Have foundations got too much power? Stephen Pittam, Sophie Pritchard, Sue Daniels and Andrew Barnett discussed questions arising from Alliance magazine’s September 2013 special feature on Philanthropy and Power at the September 2013 Alliance Breakfast Club held in association with Philanthropy Impact.
Opening the morning’s discussion Stephen Pittam, former Secretary of the Joseph Rowntree Charitable Trust and guest editor of the September 2013 issue of Alliance, began by raising a number of concerns he has about the power wielded by foundations in relation to grantees and to society at large.
Setting the agenda
A key concern for Pittam is the power foundations have to determine where to put their resources. In many cases they have a worryingly small number of board members (the Gates Foundation has just three). While governments can in theory claim legitimacy from popular support where does the legitimacy of foundations lie and who is there to hold them to account?
For Pittam this raises important questions both about what is being funded and about what isn’t, as well general issues regarding the lack of democracy at the heart of grantmaking organizations .’My fear’ he said, ‘is that in this monetized society those with money can determine the agenda.’
From the audience Louise Mousseau from UnLtd added that there is a class issue in funding, with foundation boardrooms being dominated by white middle class people potentially giving rise to a highly skewed agenda.
On the panel, Sophie Pritchard of Edge Fund agreed that funding organizations tend to be run by people from very privileged backgrounds and that part of the challenge for Edge Fund is trying to give a voice to other areas of society.
In response, Andrew Barnett, Director of the UK branch of the Gulbenkian Foundation, disagreed that power is a big issue for foundations. The reality is that people have made money. In setting up an organization for the betterment of mankind, he argued, founder Calouste Gulbenkian would have wanted his foundation to exercise the power it has to maximize its beneficial effect. For Barnett the focus should be less on power than on the performance and practice of foundations.
Philanthropy Impact’s Sue Daniels added that to some extent individual philanthropists have a right to set the agenda. ‘They have made the money, they have worked hard, they have provided jobs , paid their taxes.’ Rosalind Riley of the Brook Trust, an individual donor herself, agreed that for all intents and purposes people can do what they like with their money. If a government wishes to determine the agenda then it can do so through taxes. Outside of this it becomes an individual donor’s choice.
Supporting civil society
But for Pittam this is not the role philanthropy should be playing. In his view 21st century philanthropy’s role lies in building an informed and active civil society to generate new ideas, to challenge the status quo and to act as an ameliorating force to the other centres of power influencing society, one of which is increasingly the financial sector. It was civil society, he reminded us, that was at the forefront of the 20th century’s social movements and yet today 60 per cent of foundations do not accept grant applications from civil society.
Pritchard agreed and for this reason supports simplified and open application processes, noting that closed processes are more likely to benefit organizations already familiar to a foundation, thus reducing the chances of funds reaching more marginalized causes.
However, UnLtd’s Mousseau asked if we were being entirely fair to foundations, pointing out that it’s much simpler to secure funding from foundations than, for example, the government.
Sue Daniels added that less than 50 per cent of wealthy people are donors and it is imperative to encourage more giving into civil society, while Neelam Makhijani from Resource Alliance asked how we could strengthen civil society when investors in organizations, particularly in those operating in the developing world, see them as contractors rather than as institutions in their own right.
Words of warning from Diana Leat, however, who pointed out that criticisms about lack of transparency or accountability could equally be levelled at civil society.
David Wickert of Chapel and York made an impassioned plea for foundations and trusts to open themselves up to the sort of transparency and criticism we now expect from other areas including government and finance. This, he said, is the very thing foundations should be funding.
Barnett agreed with this and said he welcomes criticism. But he also maintained that although foundations can be ‘whimsical’, from his perspective they are open, a view which found some support from the audience. Carolyn Hayman from Peace Direct noted that two of her funders had sent round anonymous questionnaires to grantees providing a space for criticism, while Eve Dallas from the Paul Hamlyn Foundation noted that they have taken part in the Center for Effective Philanthropy’s Grantee Perception Survey. Laura Wigzell from Christian Aid said that they were aware of their power as a grantmaker but they go out of their way to moderate it, using an accountability partnership to make sure grantees are involved in project design and providing a framework for criticism.
Different models of power sharing
Discussing her article on power sharing, Sophie Pritchard offered some more examples of how the influence of funders might be diluted. One example is the Red Umbrella Fund, a grantmaking organization focusing on sex workers whose decision-making panel is 80 per cent sex workers. Barbara Meyer handed over the Southern Partners Fund to the community it hopes to benefit. She also described how Northern Ireland Community Foundation have involved a whole community in setting the agenda and identifying where funds should go, while the Central American Women’s Fund and FRIDA Young Feminists Fund have brought applicants themselves into the process, allowing them to score and give feedback on other applicants.
