Philanthropy and Democracy / Philanthropy and the State / Philanthropy in Sweden

The Democratic Challenges of Philanthropy in Sweden

Editors’ Note: Noomi Weinryb and Jaakko Turunen continue HistPhil‘s forum on philanthropy in Sweden

In the historical context of the Swedish welfare state, we will here discuss philanthropy as an economic expression of pluralism, which may be interpreted as historically antithetical to democratic practice in Sweden. We will hypothesize what an expansion and development of philanthropy could mean for the idea of the “people’s home” [folkhemmet] that was the bedrock of the Swedish welfare state, and still continues to inform much of civil society-state relations in Sweden. The “people’s” home in this context is understood as a political project of expanding democracy –a universally conceived right to participate and influence – from the sphere of politics to encompass economic and social relations in society. In other words, democracy in the Swedish context is understood as a broad and active form of citizenship for all citizens alike.

Over the major part of the 20th century, during the construction and heyday of the welfare state, Swedish civil society at large, and philanthropy in particular, worked in tandem with the state. The Swedish welfare state, contrary to the common belief, did not eradicate civil society, but it was most active in areas such as culture, sports, and opinion building and tended to stay away from the core welfare services of education, medicine, and support of groups such as the elderly and unemployed. While citizens contributed primarily with their time and resources to shape culture, sports, and opinion building, core welfare services were subject to public funding. This public funding of universal welfare services and social rights created an expanding neutral and secular space for the exercise of citizens’ political, economic, and cultural rights; emancipating the citizens from traditional bonds of subjugation whether social, economic, or cultural in nature. One of the most conspicuous examples of this emancipation policy was the establishment of something called the wage-earner funds in 1983. The wage-earner funds aimed to empower the workers and give them – in addition to their old right to oppose capital with a strike – also the possibility to influence private employers by investment through their unions. Workers’ ability to take part in steering economic development came to be known as economic democracy. The idea of economic democracy was closely allied with the overall aim of the welfare state to balance inequalities in society. The aim was not primarily that of compensation of economic inequalities by redistribution, but rather by emancipating the individual citizen from different relations of dependency. This created a bond between the individual citizen and the neutral and secular state that guaranteed the individuals’ liberty and means to exercise their rights.

Private giving in this context had a limited space and was largely confined to research funding, a neutral and secular area from the state’s perspective. Large research supporting foundations were set-up owning controlling shares with preferential voting power in publicly listed companies. By allocating ownership and control in these foundations, gift and inheritance taxes could be avoided, and the control of the companies remained in a closed circle of people, primarily families. The prominent families at the helm of these companies often engaged in a continuous corporatist dialogue with the state concerning their business interests. The most well-known example of this is the corporate sphere controlled by the Wallenberg family, where the central foundation Knut och Alice Wallenbergs Stiftelse, founded in 1917, today has assets of 11 billion USD, and had up until 2016 donated 3 billion USD to charitable purposes. The very specific, and restricted, philanthropic construct of these research supporting foundations was far from a philanthropic pluralism, where any individual would receive tax breaks and where the size of wealth, and thus of potential gifts, of that individual would determine the possible scope for influence.

The state’s indirect presence in the field of philanthropy is further manifested in the development of the wage-earner funds. Political opposition to the social democratic project that had created the “people’s home”, and together with it the wage-earner funds, increased. Especially the notion of economic democracy faced severe criticism from the right-wing political parties and as they came to form the government in 1991, the wage-earner funds were dismantled and the capital was relocated to research funding foundations – again an area that could be seen to contribute to the neutrally and secularly conceived common good. Such foundations based on the capital re-allocated from the wage-earner funds were for example The Foundation for Baltic and East European Studies, The Swedish Foundation for Strategic Research, and The Knowledge Foundation. These state-created, yet formally private autonomous foundations, support a wide range of research spanning from natural to social sciences and humanities.

In other words, even as political parties and ideologies have shifted over the decades, and even as they have debated the value of such welfare state programs such as wage-earner funds, the Swedish governments have remained relatively consistent on the general scope provided for philanthropy.  All in all, we can conclude that in the context of the Swedish welfare state, the space carved out for philanthropy has traditionally been focused on research funding, something that can be seen as a common good rather than supporting certain social groups, whose wellbeing has been the responsibility of the welfare state.

