Westfälische Wilhelms-Universität Münster
17 July 2015
The intention of the stakeholder meeting was to integrate German stakeholders into the research process of TSIs work on the identification of third sector barriers that hinder nonprofits to flourish and prosper – and even might keep them from fulfilling their civil society functions.
TSI researchers Patrick Hoemke, Benedikt Pahl, Christina Rentzsch, Annette Zimmer consider the meeting to be very successful. First, stakeholders provided insight regarding the challenges and opportunities third sector organisations (TSOs) are currently confronted with. Second, the Münster team can use the feedback from stakeholders and practitioners from the policy fields of sports, social services and arts and culturefeedback to confirm first results of the research conducted as part of TSIs work on third sector barriers. In their daily work, TSOs experience the described trends and most recent developments that were identified by the research team. The stakeholders shared their work experiences and provided useful insights and further information on how nonprofit organizations currently adapt to significant environmental changes.
The following trends were identified by our stakeholders:
Financing and Marketization
Stakeholders underlined that changing modes of financing in the context of new public management techniques put nonprofit organizations under efficiency and cost pressures. This trend translates into an increasing marketization of the economic environment of nonprofits with the result that they run the risk of losing their civil society qualities and culture. Therefore, stakeholders highlighted that German nonprofits are forced to adapt to a significantly changing environment. Marketization and the shift to business strategies are not a deliberate choice by nonprofits, it is imposed by public authorities tending to give preference to a commercial instead of a nonprofit provision of social services. Regarding the political environment, one stakeholder exemplarily referred to the introduction of nursing care insurance in the mid-90s, which constituted an important policy change that turned social service provision into a market commodity. “We must speak of marketization, this is the corect term. However, this is not a strategy deliberately chosen by civil society actors, it is a political strategy.”
Furthermore, stakeholders underlined that one outcome of the process of marketization is the downgrading of the advocacy function of nonprofits. Here, they specifically referred to social service provision in Eastern Germany and hence in the federal states (Bundesländer) of the former GDR, where nonprofit service providers do not look back on a long history and tradition as they only were founded after re-unification. They are not very strong regarding interest representation in the area of social services, presumably because marketization of the policy environment of social service provision developed in parallel with the establishment of nonprofit social service providers in this part of the country.
However, it is not easy to avoid marketization by turning to other markets such as the one of private giving. Stakeholders stated unanimouslythat establishing personal contacts and close co-operation with private funders – individuals as well as corporations – is rather difficult. It is necessary to know the “terms of trade” of professional marketing and public relation techniques in order to become attractive for funders. However, specific know-how asks for skilled and professional staff that only large nonprofits are able to afford.
In line with the findings of the Münster research team, stakeholders underlined that their organizations increasingly have to cope with extensive bureaucratic control mechanisms, such as reporting obligations and attuned requirements of evaluation. This once more requires requires certain professional skills. As a consequence volunteering, especially at board level, is increasingly time consuming and quite demanding in terms of administrative know-how. All in all, stakeholders made clear that the increased bureaucratization reflects a significantly altered relationship between nonprofits and government. In particular, there is a shift from a trust-based partnership between nonprofits and government to a customer-supplier relationship in which nonprofits are increasingly controlled and regulated by public authorities.
Stakeholders reported that motivations, interests and time-budgets of volunteers have fundamentally changed. In general, volunteers seem to face increasing time constraints due to a more and more demanding work environment. Therefore, for many citizens and members of the work force the time slot available for volunteer activities is shrinking. “The work environment has changed in such a way that citizens who are willing to take up a honorary position are indeed no longer able to actually do that.”
Correspondingly, volunteering as well as organizational commitment have become fluid and volatile. Nowadays a lifelong membership is rather the exception than the rule. Any civil engagement requiring a long-term commitment has become rather unpopular. Furthermore, today´s volunteers are neither highly interested in participating in decision making processes of NPOs nor in taking up administrative responsibilities. Hence, it has become increasingly difficult to fill open positions of honorary board members.
Also, the bureaucratic pressures described above significantly decrease the attractiveness of volunteering. There is no doubt that volunteers serving on boards are lacking both sufficient time capacities and knowledge of administrative procedures.
“Marketization is a necessity. Nonprofits are forced to counteract excessive bureaucratization through professionalization. When we used to organize a party of our club at the end of the sports season, we organized some soft drinks, pinned a notice on a tree and people came to join us. Today you need three official permits and five licenses from seven government agencies if you want to organize an informal meeting for your club members. It is quite understandable that everybody is very reluctant to get active and no one is willing to go through all of this just for a simple get-together.“
Moreover, there is nothing special about volunteering anymore. Indeed, volunteering is increasingly regarded as just one leisure activity among others. Hence, from the perspective of organizations, volunteering itself has undergone a process of marketization. Finally, in the area of sports and leisure, which is a key area of nonprofit activity and volunteering in Germany, sports clubs are more and more confronted with commercial competitors and hence fitness and wellness studios. Due to their professional staff and flexible opening hours they correspond very well with the increased service orientation of German citizens. The commercial sport providers have turned into a strong competitor for sports clubs of which roughly every third German is still a member. However, as one stakeholder and representative of a sport associations indicated: in recent years sport clubs have lost ground to commercial providers and in some cities commercial providers already outnumbered the members of nonprofit sport clubs by far.
Professionalization of TSOs
To cope with these new demands as well as a significantly transformed environment, professionalization or becoming “corporate-like” constitutes the primary strategy for nonprofits today. This is specifically the case for TSOs active in the area of social service provision. Stakeholders worry aboutthis development. They expressed their concerns that the professionalization of the nonprofits and the increasing bias towards pure service provision will affect the overall impact of nonprofits negatively, particularly the potential of nonprofits to encourage empowerment and democratic participation.