Five lessons from leading United Kingdom philanthropists

Find people or organisations you trust and fund them

Trust is hard, but the first step is intent. A personal highlight for me was taking the group to visit the Pears Foundation, with which I have worked for more than decade, and where I learned much about trust-based philanthropy and power-sharing in practice. Director Amy Braier describes Pears as a relational, invitation-only foundation that provides multi-year, unrestricted and flexible funding that “meets the needs of our fundees”. Trust and genuine relationships where they “learn from each other” underpin the model.

“We find good people and good organisations and we help them do what they do better,” Amy said.

The group was also wowed by Ben Cairns, director of the Institute of Voluntary Action and Research (IVAR), which facilitates the Open and Trusting Grantmaking Community. It’s a UK movement of 140 foundations that have signed up to eight grantmaking commitments. Open and trusting grantmaking is characterised by patience, persistence and empathy, said Ben. It recognises that the money and attributes of a foundation are one set of assets but “it’s only by combining those assets with the expertise and direct and lived experience of funded organisations that social change can really have impact”.

Empower the experts by investing in pooled funds

While there is growing interest in collaborations in Australia, pooled funds is perhaps an area that’s less well known. The group heard from Lena Baumgartner and Alice Sachrajda at a session hosted by the Paul Hamlyn Foundation. They defined a pooled fund as one in which multiple funders contribute funds and delegate grantmaking authority to a separate entity run by experts who advance the pool’s objective or strategy. The key point is the delegation of grantmaking authority and an understanding that the knowledge required to make the best funding decisions lies not with the funders but with its subject experts, who may be academics, arts practitioners or lived experience advisory groups. The group heard from fascinating case studies, such as the UK Democracy Fund and the Power of Pop Fund.

Invest across a spectrum to create more impact aligned with purpose

Jonny Page at the Esmée Fairbairn Foundation (EFF) provided an incredible session on EFF’s “spectrum of capital approach”, by which all the foundation’s funds are invested for impact that supports its mission.

“Every investment has an impact and it’s our choice as to 1) whether we want to know what that impact is, and 2) whether we want to steer that impact to something that supports our strategy and our reason for existence, and we firmly believe that it does,” Jonny said.

At one end is EFF’s £50–60 million grant fund and at the other is its £1.3 billion sustainably invested endowment. In between are three pots – £60 million, or 5 per cent of total funds, in impact-first social investments, £10 million in experimental and themed impact investments and another £60 million that targets ESG leaders. It was a fantastic lesson in how to use investments thematically and for “contributing to solutions” rather than harm.

Open data will help funders and grantees to understand each other better

There is much for our sector to learn from the development of 360Giving, the UK open data movement and tool. Katherine Duerden explained that 360Giving is a charity that supports funders in publishing open and comparable data about their grants and builds tools to help people explore the data to inform their decision-making.

“You can see who’s funding what, where and how much… so that’s helping people to understand where their funding fits alongside others. It’s also helping charities to find out who might fund them and it’s powering research that we and others are doing to understand the sector and the trends in grantmaking,” said Katherine.

More than 300 funders of all sizes are working with 360Giving and it holds over 1 million grant records with a collective value of £270 billion. 360Giving is very much achieving its aim of being an essential tool for funders and fundees alike, one they can use to better ensure funding goes to where it is most needed through more informed, effective and strategic grantmaking.

Have you had your grantmaking practices independently reviewed?

Sufina Ahmad MBE, director of John Ellerman Foundation, talked about measures the foundation has taken to improve its grantmaking practices. She highlighted the importance of taking on feedback through two “perception audits” the foundation commissioned from an independent provider, which sought input from grantees and informed the changes the foundation made. One change meant providing more informative correspondence declining grant applications, so “we are much better at telling people why they haven’t been funded by us and how they could improve their applications”. Another meant making sure application information on the foundation’s website was as clear as possible.

The foundation also joined IVAR and the Foundation Practice Rating and focused on improving its pre-application process, spending time helping applicants prepare their applications.

Many of the lessons from the UK study tour aligned with issues raised in Philanthropy Australia’s recent Better Philanthropy Telescope report, which “takes the pulse of the sector”.

More information

Philanthropists scope out a big year for giving