A problem with perception
Whist disagreeing that grantmakers hold too much power, Barnett agreed that there is nonetheless a perception that they do which can affect the way in which they and grantees act. This perception also concerns Pittam, who noted that in editing the September 2013 issue of Alliance many contributors were reticent to openly voice their thoughts in case it damaged potential grants. Thus a level of transparency and honesty between funded and funder was being lost. Michael Linke of Ben’s Bikes agreed that he doesn’t tell donors the same things he tells his staff, adding that funders aren’t necessarily aware of the perception grantees have of them and how this affects their organizations. Another audience member referred to a report from Beth Breeze that media perception of foundations and wealthy philanthropists is overwhelmingly negative in comparison to that of charities.
A little perspective
As the talk approached its end Diana Leat requested a little perspective. The amount of money foundations have, she pointed out, is not only tiny compared to government, it is a small fraction of non-profit sector funding as a whole. Jon Cracknell of JMG Foundation produced actual figures produced by environmental grantmaking bear this out. But they also make clear that in certain areas foundation funding can account for a much larger proportion of all available funding.
To this point Barnett agreed. ‘It is not about whether we hold power,’ he said. ‘We are just deluding ourselves if we think this power is excessive.’ By way of example his own foundation based in Portugal has funds of €100 million each year, but this amount is many orders of magnitude smaller than government spending. While one can point to the power of organizations such as the Gates Foundation, Barnett argued that Gates is not typical of the general landscape.
With much of the discussion focusing on the negative implications of power, Sue Daniels also pointed out that power can also be something positive – the power of knowledge, the power to provide opportunity. Power can be both soft and hard. By itself money does not guarantee the power to influence events without the knowledge of how to do so effectively.
In some respects the power of organizations such as the Joseph Rowntree Charitable Trust comes from their many years of experience, and who could complain about that?
The Alliance Breakfast Clubs are free to attend. The next Breakfast Club will be held on Tuesday 3 December discussing ‘What will the next generation of philanthropists do?’. If you are interested in attending please email us at email@example.com
The closing date for nominations for the Second Olga Alexeeva Memorial Prize is Friday 18 October, so just two days to go.
The prize will be awarded to an individual ‘who has demonstrated remarkable leadership, creativity and results in developing philanthropy for progressive social change in an emerging market country or countries’. Does this sound like someone you know? This is your chance to draw attention to the work of someone who is doing pioneering work to develop philanthropy.
Read more about the prize and nominate someone here: http://www.alliancemagazine.org/en/content/olga-alexeeva-memorial-prize
The £5,000 prize will be for the individual winner to use at their discretion. All finalists will be invited to attend the Wings Forum, to be held in Istanbul on 27-29 March, where the winner will be announced, and invited to deliver a keynote speech.
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This year’s conference of the UK’s Association of Charitable Foundations (ACF) ended on a European note with a closing speech by Luc Tayart de Borms, managing director of the King Baudouin Foundation (KBF), a leading Belgian foundation.
Tayart, whose foundation’s objectives include promoting justice, democracy and respect for diversity, focused his remarks on the vexed question of how to give citizens a voice in foundations’ decision-making process, which can sometimes seem remote from the needs of beneficiaries.
In an intriguing talk, Tayart explained KBF’s approach which combines ‘top down strategy with bottom-up implementation’. At the heart of this approach is the idea that foundations can use their intermediary role between citizens and the state to foster deliberation, participation and compromise. The fact that 1,700 people are involved voluntarily in KBF’s work is testimony to their convening power. This pool of talent, drawn from a range of sectors including but not limited to civil society, is a source of both legitimacy and expertise – something that foundations are sometimes accused of lacking by their critics. As Tayart put it, ‘KBF identifies the problem but stakeholders identify solutions.’
He illustrated this by reference to KBF’s work on dementia. The management of the foundation was charged by its board with the task of improving public perceptions of dementia in Belgium. KBF built an expert group to create theories of, and strategies for, attitude change. Their work employed a variety of tools including grants but also publications, media programming and advocacy efforts at a European level. KBF’s proximity to major European institutions puts them at an advantage here compared to many of the assembled British foundations who lack such a presence in the European capital.
KBF’s approach clearly has many virtues. But whether it amounts to ‘citizen grantmaking’ is unclear. In theory, the perspectives of a 1,700-person network shape and influence the decisions of the 12-person board. But in practice, Tayart conceded that this is not straightforward. He expressed hope that a new advisory structure drawn from the large cadre of volunteers will improve representation and amplify the voice of those involved in bottom-up implementation.
The continental European voice at ACF, while limited, was a welcome addition to this year’s conference. ACF will be encouraging its members to be good Europeans by reciprocating in even greater numbers at the next European Foundation Centre gathering which takes place in Sarajevo in May 2014.
