysis will be made for each of the three options of a blind trust. Thus, the analysis will offer valuable information on pros and cons of various models for a blind trust which may feed directly into a decision-making proc-ess.

2 http://isca-web.org/english/ 3 http://www.vkr-fondene.dk/Page.aspx?ID=81f777a4-2653-4227-af2b-dc45dbc0b5b2&Lang=uk


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4 Generic model for a voluntary and not for profit public health blind trust

In this chapter, a generic model is presented forming the basis for the three op-tions for blind trusts in the field of voluntary and not for profit public health activities at pan-European level.

4.1 Introduction A trust is an arrangement whereby a number of people are appointed under a legal document (trust deed) for the purpose of holding funds or property on be-half of another person or persons. Typically, the trust is established and work-ing under a set of defined objectives. These objectives have most recent been defined by the founders of the trust. The trust's objectives are often difficult to alter or amend. Blind trusts have the distinguishing feature that the beneficiar-ies cannot be told details of the asset holdings of the trust. The establishment of a blind trust will be discussed in detail in Task 3.

In legal form, a trust is a relationship between a trustee/s (who has/have legal title to the trust property) and the beneficiary/ies (for whom the trustee is obliged to use that property to benefit). The trust deed may allocate control flexibly among the trustee, beneficiaries, creator of the trust, and a contracted manager, or there may be no discretion required beyond instructions in the trust deed. The trust can be distinguished from activities of the trustee in other ca-pacities, and from the beneficiaries whose involvement may be as little as a po-tential to receive future income. With the structure, a range of economic func-tions can be carried out, such as collective investment vehicles, and asset hold-ing for individuals.4

Distinction may be made between the following criteria for legal structure of a blind trust:

• Typically, the trust is established in a way so that only specifically ap-pointed persons or organisations may be members of the board of the trust;

• National legislation sets forth the requirements as to the nature and objec-tives of the trust that are recognised by this legislation;

4 Fourteenth Meeting of the IMF Committee on Balance of Payments Statistics Tokyo, Ja-pan, October 24-26, 2001

Definition of a blind trust

General legal aspects of a blind trust


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• National legislation also requires that a designated public authority is given the right to monitor the actions taken by the trust;

• The right to take decisions on expenditure of the trust's fund is governed by the defined set of objectives of the trust.

4.2 Organisational structure and elements in a blind trust

A simple generic model of a blind trust is shown in Figure 3-1.

Figure 4-1 A generic model

The generic organisational structure of a blind trust arrangement includes a governing body, consisting of the Board, advisory committee(s), and a secre-tariat including a performance and financial controlling system.

An important issue for the board of trust is to define and describe the vision, mission and strategy/objectives of the trust. The board makes decisions on be-half of the trust and is responsible for these decisions. It will be the board's foremost obligation to manage the funds of the blind trust in alignment with the strategy/objectives and mission of the trust.

The board members include representatives and main actors in the field of vol-untary and not for profit public health activities from both international institu-tions, EU institutions, not for profit organisations, and the private sector.

Advisory committee Permanent or ad-hoc advisory committees of experts could take the role of supporting the board on professional and technical health issues in relation to nominating projects for financing to the Board. A number of committees could

The board of trust

Members of the Board


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be formed according to the strategy and focus areas within public health to en-sure that the objectives of the trust are covered.

Secretariat It is relevant to establish a secretariat supporting the trustees and the advisory committees and dealing with the practical issues. The size, scope and role of the secretariat will depend on the different blind trust models and what tasks the secretariat should have.

The blind trust's public awareness activities towards the general European pub-lic as well as to potential voluntary and not for profit actors and donors to the blind trust is essential and two-sided. On the one hand, it is central for the blind trust to ensure that its funds are generally available to voluntary not for profit organisations in the public health area across the EU Member States. On the other hand, it is vital that the trust has a strong positive profile in the general public so that potential and current donors see an incentive to contribute to the blind trust.

The benefit of donating financial resources to the blind trust is closely related to the revenue already obtained in the non-profit and voluntary organisations. Ac-cording to the findings in Task 1 the revenue of the non-profit and voluntary organisations comes from many different sources – such as sales of goods and services, membership dues, investment income, donations from individuals, foundations and companies and government support, which includes grants, contracts and reimbursement of services provided. The revenue is divided into three main categories: government support, earned income and philanthropy. 60 per cent of revenues to non-profit sectors come from public sources in the EU whereas overall, philanthropy plays a minor role. Foundations and trusts de-rives from philanthropy which cover donations from individuals, founda-tions/trusts and private companies. The revenue of the pan-European blind trust could as well be established based on the principles of earned incomes, such as membership fees or principles of government support, such as Member State support. This may cause competition or profit to a pan-European blind trust; a factor which must be thoroughly considered.

The attraction of donors is very important for the trust and especially how do-nors' inducement to make donations can be embedded in the set-up of the blind trust options in an ethical way. Without donors (money), no trust! One possibil-ity of making donations attractive could be a logo which donors can use on their products or website to promote their health and social profile.

In the blind trust's funding procedure, it will be fundamental to ensure that the allocated funding is spent in coherence with the defined objectives and mission of the blind trust. On that basis, a performance and financial monitoring system will be important to implement as part of the funding cycle.

As regards donations, revenues may derive from either Government (or EU) support, philanthropy or earned income as described in Task 1. After identifica-tion of donors, it is up to the trust secretariat to handle the donations according to the legislative nature of the trust and the objectives of the trust.

Marketing and public awareness

Donation arrange-ment

Attraction of donors

Performance and fi-nancial controlling

Operating donations


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The first screening of applications is performed by the trust secretariat to ensure strict adherence to the trust rules. The secretariat passes the applications on to the advisory committees, which assess the technical and scientific contents of the applications followed by a nomination to the board of trust. It is the respon-sibility of the board to select the projects that can obtain funding from the trust.

The flow of financial and performance management (controlling) and market-ing/awareness is continuously applied to ensure that the trust observe legisla-tion governing trusts and the trust objectives.

There are different ways of regulating how foundation grants are allocated to the strategy according to the decisions made in the board. One issue is if bene-ficiaries are obliged to obtain co-funding e.g. by national support/funding or they can be purely trust funded. Policy options could be to fund in coherence with the EU Public health policy or in coherence with independent objec-tives/strategies or in relation to specific targets.

Operating applica-tions

Operating manage-ment and marketing

Output


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5 Three blind trust options This chapter will focus on three different options for a blind trust operating in the area of voluntary public health activities across the EU. The options will be based on the generic model of a blind trust described in Chapter 3. Further-more, the analysis in Task 1 indicated that type of donations, organisation and legislative framework were important when describing options.

Task 1 revealed three main categories according to type of donations received by trusts. The analysis performed in Task 1found that a quite high percentage of revenues obtained by the trusts derive from earned income. In fact, 24 of the 32 trusts receive earned income; and for 15 it is the only source of income. This reflects that income from interests deriving from re-investments presents a high percentage of revenues; but also income from fees and sales are important in-come. Those trusts receiving income from only one source are typically based on income from either earned income or Government support; only two of the trusts receive all income from philanthropy. Although, the analysis in Task 1 revealed that philanthropy is under-represented in Europe compared to the US, this may reflect unused potentials regarding philanthropy in Europe. It seems perilously to fund a trust only based on philanthropy; at least one more source of income should be present.

When establishing a blind trust, the organisational set-up is partly elucidated by the internal set-up which is related to establishing Board of the trust, secretariat, financial/performance controlling and advisory committee(s). The internal set-up and procedures will be discussed in more detail in Task 3 as will the costs of the blind trust. However, it is important to take into consideration the general power of a board of trust in discussing the different options of trust. Normally, it is the board who formulates the trust's strategy. This directs attention to the objectives and focus areas of the trust; or in other words the political impact in relation to the EU Health Strategy. This points out that the degree of direction from the Commission is important to discuss when looking into the organisa-tional options of the blind trust. The meaning of being managed under the di-rection of the Commission correlates to being operated in the context of the EU political system.

Overall, a pan-European trust can be hosted in any of the 27 EU Member States. However, the analysis in Task 1 demonstrated that the legislative framework of a trust is subject to specific legislation dependent on the country in which it is hosted. This means that given level of direction, legislation in the

Type of donations

Organisational set-up

Geographical place-ment


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area of blind trusts' operation, and EU legislation in general will affect the blind trust's targeted operation.

It is also essential to consider whether the blind trust should have regional/local offices in a selection of Member States, in all Member States, or have any satel-lite offices at all. An organisational structure where offices are located in each or a number of Member States (satellites) poses several challenges. These will be discussed below for each of the proposed options.

Marketing and public awareness is of the highest priority when discussing the different options. It is vital that the trust has a positive profile in the general public; otherwise it may not survive since this is one of the most important fac-tors in attracting donors.

The three options for a blind trust are presented in sections 4.1, 4.2 and 4.3 where each option is described in detail.

The three options are defined as follows:

• Option A: The blind trust is fully under the direction of the European Commission. The blind trust is fully controlled by the Commission.

• Option B: The blind trust is in any way independent of the Commission or any other political system. The governing body of the blind trust operates without directions from the Commission.

• Option C: The blind trust is organised with satellite offices in a number of or all EU Member States. This option can both be under the direction of the Commission or independent of any political systems in various de-grees.

Options A and option B are contrasts at each end of the scale in terms of the level of direction or organisational link to the Commission. Thus, in between various intermediate options do occur.

Option C represents a geographical challenge of deciding how the blind trust should be organised. Thus, a satellite organisation of a blind trust may be or-ganised in several ways.

The detailed presentations of the three options for the operation of blind trusts in the field of voluntary public health activities across the EU will be structured according to the below four issues:

• Overall objective/strategy and function of the blind trust

• Legislative issues related to the option

• Donations and the ability to attract donors

• A SWOT analysis of the option.


Options A, B and C

Options A and B - at two ends of the scale

A satellite organisa-tion dealing with geographical issues

Structured presenta-tion of the options


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5.1 Option A - fully under the direction of the European Commission

As mentioned above, option A is under the full direction of the Commission and therefore under the guidance of the EU political system, including the Council and the European Parliament (Fig. 4-1).

Figure 5-1 Graphical illustration of an EU directed trust

5.1.1 Overall objective/strategy and function of the blind trust The establishment and operation of a trust in the field of voluntary public health activities that is under the complete direction of the Commission will result in objectives and strategies of the trust being closely related to the EU's public health policy. It is unlikely to image such a trust having objectives and specific focus areas which are not in coherence with the objectives of the EU Health Strategy 'Together for Health: A Strategic Approach for the EU 2008-2013' (see text box 4-1).

