The future of foundations

This blog first appeared on Third Sector on 22nd December 2016.

Foundations should hold Theresa May to her promise of a ‘country that works for all’, says our Chief Executive Paul Streets.

As we welcome new leadership at the top of the Association of Charitable Foundations, I’ve been reflecting on the wider role of foundations as we move into 2017.

This past year has seen a voluntary sector beset by change and turmoil, yet foundations remain a constant, with a collective annual spend of about £2.5bn. But as the state continues to divest itself of charities at both national and local levels, grants from foundations increasingly form a bigger slice of the cake. Whether we like it or not, funding from foundations is more significant to charities than ever before. The Community Links 10-year funding profile illustrates this vividly.

Whether we like it or not, funding from foundations is more significant to charities than ever before.

For those applying to foundations we might come across as eclectic, often historic organisations that stick to their founding objectives while continuing to respond to need as perceived by our founders – sometimes centuries ago. And it’s true that because most foundations are endowed they can afford to take a long-term perspective.

But because our funding is independent from government and relatively secure, we have the freedom to speak without fear or favour and without being viewed as self-serving. Yet how many of us choose to do so? If we care about the people charities reach, surely we can no longer watch from the sidelines as the time bomb of diminishing public funding ticks loudly. With the shift from local government grants to contracts threatening the very survival of small and local charities, how can we continue to sit quietly?

We have the freedom to speak without fear or favour and without being viewed as self-serving.

If anything, we have a duty to speak out, not just because it matters, but also in the selfish sense that our own funding model relies on it. We are not immune. As foundations, our relationship with public funding is symbiotic. No foundation can afford to fund charities or issues lock stock and barrel. We rely on what I call the “fruitcake” model: foundation icing and marzipan on top of what has been a publicly funded cake. Can we stand and stare as the cake collapses in front of us?

fruitcake

The world we fund has changed, because public funding has changed it. Most of us have never known life without the welfare state. The economic consensus after 1948 cared for all, whatever the politics of the day. Austerity has broken the deal. As a society we now seem content to co-exist with levels of inequality, poverty and injustice that Dickens would recognise.

We should welcome Theresa May’s promise of a ‘country that works for all’. Foundations could and should play an important role in joining our voice along with those shouting about why our country isn’t working for all, how it might and holding Government to account for its promise.

The voluntary sector needs a new deal with government, one that learns from the hollow social reformer rhetoric of Cameron’s coalition and the financial enticements of the last Labour governments, which lured us into transitory dependency. With its alternating feast and famine, government has been a fickle friend.

As foundations with a shared interest in a society that works for all, we can play a unique convening role in renegotiating our terms of trade with government. We can support a voluntary sector that has more self-determination and independence from the state and reset the compass to remember the aspirations of 1948.

As foundations with a shared interest in a society that works for all, we can play a unique convening role in renegotiating our terms of trade with government.

Some of us are beginning to move in this direction. There are great examples: the Trust for London using its 125th anniversary to push for widespread change; the Joseph Rowntree Foundation and the Resolution Foundation are increasingly powerful voices speaking out on poverty. But we need to do more. It’s more important than ever that the foundation sector leads by example. Let 2017 be the year that we’re seen as a sector that is brave, which steps into the ring in the interest of those charities we know are working their socks off to make a real difference to people in need, day in and day out.

It’s more important than ever that the foundation sector leads by example.

In 2017, I’ll be writing more on the role of the wider voluntary sector. Watch this space.

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