Charles Keidan is a philanthropy expert and visiting fellow at Cass Business School.
Participants at this well-attended breakout session at this year’s conference of the UK’s Association of Charitable Foundations (ACF) were treated to an absorbing case study of collaboration between the Cripplegate Foundation and Islington Council. The partnership, known as the Residents Support Scheme (RSS), was launched in April 2013 and offers assistance to Islington residents facing multiple disadvantage and hardship. Representatives of the Cripplegate Foundation and Islington Council were on hand to describe their expectations for the partnership and to give some early indications of the impact of the scheme so far.
Several things stood out.
First, it was clear that considerable thought had gone into the structure and organization of the scheme. Governance provisions included quarterly joint strategic management board meetings as well as more informal points of contact. As Ian Adams of Islington Council pointed out, these arrangements built trust and enabled effective working relationships to be established over time.
Second, the ability of each partner to exploit each others assets was striking. For the council this meant benefitting from Cripplegate’s expertise in local grantmaking and their good reputation as a place-based funder rooted in the community. For Cripplegate, the council provided access to data, new funds and decision-makers. Both parties emphasized the added value of the partnership, especially the greater ability to meet a whole range of needs through one approach, while avoiding duplication.
Third, the role of local community stakeholders was critical. This included seven ‘Trusted Partners’ and over 30 referral organizations. This network of stakeholders is helping to bring credibility and legitimacy to the scheme.
Finally, the scheme is committed to best practice. Cripplegate’s Paul Rickard gave an overview of RSS in the wider context of local welfare initiatives and the benchmarks set out by the Children’s Society. The scheme’s flexibility of access, especially eligibility criteria that include benefits to help the working poor, stood out in this regard.
Early indications are encouraging with 2,500 applications in the opening months and a high success rate in handling cases. Islington Council and Cripplegate Foundation have leveraged each other’s capabilities for the good of local residents, reflecting an innovative use of philanthropy with perhaps a not-so-unlikely partner as first imagined.
Charles Keidan is a philanthropy expert and visiting fellow at Cass Business School.
The opening plenary set the bar high for this year’s Association of Charitable Foundations (ACF) conference. The session featured stirring, insightful and complementary contributions on the changing role of foundations from Theo Sowa, Julian Corner and Cliff Prior.
Prior, CEO of Unltd, an engine for social entrepreneurs, argued that the ‘old days’ of clear demarcations and roles between government, business and civil society have given way to new realities shaping civil society. The posture of government has been shaped by retrenchment and the consequent need to mitigate the impact of cuts. The ensuing government innovation and experimentation, Prior argued, has created new challenges and opportunities for civil society organizations. Similarly, the shift among companies from corporate social responsibility to corporate social investment has created new civil society-business innovation. Several examples were cited including the partnership between M&S and Oxfam and Unltd’s own digital social venture partnership with Telefonica. In this environment, conventional sector boundaries matter less than securing effective outcomes for the most vulnerable and disadvantaged.
Prior’s suggestion that the empowerment of local people and communities, otherwise known as ‘asset-based community development’, is a fruitful route for philanthropy was particularly apt as was his reminder that interventions should be underpinned by the decency, trust and value that characterises the best philanthropic activity. Prior’s closing question set a perfect stage for Julian Corner’s presentation ‘does our work leave excluded and disadvantaged people more capable of taking control of their own lives?’
Corner, CEO of the LankellyChase Foundation, identified a clear role for civil society and foundations to ‘germinate’ unusual ideas and challenging existing assumptions. Citing his experience as a civil servant, he noted that many of the innovative solutions to prison reform came from the voluntary sphere with support of independent foundations rather than government. Yet Corner identified a disturbing paradox at the heart of foundations work centred on issues of power: namely that foundations’ independent private wealth, privilege and power are in tension with their public mandate to tackle poverty, inequality and injustice.
Corner proposed two solutions to address this challenge. The first was an urgent need to shift to socially responsible investment. He pointed out that global corporations derive more money from foundations than grantees. To change this, he argued, means translating more of the economic power of foundations into social investment purposes.
The second proposal was for foundations to use their unique assets, including their research, communications and convening capabilities to empower small charities. He also called for foundations to be more accountable to small charities in return for the legitimacy they provide.
Ultimately, Corner’s vision held out the promise that foundations can play a role in addressing social needs but need to mind the gap, both material and psychological, between their wealth and the poverty of their beneficiaries.
Drawing on her considerable experience as CEO of the African Women’s Development Fund, Theo Sowa also emphasized the potential of foundations to advance change. Two aspects of her presentation stood out. First that African philanthropy is rooted in traditions of ‘solidarity’ as much as financial largesse. Second, she emphasized that although the need for partnership and collaboration between foundations and the rest of civil society was essential, foundations should also make use of their non-economic assets as well as financial power.
