Czechs increasingly charitable despite economic woes

Photo: archive of ČRo 7 - Radio Prague

Over the past two decades, philanthropy has become an important part of Czech society, with many people being increasing generous in giving to charity. Radio Prague looks at how the gloomy economic climate affected Czech philanthropy in the past year, and how the donor culture has developed.

Photo: archive of ČRo 7 - Radio Prague
Czechs are often seen through a post-communist lens as skeptical about charitable giving, suspicious of non-profit organizations, believing that people should help themselves or that at the worst the state should help those in need. But the statistics available and the experience of experts in the field show that this may be pretty far from the truth.

The total volume of charitable giving in the Czech Republic has doubled in the past decade or so. It was increasing steadily for about ten years before 2008, when economic uncertainty may have played a role in a slight decrease or simply stagnation. But Jan Kroupa, from the Czech Fundraising Center, which helps NGOs develop strategies for attracting donors, says the crisis has not had a large impact on the overall volume of giving in the past couple of years:

“In 2010 and 2011 individual giving has been on the rise again. And last year it grew by somewhere between five and six percent. This is largely due to an increase in corporate giving, which has been, surprisingly, the fastest growing sector in the past few years. Corporate giving grew by almost 11 percent in 2011.”

In the Czech Republic, where the culture of giving to charities and non-profit organizations does not have a long tradition, the make-up of the donor pool is somewhat unconventional. Whereas in countries like the United States or the UK, eighty percent of all the charitable gifts are made by the richest five percent of the population, the Czech Republic’s super rich contribute to only a one third of all the financial gifts. The remaining two-thirds are donors from medium and low-income brackets and almost half of donors with the lowest income are pensioners. I asked Mr Kroupa about what charitable causes appeal most to Czechs and what they would rarely give money for:

“Czechs generally don’t necessarily like to, or are not mature enough donors, to support complicated or controversial causes. Such as Roma issues or other more difficult to understand issues such as watchdogs or think-tanks.

Photo: archive of ČRo 7 - Radio Prague
“The ‘mass’ donor, just like anywhere else, likes [giving money to] children with disabilities and animals. Czechs are very generous in crisis. More so, comparatively speaking, than most other Central European countries, including Germany. So during the Haiti crisis, or an earthquake in Pakistan or other major emergencies Czechs have been very generous.”

In general, this country has not really reached the same level of the number of donors or the amounts given as in most west European countries. Although things are most certainly improving, Jan Kroupa sees this more as a problem of the organizations seeking donations rather than the donors:

“I would say that the biggest obstacles for Czech to give [to charity] is that they are not asked enough, and they are not asked well enough. The amount of fundraising activity is still relatively low compared to other countries with uninterrupted tradition of philanthropic giving. Compared to other Central European countries, Czechs are very generous, and I think the major obstacle in increasing giving is that Czech charities are not active enough in their fundraising.”

There are hundreds of charities currently functioning in the Czech Republic providing support to a vast variety of causes. Some of them have staff members dedicated to fundraising, but many smaller NGOs just cannot afford to hire an extra person or struggle to find skilled fundraising experts who would work for a non-profit salary. So why hasn’t the non-profit sector developed the needed infrastructure and skills to effectively raise money from donations? Jan Kroupa sees the roots of the problem in the early post-communist days of this country:

“It’s a combination of reasons. The Czech NGO sector was kick started in the 90s by Western private foundations. In the 90s we were spoiled, to a degree, by easily accessible grants mostly from large foundation. Relatively soon, they began to leave the Czech Republic towards the end of the 90s there was almost no one here. But they taught Czech NGOs to write grants and be very good at that. And even though already in the early 90s they told us to learn how to work with our constituencies, larger donors and be more active in fundraising. But as long as Czech NGOs could relatively easily receive relatively large amounts of money, who would bother fundraising.

Photo: European Commission
“Their departure more or less coincided and overlapped with pre-accession funds from the EU. So the NGOs just swapped to them. And we were never forced to face the fact that in the long-run we will have to go out and ask for public support.”

The European funds, Jan points out, will end very soon, as the EU cuts back on structural funding. The big challenge for Czech NGOs is now to attract a much greater number of large donors. Although there are many individuals who may be persuaded to open up their pocketbooks for a good cause, the most effective way to get large donations is approach companies. Corporate giving is a growing trend all over the world, and the Czech Republic is no different. In fact, Pavlina Kalousova, who works for the Czech association of social conscious companies called Business for Society, told me that this are has seen vast changes in the past decade:

“There has been an enormous evolution in the sphere of corporate giving. This is due to the fact that more and more companies are looking into integrating the Corporate Social Responsibility (CSR) approach into their business. Big companies have started looking into the synergy of their corporate strategy and the area they are supporting. And the biggest mental change has been that the employees of the companies started to get engaged through corporate volunteering and through employee engagement programs.”

In foreign-owned companies operating in the Czech Republic, the CSR strategy is usually dictated from the mother company. But for local businesses, the initiative of the employees is often the first and main building-block for greater engagement in charitable giving.

“People want to work in a company that is responsible that gives them an opportunity to be engaged in their community. But also the customers are looking more often into where the products they buy come from, and if the company that produces them is involved with CSR and is behaving responsibly.”

Pavlína Kalousová,  photo: CSR Europe
Corporate giving in this country also seems to have been almost crisis free in the past few years. Ms Kalousova has only seen more caution decisions from companies in the past few months:

“In the last year I have seen a sort of nervousness from the corporate sector. They don’t know what to expect from the economy in our country. But there isn’t a decrease in the number of companies giving money to the community, but the amount of money each of them invests into good causes. We try to motivate companies and show them that it’s not only about money, and that they can compensate the non-profit sector in other way. For example, they can give their employees’ time, or pro bono services, or in-kind donations.”

Supplementing the decrease in financial support with volunteering time or services has been a growing trend in the past five years. Many companies have also begun building their social responsibility models on, somewhat cynically, what they need to successfully do their business. The benefits are of course not only for them, but hopefully for the society as a whole.

“The companies are looking into areas that they can support that are somehow close to their business strategy or corporate culture. They are supporting more and more projects in education and cooperating with schools and universities in order to support potential talent. Or, for example, they invest in water conservation projects or prevention programs or even project in financial education, when it comes to banks. So, more and more, strategic giving and strategic CSR is connected with the character of the company and the area where it is active.”

Pavlina Kalousova’s outlook on the efforts of non-profits are less gloomy than Jan Kroupa’s, and she offered other concrete ways that charities could work on attracting corporate donors.

Photo: archive of ČRo 7 - Radio Prague
“They should look more closely at the priorities of the companies have. In the area of HR, for example, it would be women leaders, work-life balance. In the area of environmental protection it would be CO2 emissions, energy saving. It doesn’t necessarily have to only be about asking companies for money, but also offering partnerships or expertise to companies in order to develop [the culture of] corporate social responsibility as such in the Czech Republic.”

Larger companies like Vodafone, O2, or some banks have also partially adjusted to the NGO focus on grants, offering fellowships for new socially conscious projects in communities. But developing better donor relations is an inevitability for most Czech NGOs. The non-profit sector and civil society in general in this country has grown by leaps and bounds in the past two decades, and economic woes have not seemed to decrease the amount of interest individuals and companies have in giving to a good cause.

The episode featured today was first broadcast on January 15, 2013.