Three reflections after a year spent with funders

I’ve spent a lot of time this year listening to funders; on the phone; at roundtables and during the three retreats we’ve held this year on Wasan Island as part of the SIX Funders Node.

This programme supports philanthropic foundations from around the world to work more effectively and authentically, and in 2019 we held retreats on ‘Philanthropy and the private sector’, ‘Risk, legitimacy and philanthropy’, and ‘Social cohesion and the role for philanthropy’.

It seems 2019 has been the year that many have started to rally against philanthropic foundations. Historically, and in our binary way of dividing the world into heroes and villains, foundations have generally been seen as a force for good. This is now faltering, as the 2018 Edelman Trust Barometer reports ‘a new phase in the loss of trust’ alongside the spreading of fake news and a rise in populism. Popularised critiques like Winners Take All and Decolonizing Wealth have helped this sceptical attitude towards philanthropy seep into the public psyche.

Across our Wasan Island retreats, we had representatives from family foundations, corporate foundations, community foundations, nonprofits and corporations. Here are some of the things I’ve noticed from much of this year spent with funders:

Questioning the role of the board
The role of the board has come up during every retreat we’ve held. Many progressive foundations are devolving power away from their board in order to start to shift entrenched hierarchical power dynamics, and to remove bottlenecks and streamline decision making. Lankelly Chase, for example, set up a Governance Action Inquiry to look into what governance could and should look like in organisations that are trying to think and act systemically. 

In the nonprofit sector, boards severely lack diversity – one in 12 trustees are named either David or John. Yet, when we talk about accountability, funders often mention both being accountable to their boards and to the communities they serve. Can foundations be truly accountable to both when these two groups statistically look nothing like each other? More importantly, how can we be sure a foundation is working in the right way, and engaging the right people in communities if this gap isn’t closed?

There is, however, momentum towards this changing, and we’re particularly excited to watch how initiatives like the Diversity, Equity and Inclusion Coalition, being led by Luton and Bedfordshire Community Foundation, and the Young Trustees Movement start to disrupt the status quo.  

Increased interest in the alignment of investments
Amidst the conversation about legitimacy and accountability in the philanthropic sector, one piece of the puzzle that gets little attention is the investment of a foundation’s assets.

At our retreat on ‘Philanthropy and the private sector’, we spoke about how those from corporations can feel distrusted by those they try to collaborate with from the philanthropic sector. There’s a sense that capitalist drive for profit and the collateral damage of the environment and social welfare is quite apart from philanthropy, rather than its origin story. 

Nevermind that the accumulation of a foundation’s endowment has most likely played a role in creating and sustaining social inequality (you only really need to look so far as Carnegie’s Gospel of Wealth), the investment of an endowment often continues to sustain inequality. There is little open conversation in the sector about this irony, even when assets are invested in the very industries that have a negative impact a foundation is working to counterbalance. However, divestment from fossil fuels is on the rise – and includes big names like Rockefeller. This doesn’t necessarily translate into focusing on social rather than financial returns on endowments, but it seems that slowly foundations are beginning to feel more comfortable considering and discussing the alignment of their investments and their mission. 

Leaving a legacy
During our retreat on ‘Risk, legitimacy and philanthropy’, we discussed how real risks to philanthropic foundations are few and far between. Instead, reputational and personal risks are felt more keenly and play a bigger role in behaviour change. Again and again, the question ‘how do we have more skin in the game?’ was posed. 

This conversation about reputation and personal stake happened alongside some leaders moving on from their organisation, and it made me think about how this sector considers the notion of legacy. In many ways, foundations are built on legacy, yet surely the legacy of these sorts of organisations should be them ceasing to exist. When this is coupled with the biggest risks to a foundation being personal and concerning reputation, how are foundation leaders thinking about legacy, both their own and their organisation’s? And how are values, experiences and knowledge shared within an organisation to ensure it is kept moving in a certain direction?

I’m looking forward to continuing to explore these ideas, and many more, over the next year as our Funders Node programme evolves. We’re expanding the programme to include new voices, different kinds of foundations and moving to new regions. We’re working hard to make the Funders Node a pioneering reflection of how we think the philanthropy sector should look, to be challenged and challenge, not a reflection of how it is at the moment. In the process, hopefully we’ll push philanthropy to get there quicker. 

Sophie Monaghan-Coombs is Strategy and Development Manager at Social Innovation Exchange

To learn more about the insights from our retreats this year, please read here: ‘Risk, legitimacy and philanthropy’, and ‘Social cohesion and the role for philanthropy’.

This article was originally published on Alliance Magazine. To read the original click here.