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Rockefeller Philanthropy Advisors and LSE Marshall Institute for Philanthropy Launch Results of “Theory of the Foundation: European Initiative"

Rockefeller Philanthropy Advisors and LSE Marshall Institute for Philanthropy Launch Results of “Theory of the Foundation: European Initiative"

Expert opinion

Rockefeller Philanthropy Advisors and the LSE Marshall Institute for Philanthropy Launch Results of the “Theory of the Foundation: European Initiative,” a multi-year initiative, London, January 2017

On 18 January 2017, 60 people representing London’s and Europe’s philanthropy and wider nonprofit community joined Rockefeller Philanthropy Advisors (RPA) and the LSE Marshall Institute for Philanthropy for the launch of their joint 2016 report, “Theory of the Foundation: European Initiative.”

The first such study of the foundation sector in Europe, the initiative takes a “whole foundation approach,” looking beyond a foundation’s grantmaking and charitable activities to observe how it operates as an organization, and how it aligns its resources for impact.

Conceptualized by RPA under a framework inspired by Peter Drucker’s article, “Theory of the Business,” the Theory of the Foundation examines three main domains that define a foundation’s essence: charter, social compact, and operating capabilities.

A foundation’s charter is defined as the foundation’s form of governance and decision-making at the highest level, and is a precursor to mission. The social compact is a foundation’s relationship to society—how it defines its license to operate, the value it creates, and how it defines and relates to stakeholders. Lastly, operating capabilities include a foundation’s core competence, resources, skills, and processes.

Over the past 18 months, executives and board members of 41 diverse foundations were interviewed about how their foundation operated within the framework’s domains. The majority of foundations interviewed are endowed grantmaking foundations funded by individuals or families, and with annual grantmaking budgets of 10 to 50+ million Euros annually.

Key findings of the report reveal receptiveness to the concept of the framework—while also revealing differences, including, for example, in applying such terms as “risk” to the foundation sector. Ultimately, the initiative seeks to create a common language to facilitate discussion and self-examination among foundations.

 In a time when the public sector and its own social compact is on the decline in many countries, and when we see a global phenomenon of increased concentration of wealth, an examination of the foundation sector can contribute to an understanding how society, government, and philanthropy will continue to intersect.

The full report can be accessed here.

For further information about the Theory of the Foundation: European Initiative, please contact Donzie Barroso, Director, Global Philanthropy, RPA London, dbarroso@rockpa.org.