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Reports: Foundation Practice Rating & Stronger Foundations
Reports: Foundation Practice Rating and Stronger Foundations
by Alex Blake
In March 2022, there have been two new reports published, assessing grantmakers on specific aspects of their practice.
1. Association of Charitable Foundations (ACF).

The first comes from the ACF, which shares examples from the first year of their Stronger Foundations self-assessment tool, which has been used by 50 funders.

The tool includes categories from ACF’s Stronger Foundations initiative:
  • Diversity, equity and inclusion (DEI)
  • Strategy and governance
  • Impact and learning
  • Transparency and engagement
  • Investments
  • Funding practices.
  • Despite a flattering press release, the report doesn’t really tell us much other than that there are 50 funders of various sizes that are working to improve their practice and that DEI is the area where they have ‘furthest to travel’.

    I don’t mean to criticise the people behind this initiative because I’m sure it is adding value to the grantmaking sector, however it’s a shame that its only been used by 50 funders, most of which will inevitably be those that are already highly engaged in striving to make the best use of their resources. There is still far too much bad practice from the silent majority of funders, including failing to provide basic information on eligibility, funding priorities and process.
    2. The Foundation Practice Rating

    The Foundation Practice Rating (FPR) is a new rating that will be published annually with the aim of creating an incentive for foundations to improve their practice. It is an objective third-party assessment of UK-based charitable grant-making foundations in three areas of practice:
    • Diversity. To what extent does a foundation report on the diversity of its staff and trustees and its plans to improve its diversity, and how well does it cater for people who prefer/need to communicate in different ways? The FPR did not look at issues such as how well foundations captured views from a diverse set of stakeholders to inform their work, nor what or whom foundations fund.
    • Accountability. How can anyone who wants to examine the work or decisions of a foundation after the event do so, and make their voice heard?
    • Transparency. Does a potential grantee have access to the information that they need to be able to contact the foundation in order to decide whether to apply for funding, or make general enquiries?
    This first report describes how the FPR works and why, the findings from its first year of operation, and the response so far from foundations. This project was originated by Friends Provident Foundation and funded by a group of 10 foundations. The research and assessment work was carried out by Giving Evidence using publicly available information, and the foundations assessed had no influence over the findings. Each foundation was assigned a rating of A, B, C or D on each of the three areas and was then given an overall rating.

    The research team assessed 100 UK-based charitable grant-making foundations. The sample included: the ten foundations funding this work; the five largest UK foundations by giving budget; and a sample of 85 charitable and community foundations. The sample referred to here is a stratified random subset of other foundations using ACF’s Foundation Giving Trends Report 2019 (the 300 largest foundations, where the smallest annual grants total was £1.62m) plus the list of the UK’s 83 Community Foundations. The practice of each foundation was rated on around 90 criteria.

    The authors described their two major findings as follows:
    • Performance in these three areas was not particularly related to foundations’ size or structure.
    • Practice on diversity is much weaker than that on accountability and transparency (correlating with the ACF report).

    I also found some other findings of interest, for example:
    • Only three foundations achieved an overall rating of A (41 scored B, 28 scored C and 28 scored D): hats off to the Wellcome Trust, the Blagrave Trust, and the County Durham Community Foundation.
    • The data shows that most foundations are pretty consistent in their practice: few are very good at some things and very poor at others.
    • While increasing numbers of staff did not correlate to improved ratings, foundations with no staff tended to score badly. Not surprising given the poor practice of so many funders that don’t have any staff.
    • Similarly, foundations with five or fewer trustees also tended to score badly – again unsurprising as this makes it more likely it is a family trust in the sense that all or most trustees are related and are less likely to have in depth knowledge of the charity sector.
    • In quite a few instances, foundations seemed to ask their grantees to do things that they themselves did not do, for example consulting with stakeholders, a commitment to the Living Wage and having a complaints procedure. Indeed!

    I’d love to see more emphasis on the process of interacting with grantees and applicants given that this is the main purpose of grantmaking foundations, but overall this is a strong piece of objective research and it’s great that the findings are shared with funders to encourage them to improve their practice. I look forward to seeing future editions and responses.
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