Feasibility study on funding arrangements for the voluntary and not

171 Pages·2010·2.4 MB·English

DG Health and Consumers
Feasibility study on funding arrangements for
the voluntary and not for profit public health
activities at EU level
June 2010
COWI A/S
Parallelvej 2
2800 Kongens Lyngby

Telefon [phone]
Telefax 45 97 22 12
www.cowi.dk

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

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.
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Feasibility study on funding arrangements for the voluntary and not for profit public health activities at EU level
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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Feasibility study on funding arrangements for the voluntary and not for profit public health activities at EU level
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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Feasibility study on funding arrangements for the voluntary and not for profit public health activities at EU level
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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Feasibility study on funding arrangements for the voluntary and not for profit public health activities at EU level
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.
Ways to obtain fund- Various funding arrangements are available for both voluntary actors and trusts,
ing for voluntary ac- respectively. According to voluntary actors the aim is to receive money for be-
tors and trusts, re- ing able to run public health activities. Whereas according to a trust the aim is
spectively 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.
Inventory of differ- A high number of trusts and foundations are present in Europe. None of them
ent trusts across the are the same; they have different visions, missions, objectives, economical
EU and other rele- situations etc. They provide services to donors, beneficiaries, make grants, and
vant countries undertake leadership and partnership activities to address a wide variety of
need.

Income from donors 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.

Review of the The review presents the comparative data on the scope, composition and struc-
macro-economic ture of the non-profit, voluntary sector in Europe which have been generated
context for voluntary through the Johns Hopkins University Comparative Nonprofit Sector Project
activity in the differ- (JHU project) covering about 40 countries. The review elucidate among others
ent parts of the EU 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.
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Feasibility study on funding arrangements for the voluntary and not for profit public health activities at EU level

Types of voluntary, Voluntary activities are all kinds of voluntary engagement. In general, the vol-
non-profit organisa- untary sector and activities are well described in social contexts whereas the
tions in the field of description of the public health orientated voluntary sector is lacking in the
health and preven- European context. Most voluntary activity takes place at local level. Modern
tion 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.
Voluntary activities The analysis of the voluntary non-profit organisations includes three different
defined in three sec- sectors: health, social services and culture and recreation. In all three sectors
tors 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 The impact of the organized civil society, its labour force (unpaid and paid) and
organized civil soci- its economic impact on the national economies focusing on the formal net-
ety, its labour force works and organizations might partly explain why the non-profit sector / the
(unpaid and paid) organized civil society are significant lower in the Southern and Central / East-
and its economic im- ern parts of Europe. This is countries where the informal support systems
pact on the national through family, social networks and local community are more widespread
economies compared to Western Europe and especially in the Scandinavian countries.
Level of voluntary The amount of voluntary activity and the prosperity of the non-profit sector
action and prosperity seem to be stimulated rather than restricted by highly developed and formalised
at national level 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.
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Feasibility study on funding arrangements for the voluntary and not for profit public health activities at EU level
Impact of the organi- Another important health dimension in determining the level of voluntary in-
sation of the welfare volvement (and therefore the acceptability of a Trust or foundation) seems thus
system on voluntary to be the organisation of the welfare system. A highly organised and institu-
involvement 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.

Outcome of the re- The review, inventory and analysis indicate that
view and inventory
• 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'.
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Feasibility study on funding arrangements for the voluntary and not for profit public health activities at EU level
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
Background 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.
Attraction of finan- All three options of a blind trust presented below are established to capture both
cial contribution 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.
Establishing a blind The set up of a blind trust involves many different elements. The generic organ-
trust - similarities isational structure of a blind trust arrangement includes a governing body, con-
and differences 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.

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

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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