Funders often have limited in-house capacity and rely on trustees who tend not to be very diverse. Trusts and foundations could be more effective through developing their own in-house capacity and capability. They are not as accountable as other types of organisation and almost uniquely independent to develop their own strategies.

Key findings

  • Funders often have limited in-house capacity, small teams and rely on volunteer trustees. The smaller the foundation, the more stretched the staff. Most foundations with endowments of up to £50m have no staff or sometimes a part-time employee.
  • Boards could move away from processing grants and getting the money out the door to considering policy, performance and strategy, leaving staff freer and empowered to make decisions on individual grants.
  • Trust Boards are not always very representative of wider society or very inclusive. Women are underrepresented on trust’s boards, with an average of one woman per trust. Culture too often reflects corporate, banking or academic contexts.
  • Increasing focus is falling on the capacity and infrastructure of grant-making trusts and foundations. Do they have sufficient knowledge and expertise to make good decisions about who to fund?
  • The number but also the quality of staff and of staff culture matters.
  • There is an overhead myth for foundations too.
  • Trusts and foundations are commonly subject to the same legal standards of transparency and accountability as other charities but do not have to account to funders or the public in the same way, or to voters or shareholders like the public and private sector.
  • While they are relatively unaccountable, this makes funders almost uniquely independent to potentially oppose orthodoxies, innovate, take risks, and challenge established thinking. They are unusually free of constraints and have a uniquely long-term horizon.

“Putting all the elements of effectiveness together doesn’t guarantee results, but it’s probably true that you won’t get results without these pieces being in place. And that usually requires the time, smarts, skills, and energy of staff. Really good staff.” – Phil Buchanan[1].

“Last but not least, funders must be willing to ‘walk the talk’, holding your own organisation to the same standard you would expect of others” – Margaret Bolton[2].

[1] http://www.effectivephilanthropy.org/embracing-reality/

[2] http://www.nr-foundation.org.uk/downloads/Foundations-for-Organisational-Development-January-2007.pdf