Text box 5-1 Health Strategy - health objectives

Objective 1: To foster healthier lifestyles and reduce inequities in health across the EU - particularly in relation to supporting healthy ageing;

Objective 2: To protect citizens and patients from known and unknown - threats to health;

Objective 3: To increase the sustainability of health systems with a focus on new technolo-gies;

Objective 4: Strengthening the EU's voice in global health.

On the basis of the coalition between its objectives and focus areas and the EU Health Strategy, the EU directed trust will most likely be operating in parallel

Alignment with EU public health policy

Operation in parallel with PHP


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with the programme objectives of the EU Public Health Programme (PHP)5, see text box 4-2.

Naturally, the activities within which the voluntary actors operate can seem dis-tant from the general objectives of the PHP, however, the operation of a trust that is under the direction of the Commission is expected to be manoeuvred in the light of those objectives.

Text box 5-2 PHP 2008-2013 - programme objectives

To improve citizens' health security:

• Developing EU and Member States' capacity to respond to health threats, for example with health emergency planning and preparedness measures;

• Actions related to patient safety, injuries and accidents, risk assessment and commu-nity legislation on blood, tissues and cells.

To promote health, including the reduction of health inequalities:

• Action on health determinants - such as nutrition, alcohol, tobacco and drug consump-tion, as well as social and environmental determinants;

• Measures on the prevention of major diseases and reducing health inequalities across the EU;

• Increasing healthy life years and promoting healthy ageing.

Health information and knowledge:

• Action on health indicators and ways of disseminating information to citizens; • Focus on Community added-value action to exchange knowledge in areas such as

gender issues, children's health or rare diseases.

Another characteristic of a trust under the direction of the Commission would be a construction of the trust's board with a significant degree of influence by the Commission. Such a construction can obviously be established in several ways.

One way could be to let the board be chaired by a relevant Commission man-ager with a relatively high influence on EU public health policy, e.g. a Com-mission director. Another way could be to ensure that the board has a simple majority of members from the Commission, which could result in alignment of the trust with the Commission's public health policies. A board with non-Commission members under full supervision of the Commission could also be envisaged.

Naturally, it will be the board which decides on objectives and focus areas of the trust. These could be adopted in the context of the inventory and review un-dertaken during Task 1 of this study. This will among other things include es-

5 The Second Programme of Community Action in the Field of Health 2008-2013.

Board structure


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tablishing the objectives and focus areas in relation to the current activity level of voluntary public health activities, the types of organisation, including target groups and the organisations' composition of paid and unpaid labour. For ex-ample, a specific focus area of the trust could be to increase the general volun-tary public health activities in a geographical region of the EU with a tradition-ally low level of such activities. It could also be an objective to increase the voluntary activities in the form of non-profit hospitals with a specific support to the unpaid sector.

Having the board of the trust with a high influence by the Commission and building the objectives and strategies (focus areas) on the current situation in voluntary public health activities across the EU will both align the function of the trust with the EU's health policies and ensure financial support to voluntary actors in respect to the actual needs.

For a trust under the full direction of the Commission, it will be accepted to have its domicile at the premises of the Commission. Having the Commission hosting the trust in-house will not only make the cooperation between the two institutions smooth but also improve the economic situation of running the trust, including the cost related to office space, and the possibility to share the secretariat function with the Commission.

As explained previously in chapter 3, the marketing and public awareness ac-tivities in relation to the trust are two-sided. The trust needs to have the highest possible availability towards the voluntary public health actors in the EU to ease their access to the financial support from the trust. The trust also needs to have a significant profile in the general public of the EU to ensure it is as at-tractive as possible for donors to support financially.

On the one hand, a trust under complete direction of the Commission holds the strong and well know brand of "European Union". On the other hand, such a trust also needs to consider the effect on both voluntary actors and potential donors of being closely linked to the EU as a brand.

The trust will need to face the challenge of national voluntary actors seeing the EU as a large-scale institution being out of reach from their perspective. The Commission directed trust will also have to face the dispute that potential do-nors such as larger private companies might hesitate to donate to an EU politi-cally operated fund (although indirect). One instrument to face these challenges is to have a strong marketing strategic showing clearly the trust objectives and operation in a transparent manner. This also needs to take into account the abil-ity to attract donors, and in which way donors are allowed to use their donation in their company profile.

One usual way of attracting and retaining donors is to host regular do-nor/sponsor arrangements where these are invited to for example sports/cultural events or conferences related to public health, see more about this in task 3. Naturally, the trust needs to make this transparent so that it is made public how the trust's resources are spent, in particular for a EU directed trust. Another way to attract donors' attention and interest in making donations is to make it possi-

Hosted by the Com-mission



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ble to donate financially to specific aims. This will help the donors to see the details and relevance of the area(s) to which they donate. These specific aims or areas naturally fall under the trust's overall strategy and objectives.

5.1.2 Legislative issues related to option A The following will deal with the legal issues in relation to the establishment and operation of a trust which is under complete direction of the Commission. Dis-tinction is made between:

1 Funds that are allocated by the EU

2 Funds that are allocated by any donor, but which are directed by the EU.

The typical example of funds mentioned under 1) is EU Structural Funds and the Cohesion Fund. In terms of regulation, the main difference between the two types of funds is that EU allocated funds are typically subject to detailed EU regulation (e.g. Structural Funds Regulations 2007-2013). Furthermore, Finan-cial Regulation6 will apply to such types of funds. This Regulation sets out the scope of grants, the procedure for awarding them and the arrangements for payment and controls. Within the meaning of the Financial Regulation, grants are direct financial contributions, by way of donation, from the budget in order to finance:

• Either an action intended to help achieve an objective forming part of an EU policy;

• Or the functioning of a body which pursues an aim of general European interest or has an objective forming part of an EU policy.

The basic award principles are:

• The principles of transparency and equal treatment

• Grants may not be cumulative or awarded retrospectively and they must involve co-financing

• Grants may not have the purpose or effect of producing a profit for the beneficiary

• All grants awarded must be published annually with due observance of the requirements of confidentiality and security.

The Commission must respect the general principles as laid down in the Finan-cial Regulation.

6 Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regu-lation applicable to the general budget of the European Communities


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In terms of funds allocated by any donor, but directed by the EU, these are typically subject to less regulation on the part of the EU. Regulation typically takes place at the national level taking into consideration the existing EU finan-cial principles (as set out in the Financial Regulation). For Option A, it is a characteristic that the EU is heavily involved in the establishment and operation of a fund. This pre-supposes the observance of the basic principles of the Fi-nancial Regulation as well as the Commission Internal Rules of Procedure from the EU Commission side.

Although we have chosen to focus on the funds allocated by any donor, but which are directed by the EU, it is necessary for the basic understanding of the issues described below to briefly mention the legal issues related to funds awarded by the EU.

Legal issues related to marketing and public awareness One of the major issues related to the functioning of a trust is avoiding any con-flict of interest among actors involved in the trust.

One example could be a CEO of a corporation who is elected to the board of a national, non-profit organisation. His/her company develops a cause-related marketing campaign that benefits the non-profit objectives of the trust which at the same time enhances sales, profits, and the public image of the corporation. This situation may be classified as a conflict of interest and is not subject to any EU regulation.

The extent to which the donors should be allowed to use their involvement with the trust as a tool of marketing may be regulated by the following four means to resolve the matter of conflict of interests:

1 Board members of the fund

The overall mandate of the board members is to ensure broad legitimacy of the organisation of the fund's undertakings through quite broad responsi-bilities typically comprising:

• Setting the strategic direction for the trust; • Monitoring performance; • Ensuring effective financial stewardship; • Ensuring accountability for corporate governance; • Appointing, appraising and remunerating senior executives; • Ensuring dialogue with the wider community. In those areas, the board member, e.g. appointed directly by the EU Com-mission would thus have a margin of influence through the decision-making process.

However, the incentive for the representatives of high-profile enterprises to become board members of a fund is quite limited due to the lack of benefit to the enterprise. Indeed, such a board member would represent the fund, but not the enterprise.

Conflict of interests in relation to corpo-rations' involvement in an EU directed trust

Board members


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The Commission may impact donors' involvement with the trust as a tool of marketing through the board, which is the decision-making body of the fund. This may be achieved by means of the Commission's involvement in the process of the composition of the fund's board members.

2 Internal institutional rules/commands and control

Provided that the fund is administrated by the EU Commission, the Com-mission may rely on the internal rules of procedure vested within the Commission. The legal basis for the adoption of the Rules of Procedure ensuring that both the Commission and the departments operate smoothly is Article 218(2) of the EU.

Although this solution is most suited for the funds directly allocated by the EU Commission, it is also relevant for funds that are allocated by any do-nor, provided that such funds are directed and administrated by the EU.

The following two models are suited for funds awarded by the EU:

3 Targeted EU regulation and secondary national legislation, including stat-utes, by-laws and decisions (financial, accounting, etc.)

As each type of fund may be subject to a specific (targeted) EU regula-tion,7 one way of addressing the issue described above will be to include a special provision in the respective legislative instrument to regulate the ceiling for the expenditure to be used for marketing purposes. The adop-tion of such legislative instruments will typically be based on an inter-institutional agreement.

The issues related to marketing and public awareness may be also ad-dressed by national legislation regulating certain issues (e.g. accounting or financial regulations or by-laws).

4 Direct order

The decision-making hierarchy should be analysed in a concrete situation to determine whether:

• it is possible to issue an internal order • if yes, whether it is possible to enforce such an order on the donors

who are involved in the EU fund. Legal issues related to donations. Although generally EU legislation does not block the extent to which non-profit foundations may invest in non-liquid assets, the following issues should be considered: 7 E.g. Structural Funds Regulations 2007-2013, Directive on Alternative Investment Fund Managers (AIFMs) (proposal)

Commands and con-trol

Targeted regulation

Direct order


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1 In a number of legislative regimes of EU Member States, the permitted purpose of a non-profit foundation is limited to serving public purposes and does not pre-suppose economic activity/financial gain.

2 If an economic activity is considered legitimate, the non-profit organisa-tion may be subject to EU competition rules.

For the funds awarded by the EU, the Commission has quite limited powers to provide investments in the form of non-liquid assets due to the following main reasons:

1 The Commission shall respect award principles as set out in Financial Regulation8, including that of the grant may not have the purpose or effect of producing a profit for the beneficiary, which applies to all operations managed directly by the Commission (Cf. Articles 109, 155-156).

