Daniel Ferrell-Schweppenstedde

Policy and Public Affairs Manager

Charities Aid Foundation


19 November 2019

Nesta just released their Foundation Horizon Scan (in collaboration with the Centre for Public Impact), which looks at the changing landscape in policy and society and how foundations across the globe can play a larger role in addressing change. The report is accompanied by a provocations paper for which CAF’s Rhodri Davies wrote a piece on the impact of AI and technology on how foundations and trusts will operate in the future.

The report identifies three main challenges – legitimacy and impact – that foundations face and three (non-exclusive) roles that they can take in addressing them (stabilisers, modernisers, transformers). Nesta hosted a lively launch event that brought together a wide-range of people from the foundation world to discuss foundations’ role in terms of three key topics – time, power, and collaboration. Here are some impressions from the event (credit for most of the thoughts should obviously go to the people in the room and the panel!).

On time

Some foundations are ‘working in murky waters over the long haul’ and are focusing their work on social and systems change over an extended time horizons in larger partnerships. However, this requires that the governance of the funder is set up to do this so it might not be something for everyone (and the diversity of funding approaches and organisational structures was also highlighted as strength of the sector). Furthermore, setting up a new organisation (or programme/project) with a view to keeping it going over a long time period brings the risk that if not implemented correctly, it becomes nothing more than an expensive vanity project. Cost can also be an up-front barrier: as being able to take a long view also often comes down to resources, with many trusts and foundations having very few staff.

Nevertheless, some funders are in a position to invest over long time horizons and are set up as independent organisations in perpetuity. They increasingly recognise time as a ‘superpower’ and try to ‘gift time’ to grantees delivering frontline services who don’t have the luxury to take a step back and reassess their activities and strategic outlook. Time can be also used differently: for instance working as a stabiliser in the charity sector through investments into anchor organisations or infrastructure is another thing that can be done over a longer time horizon. But internal change processes take time. For example, aligning mission and endowment investment can take up to six years to decide upon and another four to implement.

There was also a discussion on what time horizon we are talking about. Just getting to 2030 and taking a ten year view and then reassess can be already a ‘long view’. Some people were wary of taking 20-30 year views, because it could also lead to putting off crucial decisions that need to be taken now. Some big impact and long-term projects need immediate action. Some funders are also, just by the nature of their work, focused on more immediate need. Framing and linking up with long-term goals (like the SDGs) is crucial as well. There was an impression that funders in England did not focus much on the SDGs as a lens for their work, whilst the situation seems different in Scotland, Northern Ireland or the US.

horizon scanning binoculars

On collaboration

Most future challenges will be riddled with complexity and addressing them will require collaborative and system change approaches. But collaboration is more than just organisations and individuals being in a conversation with each other. It also requires the right vehicles to be in place. Philanthropy in the US seems to be more advanced in this regard, and best practice examples for mission-driven collaboration are more prominent.

There is an increased awareness among UK funders around power dynamics and effectiveness and the related trade-offs (e.g. if you want to be ‘strong go with others’, if you want to be fast go alone’) but ‘egos and logos’ were still mentioned as a barrier for collaboration. Talking about contribution rather than attribution can help to foster collaboration. Established trust among players that work in the same field can also ‘turbo-charge’ the process.

Funding philanthropy infrastructure should be seen as investment and not an overhead because it becomes a vehicle for nurturing collaborative efforts and curating philanthropy ecosystems. The #LiftUpPhilanthropy movement is advocating for this also on a global level. Mission-driven collaboration and systems change approaches require a different skill-set from grant-making that require investment, and trustees may need to be taken on a journey to understand the value of it, as well to see if there is an appetite to move in this direction.

On power

Ideally power is ‘to be harnessed to mission and shared for good’ but there is a wider recognition that most funders can achieve impact only through their grantees, and that success in addressing future challenges will be defined by the extent to which people are put at the heart of institutions and the ability of organisations to work on the ground. In particular, applying system change approaches should go hand in hand with addressing power dynamics and innovation in governance and funding approaches; as well as a higher exposure to a variety of differing external views and bringing disadvantaged people and minorities to the table so that they can have a stake in decisions on ‘how to divide the pie’ and ensure that funders don’t represent ‘white spaces’.

Moving more towards equity-based practices should be at the forefront of funder’s thinking. In the context of philanthropy as a whole, this conversation probably also requires the involvement of other ‘gate-keeper’ professions like lawyers and wealth and philanthropy advisors, because there are a variety of vehicles available that differ from the independent endowed trust that pursues a charitable objective in perpetuity. Conversations around power dynamics can mean different things depending on the vehicle. Sharing power can also mean different things depending on the process and point in time. Some funders have a very participatory process and involve communities upfront when setting up a strategy and defining priorities. Implementation of those priorities can then take place with less external involvement but having feedback loops in place.

Some funders are more intertwined with the communities they serve and for them power sharing will be less about ‘starting to distribute power’ but making sure they are still reflecting their community over time. Trustees and other senior staff can also have a lot of access to people power and it was mentioned that they could use their access more to affect policy change. Philanthropy still holds a lot of power in terms of putting a model on the charity sector and the way it operates, down to the culture and norms it runs on (they can exert isomorphic pressures’).

Overall, the philanthropy landscape was seen as sitting in the context of a decline of trust in institutions across countries (something that CAF has also observed in its research). While philanthropy was met with ‘civic gratitude’ in the more recent past it is now under more ‘civic scrutiny’ – something which probably has to be embraced in the age of social media and increased transparency driven by technology.

Part of this discussion will be also addressing the question of ‘where the money comes from’ – separating endowment and investments on the one side and mission fulfillment on the other will be increasingly less feasible.

Differences across contexts and outlooks

Most of these issues are relevant across contexts, but there are some differences in terms of regulatory regimes which mean that a specific UK-lens is required when discussing them here. For example foundations are not distinct legal entities as they are in many other countries and have to follow charity law and regulation for the most part. This means information on their trustees, assets and activities is in the public realm; something which is not the case in many other countries. Most European foundations are operative and not grant-makers. Discussions around openness, transparency and power-sharing therefore have different starting points.

However, philanthropy is on the rise globally, with many new players entering the field in countries like India, China and Russia, while there is consistent growth of the field in philanthropy hotspots like the UK and the US. Nesta’s report is making a valuable contribution to the development of the field and highlighting some of the core questions that funders will need to address in the next decade or more.