Alliance Online - September 2006

The role of foundations in society

Barry D Gaberman

When speaking at the launch of Trust Africa in Dakar, Senegal on 6 June 2006, Barry Gaberman listed ten attributes of foundations that make them important in getting what he called the ‘business of society’ done. Together, he says, these add up to ‘a picture of a sector that goes beyond just the provision of services, important as that is, to one that challenges the status quo in society’. Particularly important, in his view, is the support they give to the institutions of civil society. What follows is part of his presentation at the TrustAfrica launch.

To this point I’ve concentrated on the Ford Foundation’s reasons for helping to establish TrustAfrica and the development of the effort to date. But there is a broader reason for building a foundation and it has to do with the role of foundations in society. I think one can best see this role in a set of attributes that have made foundations important in getting the business of society done.

For the purpose of these brief remarks, I will define philanthropy as the capture of private wealth for public purposes and I suggest that foundations are one important vehicle through which organized philanthropy is practised.

Philanthropy existed long before there was a United States and long before Europe was organized into a cluster of nation states. It is not today, nor was it ever, solely a Western concept, and each society puts its unique stamp on this work in progress called philanthropy. And while that will be true of TrustAfrica, there are certain attributes that most foundations hold in common.

First, because of their accountability structures, foundations can take risks in a way that is difficult for institutions responsible to the public or for for-profit institutions that must meet a bottom-line test. In other words, these are institutions that can afford to fail.
Second, foundations can take on sensitive issues that public institutions will often step away from. This was the case with the early development of contraceptive technology in the United States, for example.
Third, because foundations are not governed by the tyranny of the bottom line as are corporations, they can take on activities that are not sustainable with only earned income and that require a certain measure of subsidy. Such as microfinance funds, which because of their high transactions costs may not be sustainable from earned income.
Fourth, an important but often overlooked role of foundations is to help sustain services desired by a particular segment of society, but where there is neither the level of demand nor the consensus necessary to make it a government priority. This is particularly the case in diverse ethnic and racial societies.
Fifth, foundations can afford to think long term and recognize that the solutions to many complex societal problems are multifaceted and take time. There are few silver bullets.
Sixth, foundations have the capacity to be flexible and to incorporate mid-course correction to their programmatic efforts in a way that is difficult for the larger bureaucracies of the public sector.
Seventh, related to this attribute is the point that foundation can act rapidly. The 2001 response to 9/11 was a case in point, as are the more recent responses to the tsunami in South and South-east Asia, Hurricane Katrina, the earthquake in Pakistan, and the earthquake in Java. In fact, in a strange way, both manmade and natural disasters often prove to be a catalyst to the growth of civil society institutions, supported by foundations.
Eighth, foundations can often test innovative and new initiatives or demonstration projects that, if successful, can be brought to scale.
Ninth, foundations can fund independent policy analysis as a check on the claims of the public sector.
Finally, foundations can fund advocacy organizations, a function not always looked on kindly by the public sector.

These are ten attributes that seem particularly important to me, but I’m sure most of you could come up with additional attributes.

What emerges from the attributes I have suggested is a dynamic picture of foundations and the institutions of civil society that they support. It is a picture of a sector that goes beyond just the provision of services, important as that is, to one that challenges the status quo in society.

It does this by analysing programmes to see if they deliver on their promises, and by suggesting new and innovative ways to deal with complex issues. It constantly holds us up to the yardstick of fairness and a level playing field. And it gives voice to those that tend to go unheard in our society.

We need to be clear about this vision of the role of foundations in society and whether this is a vision we are prepared to support. I say this because this is not the only vision one can have and it is likely that this vision will be increasingly challenged.

This challenge is likely to come from those holding a vision that is much more static and that tends to see the legitimacy of foundations in their support of the status quo. The argument essentially goes that the government does not grant the benefits of the tax exemption to institutions that work to undermine its legitimacy and the legitimacy of its programmes. It is an argument with a solid intellectual underpinning and one that we should not dismiss easily.

Before adding a final attribute to the list of ten, let me mention two things. The first is that, unfortunately, foundations do not always live up to their attributes. They often tend to play it safe, rather than take risks. They often stay away from sensitive issues. They can jump to follow the current fad rather than sticking with complex issues that demand long-term solutions. And, as many of our grantees tell us, we can become overly and unnecessarily bureaucratic, thereby reducing our flexibility.

The second caution for us is not to fall into the trap of thinking that philanthropy and the institutions of civil society that it supports are alternatives to either the public sector or the for-profit sector. If you need to extract significant levels of resources and sustain them over time to affect societal change on a large scale, there is no alternative to the public sector and its power of taxation. The point is that each of the sectors has a set of comparative advantages and the task is to craft policies and programmes that take these comparative advantages into account.

Now a final attribute of foundations, and one that I would like to suggest should be their primary objective or mission, is the support they give to the institutions of civil society. I say this because the reality is that for the most part foundations support their substantive priorities by funding the institutions of civil society to conduct the work that operationalizes and implements their substantive strategy.

Basically, civil society organizations are organizations that:

provide services, often to the most disadvantaged, isolated and marginalized segments of our populations;
educate and train us throughout our lives;
do independent policy analysis and assessment;
engage in advocacy to make sure that people’s dreams and demands are heard;
strengthen our awareness, identity and enjoyment through artistic expression and cultural understanding.

If we think about the transition to more open and participatory systems that took place in Latin America in the 1970s, Eastern Europe in the late 1980s, and Africa and Asia in the 1990s and the new millennium, we can reasonably ask what is to prevent a regression to authoritarian regimes, as has been the pattern in the past? The answer for an increasing number of people is that in large measure it is a vibrant civil society and the social capital it builds that offer the best protection against regression.

To be sure, the institutions of civil society have always been there. What is different in this period of history is that they have a conscious sense of being part of a sector, and these linkages reinforce and strengthen the soft power of their influence.

We live in a time when societies and the issues they face are very complex. The traditional safeguards against the abuse of power, such as the separation of power into legislative, executive and judicial branches and the newer addition of an independent press, may not be enough. In this context, the institutions of civil society add another layer that helps safeguard against the abuse of power.

So, as you can see, the task before TrustAfrica is daunting. It must not only continue to build itself up as a foundation, but it must help nurture the institutions of civil society that will be its partners in making Africa a place that offers dignity and livelihood to its people. And in that task, the Ford Foundation is proud to be a partner with TrustAfrica.

Barry D Gaberman is Senior Vice President of the Ford Foundation. Email b.gaberman@fordfound.org

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