2 In accordance the Rules of Procedure,9 the Commission shall respect the principles of transparency, accountability and sound financial manage-ment. The donation of non-liquid assets pre-supposes financial gain due to the fact that it is beyond the control of the Commission whether the asset value will rise or decline.

For a more detailed analysis of the above legal matters.

Legal issues related to distribution of funds. The principal question is how the Commission can ensure that the funds are distributed to the purposes determined by the Commission. This could be re-solved by means of

1 A special agreement between the donor and the recipient/beneficiary

2 Organisational monitoring.

The last-mentioned solution is though only suited for funds that are adminis-tered by the Commission.

Overall, the Commission should respect budgetary and award principles as set out in the Financial Regulation, and the general principles of transparency, ac-countability and sound financial management as set out in the Commission's Rules of Procedure.

For a more detailed analysis of the above legal matters, see annex 2.

8 Council Regulation N (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities 9 Rules of Procedure of the Commission C(2000) 3614

Commission's lim-ited powers

General principles


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Legal issues related to taxation. In the area of direct taxation, the EU has quite limited legislative competence. The regulation of tax-related issues is largely subject to the national legislation of the Member States. The diverse legislation of the 27 Member States create difficulties in the treatment of capital-asset movement and tax treatment of do-nations, particularly cross-border donations.

There is no common approach to defining public benefit criteria that can lead to tax relief. What may qualify as a public benefit in one country may not be con-sidered as such in another. The resulting lack of harmonization has implied that Member States have had the freedom to develop their own legal criteria for the definition of public benefit for tax purposes and for ancillary legal requirements that may impose on an organisation seeking tax relief for its charitable pur-poses.10

Despite national differences in tax treatment, all Member States have made provisions for special tax treatment of public benefit purpose foundations. Do-nations to public benefit purpose foundations are generally exempt from corpo-rate income tax. The same applies to income deriving from asset management in most countries. In the majority of the countries Foundations that pursue pub-lic benefit purposes are, also exempt from gift and inheritance tax. To reduce the tax burden, the following measures may be taken: 1 National-level measures;

These comprise the revision of Member States' national legislation and in-troduction of public benefit status regarding tax privileges for both national and European organisations; establishment of the same tax incentives for donors when donating to a foreign foundation; and equal treatment of both foreign and national foundations.

2 Bilateral agreements

3 EU-level measures.11

For a more detailed analysis of the above legal matters see annex 2.

For option A, the EU has various tools to regulate the extent of donors' in-volvement with a trust as a tool of marketing. The appropriateness of each tool is determined by its enforceability. Against this background, the Commission may have a margin of influence on the trust's decision-making through its in-volvement in the composition of the trust's board. Furthermore, for funds that are directed and administrated by the EU, internal institutional rules (upon the condition that the enforceability of an administrative decision is reached by 10 Nilda Bullain and Radost Toftisova A Comparative Analysis of European Policies and Practices of NGO-Government Cooperation The International Journal of Not-for-Profit Law Volume 7, Issue 4, September 2005 11 European Foundation Centre, Introduction and Comparative analysis

Commissions' lim-ited legislative com-petence

Lack of harmoniza-tion

Special tax treatment

Measures to reduce the tax burden

Conclusion on legal issues - option A


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means of an "ex-territorial agreement") will apply. Although EU legislation does not regulate the extent to which non profit foundations may invest in non-liquid assets, there are issues to be considered.

The Commission may ensure that the funds are distributed to the purposes de-termined by the Commission by means of special agreements concluded be-tween the donor and the beneficiary. The EU has limited legislative competence in the area of direct taxation, and therefore regulation occurs at national level.

5.1.3 Donations and hereby the ability to attract donors In Task 1, it was found that financial support to voluntary public health actors originates from various sources, which can be categorised in three groups: gov-ernment support, earned income, and philanthropy.

As to potential donors to a trust under the full direction of the Commission, these can also take the form of any of the above-mentioned three groupings. Such a trust will be likely to attract donations from private companies and other national or other global foundations. These financial sources are examples of philanthropy. The ability to attract particularly donations from private compa-nies largely depends on the availability of mechanisms in place for the compa-nies to use in their public profile because of their donation to the trust. It is one of the biggest challenges to the trust to put in place an adequate incentive struc-ture for donors, including in particular incentives for private companies.

Furthermore, the equivalent to government support in relation to a trust operat-ing across EU borders and at EU level could be financial support from the EU budget. This will be another way of getting 'public' donations. Especially, an EU directed fund will provide incentives for the EU to invest in as such a trust would operate in parallel with the EU public health policies. Member State do-nations to an EU directed trust could also be relevant.

Additionally, the trust has the possibility to provide financial support with the help of own earned income. This can take form of membership dues both for individuals and for companies. Such a measure would also require a mecha-nism that benefits the potential members of the trust. Some foundations use a label or logo that members can use on their products, website, or annual report to flag that they have provided financial support to this particular foundation.

An important way of generating self-earned income is to invest the financial capital of the trust to increase the financial support for the voluntary actors.

5.1.4 SWOT analysis of Option A This section will focus on the strengths, weaknesses, opportunities, and threats of the operation of a blind trust under the direction of the Commission (Option A). In the below table, the conclusions of Option A are summarised. Following this, conclusions are detailed primarily based on interviews with experts (re-searchers) in the field, voluntary actors and potential donors.

Table 5-1 SWOT - Option A

Several sources of financial support

Government support

Earned income


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Internal factors

Strengths Weaknesses

• Objectives/strategy known and coher-ent with EU policy

• Organisational support from the Com-mission

• Lower administrative cost, if hosted by Commission

• Lack of freedom to act in line with objec-tives and focus areas during EU pro-gramming period

• Conflicts of interest in relation to Com-mission board members

External factors

Opportunities Threats

• Co-donation from the EU budget • The EU is a well-known 'brand' - could

be an advantage in attracting donations

• Private donors could be unwilling to do-nate to 'a political system' (EU)

• Challenge to supervise which do-nors/products with which the EU be-comes associated

• Distance to potential recipients (voluntary actors)

On the ability to attract donations, the approached experts on philanthropy point to some difficulties envisaged for a blind trust under the full direction of the Commission. One complication could be that there is a risk that prospective donor companies will be reluctant to donating financial resources to a politi-cally governed fund (direct or indirect). Another constraint could be that pro-spective donors in forms of other funds are often unable to donate to political aims. Both obstacles are often encountered in philanthropy in the US12.

Based on the interviews with stakeholders and experts, it was found that in or-der to attract donations it is essential that the blind trust defines a number of focus areas so that donors experience that their donations can be targeted to-wards a special focus area, although not towards a particular voluntary actor. In the case of a Commission directed trust, the objectives of the trust that are co-herent with the EU health policy need to be broken down into a number of fo-cus areas.

To attract donations, experts in the field mention that personal relationships with prospective and current donors are paramount. The most effective 'tool' is to establish face-to-face contact with donors in various situations, such as pub-lic events, dinners or conferences. The effect of using celebrities as 'ambassa-dors' (e.g. sports stars, actors etc.) should not be underestimated13.

12 Interview Kristen Grønbjerg 13 Interview Mogens Kirkeby

Constraints on dona-tion

Focused donations

Labelling


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The use of a logo or other forms of labelling can be a very effective means for a blind trust to attract donations. Donating companies may use such logo for marketing purposes to show social responsibility. However, a blind trust needs to be cautious about the companies and/or products with which they become associated. This naturally applies to blind trusts in general but to EU directed trusts in particular, recognising the embedded political sensitivity of the latter.

The distance between a central EU directed trust and the likely recipients of financial support in the field of voluntary public health activities may at first seem long. However, information from voluntary actors as well as experts indi-cates that this might not be as big an obstacle as firstly presumed. It can be as-sumed that voluntary actors applying to a pan-European trust have some capac-ity and will therefore be capable of observing international procedures and ap-plying in other languages. Furthermore, such actors are used to applying for financial resources internationally.

Distance to voluntary actors


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5.2 Option B - independency of EU and the European Commission

As previously mentioned, Option B is entirely independent of the Commission and any other political body. Such a trust fund is free to act exclusively under the direction of its own independent board (Fig. 4-2).

Figure 5-2 Graphical illustration of an independent trust

5.2.1 Overall objective/strategy and function of option B A trust fund operating in the field of voluntary public health absolutely inde-pendently of any political system or other interests will naturally still need to have its role based on objectives that are linked to a strategy and focus areas.

In a trust, such elements will obviously have to be based on the needs for inter-ventions by voluntary actors in relation to public health problems and needs in the local, regional and EU societies. Therefore, it will be the trust board's re-sponsibility to ensure that the trust is operated in accordance with objectives that match the present needs.

A trust board in an independent trust should be formed by members with a broad variety of backgrounds; all having motivation and knowledge in the field of voluntary public health activities. The members could come from the public and private sectors as well as from academia. This could for example be rele-vant representatives of the Commission, national or regional public authorities, private companies with a broad interest in the field, and researchers in the field of voluntary activities and health.

The most important element in the creation of the board is that each involved person can act freely as board member without any detached conflict of inter-est, or that the composition of the board ensures that specific interests are eliminated. To this end, it is also of utmost importance that the public knows the board members' professional backgrounds, e.g. through the trust's webpage. In this way, it will also be evident in which situations the board members have to disqualify themselves.

Trust objectives cor-responding to public health needs

Board structure

Independent board


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On the domicile of an independent trust, it would be most natural as opposed to Option A if such a trust had its own premises (rented or owned) or shared premises with either similar, independent organisations or organisations which operate in non-related fields. The domicile issue will naturally have an impact on the costs of operating the trust; see more on this in Task 3.

In principle, the location of the trust could be in any Member State of the EU. However, such organisations and other organisations involved in EU-wide ac-tions, e.g. NGOs and other interest organisations have a tendency to locate themselves in Brussels. The location of the trust will have legal implications for the trust's operation; see below for a more detailed account of the legal perspec-tives of trusts.

As is the case with Option A, it is also relevant in Option B to view marketing and public awareness aspects from two sides. The independent trust also needs to secure the highest possible availability towards the voluntary public health actors in the EU for the latter to gain access to the financial support from the trust. Furthermore, the trust needs to build a positive image in the general pub-lic of the EU to ensure that the trust is considered attractive by prospective do-nors. An independent trust faces the essential tasks of building a strong brand, which can attract donations, and of creating an image with which voluntary ac-tors can identify.

