Posted on 26th January 2012
Around £292m of UK foundation funding is spent on international development and related causes, representing 9% of UK grant-making, according to a new review. This amount is equal to just under half of the amount spent by the department for international development (DFID) through NGOs.
One of the key messages of the report is echoed in a recent report by the International Development Committee (IDC) of MPs, which says DFID should do more to engage foundations in co-ordinated efforts to improve the effectiveness of aid. It calls for foundations to sign up to International Aid Transparency Initiative guidelines.
Global grant-making, commissioned by the Nuffield Foundation and funded by the Baring Foundation and the Paul Hamlyn Foundation, showed that Africa attracts the most funding from foundations (37%) followed by Asia (23%). The most popular areas of funding are direct health care and education. This is followed by sustainable economic and agricultural development.
The research carried out by the Centre for Charitable Giving and Philanthropy (CGAP) showed that foundations are establishing new programmes and strategically reviewing and re-focusing existing programmes. Foundations are also increasingly working with multiple stakeholders.
One of the key messages from the research is that foundations face more responsibility to assess the legitimacy and effectiveness of their funding. IDC chair Malcolm Bruce MP said: “While their [foundations] efforts are to be welcomed, there is a danger that private foundations can by-pass civil society groups in developing countries and skew aid programmes in favour of big hi-tech single issue interventions. DFID should work with foundations to maximise their contribution and help them play a bigger part in global efforts to end poverty."
The report recommends that a designated contact official for foundations should be established within DFID and that a DFID minister should hold an annual meeting with groups of smaller foundations to co-ordinate actions.
Chiming with the MPs’ concerns, the authors of Global Grant-making Cathy Pharoah and Linda Bryant say their research throws up a number of questions including:
· How can foundations’ contribution be made in the most effective way?
· How far should foundation funds be used within governmental or multi-lateral programmes and how far should they maintain a completely independent and diverse role?
· How can foundations best empower and build local civil society and capacity?
The report gives examples of how foundations have funded overseas development, including the Indigo Trust’s investment in information technology in Africa. The trust has developed a programme around the use of computer and mobile phone applications at grassroots level, to improve governance and empower citizens. Currently only 10% of Africa’s population is connected to the internet.
Pharoah says: “The research indicates just how important a place international grant-making now occupies in foundation funding, and the emerging ways in which they are responding to need, whether in practical or increasingly strategic and change-oriented ways. Given the sheer scale and complexity of global need and inequality, the role of foundations in funding civil society in developing countries, supporting sustainable local economic growth, or partnering with major government programmes, means they face a growing challenge to ensure that their programmes meet local needs on the ground and are as effective as possible in achieving impact and change.”
She added: “The recent report of the Commons Select Committee on International Development notes the growing role of philanthropy in helping some of the poorest communities in the world, but calls for donor transparency and co-ordination with the efforts of others, whether civil society organisations or multinational and governmental donors. This research helps to contribute to this kind of process.”
To download the CGAP report for free click here
