Philanthropy Impact

Inspiring philanthropy and social investment across borders, sectors and causes

Theory of the Foundation European Initiative 2016 Report

Report
February 2017
Rockefeller Philanthropy Advisors

The Theory of the Foundation Initiative was started by Rockefeller Philanthropy Advisors in 2013. Its aim is to enhance the capacity of foundations to align their resources for impact. It comprises seminars, workshops and reports intended to develop a shared language for foundation leaders globally. The initiative seeks to extend the field of knowledge about foundations as institutions and encourage the sector’s development.

In 2016, Rockefeller Philanthropy Advisors partnered with the LSE’s Marshall Institute for Philanthropy and Social Entrepreneurship to develop a European report as part of this initiative (http://www.lse.ac.uk/MarshallInstitute/home.aspx).

The report, supported by ten European foundations, was launched in London in January 2017. It aimed to look at European foundations’ work beyond their grants or operating charitable programmes and explore a variety of foundation practices on governance, external relationships, people development and beyond. The report uses interviews with 41 European foundation leaders to surface different dimensions of philanthropic practice critical to philanthropy work but frequently left unexamined, and in so doing, explore the whole-foundation’s role in driving public benefit.

The report contains insights on four key areas:

  • A foundation’s Charter and fundamental governance: The role of origin stories and legacy within the foundation, as well as observations on the changing role of the board as foundations evolve their social role from traditional grant givers or providers of charitable programmes to focused, strategic, problem-solvers using financial and non-financial tools.
  • The Social Compact or the foundation’s relationship to society: Exploring foundations’ accountabilities to external stakeholders and how that shapes different internal processes; challenges to legitimacy for foundations in a context of public scepticism about institutions; efforts to stay relevant to outside trends and ‘bring the outside in’; and how a foundation relates to government.
  • The Operating Capabilities of a foundation, its core competencies and resources: How foundations are deploying both financial (grant-making, endowments and spend-down) and non-financial assets (such as their people, skills, tools and institutional properties) for public benefit. These include insights into European foundations’ practices around staff development and internal collaboration, as well as external funder-to-funder collaborations.
  • The interplay between the different domains of Charter, Social Compact and Operating Capabilities: The report shares some operating models that foundations are deploying to execute their work. It additionally looks at how foundations are using the concept of risk in practice and seeking to evaluate their work as a whole.