As for Option A, meeting these challenges requires a carefully formulated mar-keting strategy which displays the trust objectives and operation in a transpar-ent manner. The strategy should also take into account the ability and means to attract donors and the extent to which donors are allowed to use their donation to enhance their corporate image.

For an independent trust the sponsor activities may improve the attractiveness of the trust as would possibilities of directing donations to specific areas, as explained under Option A.

5.2.2 Legislative issues related to option B In the following, the legal issues governing the establishment and operation of a trust independent from any direction from the Commission or any other govern-ing body are described.

Legal issues related to marketing and public awareness activities In the absence of a tailor-made framework EU legislation regulating this issue, the framework for donors involvement in a 'blind trust' as a tool of marketing is set out in the national legislation of Member States.

The distribution of funds for marketing purposes may also be regulated by pri-vate agreements, in which cases general contractual terms and conditions would apply.

Legal issues related to taxation Due to the limited EU legislative competence in the area of direct taxation, tax-

Trust domicile


National legislation

Private agreements


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treatment issues are subject to national regulation in the individual Member States (see discussion above under Option A).

Legal issues related to donations Donation issues are also subject to national regulation in the individual Member States. Among other things, such issues include basic organisational require-ments, the requirements of holding accounts etc.

When a fund is established in EU territory, due consideration should be given to the basic principles of existing EU legislation (and the principle of suprem-acy). In addition, traditional considerations such as transparency and account-ability (as laid down in the Financial regulation) should be taken into account.

Specific financial issues, including the distribution of funds and conditions for the EU providing funding to non-profit organisations, may be regulated by means of private agreements. The contractual terms may also require that the organisational set-up includes one-to-one compatibility (clear correspondence between the purpose defined by the Commission and that of fund).

In the absence of a single European legislative framework, the regulation of issues under Option B is mainly vested within Member States. The regulation of specific issues, e.g. those related to the distribution of funds for marketing purposes or financial issues may be enforced by means of private agreements. Furthermore, the EU Member States should respect existing EU principles and considerations. However, reliance on private agreement and general EU princi-ples may not always be efficient enough to achieve the desired result. Firstly, an agreement is targeted towards regulating a certain situation rather than being a comprehensive regulatory tool. Secondly, general EU principles are not al-ways implemented at the national level.

5.2.3 Donations and hereby the ability to attract donors In Task 1 it was found that financial contributions to voluntary public health actors originate from a variety of sources. These can be categorised into the fol-lowing: government income, earned income, and philanthropy.

As for Option A, the potential donations to an independent trust can also take the form of the above-mentioned three groupings. This trust will attract dona-tions from private companies and other national or global foundations. This kind of financial income for the trust is exemplified by philanthropy. Under Option A, it was also discussed that the ability to collect donations from private companies depends on the availability in trusts of mechanisms that may be at-tractive to donating companies for enhancing their corporate profile. Therefore, one of the basic challenges for the trust is to put in place an adequate incentive structure for donors.

Moreover, for an independent trust operating across European borders support corresponding to government support could be financial support from the na-tional governments as well as the EU budget. Although, the trust is not under the direction of any national government or the European Commission, these

National and EU leg-islation

Private agreements

Conclusion

Several sources of financial support

"Public financial support"


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governing bodies could choose to donate financial support and increase volun-tary actions in European public health if deemed relevant.

Additionally, the independent trust can also secure financial support from own, earned income (as is the case with Option A). This can take form of member-ship dues both for individuals and for companies. This, in turn, calls for a mechanism that benefits the potential members of the trust - be it a label or logo that supporting members can use as part of their marketing activities, e.g. on their products, website, or annual report to flag that they have provided finan-cial support to this particular foundation.

Another way to generate self-earned income is to invest the financial capital of the trust to increase the financial support for the voluntary actors.

5.2.4 SWOT analysis of option B This section will focus on the strengths, weaknesses, opportunities, and threats of the operation of a blind trust entirely independent of the Commission (Op-tion B). In the below table, the conclusions of Option B are summarised. Fol-lowing this, conclusions are detailed primarily based on interviews with experts (researchers) in the field, voluntary actors and potential donors.

Table 5-2 SWOT - Option B

Internal factors


• Independent to act both in terms of ob-jectives and donors

• No financial or organisational back-up from e.g. the Commission

External factors


• Likely to attract private donors • Direct communication with donors

• Difficult to establish a brand/name • Distanced to potential recipients (volun-

tary actors) The approached experts on philanthropy believe that an independent trust such as Option B is more likely to attract both private donations as well as donations from other funds compared to an EU directed trust (Option A). The argumenta-tion is the opposite as for Option A. Potential private donors and other funds will be less reluctant to donating financial resources to an independent trust op-pose to a political directed trust. This is often encountered in philanthropy in the US14.

As mentioned in relation to Option A and based on the interviews with stake-holders and experts, it was found that in order to attract donations it is essential 14 Interview Kristen Grønbjerg

Earned income

Constraints on dona-tion

Focused donations


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that the blind trust defines a number of focus areas so that donors experience that their donations can be targeted towards a special focus area, although not towards a particular voluntary actor. In the case of an independent trust, this trust is free to define its own objectives and breakdown of focus areas.

To attract donations within these focused areas, the personal relationships with prospective and current donors are paramount. An effective 'tool' is described as the face-to-face contact with donors, as mentioned in relation to Option A. However, it is pointed out by the approached experts that an independent trust will have the advantage to act more freely towards current and potential donors without having any political or financial hindrance.15

As for Option A, the use of a logo or other forms of labelling in the operation of an independent trust can be an effective means for a blind trust to attract do-nations. Donating companies can for example use such logo for marketing pur-poses as part of their social responsibility. However, as also mentioned in rela-tion to Option A, a blind trust needs to be cautious about the companies and/or products with which they become associated. For an independent trust, this is of particular importance to have a reliable reputation in the general public both towards current/potential donors and the voluntary actors.

The experts in the field of voluntary actors mention that the awareness of a blind trust among the voluntary actors which can be potential recipients will be fairly unproblematic. Assuming that actors being relevant for this trust have significant size of organisation they are experienced in applying for financial support as this is the basis for operating their organisation. Information about a newly established trust (a potential new income source for voluntary actors) will according to the experts rapidly distribute in the network of voluntary ac-tors.

The distance between a central EU directed trust and the likely recipients of financial support in the field of voluntary public health activities may at first seem long. However, information from voluntary actors as well as experts indi-cates that this might not be as big an obstacle as firstly presumed, as also men-tioned in relation to Option A.

5.3 Option C - satellite organisational structure As previously mentioned, Option C has an organisational structure that in-cludes local satellite offices and a central headquarter. This Option could be both an EU-directed trust (such as Option A) and an independent trust (such as Option B), or be anywhere on the scale between the two. Opposed to Option A and Option B, Option C includes a number of local units which are responsible for parts of the trust's operation on behalf of the central trust unit.

Figure 5-3 Graphical illustration of option C. The map of Europe illustrate satel-lites in relation to a Commission directed trust or an independent trust, respectively.

15 Interview Kristen Grønbjerg, Mogens Kirkeby, and Kjeld Juel Petersen

Labelling



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5.3.1 Overall objective/strategy and function of option C The fact, that Option C can both be an EU directed trust and an independent trust means that the trust's objectives and focus areas are more a result of the level of dependency than of whether or not the trust is organised with satellite units.

However, an essential element to look into in respect to a trust structured with satellites is the number of satellite units and the role of these units in relation to the central body of the trust. On the number of local units, one alternative could be to locate a local unit in each Member State, whereas another choice could be a lower number of local units where each unit covers a number of Member States that are similar in terms of type of government, public health, and volun-tary activities.

Apart from deciding on the number of local units, the role of the units should also be defined. The main argument for establishing local units is that it secures the presence of the trust present where the voluntary actors are, which would not be the case with a trust with one central location in Europe. The local pres-ence of the trust may also help attract donations to the trust.

The division of labour between the local units and the main body of the trust can obviously be organised in various ways. At one end of the scale, the local units can purely function as 'mail boxes', and at the other end of the scale, the satellite units can work as fully operating bodies of the trust and undertake han-dling and screening of applications and draw up recommendations for the cen-tral body of the trust. The local units could also fill in a role in the marketing and public awareness activities of the trust as well as in the distribution of funds in their area.

The obvious advantage of local units of the trust is that such units have the nec-essary understanding and knowledge of the activities, culture, and language of their country of work.

Obviously, the cost of the structure including local units will vary with the number units and their role. This will be dealt with in Task 3.

Role of the satellite units


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Naturally, the domiciles of the local units can also be established in different ways depending on the role of the units. One alternative could be to integrate units in the national administration, e.g. the ministries of health, which would thus host the local trust secretariat.

5.3.2 Legislative issues related to option C The regulation of a pan-European trust with attached satellite units has the fol-lowing main distinctive futures: 1 The EU has adopted a laissez-faire approach to the establishment and man-

agement of a pan- European fund;

2 There is a lack of harmonisation of national legislation regulating issues related to the establishment and management of such a fund;

3 Satellite units are established and managed in the EU Member States. Therefore, regardless whether it is an EU satellite fund or a private satellite fund, its establishment and management must comply with existing EU legislation and principles (e.g. financial principles set out in the Financial Regulation, the principle of prohibition against discrimination of Article 12 EU Treaty) and the national legislation of Member States.

