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Kiwi Businesses Step Up: A Profile of New Zealand Philanthropy

By Tom Watson on January 11, 2007No Comment

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Kiwi Businesses Step Up: A Profile of New Zealand Philanthropy
By: Maria Nardell, 01/11/09

The desire is there; it’s the historical experience that’s lacking. 

So says the first major research into New Zealand corporate philanthropy to come out in nearly a decade. Reflecting the increasingly global trend of business-nonprofit partnerships, an Auckland University of Technology (AUT University) study reported this fall that New Zealand businesses are eager to expand their giving programs and to do so more strategically.

Not that these companies are new to social investment altogether.  Many do have well-established giving programs.  The report also revealed that New Zealand consumers and investors show preferences for companies actively engaged in their local communities, confirming similar results from a 2004 consumer survey. 

Yet in contrast to their American counterparts, for whom “cause marketing” focuses as much on “marketing” as on “cause,” many businesses in New Zealand have been hesitant to “blow their own trumpets” in promoting their nonprofit partnerships.  Others have giving programs that reflect the C.E.O.’s personal philanthropy more than a strategic business plan.

Although there is a strong tradition of individual volunteering in the nation, the practice of corporate philanthropy is less well-established.  One key factor, explains a 2006 working paper from the Johns Hopkins Comparative Nonprofit Sector Project 1, is the expectation that the government should play a significant role in supporting nonprofits.  Another issue is the complex role of the indigenous Maori in the nonprofit and philanthropic sectors.  Tracing these themes throughout New Zealand’s history, it is clear that they will continue to influence the development of corporate philanthropy into the future.

The government/nonprofit alliance

Even before New Zealand became a British colony in 1840 with the Treaty of Waitangi, there were numerous associations among both the burgeoning number of European settlers—known as the Pahekas—and the Maori.  Throughout the nineteenth century, the government took a direct role in some social services, such as employment in public works, though it tended to help those best positioned to help themselves.  Paheka religious and secular associations, on the other hand, reached a broader constituency of those in need.

Significant financial support from the government was crucial to the growth of these early Paheka associations.  In 1985, The Hospitals and Charitable Institutions Act formalized the relationship between the state and charities.  Though the act itself was not long-lasting, it signaled the extensive financial and administrative links between the sectors—with some exceptions such as with sports organizations and labor unions—that were to continue into the next century.

The government remained a major benefactor of the nonprofit sector during a period of welfare expansion beginning in the 1930s—when nonprofits flourished in niches such as early childhood services—as well as during fractures in the welfare structure in the 1960s, as the nonprofit sector was pressured to take on services previously within the government’s realm.  In addition to direct grants, the state provided these organizations free passes on government transport and access to departmental libraries and informational systems.  For the state, supporting nonprofits was also appealing in that they had greater freedom to employ experimental problem-solving methods, yet still at an arm’s length from the government.

State funding has increased exponentially as New Zealand’s nonprofit sector has grown in size, scope, and diversity from the 1980s through the present day.  From an estimated NZ$4 million transferred from the central government to nonprofits in 1967, the amount rose to NZ$73.4 million in 1986 and NZ$920.6 million in 2002.2   The figures, however, mask emerging tensions regarding the autonomy of the nonprofit sector at the same time that a greater range of agencies, including Maori providers, are claiming their share of government resources.  

Maori in the nonprofit sector

With their unique cultural and historical underpinnings, Maori associational bodies have not always coincided with western definitions of the nonprofit sector.  The Maori arrived on the islands between 800 and 1300 A.D., and from the beginning they had their own fluid forms organized around iwi (tribes), hapu (sub-tribes), and whanau (extended family groups).  These groups placed a greater emphasis on membership by birth and on cultural obligations than did their European counterparts.

In contrast, concepts of the individual and the separation between family and community form the basis of Western notions of philanthropy and community involvement.  When these lines of separation are blurred, as with iwi, hapu, and whanau, debates over the meanings of family involvement and broader community volunteerism ensue, which have precluded some Maori groups from receiving nonprofit status and funding from both public and private sources.

By the second half of the twentieth century, however, large Maori nonprofits modeled on Paheka forms were endorsed and supported by the government, particularly by the Department of Maori Affairs.  These included the Maori Women’s Welfare League, formed in 1951, and the New Zealand Maori Council, founded in 1962.

