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The Dutch cabinet formation and what it means for philanthropy in the Netherlands

31 May 2021

Siep Wijsenbeek, Director of FIN, the association of Dutch charitable funds and corporate foundations, and Stephanie van Berckel, EU Public Affairs and Communications trainee at Philanthropy Advocacy

A national election is a moment for citizens to re-evaluate their political views and let their voices be heard. For many Dutch citizens in the most recent parliamentary elections in the Netherlands, this re-evaluation has led to a change of heart. Never before in Dutch history have so many different parties earned a seat in parliament. The fragmentation in the House of Representatives has continued even after the elections due to a split of leadership within one of the right-wing populist parties, Forum voor Democratie, and the 50plus party that advocates pensioners’ interests. There are now 16 parties and 2 independent groups in the House of Representatives, which has a total of 150 seats.

Two of the many factors that have led to this fragmentation in Dutch politics are widespread frustration with little room for political opposition caused by a so called ‘coalition agreement’ between governing parties as well as structural inadequacies of the government, notably the tax authority brought to light by the Dutch childcare benefits scandal. This fragmentation has further contributed to the polarisation of the overall political landscape in the Netherlands.

What does the Dutch citizens’ call for change mean for the role of philanthropy in the Netherlands? As I will argue in this article, political polarisation and structural governmental changes provide opportunities but also pose risks for the future of philanthropy.

Polarisation

The continuing trend of polarisation – unfortunately, though not surprisingly – does not have a positive effect on the political position of philanthropy in the Netherlands. Centre parties are generally benevolent towards philanthropy. However, Populist parties, both on the right- and left-wing, are not so much in favour of philanthropic activities, although their positions are based on different points of view.

The populist and conservative left distrust private philanthropic initiatives – no matter whether they come from  companies, institutions, or wealthy individuals. They prefer the state as the dominant actor in society. They plea for higher taxes both as an equaliser of social differences and as well as an enabler of a more interfering state. With right-wing parties the distrust towards philanthropy comes from a different angle. These parties suspect the progressive agendas of many philanthropic organisations and they fear foreign influence on the civil society sector. In fact, both right- and left-wing populism seems to prefer the state as the main actor in Dutch society over philanthropy.

The government is being formed at the moment. The political position of philanthropy will be influenced by the outcome, positively in the case of a combination of centre parties, negatively in case one of the populist wings in Dutch politics will join a coalition.

The coalition agreement

One of the contributing factors to the fragmentation and consequential polarisation in the Dutch party system is a growing sentiment against the coalition agreement. A coalition agreement is signed by the political parties that jointly form a government after each election. The agreement sets out the goals of the government for the next four-year term. This agreement is not legally binding, yet it is highly valued politicly, as it is seen as a promise to the Dutch citizens. This political agreement gives very little room to manoeuvre for members of parliament from the opposition and the coalition parties alike.

The formation talks are led by Mariëtte Hamer, a very experienced political woman, who currently presides over the government’s Social Economical Council. One of the outcomes of her – soon to be published – report will be that the future coalition agreement will be less set in stone than in the past. The new political modus will be finding majorities per topic instead. This expected flexibility in the upcoming four years of the cabinet could be an opportunity as well as a risk for philanthropy in the Netherlands.

First of all, it protects the current position as a majority vote in parliament is required for each measure to be implemented. This provides protection against major changes. Giving and grant-making are an integral part of Dutch society, both in terms of individual behaviour and in terms of contributing economically. 85% of the Dutch donate to charity and 50% of the adult population is a volunteer. In the Netherlands, philanthropy is self-regulated and civil liberties ensure a good philanthropic environment. Philanthropic organisations are tax-exempt and donations to charity are tax-deductible.

In the run-up to the elections, FIN has consulted with multiple prominent political parties of the centre. These parties confirmed their goodwill and intentions to keep the environment philanthropy-friendly. An old-fashioned coalition agreement could have safeguarded these intentions. In that sense, more flexible politics would be a threat. On a more positive note, flexibility also provides opportunities for innovative legislation, for instance about impact investment and sustainable entrepreneurship. It’s up to us to keep a close eye on politics in the coming years, both in terms of opportunities and threats.

Structural increase in bureaucracy

Driven by supranational bodies, such as the FATF and the European Union, and by the Dutch government itself, there is a structural increase in bureaucracy. Supranational anti-money laundering and anti-terrorism regulation, despite good intentions, will increase red-tape for philanthropy. The effects are already clearly visible: volunteer time and charitable money spent on bureaucracy is a great loss for society! This will also lead to decreasing willingness to be a volunteer board member of a fund or a foundation, as more time is spent on regulations, while at the same time personal legal liabilities increase. Last but not least, international donations, in particular to countries in the developing world, will be hindered.

Opportunities for philanthropy

The trends of political fragmentation, polarisation, distrust and growing bureaucracy are not unique to the Netherlands; these trends coincide with developments in other parts of Europe. These trends should be seen as a reminder of the importance of philanthropy. Philanthropy is a force for good that strengthens the fabric of society. We must never forget that our charitable work counters political fragmentation, polarisation and distrust. The more effectively we work, the better we can counterbalance these negative trends. Cooperation is one of the most efficient ways to be effective and since we are facing Europe-wide trends, we should work together at the European level.

Read more about the philanthropy sector in the Netherlands here and here.