Thirty years ago, European philanthropy stood on the brink of new promise. The formation of the European Foundation Centre (EFC) on 9 November 1989 – the same day that the Berlin Wall fell – ushered in a new era for philanthropy as part of a vision for a new Europe.
There was hope that support for civil society, an idea which emerged from the struggles for democracy in Central and Eastern Europe, would drive people’s participation in a new Europe in which liberal democracy would bring a new understanding of cooperation and unity. On this model, the future appeared to be rosy. It depended on a combination of continued economic growth, generous welfare states, citizens being active in their societies, and philanthropy adding value in a variety of ways to improve, enhance and develop new systems for society.
Philanthropy has flourished in the succeeding years. It is now much larger, better organised, and more visible to the outside world. There is a sophisticated infrastructure and a wonderful focal point for activities across Europe – Philanthropy House. Much credit is due to the EFC, which has acted as an engine room for new ideas and new institutions.
In the process of growing, philanthropy has become more diverse. The key text here is Lester Salamon’s “New frontiers of philanthropy”, which points to ‘… a massive explosion in the instruments and institutions being deployed to mobilize private resources. Where earlier such support was limited to charitable gifts, a bewildering array of new instruments and institutions has surfaced – loans, loan guarantees, private equity, barter arrangements, social stock exchanges, bonds, secondary markets, investment funds, and many more.’  Modifying its language in accord with this growing hybridity, the EFC replaced the term ‘foundation’ with ‘institutional philanthropy’ in its EFC Strategic Framework 2016-2022.
While the signs of progress in philanthropy are all around us, things have gone wrong in other sectors. We now live in an age of austerity, climate catastrophe, volatile economies, and failed labour markets where trust between people and established institutions has broken down; lies are used to manipulate public debate; and xenophobia flourishes. A rising tide of popular dissent and political extremism threatens the governability of our societies and the environmental conditions in which philanthropy operates. Not a single European country is immune to the risks of shrinking civic space, and the evidence suggests that threats are increasing. A study by the Guardian newspaper in the UK has shown that populist parties (both from the left and the right) have more than tripled their support in Europe in the last 20 years, securing enough votes to put their leaders into government posts in 11 countries and challenging the established political order across the continent.
Autocrats typically reduce the influence of democratic institutions, restrict human rights and free speech, while also discriminating against migrants and minorities. The European dream, despite aspirations and struggles for another Europe, may disappear following the Brexit saga and as opposition to the EU grows from some of the new autocrats.
Threats to philanthropy
Philanthropy has inevitably been caught up in the gathering storm. A recent Ariadne survey found that 93% of their European members were finding life harder due to threats in the external environment. Restrictions on the registration, financing, and operations of civil society organisations are increasingly common. The situation has steadily deteriorated since 2013 and will likely get worse because philanthropy is increasingly in the firing line. While there has been much analysis of the problems, there has been less in the way of solutions.
This is not surprising since it is hard to find solutions when so many sources of the threats are hidden. In the new dark age of information, it is ultimately impossible to tell who is doing what, or what their motives and intentions are. Watching endless streaming videos, scrolling through walls of status updates and tweets, it is difficult to distinguish between what is algorithmically generated, carefully crafted fake news, clickbait for advertising, paranoid fiction, state propaganda, spam, or carefully compiled research data. The confusion about sources serves the manipulations of state actors who pursue political power through the expressions of hatreds of various kinds (e.g. racism, an anti-gender ideology and persecution of LGBTI communities).
It is also clear that some of the problems stem from the efforts of international institutions to instil bureaucratic protection into the system to counter malevolent forces. Take for example, the Financial Action Task Force (FATF). This is an inter-governmental body operating in more than 190 jurisdictions to counter money laundering and the financing of terrorism. Although not a legislator, its 40 recommendations provide an important global framework that influences policymaking and regulation of the financial system. Regulation 8 (dating from 2016) reads:
‘Countries should review the adequacy of laws and regulations that relate to non-profit organizations which the country has identified as being vulnerable to terrorist financing abuse. Countries should apply focused and proportionate measures, in line with the risk-based approach, to such non-profit organizations to protect them from terrorist financing abuse.’