Her call for humility chimed well with her argument that the new framework for the International Development Post 2015 should think globally about poverty rather than treating it as just a ‘southern’ problem.
In asking difficult and searching questions of foundations, this impressive opening plenary set the tone as well as the scene for much of what followed.
Charles Keidan is a philanthropy expert and visiting fellow at Cass Business School.
This article will be published in the forthcoming issue of ACF’s Trust and Foundation News.
The Council on Foundations’ 2013 Fall Conference for Community Foundations, held on 22-25 September in San Diego, marked a unique opportunity for CAF America to speak directly with community foundation decision-makers, thought-leaders and strategists to connect and learn the best ways to continue advancing the common good.
With a diverse contingent of over 950 registered attendees, this year’s Community Foundation Conference provided relevant and thoughtful insights on current trends affecting community foundations’ philanthropic footprint. Discussions on a variety of topics including ‘the suburbanization of poverty: surprising challenges and regional solutions’; ‘donors, data & population demographics’; and ‘implementing healthcare reform: what community foundations need to know’ gave participants a holistic view of the community foundation landscape and best practices for serving their respective constituents.
While the conference primarily focused on US-centric topics and issues that community foundations encounter domestically, the level of engagement and interest in international philanthropy was pleasantly surprising. One particularly insightful session, entitled ‘US–Mexico border philanthropy partnership’, specifically highlighted community foundations’ role in international philanthropy. The session included a discussion on the availability, accuracy and transparency of information on the philanthropic sector in Mexico and the US–Mexico border region. Participants first explored how to identify trends in donations and donor institutions in Mexico and then worked together to best understand and define community foundations’ role in cross-border philanthropy. These themes benefited the session as a whole by enabling the conversation to unfold on a much larger scale.
As the CEO of CAF America, community foundations throughout the nation have shared with me their difficulty in finding a credible outlet to best serve their donors’ global interests. For years, it has been thought that only larger community foundations had the ability to serve their donors on a broader scale. Now, community foundations of all sizes have found it easy to partner with intermediary organizations such as CAF America to enhance their capacity and scope. I was impressed by the donor-centric approach of the community foundations represented at the San Diego conference: their staff showed such dedication to their donors’ global needs through inquiries and genuine enthusiasm about best practices in global philanthropy.
It is readily evident that the community foundations offering an international component to their donors are better equipped to serve the diverse interests and passions found within their local communities. In the larger framework, there has been a departure from the notion that international philanthropy is merely a ‘value-add’; on the contrary, it is rapidly becoming a vital component to the overall health and sustainability of such organizations. I look forward to next year’s Fall Conference for Community Foundations as it will undoubtedly provide another opportunity to gain valuable insights on the dynamic and indispensable field of philanthropy.
Ted Hart is CEO of CAF America.
"The entire success of an international intervention can be put in jeopardy if corruption is not addressed early on in the process. Corruption in conflict can perpetuate violence and opens the door to organised crime. Yet guidance on preventing corruption is largely absent from almost everything to do with peacekeeping."
Like practically everyone else I know, I’m a regular user of Wikipedia, and I have often marvelled at the thought of all those thousands of people writing and editing Wikipedia entries. I still don’t know who they are but, having interviewed Anasuya Sengupta, Senior Director of Grantmaking at the Wikimedia Foundation, I do have an idea of the role grantmaking plays in supporting them. ‘Grants go to national chapters around the world as well as to small and emerging groups and individuals who are helping build knowledge on Wikipedia and its sister sites,’ explains Sengupta. ‘They support both online work – making the editing environment easier for contributors, running edit-a-thons and workshops to help people understand how to edit Wikipedia, etc – and offline outreach, from going into schools and colleges and informing people about Wikipedia to much longer partnerships with galleries, museums and archives to help them understand the advantages of having their content in the public domain.’
Another thing that particularly interested me was the process by which grant proposals are developed and considered at the Wikimedia Foundation. The September Alliance special feature on philanthropy and power gives examples of a variety of different ways in which funders are sharing power with beneficiaries. One possible downside of these models is that the processes involved are often resource-intensive. They take up a lot of both funders’ and beneficiaries’ time, making them perhaps more practical for small funds. But the Wikimedia Foundation will distribute around $8 million this year, and its grantmaking is totally participatory.
‘We’ve always been transparent about our grantmaking,’ said Sengupta. ‘Every grant proposal comes to us on wiki through the individual or group that is applying for it. Community members – active participants and editors in one of the Wikimedia projects – can look at the proposals and comment on them. Other community members who are on grants review committees then review the proposals and offer their suggestions and advice as well as their recommendations to the foundation and its board.’
Click here to read more …
Caroline Hartnell is editor of Alliance magazine