Against this background of effectively marginalizing philanthropy’s influence on the core functions of the welfare state, three recent trends appear significant. Firstly, there are organized interest groups specifically promoting philanthropy as beneficial and important for the development of Swedish society. These groups include Swedish Entrepreneurship Forum, Stockholm Philanthropy Symposium, and Stockholm Chamber of Commerce, and they associate philanthropy closely with entrepreneurship, pointing out that a larger philanthropic presence would generate societal improvements, innovation, and economic growth. These arguments often cite the US history of economic and entrepreneurial success as brought about by philanthropic activities. Such arguments, however, conflict with the tradition of state–civil society relations in Sweden. This is because the common understanding of democracy in the Swedish welfare state context builds on a neutral and secular sphere, where the equal exercise of rights is possible. In this sense, the state–civil society relations in Sweden are democratic rather than pluralist: civil society and philanthropy enjoyed autonomy and thrived because they existed in a continuous dialogue – or dialectic if you wish – with the state and created a mutually beneficial dynamic. The initiative for economic change in society was firmly in the hand of the state, but it was subject to constant checks by democratic procedures and the opinion-building function of civil society.

Secondly, in Sweden, as elsewhere in the world, scholars are observing new forms of organizing gifts through crowdfunding platforms and other social media sites. In Sweden, these funding streams are conspicuous as they are increasingly geared towards individual involvement in those areas that have historically been the prerogatives of the Swedish welfare state, such as supporting those who cannot support themselves; providing healthcare, food, and housing. This was for example the case in the fall of 2015, when thousands of refugees entered Sweden in a very short period of time. Civil society movements such as Refugees Welcome and Vård på Centralen [Healthcare on Stockholm Central Station], donated time and money to essentially replace state functions.  These were mass movements providing welfare services, rather than focusing on contentious politics. Nevertheless, their very existence challenged the mandate of the welfare state.

Thirdly, over the past decade new wealth has been accumulated, much of it created in the Swedish digital industry in companies such as Klarna and Spotify. Some of this wealth has been allocated in philanthropic endeavors, finding new forms of donor activism often related to environmental and societal sustainability. Such initiatives include organizations such as Zennström Philanthropies and Norrsken Foundation. Although not specifically focused on the welfare state, these funders are using private funds to alter societal practices, in essence introducing new philanthropic models in Swedish society.

In sum all three developments point towards a new role of philanthropy in the Swedish welfare state context, where donors, big and small, become more proactive to influence what once was called “the people’s home”. These new ways of giving pave the way for altered philanthropic practices, where giving is not limited to research, culture, and sports. Instead, the individual citizens can provide funds, small or large, to essentially supplement the state in its welfare provision and thus challenge the prerogative of initiative of the state in promoting social change.

The biggest challenge of these new practices concern the more conceptual change contemporary philanthropy implicitly brings to state–individual relations in Sweden. The Swedish welfare state, the wage-earner funds, and the universal social security, all aimed at balancing inequalities in society by emancipation and democracy; the redistributive aspect was important, but secondary to the overall democratization of economic, social, and cultural relations in society. To achieve this, the welfare state created an unusually broad secular and neutral space for individual citizens to cherish their individuality – with the support of the state. Philanthropy – as it is recently conceptualized and developed in Sweden – seeks to reintroduce a non-neutral, potentially also non-secular, and most importantly private funding of public goods. By advocating pluralism and segmented interests, philanthropy comes to contest the very foundational idea of the Swedish welfare state as the individual’s economic, social, and cultural emancipation through universal dependency, where every individual is made to depend on the state for democratically decided welfare services. This makes the rich and the poor equally rely on and benefit from the common state for the health care, education of their offspring, and care for their elderly parents. Pluralism in this context is limited to what can be democratically agreed on. An expanded philanthropic presence in Swedish society thus also entails challenges in the reconfiguration of the local democratic practice, aimed at maintaining the sphere of democratic neutrality and secularity for the prosperity of each and every citizen alike.

 –Noomi Weinryb and Jaakko Turunen

Noomi Weinryb has a PhD in Business Studies from Uppsala University, and is an associate senior lecturer at Södertörn University, Stockholm, Sweden. Her research is centered on issues of accountability and organizing, comparing nonprofit organizations to public administration. She also makes cross-national comparisons across welfare regimes. Jaakko Turunen has a PhD in Political Science from Uppsala University, and is a researcher and lecturer at Södertörn University, Stockholm, Sweden. His research focuses on language and politics, civil society, and social media’s role in political communication. His previous research has focused on Central and Eastern Europe and he is an editor of the Finnish Review of East European Studies. 

Acknowledgments: The authors want to thank Stefan Einarsson for excellent comments on this text. For the photo of Jaakko Turunen, the authors offer special acknowledgement to Sophie Landwehr Sydow. 


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