Bulgaria, March 01, 2005

BCAF SURVEY OF PHILANTHROPY IN BULGARIA

NATIONAL REPRESENTATIVE STUDY ON PHILANTHROPY
IN BULGARIA

(March, 2005)

Bulgarian Charities Aid Foundation has accomplished a national representative study on philanthropy in Bulgaria among Bulgarian citizens and business.

The research has been conducted within the programme "An Optimistic Look at NGOs and Domestic Resources", funded by the Trust for Civil Society in Central and Eastern Europe. Its target is to examine the characteristic features of charity in Bulgaria, as well as to register the main attitudes towards philanthropy compared to results of previous studies.

The collected statistical data has been presented at a public discussion on the effectiveness of philanthropy in Bulgaria conducted on June 8, 2005 and it enjoyed great public interest.

I. Philanthropy practices and attitudes of Bulgarian citizens

1. Charity practices among Bulgarian citizens.
The survey shows that more than half of Bulgarian citizens made a donation during 2004. Most people donate directly to people in need (33%). Donations to non-profit organisations made 22% of the respondents. Public institutions (schools, hospitals and homes for orphans) receive support relatively rarely (14%). Though with lower intensity, non-profit organisations and public institutions are supported with more resources, which is a prerequisite for an integral and long-term effect of the donation.

A constant and most popular form of charity remains single charity gesture, which happens on the spur of the moment by direct contact with people in need. One third of the interviewed citizens (34%) made donations directly to a person in need or into a donation box. The group of respondents, which bought a greeting card of a fundraising organisation is relatively big (25%). Products or food donated one fifth of the respondents (22%).

Comparing to previous studies, these forms of donation are gradually losing on popularity. The process is connected with the establishment of new forms of charity. The most popular new form of donation is short text messaging. 15% of the respondents used this form of donation to support a selected cause. 6% of the interviewed citizens bought a ticket for a charity event - a concert, an exhibition or an auction. Although less popular, donations through bank account made 2.3% of the respondents. These three forms of charity appear to be popular mainly among younger people and show potential for further development.

The common thing about all these forms of donation is that they all allow coordination and accumulation of resources. Thus, individual donations could be collected in a fund, which could produce additional effect beyond just being the sum of all donations. The accumulated financial result could have a long-term effect for a bigger group of people in need. As a consequence, the effect of charity is visible, public and creates conditions for public control and accountability of the fundraising organisations.

2. Factors which influence charity
Over half of citizens, who received a petition for donation by people in need, non-profit organisations or public institutions, responded. Statistical data indicates that citizens are willing to make a donation under certain conditions. Main factors, which influence their decision, are straight approach and detailed explanation of the expenditures. The significance of the problem, for which the donation is purposed, comes on third place.

The study shows that citizens inform themselves about the reliability of the fundraising organisation and its relations with givers before they take a decision to donate. Therefore, it is of high importance for the non-profit sector to build procedures and mechanisms to differentiate honest organisations from dishonest and to avoid fraud.

A main component of these procedures is the Central Register of Non-Profit Organisations with the Bulgarian Ministry of Justice. 13% of the respondents claim to be familiar with the functions of the Central Register - public control on the activities and the financial reports of non-profit organisations - and 87% say that they do not know about its existence.

According to statistical data, public mistrust is not a reaction to single dishonest gestures of fundraising organisations as to the fact that the popular forms of charity in Bulgaria do not allow accountability.

3. Attitudes towards future charity
Comparing to statistical data collected in 2003, the willingness of the citizens to make donation has risen significantly. This position does not necessary lead to donation but it indicates the positive attitude towards philanthropy. 10% of citizens point out that they are willing to make a donation in 2005 (in 2003 only 4% were ready to donate).

Future donations: 62% of citizens would address it to orphans, 48% - to people with need of medical treatment, 44% - to children with physical and mental disabilities and 25% - to homeless or wandering children. Almost one fifth of the respondents would support homeless and socially weak adults. This range of priorities responds to the causes, which citizens have already supported in 2004.

The survey does not show significant differentiation between the factors, which would guarantee the fairness of people in need or fundraising organisations. Citizens point out as an important factor for building public trust the self-regulation of the public sector. Main guarantees appear to be the straight description of problems, the visible effect of previous actions and the degree to which non-profits are investing in their public image and are generating public trust and authority.

4. Awareness about the legislation connected with philanthropy
Most popular charity practices in Bulgaria do not allow regular accountability of the allocated means, which explains the low percentage of people informed about tax reduction for charity activities - only 4% of the respondents are familiar with the official documents, concerning the philanthropy practices. These values are identical with that registered in 2003. Higher level of awareness about tax reduction show the groups of private owners, households with higher income and people with university degree. The same groups of respondents point out the lack of simple and clear mechanism to prove and account donations.

Almost one fourth of the respondents (24%) are aware about tax reduction in general and not in details. Less than two thirds have not heard about the available tax reduction at all.

It is very positive that parallel to philanthropy practices, which do not presume public regulation and control, new forms of charity that allow accountability and relate directly to tax reduction have been established.

5. Attitudes towards specific forms of donation - payroll giving and cause related marketing
The awareness of citizens about payroll giving has risen to 14% compared to 6% in 2003. 4% of the respondents are willing to participate in payroll giving in order to support an important cause and 11% would participate if they had more information. Higher awareness and readiness to be included in payroll giving have employees, private owners and free-lance workers, all between 30 and 50 years in age.

Statistical data shows positive attitudes towards cause related marketing. Almost one fourth of the respondents (23%) bought a product, part of which price is allocated to support a charity cause. Cause related marketing campaigns have potential, of which companies are not aware yet - 67% of respondents say they would prefer a product instead of other with the same price and quality if part of its price supports a charity cause.

