Latest research has studied how representatives of organizations view the potential of their activities today. Civil society is getting more professional in character but that also has a reverse side. Does the financier guide organizations’ operations too much? This blog recaps the results of the project.

Finland is the promised land of societal organizations. Whereas in France citizens advance their goals by initiating strikes or demonstrations, in Finland the civil society is mostly participating in societal organizations. Therefore, determining the state and atmosphere of such organizations one can enquire a clear view of the sentiments of the Finnish society at large.

What then is the current situation of the Finnish societal organizations? Looking at figures alone there is little apparent concern in evidence. Finland has approximately 106 000 registered organizations with approximately 2000 new ones founded every year. Three quarters of the Finnish population belongs to one organization or another and over half have joined two or more such entities. By contrast, the number of political organizations has decreased during the past decade, but the number of organizations caring to issues of leisure and lifestyle have grown.

Civil society is defined as a part of society outside government and commerce, where citizens come together to form objectives on which to act upon equally and free of outside authorities. Within that definition, one has a reason to stop and enquire, do these objectives still fully actualize:

In the “The state and future of civil society in the post-industrial society” project, a literature review and interviews with organizations were used to determine how their areas of activity have changed in the past years.

The organizations’ activities are getting more professional and effective, which is not solely good

Up to 1990’s, it was customarily thought that Finnish civil society operates with volunteers and funds its operation with membership fees. Come the 21st century, the reality has changed. Since 1980’s, new public management has spread the models of private sector’s operations to the third sector. Now organizations see their members as customers to whom services and activities are being offered, and the “customers” are expecting them. The slow democratic organizational model has been replaced by centralized leadership; they can react faster to customer needs.

This has led to, instead of volunteering, more organizations are being run by salaried personnel. Increased salaried employees within organizations is one of the most recognizable trends within civil society. Since the beginning of 1990’s, organizations as employers have doubled. Along the recession in the 1990’s, the development accelerated when the public sector’s financial difficulties caused some well-fare services to be transferred to the third sector. Other government directed sociopolitical acts have enhanced the professionalism within civil society as well: when municipals’ self-governing was increased, they started outsourcing well-fare services. At the same time, part of the government funding was transferred to RAY (Finnish Lottery and Slot Machine Association), which had been funding Social and Health Services organizations. After the government’s subsidiary renewal, the municipalities began purchasing public services from third sector organizations. This added the need for salaried employees. The municipals had also participated in instituting third sector organizations to create new models of collaboration. The counties were encouraged into this by Finland’s membership in EU, through which EU funding would become possible.  EU had structural and community funds available for distribution for organizations to apply.

Organizations have begun to operate more and more in accordance to marketing logic. Increasing request of services by Social and Healthcare Sector has brought on an increasing number of private businesses. According to tax administration interpretation, these organizations might compete in the same markets with private businesses. Therefore, they would not be considered nonprofit businesses. This removes the tax-free status from these organizations.

In addition to the tax-free status, the funding of the third sector has been seen to distort competition, thus, at the beginning of 2000, RAY (Finnish Lottery and Slot Machine Association) started to encourage organizations to incorporate their operations. Incorporating has taken place, especially in the social and health sector.

Strict interpretation of EU’s laws related to competition mandates the organizations to the same line when competing services with private companies’ services. The Finnish government has also pushed the organizations to intensify their operations by fusing with public resources and centralizing operations. This, for example in sports sector, has created critical conversation: are organizations led by civil service logic or rather by the manner private sectors operate.

Does the funder excessively direct the operations?

The second worry which surfaced in the research, concerns autonomy. Autonomy means for the organizations that they themselves can mandate their objectives, goals and models of operations. Within the organizations it has been asked, how does the autonomy actualize if sponsoring officials intervene in detail in the organizations’ objectives and operations.

According to organization representatives interviewed, the sponsors have, stricter than before, followed up the usage of the funds. There are two notable reasons in the background: The Examining Office of Government Finances remarked in 2012 to the Ministry of Education and Culture, that usage of lottery funds should be monitored more accurately, and the Ministry began to act accordingly. Giving out funds were transferred from RAY (Finnish Lottery and Slot Machine Association) to STEA (Center for Government Subsidized Social and Health Organizations). Grand proposals were made by the organization representatives to RAY, whereas in STEA, proposals are part of STM’s (the Ministry of Social Affairs and Health) liability. The government’s role has thus strengthened when deciding about social and health organizations’ funding.

Exemplary problem brought up by organizations shows that contributions have been tied to certain projects instead of having organizations themselves decide what to do with the funding.

It has been felt unnecessarily bureaucratic and often with unclear instructions and timelines when applying for financing.

The problems mentioned above have generalized last year. In the organizational barometer, a totally new challenge came up: 15 % of those interviewed were of the opinion that the funder does not understand the organizations’ nature of the work. In the organizational barometer in 2018, only 58 % of social and health organization participants interviewed felt their autonomy sufficient, compared to 80 % in 2016.

When public officials grant public funds from lotteries to third sector operators, they naturally have to oversee the usage of the funds and results.

Organizations proclaim a two-way relationship, where the funder also acts responsively so that their decisions come in time and the interpretation for the objectives to be funded do not change repeatedly.

Civil activity does not disappear, but it changes its form

Professionalism and efficiency in organizations’ operations is not bad in itself. Yet the development direction is worrisome if the organizations drift further toward to public sector service providers or toward operating with the logic of private businesses. Then organizations’ character as operators for social change and creators for new openings threatens to weaken. If citizens do not meet any more within organizational activity, their important role as a meaningful creator of social cohesion might deteriorate.

Informal civic activity, based on networking outside of formal institutions in the “fourth sector” seems to draw more people along at the same time as organizations become more professional. The organizations must balance between professionalism and the peoples’ wishes for informal and spontaneous action.

Text: Julia Jousilahti, Demos Helsinki

Writing is based on the interim report by Government Research- and Clarification Task ” Civic Society and future  in the aft industrial society” (Ruuskanen,P and Faehnle, M. 2019)

Translation: Pirkko Nurmikko