Lack of a single European legislative framework, on the one hand, and the vari-ety of national legislation may cause legal and fiscal barriers to the establish-ment and management of a satellite fund at the national level. Such barriers are caused by existing legal, administrative and tax barriers to the transnational work of foundations: • Administrative burdens during the procedure of setting up a branch in an-

other country; • Increased cost linked to the creation and administration of several “recog-

nised” legal entities in countries where a foundation needs to operate to fulfil its objectives, and use of available assets/funds which otherwise would have been distributed as grants or used for programme activities;

• Difficulties with the recognition of legal personality of foreign founda-tions, and legal insecurity as to the recognition by domestic public authori-ties of the general interest character of the cross-border activities of the resident/domestic foundation;

• Added difficulty of maintaining a common and effective policy strategy between different legal entities;

• Most countries allow the creation of a foundation that is active abroad as well as cross-border activities, but the foundation might not qualify for tax privileges or will not be able to receive tax-deductible donations;

• Tax exemption is usually denied to foreign foundations established and based in other countries;

Local unit domicile

Legal and fiscal bar-riers in a transboun-dary context


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• Almost all EU countries refuse tax deductibility for donations made to for-eign-based foundations.16

In Croatia, some organisations have had difficulties registering 'the provision of volunteer services' among their statutory activities. Due to the lack of legal definition, registration authorities did not have a clear definition of what 'volun-teer services' implied. In some countries (e.g., Switzerland, Belgium, Mace-donia), reimbursement of expenses to volunteers is taxed; only reimbursement to employees is exempted.17 Charitable status can vary considerably across countries and jurisdictions. There is no guarantee that a charity in one jurisdic-tion will be eligible as a charity neighbouring jurisdiction in which it wishes to operate. The regulation of legal issues (e.g. in terms of taxation, financing, etc.) related to a satellite fund comprises of two elements: horizontal regulation (among/between Member States) and vertical regulation (between Member States and the EU Commission). Against this context, the horizontal regulation aims at facilitating cross-border donations. This may be carried out by means of bilateral agreements harmonising national legislation (which is quite time-consuming) and private agreements (such as the Transnational Giving Europe Agreement18). The vertical regulation determines the extent of EU influence on e.g. the distribution of a trust's funds. In those areas, where EU lacks or has lim-ited legislative competence, the regulation may typically be implemented through a private agreement (the EU rules and principles should be respected in all cases).

Due to the lack of a single European law, on the one hand, and the diversity of national legislative regimes, on the other hand, the regulation of a satellite fund is a complex matter. The organisation of the fund that is subject to numerous legislative regimes gives rise to various set-ups, which makes it difficult to draw a clear distinction between an EU-dependent and independent satellite fund. The relations among Member States (horizontal regulation), Member States and the EU (vertical regulation) in the matters related to a satellite fund may be regulated by private agreements.

16 European Foundation Centre Challenges and opportunities for foundations’ and funders’ work across borders 17 The International Journal of Not-for-Profit Law Volume 9, Issue 3, July 2007 Compara-tive Analysis of the European Legal Systems and Practices Regarding Volunteering By Katerina Hadzi-Miceva 18 The Transnational Giving Europe Agreement between the Charities Aid Foundation, the Community Foundation for Ireland, the Fondation de France, the Foundation for Poland, the King Baudouin Foundation, Oranje Fonds and the Maecenata Institute for Philanthropy and Civil society, see the Transnational Giving Europe website http://www.transnationalgiving.eu/tge/default.aspx?id=219948&LangType=1033

Horizontal and verti-cal regulation

Conclusion


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5.3.3 Donations and hereby the ability to attract donors As mentioned under both Option A and Option B, the financial contributions to voluntary public health actors come from a variety of sources. These can be categorised into the following: government income, earned income, and philan-thropy. Potential donations to a trust structured according to Option C also take the form of the above-mentioned three groupings and can have the same char-acteristics depending on how close the option set-up is to Option A or Option B.

Opposed to the two other options, the satellites may support the attraction of donations as well as maintain the flow of donations. This is secured by the close and easy access to national donors facilitated by the satellite units' knowl-edge of potential national and local donors. Additionally, the satellites have a major role in the contact with the voluntary actors.

5.3.4 SWOT analysis of option C This section will focus on the strengths, weaknesses, opportunities, and threats of the operation of a blind trust with an organisational structure that includes local satellite offices and a central headquarter. (Option C). In the below table, the conclusions of Option C are summarised. Following this, conclusions are detailed primarily based on interviews with experts (researchers) in the field, voluntary actors and potential donors.

Table 5-3 SWOT - Option C

Internal factors


• Knowledge about needs at regional, national, and local levels

• Linguistic skills

• High administrative costs • Legislative complications

External factors


• Closer relationship to recipients of dona-tions

• Distribution according to geographical balance in contrast to reel needs.

• Less pan-European knowledge sharing As indicated previously Option C can both take form as an EU directed trust (Option A) and an independent trust (Option B) meaning that the argument for and against these options also counts in relation to Options C. One unexpected finding during this study is as also indicated earlier that the approached experts and voluntary actors all claim that the local satellites at-tached to the central trust not necessarily will have the suitable effect. At first, the distance between a central EU directed trust and the recipients of funding seem long. However, it may be assumed that voluntary actors applying to a pan-European trust have some capacity and will therefore be capable of observ-



35

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ing international procedures, applying in other languages, and such actors are usually used to applying for financial resources internationally. In this relation, it is also relevant to keep in mind that the distance from for ex-ample a voluntary actor located in a region of Rumania to a satellite office of the trust in Bucharest could be argued as seeming as distanced for the voluntary actor as a trust located in for example Brussels. It can also be argued that a danger in relation to the decentralised structure of a trust is that the distribution of funding is undertaken in respect to geographical balance in contrast to the geographical areas with the real needs. A decentral-ised structure could also result in less pan-European knowledge sharing as an effect of less interaction across EU borders. Furthermore, a trust with satellite offices will have some legislative complica-tions as described previously in this section, and the administrative costs of the operation of the trust is significantly higher than for the options without satel-lite offices, see task 3. In this relation, it is worth mentioning that the more fi-nancial resources spend on administration costs then less resources is available for the trust to distribute to voluntary donors.

C:\Documents and Settings\RT\Local Settings\Temporary Internet Files\Content.Outlook\FU7OU3HW\Annex 2 1.docx

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1 Feasibility study on funding arrangements for voluntary and not for profit public health activities at EU level

First, this interview guide includes a short presentation of three different op-tions of a blind trust operating in the field of voluntary public health activities. In particular Option A and B should be seen as each end of a scale in respect to the level of direction or organisational link to the European Commission. Hence, in between various intermediate options do occur. Secondly, the questions to the interviewees are given. The interviewees are voluntary actors, potential donors, and experts in the field. The overall aim of the interviews is to support the SWOT analysis of each op-tion of a blind trust. Thus, the interviews will clarify the relevance and function of each option. The interview questions are based on the previous task of the study and the SWOT analysis. Each interview will begin with a short introduction to the study and to each of the three options.

2 Presentation of the three options Option A is under the full direction of the Commission and therefore under the guidance of the EU political system, including the Council and the European Parliament:


Interview guide

COWI A/S

Parallelvej 2 DK-2800 Kongens Lyngby Denmark Tel +45 45 97 22 11 Fax +45 45 97 22 12 www.cowi.com

Aim of interviews

Option A: EU di-rected trust

Interview guide


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Figure 2-1 Graphical illustration of an EU directed trust

Option B is entirely self-governing in relation to the Commission or any other political bodies. The trust fund will on this basis be free to act exclusively un-der the direction of its own independent board.

Figure 2-2 Graphical illustration of an independent trust

Option C is organised with an organisational structure that includes local satel-lite offices and one central body. This Option could be both an EU directed blind trust (as Option A) and an independent blind trust (as Option B), or placed anywhere on the scale between the two. Oppose to Option A and Option B is that Option C includes a number of local satellite offices undertaking parts of the trust's operation for the central trust unit.

Option B: Independ-ent trust

Option C: Satellite fund

Interview guide


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Figure 2-3 Graphical illustration of option C

The yellow dots at the right side of the illustration and the stars at the left side of the illustration illustrate the satellites, as well as the degree of independency in regard to the EU.

3 Questions The following represents the questions to the different interviewees1:

General questions:

1 What are your general thoughts on the introduction of a blind trust operat-ing in the field of voluntary public health activities across the EU?

2 What are your overall thoughts on the three options mentioned above?

Questions related to donations:

3 How do you see the three options' ability to attract donations?

4 Which initiatives could a blind trust make to raise public awareness/ mar-keting and attract donations? Differences between options?

• Membership of blind trust as part of CSR • Use of logo (labelling) • Sponsor arrangements • Advertisement

5 Who do you see as potential donors? Differences between options?

Questions related to voluntary actors:

1 Not all questions are relevant for all interviews

Interview guide


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6 Are the three options relevant for voluntary actors to apply for funding? Differences between options?

7 Which voluntary actors do you see applying for funding in such a blind trust? Differences between options?

• International/ European associations of voluntary actors • National voluntary actors • Individual voluntary actors

8 Are there any essentials for a blind trust working with voluntary actors?

Differences between options?

9 How does a blind trust raise awareness in respect to its existence towards voluntary actors?

• Voluntary public health arrangements/days • Advertisement

Structural questions:

Figure 3-1 A generic model

10 What are your general thoughts on the internal organisation of a blind trust (see the above figure)?

11 How do you see the structure of the board in relation to the three options? Members?

Interview guide


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12 How do you see the structure of the advisory committee(s) in relation to the three options? Members?



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Appendix 3: Roadmap and cost estimate related to the establishment of a blind trust


Feasibility study on funding arrangements for voluntary and not for profit public health activities at EU level Report on TASK 3: Roadmap and cost estimate related to the establishment of a blind trust

SANCO/2008/C4/05

January 2010


Feasibility study on funding arrangements for voluntary and not for profit public health activities at EU level Report on TASK 3: Roadmap and cost estimate related to the establishment of a blind trust

SANCO/2008/C4/05

January 2010


Document no.

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Table of Contents

1 Summary 2

2 Introduction 3

3 Methodology 4

4 Roadmap for the establishment of a blind trust 5 4.1 Establishment of a blind trust 6 4.2 The Board of the blind trust 7 4.3 Secretariat 11 4.4 Advisory committee 11 4.5 Application procedure 12 4.6 Marketing and public awareness 15 4.7 Financial and performance controlling 18

5 Cost estimation 21 5.1 Costs 21 5.2 Costs of establishing and implementing a blind trust 23 5.3 Costs of operating a blind trust 23


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1 Summary A thorough understanding of the different steps in establishing a blind trust is necessary and comprehensive. This task describes the different steps which may be undertaken and carefully prepared before a blind trust is implemented as well as the operation of a trust.

The following steps must be taken into account:

1 Decision of establishing a blind trust by a founder/creator. Subsequently, the aim of the trust must be defined and notification of the trust given, as well as drawing up a trust deed.

2 Selection of Board of the blind trust. The Board elaborate:

• Vision, mission and objectives

• Priority objectives and specific activities of the blind trust

3 Establishment of secretariat

4 Selection of advisory committees

5 Applicants to the blind trust

6 Marketing and public awareness:

• Attraction of donors

7 Financial and performance controlling.

Special attention must be given to election of Board members to avoid conflict of interest. Furthermore, focus on marketing and public awareness - and espe-cially attraction of donors - claims a well-researched strategy. According to cost Option A and B are almost identical except for Option A which may have fewer administrative cost and thereby running costs. Option C is much more costly due to the satellite units.


