Transparency, engagement, and building back better

By Emma Hutchins, Policy and External Affairs Manager, Association of Charitable Foundations.

Does the origin of wealth matter when it comes to philanthropic giving?

This question has been debated in philanthropy for centuries, but is currently under a global spotlight. A few weeks ago, #BlackLivesMatter protestors in Bristol city centre pulled down the statue of 17th-century merchant and slave trader Edward Colston, and threw it into the harbour. Supporters of Colston’s legacy cite his philanthropic contribution to the city as justification for his place on a pedestal. These recent events, however, were a powerful retort, clearly suggesting this justification, like the statue itself, no longer stands up to scrutiny.

Accentuated by these events, questions are being asked as to whether the philanthropic response to Covid-19 is taking into account its disproportionate impact on black people and other ethnic minorities in the UK. Recently, ACF hosted an event where a panel of experts shared views on foundations’ responses to racial disparity in the wake of the pandemic, and what they’d like to see happen next, as well as setting out a range of practical ways to make urgent changes to funding practices. Read the summary and watch it here.

Against this backdrop, the publication of our new report, Transparency and Engagement: The Pillars of Stronger Foundation Practice, felt particularly timely. The fourth installment from our Stronger Foundations initiative, it is informed by an 18-month process of gathering evidence in a member-led working group inquiry that examined and questioned the topic, plus the wider literature and learning from other sectors and other countries. The five pillars we present as a stronger practice are that a stronger foundation:

Understands the importance of transparency and engagement, and articulates its approach
Embeds transparency and engagement across all its activities
Enables an internal culture of transparency and engagement
Proactively engages external audiences
Makes the most of opportunities and initiatives that enable transparency and engagement.

We emphasise throughout, the importance of recognising the foundation’s own story – its origins, its history, its current role in society – and telling it in a way that enhances its legitimacy to work on the issues it does and its accountability to those it exists to support. Delving into the foundation’s story might not always be comfortable, but that is when it is even more important that foundations are transparent so that issues of power, trust, ethics, and reputation can be addressed and redressed.

Power and accountability have emerged as cross-cutting themes in the Stronger Foundations initiative. In addition to transparency and engagement, we have explored: diversity, equity and inclusion; impact and learning, strategy and governance; investment; and funding practices. Each one has highlighted the need for foundations to be accountable in order to be effective, and transparency is key to sharing power and being held to account.

Now more than ever we see the pressing need for foundations to be accountable to society and the communities they serve. Difficult political and economic decisions are being taken that will affect the lives of millions; foundations have a unique strength in their flexibility, independence, and ability to take the long view to ensure that the causes and communities that will be hit hardest are seen, heard, and included as we recover and rebuild. This can only be done when foundations are – and are seen to be – accountable, legitimate, and trustworthy actors in civil society. Transparency is key to achieving this.

But it is not enough just to be transparent. Engagement is the essential proactive element of transparency that takes foundations beyond broadcasting information and towards a practice that is shaped by and responsive to the needs they are trying to meet. The report sets out ways in which foundations can engage with both internal and external audiences, including by learning from and with other foundations, and meaningfully offering grantees and applicants opportunities to feed into foundation decision-making.

The events of recent months have brought into sharp focus the urgent need for foundations to be transparent in their practice. But transparency is not just about process. It’s an amalgamation of attitudes, actions, behaviours and cultures that takes time to embed. Many foundations are already demonstrating stronger practice, and many more have made significant steps accelerated by current events. As associations of philanthropic institutions, we have a crucial role to play in showcasing stronger practice so that foundations are equipped to be ambitious and effective with all of their resources at a time when these resources are arguably more scrutinised, precious and consequential than ever.