The ‘4Rs’ agenda for philanthropy
The outlook may be grim, but the crisis offers important opportunities for the work of philanthropy in the coming decade. I believe that philanthropy can make a vital contribution towards turning things around.
It is imperative for the future of our societies that we rise to the occasion. We cannot simply continue with business as usual and hope that the three key structural underpinnings of liberal European society – democracy, the rule of law, and human rights – will remain intact. In his brilliant history of twentieth century Europe, Mark Mazower shows that the forces of hate are always with us, and that every generation needs to organise if we want to keep them at bay. Complacency is not an option.
I suggest that the agenda has four main dimensions: resistance, reform, reflection and reframing. I will take each one of these 4Rs in turn.
Philanthropy has made an impressive start in organising to oppose the threats and to deal with them head-on. A key plank is Philanthropy Advocacy, a joint initiative of the EFC and DAFNE. Presented to the European Commission on 20 March 2019, this has four recommendations:
- To recognise philanthropy
- To reduce barriers to cross-border philanthropy
- To enable and protect philanthropy
- To co-grant and co-invest for public good
Other organisations making significant contributions in this space in Europe include Ariadne, the Funders Initiative for Civil Society and Civitates. Globally, these efforts are supported by WINGS and the International Center for Not-for-Profit Law (ICNL).
Resistance takes philanthropy into a new political space. Not everyone is comfortable with this, since many foundations believe that political action is beyond their remit. However, there is little choice because – like it or not – philanthropy cannot stand above the fray.
Since there is strength and safety in numbers, it is important that individual philanthropies get behind their support organisations, joining their national associations and supporting pan European initiatives that aim to uphold European values. At a time of such danger, it is important that philanthropy support organisations have the resources they need to support the collective action that will be necessary if resistance is to be successful.
Resistance is not enough; reform is needed too. Philanthropy will be less vulnerable to the threats if it deals with some of the legitimate criticisms levelled against it and becomes a more useful force in the society we find ourselves in. When critics such as Rutger Bregman, author of Utopia for Realists, Winnie Byanyima from Oxfam International, and Winners Take All author Anand Giridharadas talk about philanthropy’s ‘bullshit narrative’, it is time to find a new one.
We must confront some uncomfortable truths and not try to hang on to what we have in the hope that we can ride out the storm. Philanthropy needs to clean up its act, taking accountability seriously and becoming more relevant to ordinary people’s concerns, while upgrading its overall performance.
There are hopeful signs that the reform process has begun. For example, a group of international funders has been meeting in London to consider the implications of the #ShiftThePower movement inspired by the Global Fund for Community Foundations. This involves the new ways of working (for example, through participatory grantmaking, giving circles and community asset mobilisation). A new generation of philanthropies (including community foundations, women’s funds, environmental funds, LGBTQI funds, and national public foundations) is challenging the traditional donor-beneficiary relationship by turning all actors in change processes into donors. These initiatives cast large foundations as equal partners in social advance by bringing resources and agency closer to the people, rather than as a remote elite who control civil society through purchasing specific outcomes through short-life grants. The underlying principle is that philanthropy is for everyone.
The third ‘R’ is to reflect on whether philanthropy is making a positive difference to social justice in European societies.
A survey conducted by the EFC in 2017 suggested that ‘democracy’ was a high priority among its members. This commitment translated into significant support for work on international affairs, migration, human rights, peacebuilding, Roma, women and gender, solidarity, and sustainable development. However, indicators measuring societal change on these dimensions are going in the wrong direction. The mismatch between effort and outcomes is at least partly explained by a survey conducted three years earlier. In preparation for a PSJP event at Philanthropy House, 33 European foundations were asked how they were faring on producing social change. They said they felt that they were having limited impact because they were ‘up against it’ and ‘powerless to deal with complex problems’, while ‘lacking in a vision for what could be different’.
Since then, many philanthropies have begun to rethink their approach. In “Does philanthropy need a new story?”, Oksana Oracheva and I suggested that there was a ‘quiet revolution’ underway in philanthropy in which individual foundations are beginning to recognise that short term for particular projects and programmes with narrow objectives which rely on grants to NGOS may ameliorate specific problems, but do little to produce wholesale changes to the way that societies operate.
