The foundation sector has shown some remarkable strengths during the Covid-19 pandemic, such as being more flexible, responsive to communities' needs, and having the independence to speak truth to power.
However, our sector has a diversity problem. Many people in society are not represented in positions in power within grant-making foundations. At Friends Provident Foundation, we are also concerned that there is insufficient accountability and transparency in the sector.
These issues are not new and have been the subject of discussion for several years. Research carried out in 2018 into the characteristics of trustees in grant-making foundations found that 99% were white, 68% were male and 58% were aged 65 or over. It also found that the majority of foundation trustees were recruited informally, by word-of-mouth networks.
To address this, Friends Provident Foundation convened a working group of like-minded foundations to focus on increasing accountability, transparency and diversity in foundations. We have developed and implemented a new method of assessing the governance and reporting practices of private trusts and foundations in the UK. We are leading this project in collaboration with Barrow Cadbury Trust, The Blagrave Trust, Esmee Fairbairn Foundation, John Ellerman Foundation, Joseph Rowntree Charitable Trust, Joseph Rowntree Reform Trust, Lankelly Chase Foundation, Paul Hamlyn Foundation and Power to Change.
Following a public consultation that received over 150 responses, the working group produced the Foundation Practice Rating (FPR), a new method of assessing the governance and reporting practices of private trusts and foundations in the UK which will be made available publicly. This draws upon the pillars of ambitious foundation practice set out in the Association of Charitable Foundations’ Stronger Foundations initiative.
As a small trust with a big mission, we have always known that working in partnership with other foundations was the best way to maximise the chance of change. Working with peers to fund the Foundation Practice Rating also enables us to share knowledge and expertise and to learn together.
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The FPR will assess foundations in three areas.
Accountability - How can anyone who wants to examine the work or decisions of a foundation after the event do so, and make their voice be heard?
Transparency - Does a potential grantee have access to the information that it needs to be able to contact the foundation, decide whether to apply for funding, or more generally in advance of any grant?
Diversity - The extent to which a foundation reports on diversity of staff and trustees, and how well it caters for people who prefer/need to communicate in a particular way.
Over 100 foundations, including all those in the working group, will be assessed against a standard list of criteria relating to these three areas. Each will be rated annually for several years, with the ratings published along with the underlying data.
FPR has used publicly available materials (foundations’ websites, annual reports, etc), reflecting the experience of prospective grantees searching for information. The starting criteria has been published here and we have also published a how to do well guide.
Additionally, the FPR will create consistent standards addressing power imbalances between funders and grantees. Independent funders tend to be relatively powerful in the relationships in which they operate: those requiring funds have rarely been in the position to question the source of funds or the legitimacy of the funder.
Many foundations increasingly acknowledge they have a long way to travel to improve on diversity, equity and inclusion (DEI). There are lots of sources of learning and networks available for foundations to access. These include DEI-focused funder collaborations such as the DEI Data Standard, DEI Coalition, Just Foundations Initiative and Funders for Race Equality Alliance. The Foundation Practice Rating adds to this support.
Some foundations have already received their scores. Jane Ray from the Albert Hunt Trust stated:
"The Foundation Practice Rating has provided an opportunity for a ‘conversation starter ’ for us to undertake a review of our website with a view to becoming more accessible to applicants. This will be looked at during 2022 and beyond."
The FPR is intended to support foundations in highlighting where they can improve on being more accountable, transparent and diverse. Best practice resources will be shared and links to training will be made available.
We are launching the report on 22nd March 2022 and hope that these principles will serve as an underpinning for what is an innovative approach to foster openness to new conversations in philanthropy in the UK – about who we are, our accountability for our actions and how transparent we are about our decision-making.
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