How not to lose trust and miss a window of opportunity

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As the general set up of Europe underwent fundamental changes in 1989, it seemed that European foundations were getting their act together to help trigger them. One might remember this as we celebrate the EFC’s 30th birthday, which unintentionally coincided to the day with the fall of the Berlin Wall. What an opportunity! Philanthropy, one of the oldest and most consistent cultural achievements of mankind, seemed prepared to have a real role in mapping and shaping the future of European society. But did it?

When I first got to know the EFC, nearly, if not quite 30 years ago, European philanthropy was very different from what it is now. I remember meeting in Brussels to try and establish a European foundation database – and realising that databases (of sorts) at national level existed in only two countries (Poland and Germany). There was no way to compare foundations in different legal environments as virtually no research had been done, and most Europeans probably did not know what a foundation or trust was. Besides, even the largest European foundations hardly knew each other. Civil society as a concept, while not as a reality, was only just emerging, and most foundations would not have seen themselves as belonging to this exciting and highly relevant societal arena. In most European countries, the surge of new foundations had yet to start, and few existing foundations were prepared to actively contribute to social change or be part of deliberative democracy. They would stick to their own traditions and not care very much about what was going on outside their immediate scope of activity. In short: not many foundations made the best use of the opportunity awarded them in 1989.

Thirty years on, philanthropy in Europe is arguably different. The attitudes and outlooks of foundations have changed. Empirical and theoretical research have been carried out. The long history of foundations has been studied, and some attention has actually been paid to the big question of whether modern democracies should or should not favour private philanthropy. However, the more foundations there were around, and the more visible and active they were, the more obvious it became that they were not beyond criticism – not only for what they were doing, but also for being too powerful, too influential, too set on preserving social inequality.

Looking at today’s EFC membership, you realise a lot has happened. The number of members has mushroomed, as have joint activities. Younger, more proactive foundation executives and staff, and indeed a number of foundations like my own that consider themselves think tanks rather than grantmaking bodies, have emerged and aspire to have a voice at both European and international level. “To make a difference’’ has moved up on many foundations’ agendas. Some long-standing habits have been challenged: Should foundations really demonstrate how innovative they are by never working with a partner for more than three years? (Europe is littered with the ruins of projects that could not have possibly survived after three years of funding.) Does it really make sense to limit oneself to funding a project and refuse to even consider funding overheads, let alone the partner’s organisational development? (Civil society could be so much stronger and resilient today, if funders had helped CSOs to develop.) And should foundations be as keen as some are to co-fund government programmes? (Doing so may carry some perks and honours, but is that really the point of philanthropy?)

Some trends have come and gone: one that has become less popular is to follow the American model. Not only has general disenchantment replaced post-WW II transatlantic solidarity but more important, it has become evident that European foundations have a long tradition of their own to build on. For a while, another fashionable trend was that foundation activity should make an impact. This was certainly called for at a time when many did not really care what happened after they had made a funding decision – based quite often on personal relationships and matching attitudes, rather than on the merit of the project itself.

Today we realise that impact alone cannot serve as a foundation’s unique proposition and will not save it from being mistrusted, as all large organisations are at this point in history – largely by their own fault, by behaving arrogantly, not listening, and not being respectful to others. Like other institutions, foundations today face the challenge of preserving, and in some cases, regaining trust. Their licence to operate depends on showing that their contribution is different and needed. To this end, impact alone is not sufficient. On the contrary, focussing on impact may well serve to underpin the criticism that is increasingly being voiced – incidentally, on both sides of the Atlantic. Trust, which famously arrives on foot and leaves at a gallop on horseback, depends on an amalgam of rational and emotional reasonings. Besides, as Europe has lost its status as the centre of the world, relating to other global regions on a level playing field has become one of the essentials on which trust is built.

In an attempt to face these challenges, my foundation, being devoted to the study and empowerment of civil society and philanthropy, is now working on a new project: Philanthropy.Insight. Guided by former OECD executive Rolf Alter, we want to work with foundations worldwide, and with experts from academia, think tanks, and civil society in looking at philanthropy under five sets of criteria: commitment, public purpose, relevance, performance, and accountability. Each of these ranks equal in determining whether and to what extent a philanthropic institution deserves the trust it needs to fulfil its mission and to be considered legitimate. In a 1st phase, we have defined three sub-criteria for each of these criteria, and three questions for each of the sub-criteria. The findings have been published and are available online. In a 2nd phase, we now wish to put these 45 questions to a number of foundations worldwide, while inviting them to do the same on their own. In doing so, this category model will be put to the test and hopefully improved on. What we would hope to see happening is that foundations will use this model to discover their strengths as well as their weaknesses, and work on their opportunities as well as their threats.

Our goal is to invite trust to come to, and remain with, the world of philanthropy in these challenging times and thus render it more resilient. We strongly believe there is a very specific role for foundations in a time when private initiative is finding it increasingly difficult to compete with government and corporate action and funding. Ultimately, as history teaches us, creative initiative brought to the fore by self-empowered individuals and comparatively small entities is what moves the real issues forward. Foundations should be one of these, or be at their side and enable them to move. Shaping Europe, for one, is a window of opportunity. Unlike in 1989, they should make the most of it.

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