II. Philanthropy practices and attitude of Bulgarian business

1. Philanthropy practices of Bulgarian business
The survey shows that 62% of the currently active companies have been engaged in some kind of philanthropy. The most popular form of charity is donation, while sponsoring and social projects are less popular and are indicated respectively by 22% and 16% of the interviewed managers.

A relatively small part of the companies have established contacts with non-profit organisations, which they periodically support (19%), have determined budget for charity (7%) or set priorities for donations (7%). Though still lightly spread, having an integral charity policy is presented mostly by major companies with annual turnover above 5 million BGN (6%). Mainly major companies have defined budget and priority directions for charity.

According to the survey, charity gestures are mostly accidental and not bound with institutionalised long-term relations. Only small percentage of the companies donates periodically (12%). Usually, donations are in form of single charity gestures and come as a result of the established contact between a giver and a recipient (59%). "Untraditional" forms of support such as lower prices for products and services, rendering equipment or material help for organisations, which organise charity events, are rare.

Public institutions (42%) and private persons (31%) become support most often. On third place come non-governmental organisations. Groups with legitimate need of support (mainly socially disadvantaged people, which have been institutionalised in some way or another) are more likely to gain funding than people, which do not belong to disadvantaged groups (talented and active people: sportsmen and artists, etc) or people, which are not considered disadvantaged (former prisoners, homosexuals or addicted people).

2. Factors, which influence charity
Main factors that influence decision for charity correspond with the nature of the problem for which means are allocated and certainly with the authority of the fundraising organisation. Major companies have more formal and institutionalised approach towards charity (a well-grounded explanation of the expenditures, authority of the fundraising organisation), while personal attitude and personal relationship with a representative of the fundraising organisation, etc usually guide most small companies.

Besides subjective appraisal of the fundraising organisation, among most important guarantees against misuse is the registration of the organisation in the Central Register of the Non-Profit Organisations with the Ministry of Justice. Leading factors by taking a decision for charity are also personal impressions and successful previous experience with the organisation. Both most important obstacles, which companies face are bad financial status of the company (53%) and doubts about honesty of the fundraising organisation (53%).

3. Corporate social responsibility
Bulgarian business sees corporate social responsibility mainly as correctness to the employees (16%) and to a lower degree as philanthropy (9%) and engagement with important social causes (4%). Companies in Bulgaria are mainly small (with not more than 50 employees and an annual turnover below 5 million BGN), which explains common understanding of corporate social responsibility as building organisational capacity in the company (staff education, customer relations, etc). Less popular are activities of benefit for the society (support of educational institutions in business related fields, employment and qualification of people with disabilities, support of groups fighting corruption and initiating changes in the legislation, etc).

Statistical data shows that companies are gradually becoming aware about the positive influence of corporate social responsibility on the public image of the company. 67% of the respondents mention at least one positive effect for the company ensuing from social activities and philanthropy. Most answers stress on building positive image (49%) and sharing common values and goals within the company (39%). Respondents rarely bound philanthropy with financial results for the company (12%), which explains the limited participation in activities of this kind.

4. Intentions for future donations
The willingness for future donations among major companies (with a turnover above 5 million BGN) is higher than with smaller companies. Future objectives coincide with the priorities supported up to now. Forward come again socially disadvantaged groups. A little bit further stay talented children or merely children in school age (with no special characteristics). As a priority companies point out causes that are connected with expensive operations/medical treatment, helping of disadvantaged groups and especially children at risk. This once again shows that because of the financial difficulties in Bulgaria philanthropy is thought in connection with socially weak groups and less with talented groups and projects aimed at wider audience (sport events, education, arts, science research, environment, etc)

5. Awareness about tax reduction
About half of the companies are familiar with tax reduction. These are mostly major companies (among them awareness tax reductions stands at 71%). On the contrary, smaller companies know less about tax reduction. They rarely make donations and if they do, they donate a small amount of money and therefore donations are not included in financial reports.

The expectations about the future effect of tax reduction are polarised. According to 17% of the respondents tax reduction will stimulate charity and according to 15% these changes will have no impact on corporate philanthropy. As far as tax reduction is not among the leading factors by taking a decision for charity, it is to conclude that these changes would not influence philanthropy except donations of larger amounts of money.

6. Awareness about different forms of charity - payroll giving and cause related marketing
The survey registers higher awareness about cause related marketing (59%). This is to a high degree due to the media coverage of cause related marketing campaigns. Company representatives are inclined to call this promotion (62%) rather than charity campaign (24%).

The readiness to initiate such campaigns is relatively weak (about 14% of the respondents declare to be interested in organising cause related marketing campaigns in the future). Currently, only 3% of the respondents have experience in such campaigns (2% have positive experience and 1% see no effect). An essential prerequisite for the slight distribution of this kind of charity is the weak development of Bulgarian business, which consists mainly of small companies with relatively low annual turnover.

The awareness about payroll giving may be evaluated as intermediate - 20% of companies have heard about it and 19% are able to define what exactly is payroll giving. About 60% of the interviewed managers are not aware of payroll giving. Representatives of major companies are again better informed.

7. Partnership with non-profit organisations
Every fifth company in Bulgaria (23%) has established partnership with a non-profit organisation. Again, more active are major companies. For the bigger part of the companies this relationship does not come as a regular praxis (77%).

Among companies that have already had such partnership prevails the appraisal that this cooperation has been effective (16%) over the opinion that it was ineffective (9%).

One of the main arguments, which stand behind these conclusions, is the lack of instruments for the companies to identify the way in which cooperation with non-profit organisations could be of mutual interest. They see in their face only structures, which seek sponsorship or support for third parties, and are not informed about the degree of their engagement and fairness.
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