By Silke Boenigk.
Given the global pandemic, the policy focus in Germany is the survival of the nonprofit sector as an important provider of social services. Traditionally, the sector has acted on the principle of subsidiarity, fulfilling services of the welfare state as an alternative to direct government activity. Other pressing issues – for example, the limits on political activism that are tied to nonprofit status and the accompanying tax advantages, or the legal barriers towards professionalization and commercial activity of nonprofits, or questions of liability for volunteer boards – have taken a back seat for now. COVID-19 has underscored the fragile nature of government-funding schemes for nonprofits that provide services of the welfare state.
Early in the pandemic, the German government implemented legislation to guarantee a steady source of funding. However, this financial rescue ended. Even nonprofits falling into the category of “welfare-state service provider” may soon struggle to survive financially. Nonprofits falling outside that category are hit even harder.
Many nonprofits may soon not be able to provide important services for their beneficiaries. This isn’t acceptable, given the significance of the sector in meeting people’s needs and its role as a social-service provider. New legislation is needed to ensure permanent, financial support for nonprofit providers of welfare-state services, as well as for other nonprofits serving marginalized groups.
Only after such legislation is in place and regulatory issues are solved can the policy focus shift towards the other pressing questions. Policy experts in nonprofit organizations should make themselves heard at all government levels and push towards a solution for the common good.
Silke Boenigk is a Professor at the Department of Social Economics in the Faculty of Economics and Social Sciences, University of Hamburg. Boenigk is on LinkedIn. Photo of Hamburg, Germany, courtesy of Robert Bye & Unsplash.
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