Spain: opportunity, growth and challenges for the third sector
Charity has never been central to Spanish life, so there's plenty of opportunity for the third sector to grow. Daryl Upsall explains the not-for-profit sector in Spain.
Say to a Spanish person that you work for or with a charity and they will have no idea what you are talking about. If you try using acronyms such as NGO, NPO or talk of the Third Sector, people will think you are talking of something foreign.
The Spanish population is largely oblivious to charities, their work and issues such as fundraising. Charity has never been as central to Spanish social, political or cultural life as it is in the Anglo-Saxon world and northern Europe. Of course the Catholic church and its subsets have been raising funds for centuries and the Red Cross in Spain is one of the biggest Red Cross Societies in the world. The Cruz Roja España is the national blood transfusion service, ambulance service, beach guards, primary health care provider and is a daily feature of Spanish life. It is not surprising that the public believe it is a government department.
ONCE, the national charity for the blind (and other disabilities) – (www.once.es/new) runs the biggest weekly lottery in the country. It sells tickets from air-conditioned, satellite communication connected sales booths on street corners across Spain. The public sees ONCE as a lottery company that will make them millionaires, not as a charity serving the disabled and one of the largest social enterprise employers in the country.
How is it that a modern, vibrant 21st century country such as Spain can be so unaware of the rapidly expanding third sector growing in its midst? Much of the blame can lie firmly at the grave of General Franco, the brutal dictator who ruled Spain with an iron fist from 1936 to 1975.
No friend of any organisation that might challenge his authority or that of the Catholic Church, he had no enthusiasm for such a concept as an independent third sector. Few people in the charity world know that Plan International was founded over 70 years ago in Spain by British journalist John Langdon-Davies and refugee worker Eric Muggeridge. Originally named 'Foster Parents Plan for Children in Spain', the aim was to provide food, accommodation and education to children whose lives had been disrupted by the Spanish Civil War. The very fact that Plan might be helping the children of the defeated Republicans led Franco to expel the organisation from Spain.
The boom of the Spanish NGO market began in the mid 1980s as Spain went through its momentous ‘transition’ from dictatorship to full blown democratic state. During this period there was an explosion of charities registering as either membership ‘associations’ or ‘foundations’ covering issues that would previously have been banned – human rights, environment, development, gay and lesbian rights and other social causes.
Currently there are around 260,000 non-profit organisations in Spain, 35,000 of which are defined as social action, community development and international development and aid organisations. In reality only around 100 of these really fundraise in a way that would be recognised in the UK, USA, or other mature fundraising markets. Most are either small local self-help organisations, sports clubs or entities fully funded by local, regional and central government. This means there are no issues of donor fatigue, boredom with the sector in the media or market saturation.
Even during the current economic crisis, with unemployment at around 20%, the Spanish charity market has continued to grow and the current 2.5m donors are likely to increase to around 10m in the next five years. Major NGOs have seen growth rates of 20% in new income and committed donors per year. In 2009 as many as 200,000 new regular donors will be recruited by face-to-face fundraising and potentially 300,000 in 2010, representing a 10% growth in the entire national donor base.
According to the AEF 2009 bi-annual study “Support of Spanish people to NGOs and donor profile”, donors remain loyal with an average regular donor giving for 10 years, only 2% of the public saying they will decrease their donations because of the economic crisis, matched by another 2% who say they will increase their gifts because of the same crisis. Despite the downturn in the Spanish economy mainly due to the construction and property boom slowing down and the international rise on oil prices, the current financial status of the typical middle class, professional Spaniard has never been better as they are asset rich.
Most fundraising so far has been focused in major cities such as Madrid, Barcelona and Bilbao but when people in small to medium sized cities are asked to give it is most likely for the first time and the response is very positive. Direct mail has not proved very successful but F2F in all its forms is doing well in Spain with relatively high gifts of between 15-30 Euros a month. Direct debits also work well as there is little culture of asking for one-off gifts, except in emergencies, and no concept of posting a cheque to a charity. Even then charities soon move to convert these donors to ’socios’ or monthly donors.