There is now much emphasis on the idea of ‘system change’. Led in Europe by Edge Funders, the approach involves ‘ecosystem thinking’ to enable philanthropy as a whole to play a significant part in creating positive change. Such a perspective entails seeing individual organisations, actions and behaviour as part of a field that is interconnected, rather than merely the sum of discrete actions. An example of how this could work has been given by Stephen Pittam, chair of the Global Greengrants Fund UK, who has written that social justice and climate justice must go hand in hand. He suggests rejecting austerity in favour of a comprehensive programme of investment:
‘…massively increasing employment in face-to-face caring and a countrywide green infrastructure programme.
The programme would:
‘…make buildings super-energy-efficient, and tackle the housing crisis by building affordable, properly insulated new homes. Local public transport would be rebuilt, the road and rail systems properly maintained, and a major shift to electric vehicles instigated. A more sustainable localised food and agricultural system would be developed. This approach is labour-intensive, takes place in every locality, and consists of work that is difficult to automate.’
Clearly, such a programme would require resources way beyond what philanthropy can offer. However, investing in R&D for such a programme is within the capabilities of philanthropy. Indeed, this would play to philanthropy’s strengths and capitalise on its two comparative advantages: (a) ability to provide venture capital for good ideas and (b) willingness to allow time to develop them.
This brings us to our final ‘R’. This entails reframing the narrative to produce the Europe we want. What are the values and principles that underpin the next thirty years and how can we put them into practice?
This is important because, at present, the narrative about philanthropy is confused. In her final editorial for Alliance magazine in June 2015, Caroline Hartnell suggested that in her 16 years as editor, philanthropy had become more professional, paying attention to impact and measuring it, but still remained unclear about its role in society. Without a clear narrative about its role, philanthropy becomes vulnerable to the kind of attacks we saw earlier. It is important to tell a better story because public trust in the sector is at an all-time low.
So how do we begin to develop this narrative? In the research for my book “Rethinking Poverty”, I suggested starting with questions of a good society, asking ‘what kind of society do we want?’ I used multiple methods of enquiry, including social surveys, literature, focus groups and participative research with groups normally left out of research processes including minorities, migrants and children. The data was processed by community groups in the West Midlands of England over nine sessions and the result was five key principles underpinning the society they wanted. The results were published in the book and have been used to stimulate debate.
I suggest a process along similar lines to be conducted in Europe. A network of philanthropic bodies and their support organisations, perhaps best led by the EFC given its central positioning in Europe’s philanthropic landscape, could initiate such a process. This would involve organising neutral and safe spaces for discussion, involving a diverse set of participants across cultures and generations. Such an approach could help to ‘decompartmentalize’ society, by welcoming the free-play of ideas without seeking to control outcomes. Bold ideas could emerge through a sensitive process of facilitation and targeted research on what is needed to change things.
One outcome could be a framework for action, setting out values, principles and interventions that could bring into being the Europe we want. Such a framework would be widely owned and enable people and organisations at all levels to take part in activities that suit their skills, knowledge and experience.
This framework would not be a top-down plan with specified targets and timescales like those found in a Gantt chart. Instead, it would be highly flexible, organic and creative.
Let’s think ‘jazz’. Although we need a chord sequence to guide many different instruments to play along using the same basic harmonies, we should encourage free expression and chord substitutions when desirable. Playing a new European tune would go a long way to fulfilling the promise of philanthropy in developing good societies.
 Salamon, L. M. (2014) New frontiers of philanthropy: A guide to the new tools and new actors that are reshaping global philanthropy and social investing. Oxford University Press, USA.
 See Bridle, J. (2018) New Dark Age: Technology and the end of the future, London: Verso.
 Mazower, M. (2009). Dark Continent: Europe’s twentieth century. Vintage.
 EFC Members Annual Survey, presented to the Governing Council of the EFC, November 2017.
 Knight, B. (2014) ‘European values: promoting solidarity at a time of austerity. What role can philanthropy play?’, Paper for PSJP sponsored meeting at Philanthropy House, 7 – 8 October.
 Hartnell, C. (2015) ‘Goodbye Alliance’, Alliance, Volume 20 , Number 2, June 2015
Barry Knight is the director of Webb Memorial Trust and serves on the Management Committee of PSJP.
This post was first published by the European Foundation Centre. You can view the original post here.