ITALY'S THIRD SECTOR ON CONSOLIDATION COURSE.
| Verfasser | Barbetta, Gian Paolo |
| Posten | Statistical Data Included |
Abstract
Until a few years ago, the organizations belonging to the third sector were relatively unknown to a large share of the population, to the media and probably also to the legislator. This is not the case anymore; in fact, nonprofit organizations have gained wider public attention; they are playing a more significant and increasingly autonomous role in the Italian welfare state.
Introduction
Over the last decade, the Italian society devoted a great amount of attention to the so called Third Sector. Until a few years ago, the organizations belonging to this sector were relatively unknown to a large share of the population, to the media and probably to the legislator himself. This is not the case anymore; in fact, nonprofit organizations have gained wider public attention and now play a more significant (and increasingly autonomous) role in the Italian welfare state. Although statistical data are still missing, a common feeling is that nonprofit organizations are growing in number and strength, therefore gaining a more significant role in the Italian economic and social landscape.
Several factors explain this new attitude toward nonprofit organizations: first of all, changes in the demographic, social, economic and legal environment have to be mentioned. Thanks to a significant increase in the average life expectancy and because of a rapidly declining birth rate, the Italian population is growing older. Moreover, while the country is still confronted with a very high unemployment rate, the number of women with a full-time job is now significantly higher than just a few years ago, especially in northern higher than just a few years ago, especially in northern Italy. These changes in the age structure of the population and in women's access to the labor market generated a whole set of new needs (from children's care to care of the elderly) that the public welfare system has not been able to tackle rapidly. These needs are now generating (although to a quite limited level) demand for new services that are provided neither by the 'state' nor the 'market'. Moreover, private (and public) demand for services is also growing in areas not closely related to the traditional welfare sector, such as the cultural and the recreational areas.
Furthermore, the traditional structure of the Italian welfare state has been under attack because of its failure in providing services of good quality and because of its high costs; while criticism concentrated particularly on the pension and the health systems, public provision in the fields of social and educational services has not been immune against difficulties. These challenges to the Italian system of welfare service provision generated two different trends. The first one is a reduction of direct public expenditure in the welfare area (more relevant in the pension system, but quite evident in health and social services as well) and a tendency to decentralize service provision by transferring it onto the local authorities. The second one can be seen in a heavier reliance on private provision of services as a cost-effective way of serving social needs.
These are some of the reasons why quite a lot of people, as well as many public authorities, started looking at nonprofit organizations as a possible cost-effective answer to new needs emerging in the sector of social and health services. Therefore quite a few new organizations (associations and especially social cooperatives) have been created to answer this new demand coming from local public authorities and, although to a far more limited extent, from private citizens. Scholars agree that the number of Italian nonprofit organizations is growing, that older organizations learn to deal with new markets and behave more and more as economic entities rather than as missionary's clubs.
This attention has been accompanied by new legislation that deals with the Third Sector. A law passed in 1997 (d.tgs 460/1997) reorganized the many fiscal provisions that regulate the so-called enti non commerciali (non commercial bodies); likewise, this law reduced the discretionary power of the fiscal authorities when dealing with those entities. Moreover, the law introduced and regulated a new fiscal entity, the so-called ONLUS or Organizzazione Non Lucrativa di Utilith Sociale (nonprofit organization pursuing goals of social utility). This has been in fact the very first attempt by the Italian legislator to introduce a clear definition of nonprofit organizations, to allow for tax exemptions to Third Sector entities as well as to acknowledge extensive tax deductions on donations to nonprofit bodies.
The result is a blend of the American and the Italian tradition: ONLUS are banned from distributing profits (under any form) to members and associates, must act in specific fields and should pursue goals of 'social solidarity'. They receive advantages such as exemption from some taxes and other payments to public bodies, while donors (both individuals and firms) can deduct their donations to ONLUS.
Meanwhile, new developments have to be reported from the field of foundations. Italy has a relatively limited number of foundations; most of them are 'operating institutions' with only a few grantmaking organizations. Moreover, the endowment of most Italian foundations is very limited, so that they have been considered as 'sleepy institutions'.
Over the last years, foundations have been re-discovered as a means for running nonprofit activities and as philanthropic intermediaries. New foundations have been established at an increasing rate and foundations now act in fields as diverse as 'lyric theatres' and hospitals; some 'community foundations' are also being established in northern Italy.
Moreover, new and large grant-making foundations have been created as a result of the transformation (and the respective privatization) of a large part of the Italian banking system. These new grantmaking institutions (about 100 foundations) rely on endowments of about 30 billion Euro and their annual spending capacity should not be far from 1 billion Euro. These organizations represent a real opportunity for further development of the Italian nonprofit sector.
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Definition, Size and Role of the Italian Nonprofit Sector
Until a few years ago, not many Italian citizens could provide a clear definition of 'nonprofit organization'. While many knew about the 'voluntary movement' and the large number of persons volunteering their time for deserving causes, most people were not conscious of the existence of the array of private organizations providing social, cultural and health services to the population.
This, of course, didn't mean that nonprofit organizations did not exist in Italy, but rather that they were mixed up with other organizations and that they were not recognized as part of a specific sector of the economy. The wide extension of the public sector, together with the existence of a blurred border between public and private organizations, explains this confusion and, at the same time, accounts for the limited role played by nonprofit organizations in the provision of welfare and cultural services. The unclear distinction between private nonprofit and public organizations is deeply rooted into the Italian history and legislation, as the next paragraph will show; it has only been throughout the last decade that a clearer differentiation between the two sectors has emerged.
Nowadays, most people understand that the nonprofit sector is the vast and variegated sector including associations, foundations, social cooperatives and other kinds of organizations that redistribute wealth or produce goods and services that benefit the population at large without distributing any profits to their members and employees.
Although most people now understand the words 'nonprofit sector', the Italian legislation is far from being clear as far as the definition of 'nonprofit' is concerned. Moreover, the emergence of the nonprofit sector as a distinct entity, separate from the public and the private for profit sector, has not yet produced a reliable set of statistical information. The only attempt to estimate the size and dimensions of the Italian nonprofit sector was undertaken by the Italian part of the Johns Hopkins project in the first half of the nineties, with data relating to 1991. Beside that, only minor sectoral estimates have been produced, so that a up-to-date picture of the whole sector is not yet available. A new effort in this direction has recently been undertaken by the Italian team of the Johns Hopkins Project together with Istat, the national statistical office. Results should be available in a couple of years.
Therefore, my description of the Italian nonprofit sector will rely on data relating to 1991. Moreover, I will try to describe - in a sketchy and often non-quantitative way - the most relevant changes that took place in the last eight and nine years; these changes should justify the thesis that the Italian nonprofit sector is 'on a consolidation course'.
Employees and Volunteers
Although much smaller than those of other countries, the Italian nonprofit sector is by no means of trivial dimensions. In fact, in 1991, it employed approximately 418,000 full-time-equivalent persons, representing 1.8% of total employment for the country and 2.9 % of the...
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