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2 Introduction In Task 2 three options for a pan-European blind trust for voluntary and not for profit trusts was outlined. The options are primarily based on aspects of organ-ising a pan-European blind trust. To ensure usability of the options interviews of stakeholders was performed as well as SWOT analysis for each option. The SWOT analyses demonstrated strengths & weaknesses (internal factors) and opportunities & threats (external factors) for each option.

The purpose of Task 3 is to describe an understandable and well-structured roadmap that will facilitate the decision-making process on the establishment and support the implementation of the blind trust. The roadmap will be easily comprehensible and operational and will include a plan of action for each of the included elements. Furthermore, cost estimates for the establishment, imple-mentation and operation of a blind trust will be presented.

A successful trust needs to promote good governance, transparency and ac-countability practices with respect to the Board, overseeing operations (regular turnover, selection, periodic review etc.), professional asset management and disclosure of procedures, programmes and results. Transparent rules, such as clear information on funding restrictions, arms-length processes for calls for projects and nomination of projects by Advisory committee(s) should be used; as well as encouragement of disclosure, peer-review and self-regulation mecha-nisms and standards. Furthermore, a 'label system' element so donors are as-sured that their donations to a foundation are applied to a public benefit purpose should be adopted.

Chapter 3 describes the methodology of Task 3. The roadmap is developed in chapter 4, and an in-depth description of each element is included as are plans of action for each of the elements. Cost estimates for the establishment, imple-mentation and operation of a blind trust are presented in chapter 5.

Purpose

Background

Structure of Task 3


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3 Methodology The elements described in the roadmap are based on existing experience and knowledge of establishing, implementing and operating foundations and blind trusts' as well as information from desk studies (Task 2). Furthermore, relevant findings from Tasks 1 and 2 have been included in the roadmap.

The cost estimates are broken down into several cost elements. Furthermore, cost estimates are described with a view to the three options for blind trusts as well as the generic blind trust model presented in Task 2.

The estimation of costs is based on best available sources. Calculations are based on information and knowledge from other blind trusts and estimates from EU reports. Cost assumptions have been made in cases where information was missing.

Roadmap

Cost elements

Estimation of costs


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4 Roadmap for the establishment of a blind trust

The roadmap elaborates on the elements presented in Task 2, section 3. For a roadmap to describe the establishment of a blind trust, it should be easily com-prehensible and operational and include a plan of action for each element in-cluded.

When establishing, implementing and operating a blind trust, several issues are important. The following elements are discussed in this chapter:

1 A founder/creator decides to establish a blind trust. Subsequently, the aim of the trust must be defined and notification of the trust given, and the trust deed must be drawn up.

2 Selection of Board of the blind trust:

• Vision, mission and objectives

• Priority objectives and specific activities of the blind trust

3 Establishment of secretariat

4 Selection of advisory committees

5 Applicants to the blind trust

6 Marketing and public awareness:

• Attraction of donors

7 Financial and performance controlling.

For each element, a plan of action will be elaborated.

Introduction and background

Elements of a road-map


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4.1 Establishment of a blind trust The first step in establishing a blind trust must be taken by the foun-ders/creators. The founder/creator can represent a person or a group of persons, legal persons or an association of physical and legal persons, e.g. the EU.

The reasons for establishing a blind trust must be defined. An overall purpose of a blind trust could be to encourage research into a specific area or to increase activities in the field of voluntary and not for profit public health activities.

To notify a blind trust drawing up of a trust deed is necessary. The trust deed should contain the final rules/articles and a list of board members and the name of the trust accountant.

The trust deed must contain a specification of:

• the name of the blind trust

• the domicile of the blind trust

• the purpose of the blind trust

• the size of the blind trust's assets and net capital at the time of establish-ment

• special privileges and advantages attributed to the founder or other per-sons, if any

• the number of board members and how they are appointed

• presentation of accounts, and use of profit.

4.1.1 Plan of action The elements and activities in the plan of action for establishing a blind trust are presented in Table 4-3.

Founder/creator of a trust

Aim of a blind trust

Notification of a blind trust

Trust deed


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Table 4-1 Plan of action regarding establishing a blind trust

Activity Brief description

Notification of a blind trust To notify a blind trust, drawing up of a trust deed is necessary.

Trust deed • Name of the blind trust

• Domicile of the blind trust

• Purpose of the blind trust

• Size of the blind trust's assets and net capital at the time of establishment

• Special privileges and advantages attributed to the founder or other persons, if any

• The number of board members and how they are appointed

• Presentations of accounts, and

• Use of profit.

Set-up of the Board Appoint Board members

4.2 The Board of the blind trust The Board members must be independent according to the trust's work and rep-resent a high integrity in the field of voluntary and not for profit public health activities. It would be relevant to select Board members from among national and/or international not for profit organisations, actors in the field, the private sector, such as the food processing industry or the fitness industry, institutions such as the World Health Organisation (WHO), the European Commission, the European Economic and Social Committee (EESC), the European Union's Committee of Regions, European Public Health Alliance (EPHA) or Action for Global Health.

The Board members should be elected or appointed for a given period, e.g. four years. Furthermore, re-election of Board members should be stated e.g. two pe-riods. Thus, it will assure that the blind trust is innovative and develops over time.

Board members


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Table 4-2 Members of the Board

Possible representatives and main actors

Examples

International institutions University experts in public health

University experts in voluntary activities

Not for profit organisation World Health Organization (WHO)

Action for Global Health

The Alliance of European Voluntary Service Organi-sations

The European Platform for National Non-Profit Um-brella Organisations and for National Organisations of general Interest (CEDAG)

Private sector Donors

Industry actors

Actors in the field Organisations running voluntary activities

The board members have a number of duties. An important issue for the board is to define and describe the vision, mission and strategy/objectives of the trust. The board makes decisions on behalf of the trust and is liable for these deci-sions.

The board's foremost obligation will be to manage the funds of the blind trust in alignment with the strategy/objectives and mission of the trust. The collection and re-distribution of funds will be executed independently, and in a transpar-ent and accountable way by the blind trust to avoid conflicts of interests be-tween donors, beneficiaries, and the blind trust.

It is the responsibility of the board to implement a specific application process as well as to draw up application submission guidelines. It is important that the boards' work areas are transparent and unambiguous for potential beneficiaries and donors.

It is imperative that the blind trust has clear and transparent vision, mission and objectives. Thus, the vision, mission and objectives will determine the activities of the blind trust.

Vision: The vision reflects the blind trust's values in terms of its fundamental strategic direction. Vision is a long-term view, sometimes describing a view of how the blind trust would like the world in which it operates to be. To illustrate this, the vision of a blind trust in the area of voluntary and not for profit activi-ties could be "Strengthen the possibilities for voluntary and not for profit activi-ties".

Defining vision, mis-sion and strat-egy/objectives

Management of funds

Handling applica-tions

Vision, mission and objectives defined by the Board


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Vision:

“We envision a nation that marshals its resources to assure that all children have an equita-ble and promising future – a nation in which all children thrive.”

The Kelloggs' foundation

Mission: The mission defines the fundamental purpose of the blind trust. Basi-cally, it describes the trusts' existence and how it will achieve the vision. The mission does not have a timeline, but rather the overall goal is accomplished over the years.

Mission:

“The W.K. Kellogg Foundation supports children, families, and communities as they strengthen and create conditions that propel vulnerable children to achieve success as indi-viduals and as contributors to the larger community and society.”

The Kelloggs' foundation

Strategy: Visions and missions are often implemented by developing a strategy which reflects a clear focus on stakeholders in the area in which the trust works (in this case voluntary and not for profit activities). A strategy is implemented by objectives.

Strategy:

At the Wellcome Trust we strive to work in a way that maximises our ability to achieve our mission - to foster and promote research with the aim of improving human and animal health. The Strategic Plan provides the framework for the ongoing development of our strategy.

The Wellcome Trust

Objectives: Objectives are closely related to focal areas and often synonymous with them. Objectives define the specific goals of the trust. Objectives can cover specific strands, such as 'support activities within voluntary activities in the area of healthy diet to homeless persons' or specific projects as e.g. 'sport activities for children in eastern Europe'. The objectives can change according to the needs in the strands the trust work in; they will evolve over time in rela-tion to society trends in public health across Europe.


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Objectives:

We support many different kinds of research and activities with the ultimate aim of protecting and improving human and animal health. This support is not restricted to UK researchers - we devote significant funding to international research too.

Focus areas

Biomedical science

Technology transfer

Medical humanities

Public engagement

Capital funding

Strategic awards

The Wellcome Trust

Some blind trusts mix their vision, mission, strategy and objectives and do not distinguish between those elements. Thus, it may be convenient and suitable for many blind trusts to have this mix.

Mix of vision, mission, strategy and objectives:

Our belief that every life has equal value is at the core of our work at the foundation. We follow 15 guiding principles, which help define our approach to our philanthropic work, and employ an outstanding leadership team to direct our strategies and grant making.

Bill and Melinda Gates Foundation

We suggest that a blind trust have clearly defined vision, mission, strategy and objectives. Thus, it is important to establish these elements as early as possible and prior to implementing the blind trust as vision, mission, strategy and objec-tives guide the work area for a blind trust.

As mentioned in Task 2, it could be relevant for the trust to have a number of focus areas attached to each of its objectives so that both donors and recipients have the opportunity to target their donations and funding applications to a spe-cific focus area.

4.2.1 Plan of action The elements and activities in the plan of action in terms of vision, mission, strategy and objectives are presented in Table 4-3.

Mix of vision, mis-sion, strategy and objectives


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Table 4-3 Plan of action for objectives and mission


Appoint board members Persons with high integrity in the field and independ-ent of the trust's work are relevant board members. The members should also be relevant according to the vision, mission and objectives established.

Define the vision, mission, strat-egy and objectives

The board defines the not for profit voluntary blind trusts vision, mission, strategy and objectives.

4.3 Secretariat The secretariat takes care of the daily operation of the trust by supporting the board, the applicants and advisory committees, therefore, the size, scope and role of the secretariat will depend on the specific blind trust model.

Depending on the organisational set-up, the tasks of a secretariat should among other things include:

• Daily operation

• Coordination of meetings off the Board, the advisory committee and others

• Screening of applications from voluntary actors

• Information to applicants on whether applications have been accepted

• Marketing of the trust, including public awareness in respect to both poten-tial and current donors as well as recipients of funding

• Contact to potential and current donors, including bilateral arrangements, conferences, donors' days, events, etc.

