What are the key differences between American and European Fundraising?

Europe relies on mandatory redistribution whereas America relies on voluntary redistribution.

• European countries have long-rooted traditions of building extensive social welfare states with large social security programs. The government is the first source for ensuring that no citizens are in need. In general, this leads to higher levels of taxation. The British welfare state, for example, has been classified as a liberal welfare state system and the government makes significant investment in health, education, employment and social security.
• In the United States of America, values of personal freedom, individualism, and entrepreneurialism permeate society. There is no extensive welfare state system. In return, Americans enjoy lower taxations and tend to feel a personal or community-based responsibility to help those in needs. Americans benefit from lower taxes compared to Europeans.
• As a result, Europeans tend to believe strongly it is the government’s duty and responsibility to address social problems, especially given the high taxation rates and extensive welfare system. In the United States, citizens tend to believe it is their personal responsibility to redress societal issues, and are more likely to donate their money through private giving. Europeans and Americans both volunteer, thereby expressing their generosity in terms of time.

Europe is more secular and heterogeneous compared to America. 

• Europe has a long tradition of secularism whereas Americans place more importance on religion. In the United States, religious behaviours are positively correlated with charitable behaviours. These existing structures allow Americans to easily channel their charitable donations through their faith community.
• The United States also benefits from being a homogenous country with one language, one set of federal laws and regulations. This facilitated the creation of unified fundraising standards and policies, which contributed to the professionalization of the industry. European countries are extremely diversified making it more difficult to implement one fundraising model and one set of policies. Bespoke policies for each countries are necessary.
• The United States and Europe have a different socio-cultural fabric, which underpin charitable behaviours. In the States, religion and other socio-cultural factors such as population density and community perception, drive private donations and the professionalization of the industry. In Europe, with no unifying standards and high taxation, people rely on public forms of donations with the government acting as the main vehicle for donations. For example, in the United Kingdom, various government grants support charities across the countries.

America possesses a renowned and cost-effective fundraising industry, whereas Europe is still professionalising its practices.

• The United States has built an internationally-recognised fundraising industry. Organisations across various industries will invest heavily in their fundraising departments and hire qualified staff. The fundraising industry represents a trillion-dollar market and benefits from numerous professional fundraising organisations.
• European countries rely on different fundraising model and the charitable landscape is not yet as extensive as in America. The European fundraising industry has only been professionalising in the past two decades, although it has achieved some tremendous progress. The United Kingdom has been enhancing the standards of its fundraising practices, especially following scandals in the 2010s. It also benefit from the presence of organisations such as the Institute of Fundraising which is working hard on improving the code of ethics, setting stricter guidelines, and providing professional fundraising certifications.
• In general, European countries do not invest sufficiently in fundraising. Organisations will not always have a dedicated fundraising department and there tends to be a shortage of technical fundraising skills. A lot can be learnt from American fundraising practices, particularly their business-like approach and cost-effectiveness.

American fundraising is built on strong donor care policies and incentives.

• Americans have excellent donor care policies, allowing them to build extensive fundraising networks, attract and retain major donors, as well as secure large gifts. Thanks to excellent care policies, donors feel involved in organisation’s missions and accomplishments, developing strong loyalty to specific causes and organisations. The United States also provides strong financial incentives for donors. Indeed, giving has been deeply institutionalised with favourable fiscal incentives.
• European organisations do not always have major giving policies, gift acceptance policies, and/or donor care standards. This can result in organisations struggling to attract major gifts and retain major donors. In the United Kingdom, some organisations still rely on street fundraising practices rather than targeting major donors. European countries also have less attractive fiscal incentives and can impose strict regulations regarding charitable donations. The United Kingdom does benefit from Gift Aid, which provides a tax-incentive for people to make donations.
• European fundraising tends to be more fragmented and less institutionalised. Americans charitable organisations are excellent at attracting and retaining major donors, thereby increasing their financial sustainability and ability to carry out their missions.

The Athena Advisors specialise in fundraising across borders, and has built invaluable expertise in the United States, United Kingdom and Europe. If you are interested in learning more about our cross-border fundraising service please contact us at robin@theathenaadvisors.com for bespoke advice.

Highlight Articles

• Barnes, S. The USA and UK Charity Sectors Compared, 2015. Alliance. https://www.alliancemagazine.org/blog/the-usa-and-uk-charity-sectors-compared/
• Wike, R. Five Ways Americans and Europeans are Different, 2016. Pew Research Center. https://www.pewresearch.org/fact-tank/2016/04/19/5-ways-americans-and-europeans-are-different/

Bibliography

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Hessekiel, D. US and UK Peer to Peer Fundraising: Similar and Very Different, 2018. Forbes. https://www.forbes.com/sites/davidhessekiel/2018/06/27/us-and-uk-peer-to-peer-fundraising-similar-and-very-different/#e3406787b61e
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CAF UK Giving 2017, 2017. CAF. https://www.cafonline.org/docs/default-source/about-us-publications/caf-uk-giving-web.pdf
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Wike, R. Five Ways Americans and Europeans are Different, 2016. Pew Research Center. https://www.pewresearch.org/fact-tank/2016/04/19/5-ways-americans-and-europeans-are-different/