Giving in the Netherlands: A strong welfare state with a vibrant nonprofit sector

The Netherlands has a rich philanthropic history. However, since the introduction of the welfare state during the first half of the twentieth century, the Dutch government took over responsibility for the provision of most public goods and services. In 2007, the Dutch government spent 20 per cent of GDP on public social expenditures. Despite the strong state involvement in the production of public goods and services, philanthropy still thrives in the Netherlands: at least 55,000 nonprofits exist within a Dutch population of 16.6 million. This large and vibrant nonprofit sector, along with the presence of a small but very generous Protestant (Reformed) population, stimulates philanthropic giving in the Netherlands. Nonprofit organizations in the Netherlands serve a mainly complementary role to the state, which is reflected in the donation behavior of the Dutch. People in the Netherlands typically donate to nonprofit organizations active in fields that are not considered core state responsibilities, such as education, public health, and public and social benefits. Over the course of 2005, 94 per cent of the Dutch donated to one or more charitable organizations, donating on average 338 US dollars. Higher educated, female, and religiously affiliated Dutch people are all more likely to make a donation. Higher donations in the Netherlands are made by those who are older, have a higher education, have a higher income, own their home, are religiously affiliated (especially Protestants), attend religious services more often, have more trust in people, and are women. There are two main factors which potentially inhibit Dutch philanthropic giving in comparison to giving in other countries. First, the high level of public spending on the nonprofit sector has created a strong ‘subsidy-dependence’ among nonprofit organizations in the Netherlands. Since the economic crisis of 2008, the need for nonprofits to acquire income from fees and donations has increased, and it remains to be seen whether all organizations are equipped to deal with this rather sudden shift in funding sources. Second, philanthropic giving is inhibited in the Netherlands due to its charitable deduction system. The existing threshold for charitable tax deductions limits the number of households who use this stimulating measure, which in 2005 was only five per cent of the Dutch population