Table 4-4 Plan of action for secretariat


Establish secretariat Hire skilled staff

Elaborate fields of work Develop a work plan according to the fields of work

4.4 Advisory committee Advisory committees have the role of assisting the board with professional and technical public health related issues, voluntary work as well as principles and practices for allocation of funding to applicants. It is the obligation of the advi-sory committee to nominate projects for funding to the board which takes the final decisions on grant recipients and the grant amount.

Secretariat and task specific committees

Advisory commit-tee(s)


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The period of appointment must be defined. Advisory committees may be per-manent or ad-hoc according to the specific areas of activities. If the activities deviate from each other, it may be necessary to form several advisory commit-tees with expert knowledge in certain areas of public health. Acknowledging this, it must be decided whether one or several advisory committees should be formed. In the case of a trust with a number of focus areas attached to its objec-tives, it could be relevant with an advisory committee for each focus area.

If the organisation of the blind trust is spread over several regions/countries, it should be decided whether local advisory committees should be appointed.

Careful selection of members to advisory committee(s) is paramount to ensure that members are health professionals covering the activity areas of the trust'. Obvious members could be professionals from research institutions, lawyers specialising in public health, experts in voluntary activities, people from the industry, such as the food processing industry and fitness industry. It is the ob-ligation of the board to appoint members to the advisory committee(s).

Table 4-5 Steps in setting up advisory committee(s)

Steps Tasks

1: Permanent or ad-hoc Decision on establishing permanent or ad-hoc com-mittees

2: Organisation of advisory committee(s)

Decision on setting up committees at headquarters or in regions/countries

3: Number of advisory commit-tee(s)

Decision on the number of committees to be formed according to the areas of activities

4: Appointment of committee members

The expert members of the advisory committee(s) should be appointed (e.g. professionals from universi-ties and research institutions, and public health law-yers etc.)

4.5 Application procedure The process of receiving and evaluating applications for grants needs to be transparent.

Application procedures have two angles:

• the external application procedure and application guidelines

• the internal application procedure.

Application guidelines and submission procedures need to be precise and trans-parent for grant applicants. We suggest that the blind trust request a Letter of Inquiry from the grant applicants describing briefly the project and organisation enabling the secretariat to make a first screening of the relevance of the project

One or more com-mittees?

Selection of mem-bers

External application procedures and guidelines


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to the blind trust's activity areas, vision, mission, strategy and objectives. Thus, if the project is deemed relevant, a formal application form can be filled in. Both the Letter of Inquiry form and the application submission form should be easily accessible and in electronic format, i.e. on the blind trust's website.

The contents of application guidelines should be clear and structured according to themes, such as:

• Who can apply

• Themes/activities to be financed

• Costs to be covered

• Application, evaluation and selection of grant projects.

Eligible applicants as well as partner(s) should be clearly described in the ap-plication guidelines. Criteria could be:

• Registered as a voluntary organisation

• Nationals of Europe

• Governmental organisations/non-governmental organisations, private sec-tor associations, professional associations

• Local authorities, such as municipalities

• Universities

• Research institutes/centres

• Grants to non EU Member States

• Grants to individuals or activities that benefit only one person

• Funding of applications from donors.

The applicant is the lead organisation and, if selected, it will act as the contract-ing party. Applicants are directly responsible for the preparation and manage-ment of the project with their potential partners.

Programme areas or initiatives to be financed should be clearly defined accord-ing to voluntary activities. Furthermore, the geographic priorities should be stated. Thus, it should be decided whether the blind trust should cover Euro-pean countries, EFTA Member States, EU official candidate countries or EU Member States only.

Languages accepted when submitting applications should also be defined. Thus, if all EU Member State languages are accepted, it will require that the

Who can apply?

Themes/activities to be financed

Language


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organisation is capable of handling the translation process. Board members and advisory committee(s) will hardly be able to read and understand all European languages.

The costs to be covered by the grant should be described. Related questions concern:

• Funding of salary

• Should co-funding from e.g. national sources be compulsory?

• Funding of rent for locations

Permanent procedures for funding are necessary to ease the work for both the blind trust and actors in the field who apply for funding.

The application process should include a description of the process by which the secretariat, Advisory committee, and Board reviews and evaluate the appli-cation based on their knowledge and understanding of issues addressed, quality of planning, plans for sustainability, importance of issue in the application, strength and feasibility of the possible project to receive a grant, and expected impact of the possible project.

It is the responsibility of the Board to establish application procedures, i.e. the application guidelines.

The approval process can be divided into several steps. The blind trust receives the application, and the secretariat makes the first screening by reviewing and evaluating the formal requirements of the proposals. If the blind trust has sev-eral areas of interest, the programme director in the secretariat responsible for the particular area will receive the application. If the application after the initial screening process meets the criteria stated in the guidelines, it is passed on to the advisory committee. The Advisory committee will assess and nominate relevant applications. The application approval process is presented in Figure 4-1.

Figure 4-1 Application approval process

Cost to be covered

Application, evalua-tion and selection of grant projects

Application process

Internal application procedure


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The approval process for applications is important when assessing the workload of the secretariat, the advisory committee(s), and the Board. Thus, wage costs will depend on the workload and number of staff in each area of interest.

To enhance transparency, the timing of the approval process should be pub-lished (e.g. on a website). Thus, the following milestones should be made pub-lic:

• Deadline for submission of application

• Expected duration of grant review and evaluation process

• Time of year where the board decides of grants.

It should be decided whether the blind trust will consider grant applications all year round or only at a few clearly stated dates every year. Following the Letter of Inquiry, all grant applicants should receive a written notification from the secretariat of the blind trust's decision to either award a grant or not.

4.5.1 Plan of action 1) The elements in the application procedure of the plan of action are pre-

sented in Table 4-6.

Table 4-6 Plan of action regarding applications to the blind trust


Establish application procedures The board establishes external and internal proce-dures for applications.

Application guideline The board draws up application guidelines, in which the specific criteria of the Letter of Inquiry should be presented.

Exclusion and inclusion criteria Criteria of exclusion and inclusion according to 'how to apply', 'Themes/activities to be financed' and 'cost to be covered' should be clearly stated

4.6 Marketing and public awareness Marketing and public awareness of the existence of the blind trust is a key chal-lenge, which needs to be addressed. The following three groups are relevant in terms of marketing:

• The population of the EU Member States

• Potential grant applicants

• Potential grant donors.

Timing of applica-tion and approval process

Importance of mar-keting and public awareness


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It is vital that the blind trust builds up and maintains a strong, positive profile in the general public in the EU Member States. It is an advantage if the popula-tions in the countries and geographic areas of interest know the blind trust and have a positive impression of it. Thus, populations may induce the interest from companies and organisations to donate grants. It must be defined how the blind trust will address and communicate information to the populations in the Mem-ber States:

• Media (commercials, newspapers, folders etc.)

• Logo

• Events such as an annual day of voluntary activities.

Marketing in relation to public awareness is central and can take many forms. Commercials and folders present one form. A second form is offering subscrip-tion-based newsletters, either in paper format or in electronic format offered on the blind trust's website. A third form is different events with special focus on voluntary activities according to a specific 'Voluntary day' running all over Europe.

The group of grant applicants are probably the easiest group to reach. Nor-mally, potential grant applicants are very quick at uncovering the existence of a blind trust or the similar.

Public awareness and marketing towards applicants may take many forms. The most appropriate forms of visibility to consider are:

• A transparent and sufficient website, which appeals to the target audience

• Exposure through applicant projects that have received grants from the blind trust

• Visibility through logos used by donor companies.

It is essential that the blind trust has a strong profile among current and poten-tial donors and that donors understand the incentive to contribute to the blind trust. Therefore, the benefits of donating financial resources to a blind trust from the point of view of companies and organisations must be elaborated to attract donors.

In the process of attracting donors, donors may be divided into different types according to the grant purpose.

• Donors who expect PR in relation to the donation

• Donors who do not expect PR in relation to the donation.

Donors expecting PR are typically companies. They donate money to increase the sale/value of their products or to increase corporate social responsibility

EU Member State populations

Potential grant appli-cants

Potential grant do-nors

Attraction of donors

Donors expecting PR


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(CSR) in their company. Therefore, a marketing strategy towards potential companies could be to appeal to the companies' CSR, especially if the company has an integrated CSR policy.1 If it is possible to identify companies by em-bracing their responsibility for their impact on public health, donations of grants to the blind trust must appear relevant. CSR policies can play a role in brand differentiation for companies, and thereby give them a unique position on the market.

To increase visibility of donations, the blind trusts could have its own logo which donors can use on products and/or website to promote their social profile and thereby their products.

The blind trust can 'donate' gifts' to donors, tickets to a donating company for special events such as national concerts/theatre performances or international events, such as European Football Championship. Experts on foundations also emphasise that by letting famous actresses, sport stars, or other public persons promote the trust can be an effective way of promoting the fund. This can both help attract donors and raise the general public awareness of the trust.

Donors who do not expect PR are typically foundations or wealthy private per-sons which donate financial resources to support the aim of the trust. This is the classic definition of philanthropy.

Marketing and public awareness staff should form part of the organisation. Ei-ther as a part of secretariat or as a separate committee that supports both secre-tariat and the board.

4.6.1 Plan of action The elements of the plan of action for marketing and public awareness are pre-sented in Table 4-7.

1 CSR is integrated into a business model. An optimal CSR policy function is a built-in mechanism whereby business would monitor and ensure their adherence to law, interna-tional norms, ethics etc.

Donors not expecting PR

Other organisational arrangements


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Table 4-7 Plan of action for marketing and public awareness


Assign marketing and public awareness responsible

A person responsible for marketing and public aware-ness to be assigned. It is the responsibility of the board of directors and secretariat to identify the areas of responsibility and assign the person.

General awareness A website for the blind trust are developed and should contain information about

- Vision, mission and objectives

- Areas of activities

- Organisational structure (members of Board of Di-rectors, secretariat and advisory committee(s) etc.)

- Application guidelines and forms

- Publications

Marketing and awareness to-wards populations

Marketing and public awareness towards the EU Member States populations should be covered through:

- Media (commercials, newspapers, and folders etc.)

- Newsletters

- Logo used by donors' and applicants

The marketing and awareness activities are imple-mented in the blind trust by the responsible person or committee.

Marketing and awareness to-wards potential grant applicants

The marketing and awareness campaign is imple-mented in the blind trust by the responsible person or committee.

Key stakeholders (potential applicants) are identified.

