Where are you, fundraiser?

Look at a painting by van Gogh and you see beauty. Look at it another way and you see confusion. Yet another, and you see pain, suffering.

That was how it was last month in Vincent’s home country, the Netherlands. I was there for the European Foundation Centre’s Annual Conference in Amsterdam’s beautiful but unpronounceable ‘Muziekgebouw aan ’t IJ.’

The conference theme was ‘Imagining and Investing in our Future’ but the subject matter was about the confusion, pain and the suffering in the war zones and the refugee camps of Europe and the world. UNHCR had a substantial presence at the event, and Peter Bouckaert, Emergencies Director at Human Rights Watch (@bouckap) gave a stark speech of warning about the global migration crisis.

The conference is the annual opportunity to paint a portrait of the foundation community in Europe, so let’s take a look…

Where are the fundraisers?

All of the big foundations were there. Calouste Gulbenkian, Volkswagen, Barrow Cadbury, Oak… This is a €53 billion assets sector in Europe.* A huge, and growing, segment of European civil society that exists to support social, environmental and cultural programmes.

So where were the fundraisers?

Yes, I know, the house rule states that you are not allowed to fundraise at the event. But there is so much relationship-building, observation, listening and learning that you can do without formally fundraising. I watched one friend, one of the best fundraisers in Europe, cultivating a large banking foundation by going all around her project without actually saying the word “money.”

This is the one event in the year when you, dear fundraiser, can learn almost everything there is to know about this sector. Foundation people in Europe form a small, well-networked community, so the ideas that you plant in the ear of a foundation director can spread fast. Witness the rapid growth of venture philanthropy into the foundation sector with Cariplo, Esmée Fairbairn and many others taking on the ideas of VP.

In total I counted just twelve fundraisers in the delegate list, plus a cohort from UNHCR, there to represent the migrant and refugee theme. Twelve fundraisers, at a time when Europe that has around 8,000 professional fundraisers!

Why so few? Why are we, fundraisers, so uninterested in this sector? Why do we complain about poor response rates or declining giving, when we could be in a room with €53 billion of philanthropic money?

One possible answer is that many of us have handed foundations to our colleagues in ‘institutional’ funding. In some organisations, foundations are lumped together with EU and government funding.

But walk around the EFC conference and you will see that these are definitely not ‘institutions.’ In the old days foundations were created after a person’s death, out of their legacy, to be administered by their lawyers. But today around 80% of new foundations (the exact figure depends on which country you are in) are set up by living people. These philanthropists, younger, more active, more inquisitive, are at the annual EFC conference.

The big issues

There were many emerging themes at the EFC this year ranging from staffing and governance through to links with the academic world. Two are especially relevant to fundraisers – the question of transparency, and the new ways in which foundations are thinking about strategy.

Peak Transparency

The biggest Italian foundations (the 87 former bank foundations that make up ACRI) have just agreed a code of conduct with the Ministry of Finance that requires them, amongst other things, to be more transparent. The Netherlands passed regulations in 2013 that required foundations wanting tax relief to publish at least part of their accounts in the internet.

It looks like we were heading to more transparency in European philanthropy.

But look again.

At this year’s EFC Annual Conference there was evidence of a move in the opposite direction. The private bankers were present, in the form of their philanthropic advisers. A number of these banks (UBS, Rabobank, Coutts…) have created charitable foundations for their HNWI (High Net Worth Individual) clients. Clients can make donations to the bank foundation, which passes it on to NGOs, universities and cultural organisations. Clients often do this anonymously, and sometimes in very large amounts (I learned of a €1m donation being made in this way.) By giving via the bank, the wealthy client can ensure her or his anonymity.

Does that sound fine? Yes, in some respects. But imagine that your NGO has a policy of not accepting donations from arms manufacturers.  You receive an anonymous donation via a bank foundation for €1m. Who was the donor? The bank assures you that it is a person, not a company…but was she the boss of an arms company? Of a tobacco firm? Of the mafia?

Due diligence is impossible in these circumstances.

And in case this sounds all a bit hypothetical, we were reminded by a US professor that private firms in the USA (Fidelity, amongst others) now run huge charitable foundations that protect the anonymity of clients. We had already been warned of this in Lester Salamon’s ‘New Frontiers of Philanthropy’ where Rick Cohen points out that by 2009 US ‘corporate-originated charitable funds’ held US$9.56 billion in assets, more than the entire community foundation movement in the US.

Transparency in philanthropy has been spreading across Europe. But beware, fundraiser, we may have just experienced peak transparency.

Strategic Shake and Twist

Think about the image of an ideal foundation: a pile of money in an endowment, a bunch of nice people in charge, and an annual grant-making programme with fixed dates and fixed rules.

You are about to experience a shake-up. Foundations at this year’s conference said repeatedly that fixed long-term strategies are the old way. What we need now, in a fast-changing world, are foundations that can shake and twist with the times. Yes, a broad long-term goal, but short term, in the here-and-now, the ability to take decisions, to innovate, to partner with whoever they want.

The implications for fundraisers are clear; the old certainty is dead. We can no longer say “Stichting Richyrich will definitely support us next year.” We can possibly say “Stichting Richyrich shares our goals, this morning,” or “Martijn Richyrich seems to like us, so maybe we could talk about partnership.”

But the old idea that we could predict foundation strategy is on the way out. That is going to make our lives harder.

Takeaways

Four key points to take away:

1. Are you, fundraiser, in charge of managing relationships with foundations in Europe? Why not?
2. What are your relationships with the private banks and their philanthropic foundations? Have you met them all?
3. How could your organisation build flexible partnerships around clear social or environmental goals?
4. Think about attending EFC next year!

Reference:

Cohen, R., 2014. Corporate-Originated Charitable Funds. In New Frontiers of Philanthropy: A Guide to the New Tools and New Actors that Are Reshaping Global Philanthropy and Social Investing. Oxford University Press, pp. 255–290.

*Source: http://www.efc.be/philanthropy-sector/faq/