Yet for Maori organizations, state support is complicated not only by cultural definitions but also by historical and ongoing conflicts over the sovereignty and governance of the Maori people.   Especially at stake is the concept of sovereignty in the original translation of the 1840 Treaty of Waitangi from English to Maori, as many claim that equivalent definitions did not exist at the time.  While the government has officially incorporated biculturalism into government policy, as well as its nonprofit funding requirements, Maori organizations still face challenges in trying to negotiate at times competing historical claims between the Maori communities they serve and the New Zealand government providing funding.  As most New Zealand businesses are less directly involved in this history than is the government, they may have a unique potential to forge partnerships with Maori nonprofits from a fresh standpoint.

The rise of corporate philanthropy?

Though the central government continues to be the largest source of funding for nonprofit organizations in New Zealand, the state-nonprofit relationship has changed significantly since the 1980s.  The ascendancy of the contract model, in which the government supports organizations through the purchase of services, has led to what many perceive to be a power imbalance with greater state influence on nonprofit agendas.  Though it has allowed a greater range of nonprofits to receive support, the contract model has also contributed to more funding insecurity, higher compliance costs, increased inter-agency competition for resources, and a bigger focus on cost-effectiveness. 

With these concerns about government funding, as well as the recent AUT University report demonstrating the rising philanthropic interest among business, the time may be ripe for corporate giving to assume greater responsibility within New Zealand’s philanthropic sector.  In fact, by forcing nonprofits to demonstrate greater accountability, the contract model may have better prepared them to partner with corporate giving programs, which typically demand measurement reports and a high level of professionalism from their nonprofit partners.  Leading the way in the effort to connect businesses and nonprofits in meaningful alliances is the Robin Hood Foundation New Zealand, founded in 2002.3

In a recent interview in the Philippines, Robin Hood C.E.O. Jude Mannion eased businesses’ concerns about being too showy in promoting their giving programs.  If “you state the facts of your outcome” in terms of the people reached and the results, “then that is not over-bragging.  That is stating facts.”  Furthermore, she noted, corporate philanthropy has a great capacity to raise awareness on social issues through advertising campaigns, “inviting other people to help” in the cause. 

Yet the rise of corporate-nonprofit strategic partnerships raises important questions for the future of the philanthropic and nonprofit sectors in New Zealand.  Will corporate philanthropy take some of the pressure off state funding?  In comparison to the government contract model, will business partnerships allow for greater nonprofit self-governance?  Or will they simply lead to different restrictions, as businesses also have their own agendas?

Moreover, as much of corporate giving is consumer driven, how will it be affected by the effort to be accountable to the Maori (about 15% of New Zealand’s population according to the latest census) and other rapidly growing minority groups, particularly from East Asia?

Despite the recent growth in corporate philanthropy, it represented only 3% (NZ$80.0 million) of total nonprofit income in 2002, in contrast to approximately 35% from the state.4  Thus, even as business-nonprofit partnerships continue to expand, nonprofits will continue to rely on the state for much of their funding, as is the case for American nonprofits as well.  Still, New Zealand has often referred to itself as the “social laboratory of the world,” and the evolution of its philanthropic sector—with corporate giving currently at the forefront of new trends—will be yet another experiment.

 

Endnotes

1Tennant, Margaret, Jackie Sanders, Michael O’Brien, and Charlotte Castle. Defining the Nonprofit Sector: New Zealand. Working Papers of the John Hopkins Comparative Nonprofit Sector Project, No. 45. Baltimore: The John Hopkins Center for Civil Society Studies, 2006.

2 In U.S. dollars, the figures are, respectively: $2.7 million, $187.7, $632.8 million, and $62.8 million. Data from Tennant, Defining the Nonprofit Sector, 10,13.

3 Robin Hood New Zealand is inspired by, but not affiliated with, Robin Hood New York.

4 Tennant, 15. In U.S. dollars, NZ$80 million is approximately $55 million.

 
Sources

Tennant, Margaret, Jackie Sanders, Michael O’Brien, and Charlotte Castle. Defining the Nonprofit Sector: New Zealand. Working Papers of the John Hopkins Comparative Nonprofit Sector Project, No. 45. Baltimore: The John Hopkins Center for Civil Society Studies, 2006. http://www.jhu.edu/ccss/pubs/pdf/newzealand.pdf

“Doing good is good for doing business shows survey,” The New Zealand Herald, 20 March 2004. http://www.nzherald.co.nz/section/print.cfm?c_id=1&objectid=3555876

“Giving is Good for Business,” Scoop Independent News, 28 September 2006. http://www.scoop.co.nz/stories/print.html?path=BU0609/S00478.htm.

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