Marketing and awareness to-wards potential grant donors

The marketing and awareness is established in the blind trust by the responsible person or committee.

The board of directors and secretariat design and implement a logo that creates visibility of the blind trust. Donors to the blind trust should be able to use the logo.

4.7 Financial and performance controlling In the blind trust's funding procedure it will be fundamental to ensure that the allocated funding is spent in coherence with the defined objectives and mission of the blind trust. On that basis, a performance and financial monitoring system will be important to implement as part of the funding cycle. Implementation of a monitoring system should be introduced in the application process requiring presentation of objectives and performance indicators on how to measure the

Financial and per-formance controlling


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results related to the funding. Moreover, organisations applying for funds may be required to keep financial track records. The accountability of the voluntary actor, and by that the coherence between the achievement of the voluntary actor and the blind trust's objectives, are then ensured by reporting on both perform-ance and financial spending to the blind trust.

A blind trust should include an audit committee and a financial performance committee. The responsibility of each of these committees and types of per-sonal should be clearly and transparently defined.

An audit committee's responsibility is to evaluate the blind trust's organisational system, which also provides an assessment of the organisation's internal con-trol. The primary objective of an audit committee is to express an opinion on the blind trust's organisation. An audit should be performed annually and seek to assure the transparency and control of the blind trust. The audit could be per-formed by either internal staff from the secretariat or the board, or by external staff.

A financial performance committee's responsibility is to perform a financial audit of the blind trust. It could be an option to merge the audit committee and financial committee into one committee if relevant. The financial committee's work could be undertaken by internal staff or outsourced to external staff.

If the blind trust has considerable funds, it may be appropriate to consider set-ting up an investment committee with responsibility of investing funds if neces-sary.

It should be noted that the work of the audit committee, financial committee and investment committee could to a certain degree be covered by the secre-tariat. Thus, the secretariat could include staff with responsibility for invest-ments and staff with responsibility for financial and performance controls.

4.7.1 Plan of action The elements of the plan of action are presented in Table 4-8 below:

Table 4-8 Plan of action for organisational structure


Decide organisational structure The European Commission decides the organisa-tional structures with regard to geographical location of headquarters and whether the organisation should have satellite offices.

Locations Create facilities to operate a blind trust.

Responsibility of the Board of Directors

The European Commission determines the exact re-sponsibilities of the board of directors. Furthermore, it is determined from which public health areas they

Audit and financial performance com-mittee

Audit committee

Financial perform-ance committee

Investment commit-tee


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should be recruited.

Assign Board The European Commission assigns the members of the first Board.

Responsibility of the secretariat Assigned board of directors defines the responsibili-ties of the secretariat.

Assign secretariat Staff of the secretariat is assigned by the board.

Responsibility of advisory com-mittee(s)

The responsibilities of the advisory committee are established in accordance with vision, mission, objec-tives and activities by the board and the secretariat.

Assign advisory committee If the advisory committee is permanent, it is chosen at this point in time.

Assign special committees If found necessary, special committees such as Audit, Financial, Marketing and Awareness committees are established.

If profit and investments are allowed in the blind trust according to the trust deed, it should be noted that profits and investments may be subject to national tax. Potential profits in the blind trust could be invested in government bonds, corporate bonds, land, property and buildings, interests and dividends etc. .

Profit and invest-ments


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5 Cost estimation This chapter presents a cost estimate for the operation of a blind trust, which also takes into account the differences between the three options for establish-ing a blind trust introduced under Task 2. Furthermore, the cost estimate is based on key elements of operating a blind trust.

The following cost elements form part of the cost estimate:

• Salaries and costs of meetings (costs according to tasks performed in the establishment/implementation and operation phases)

• Overhead costs (costs of operating the blind trust including office facili-ties/offices)

• Marketing and public awareness (costs of marketing and public awareness activities targeted to the EU population, prospective applicants and do-nors).

To this end, it should be kept in mind that the options presented under Task 2 are two ends of the scale, and therefore a blind trust can be created in a variety of ways which will naturally influence the costs of running a trust. Therefore, the cost estimate should be considered as an overview of costs incurred in rela-tion to the three options and as a tool to be used when deciding on the final structure of the trust. Furthermore, a number of assumptions in the cost esti-mate have been made, e.g. the sum of the annual distribution of funds. This is a fictive figure, and the adjustment of that figure to actual conditions will natu-rally affect costs estimate.

5.1 Costs In this section, key assumptions and cost parameters are presented with a view to elaborating on how the cost estimate has been made.

The costs in a blind trust should not exceed 10 per cent of the grants. In the cost estimate, it is assumed that the blind trust should distribute funds for EUR 100,000,000 per year.

Cost elements of op-erating a blind trust

Costs in a blind trust


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The number of staff per year in the secretariat has been set based on the staffing level in a Danish trust.2 It was found that one staff in the secretariat of the Dan-ish trust covered grants in the order of EUR 2,500,000. Consequently, a blind trust with a grant programme of EUR 100,000,000 would need 40 staff (100,000,000 divided by 2,500,000). It should be noted that a linear relation-ship is assumed between the number of secretariat staff in the blind trust and the grants. .

Salary costs per employee in the secretariat have been assumed to EUR 60,000 per year.3

Costs of convening board members as well as meetings in the advisory commit-tees are estimated. Travels for meetings are broken down into travel costs (as-sumed to be EUR 450 per person per meeting), and per diem costs (assumed to be EUR 700 per person per meeting).

It is assumed that the board consists of five persons and that the board is con-vened six times a year. Thus, the annual costs of convening the board are esti-mated at EUR 34,500.

Initially, it is assumed that three committees covering different areas of activi-ties are established, and that the committees consist of five persons each that meet twice a year. Thus, the annual costs of convening the advisory committees are estimated at EUR 34,500. .

The costs of other committees such as financial and audit committees that may be deemed necessary at a later stage are estimated to be similar to the advisory committees. The costs of other committees are estimated to EUR 34,500 per year.

Overhead costs includes everything other than salaries, such as facili-ties/offices, telephones, electricity, stationary etc. The overhead costs (or ad-ministrative costs) are estimated to EUR 22,000 per secretariat staff annually.4

Marketing and public awareness activities are important elements of a blind trust, and costs should be assigned to the elements in a way that reflects their importance to the trust. Obviously, there are no standard amounts for spending on marketing and public awareness activities. For the cost estimate, it is as-sumed that 20 per cent of the maximum amount of grants distributed is devoted to marketing and public awareness activities. In a blind trust with a grant port-folio totalling EUR 100,000,000 and maximum costs of 10 per cent, this will correspond to EUR 2,000,000. 2 Forebyggelsesfonden (The Prevention Fund). Annual report 2008 http://www.forebyggelsesfonden.dk/fileadmin/webmasterfiles/AArsberetning/AArsberetning_2008.pdf (Accessed October 2009). 3 This figure has been used in several EU studies, including agency evaluations 4 Source: Interim evaluation of the EACEA. February 2009. http://ec.europa.eu/dgs/education_culture/evalreports/cross/2009/eaceareport_en.pdf. (Ac-cessed October 2009)

Number of staff in the secretariat

Salary costs

Cost of board mem-bers and committees

Board of directors

Advisory committees and other committees

Overhead costs



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5.2 Costs of establishing and implementing a blind trust

The establishment and implementation of a blind trust is related to the founda-tion of the trust. Evidently, this phase is dependent on a founder who takes the initiative to establish and implement the trust. This founder does not necessarily have to be the same as the future responsible operator of the trust.

The founder of the trust could for example be the Commission with the actual founder being a project coordinator having received funds with the aim of es-tablishing and implementing a trust.

The costs of establishing and implementing a trust depend on several factors and can only be properly estimated when the structure of the trust is permanent. Factors influencing the cost level are for example geographic location, number of units (if any), and level of independency.

Cost variables will be the introductory rent, office supply/equipment, furniture, IT, etc. It must be assumed that an EU directed trust (Option A) hosted by the Commission will incur lower establishment and implementation costs than a fully independent trust with no financial support from the Commission.

Option C (the satellite trust) will obviously incur higher establishment and im-plementation costs due to the number of units in various locations.

5.3 Costs of operating a blind trust Based on the assumptions made in section 4.1, the cost estimates for each of the three options are presented below.

Salary costs of the secretariat and the costs of convening board members and committees are presented in Error! Reference source not found.. As previously mentioned, it is assumed that the number of staff in the trust is 40. This results in identical cost estimates for Option A and Option B in terms of salary costs for the secretariat and for convening the board, advisory com-mittees, and other committees. However, on Option C it is assumed that the secretariat of the trust can be half the size (20 staff) compared to Option A and Option B and that the number of satellite units requires 40 staff. This means that the cost estimate for Option C is 50 per cent lower than the cost estimates for Option A and Option C.

Table 5-1 Costs of salary and gathering of Board of Directors and committees, EUR per year


Cost ,board of directors 34,500 34,500 34,500

Salary, secretariat 2,400,000 2,400,000 1,200,000 2,400,000

Founder of a trust

Costs


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Costs, advisory committees 34,500 34,500

34,500

Cost s, other committees 34,500 34,500 34,500

Total 2,503,500 2,503,500 3,703,500 Overhead costs are estimated to EUR 22,000 per staff member which will be EUR 880,000 for both Option A and Option B. For Option C overhead costs are estimated to EUR 1,320,000, see Error! Reference source not found..

Marketing and public awareness costs are estimated to EUR 2,000,000 annually for all three options.

Table 5-2 Overhead costs, EUR per year


Overhead per person 22,000 22,000 22,000

Number of secretariat staff 40 40 60

Total 880,000 880,000 1,320,000 Based on the cost estimates in tables 4-1 and table 4-2, the total cost estimate for operating Option A and Option B is EUR 5,383,500 per year, and EUR 7,023,500 per year for Option C.

Table 5-3 Cost estimate for operating a blind trust for each of the three alterna-tive options, EUR per year


Cost - board of directors, secretariat and committees 2,503,500 2,503,500

3,703,500

Office/facilities/rent and overhead 880,000 880,000

1,320,000

Marketing and public awareness 2,000,000 2,000,000

2,000,000

Total 5,383,500 5,383,500 7,023,500

Option C with satellite offices in several EU Member States increases the costs of establishing/implementing and operating the blind trust. Option C has higher overhead costs compared to Options A and B as more offices are envisaged. Furthermore, salary costs are expected to be higher for Option C as more secre-tariat staff is needed due to a higher number of offices in EU Member States.

A costly Option C