Over the past few years the third sector has featured in national media and journalists regularly turn to international NPOs for comment on issues in areas of conflict or crisis, or to fundraising organisations regarding the functioning and needs of the sector.
2007 saw two huge financial scandals in the NFP sector in Spain and highlighted the lack of good governance, professional leadership and effective government as key problems with the Spanish third sector. There is no equivalent of the UK’s Charity Commission and Fundraising Standards Board in Spain nor the public reporting and accountability websites such as Guidestar or Charity Navigator. Fundraising activity exists in a virtual legislative and quality monitoring vacuum. There are no league tables of the top 100 charities or foundations, and institutions such as a professional fundraising association have been very slow to create any type of voluntary codes of fundraising conduct and only reluctantly agreed to the International Code of Fundraising.
Instead the government and tax authorities seem to have a very ‘light touch’ when it comes to monitoring and control of charities, there are no consistent reporting standards, codes of best practice or requirement to file detailed accounts publically. The only private organisation that attempts to set sometimes disputed and criticised reporting standards and somewhat brutal and not always well-thought-through fund-ratios is Fundación Lealtad . It claims its mission is to "promote trust among private donors and companies in those associations and foundations that work in the area of social services, international development, humanitarian aid and environmental protection with the aim of increasing donations and volunteer participation on the part of individuals and the business world."
However, this organisation was publically challenged regarding its legitimacy in 2008 in a rare joint letter from the Spanish Fundraising Association (AEF) and the important association of development NGOs, called CONGDE. Unfortunately many corporations, private individuals and foundations will only contribute to NGOs that have been ‘legitimised’ by Fundación Lealtad and in doing so only give public legitimacy to some 135 non-profit organisations out of the 260,000 registered. Many not-for-profits choose to boycott the organisation and thus do not appear on the approved list from Fundación Lealtad, notably Save the Children, UNHCR, Greenpeace, Amnesty, ActionAid Spain and WWF. Somewhat worryingly it seems that the Fundación Lealtad model may well be franchised into Mexico and who knows where next?
If the Spanish third sector is to continue to thrive in the next decade and play an increasing role in Spanish society several critical issues need to be addressed around the areas of governance, leadership, transparency and appropriate government oversight. This is where organisations such as EUCLID, ACEVO and the European Fundraising Association can play a key role by acting as a means of bringing the experiences of best practice from more mature and developed European markets.
In Spain there is a dearth of knowledge about how the sector should operate due to the absence of strong self regulation entities, poor or totally absent training for Third Sector leaders, no models of good governance to draw up. So at the moment trustees can be paid employers with supposedly “volunteer” board chairs/presidents of NPOs earning annual salaries of up to 150,000 Euros or in some case the role of CEO and Board Chair being one and the same person.
So with little professional training available, no third sector media, very poor availability of accurate and consistent data on the sector and very little structured co-ordination between NPOs on common issues many strategic decisions taken by NPO management teams and Boards are based on rumour, uninformed guesswork and personal preference and bias.
Sadly, the proliferation of universities and other higher education institutes running courses on NGO management and even fundraising has done little to improve the quality of leadership and professionalism in the sector as most of those teaching such courses have never worked in or with the sector. Courses are based on third sector books from the UK and USA markets being used as if they were the original work of the Spanish professors with no added insight or credit given to the original author.
Spain is clearly a third sector market for the future. It will grow and has an enormous potential to at least quadruple in size in the next decade. The major INPOs and UN agencies are well aware of this and are investing significantly in growing their market size and share in Spain. However, with increase in size comes an even greater responsibility for the sector to professionalise, radically improve its governance, leadership, transparency and knowledge base. If it fails to do so there will be more financial scandals, the media and government will become more active in exposing the sector’s failures and potentially bring inappropriate legislation that will harm rather than strengthen the sector. Now is the time for the sector to seize the opportunity to reinvent itself as a modern, well run and professional contributor to Spanish society, before it is too late.
Daryl Upsall is chief executive of Daryl Upsall Consulting International SL www.darylupsall.com
