Governance for change

Danielle Walker

‘To change the world, we must change ourselves.’ This statement is not lifted from a paperback self-help manual, a Michael Jackson hit from the 1990s or an ancient Buddhist tome. It is a lesson arising from nearly a decade of experience within a medium-sized UK foundation, the Joseph Rowntree Foundation (JRF).

Seven years ago, JRF changed from an enlightened grantmaker to one of the UK’s largest ‘hybrid’ foundations, part operational foundation, part grantmaker, in order to more actively pursue social change. What was not anticipated was that this renewed focus on achieving social change would also necessitate changes in the Foundation’s own governance structures.

Why was this so, especially as playing an active part in social change had always been a guiding ethos for the Foundation?

A hundred years ago, a chocolate manufacturer in a provincial English city set out a manifesto which aimed to use knowledge as the basis for social change. Drawing on turn-of-the-century Enlightenment ideals and his own deeply held religious beliefs, Joseph Rowntree devoted half his wealth to the creation of three ‘trusts’ as vehicles to progress his aims. These trusts were run by Rowntree and his family as an extension of the family business, with trustees’ meetings conducted as a logical extension of company board meetings.

Today, one of the three ‘sister’ trusts – the Joseph Rowntree Foundation (JRF) – employs over 500 staff and is run by a team of seven directors.[1] Although the organization has grown several hundredfold, our aims remain consistent with those of the founder a century ago – to bring about evidence-based social change.

A sharper focus on change

In pursuit of this mission, JRF has established an international reputation for rigorous, policy-relevant research and development. It is one of the largest independent social policy focused institutions in the UK, making grants of over £6 million a year to academic and other research institutes – in fact, one of the most influential foundations in the UK.

Seven years ago, the trustees reviewed the situation and judged that this was not enough. Was JRF really bringing about change, they asked. Research was clearly highlighting that key social problems existed, yet government and other agencies were very slow to react. The trustees therefore agreed to establish a discrete function, Policy and Practice Development, focused on changing the structures and ways of working that were so poorly serving the most vulnerable in society. We now have eight change programmes that are focused on bringing about particular types of change.[2]

So far, this reads as a simple tale of foundation growth and corporate reorganization. However, it was through the creation of this new function that JRF became a ‘hybrid’ foundation – operational foundation as well as grantmaker. And our learning to date suggests that hybrid foundations require different governance structures from more traditional grantmakers.

Some lessons change has taught us

The renewed focus on change taught us many things. Taken together, they have fundamentally challenged the traditional model of accountability and corporate governance operated by JRF trustees and directors.

Take, for example, the issue of risk. Change requires a leap of faith – a risk and a stab in the dark. It is important to understand the nature of risk, and if possible to experience it, in order to grasp the countervailing forces maintaining the status quo. People and institutions often resist change for very logical and sensible reasons. If foundations berate government or business as intransigent, while not understanding the risks change poses to them, they are unlikely to meet with success. Good research can minimize risks through understanding, but it cannot dispel them.

A good example of this is a particularly rigorous, year-long ‘Inquiry’ JRF carried out in 1995. It involved national experts within government and without, and commissioned more than 20 research studies. On the basis of the best minds and best evidence, the Inquiry recommended an overhaul of the financial systems underpinning long-term care provision in the UK. On re-examining the issues again in 2002 in light of the stock-market ‘correction’ in 2001, we calculated that our proposals would have cost the British taxpayer billions of pounds if they had been implemented.

This lesson led to fundamental questions about how well trustees could manage the risks posed by this new activity by simply adding a brief report to their already full agenda.

Another key insight was that one distinguishing factor of the Foundation’s change-focused work is stating clearly what our objectives are at the outset. This meant that JRF had to abandon its lofty, detached, independent stance and get its hands dirty. Staff have to take the messages from research, our own conclusions and our own passionate beliefs and engage purposefully. We have to build alliances and networks, support fellow travellers and smile at government ministers. We have to make sure our case stacks up and continues to make sense in the face of changing contexts.

The questions we ask ourselves changed from ‘Have we made a good grant?’ to ‘Did an increase in government spending on health really mean new money for care for the elderly? Was the implementation of a scheme we advocated really showing improvements? How did the changes in the market for buying properties affect the models for urban renaissance we championed?’ All these questions require us to review again and again the context and our objectives – yet another task for our already overstretched trustees.

Strain on existing structures

Our trustees met only four times a year. The Foundation’s efforts to change society were only one part of their responsibilities, yet it required their detailed attention. Something had to happen.

In order to manage the research agenda, the trustees had created a committee system to review and make recommendations on research proposals. Committees met quarterly before trustees’ meetings. The first move, therefore, was to add change work to the list of things on which committees advised trustees. But our experience was that it was asking too much of the committees – change-focused activity requires in-depth knowledge, understanding of the changing context, a memory of past interventions, and time to creatively consider future activity. For proper scrutiny, change could not be simply added to an already full agenda.

We also found that decisions on foundation activities required a corporate commitment beyond funding commitments. Decisions about particular change activity meant that we could be devoting considerable staff resources to a particular cause.

New structures for change

So we changed. The trustees have created a new governance structure giving directors corporate responsibility for the commitment of staff resources. Trustees ensure that they have the ability to approve, reject and monitor the development of change programmes and create specific groups of external experts and stakeholders to shape and carry forward that work.

Now, our structures ensure proper scrutiny of proposals by senior staff in terms of resources and feasibility, input from expert committees on content, and overall approval by trustees. If activities are agreed, staff can be confident that there is support at all levels for the change objectives. Trustees also delegate detailed programme guidance to a dedicated advisory group, which brings expertise and potential partnerships. Trustees and directors monitor activities, agree specific proposals for expenditure and discuss issues as they arise. Compulsory programme reviews have been created to ensure programmes of work can be stopped.

Two years on, this structure appears to be working. The new ways of working can be summarized as intense scrutiny followed by delegation and monitored freedom to act. The normal funding structures have been modified to enable rapid reaction within cash limits. In fact, some of these changes have now been reflected in the structures supporting our grantmaking functions.

New challenges

Yet, challenges remain on the horizon. We have yet to stop a programme, although the signs are that at least one should be wound down. If the Foundation can agree decisively to stop one of its programmes, the system might be judged a sound one.

We also need to consider how we build in challenge: although we have engaged ourselves in processes of change and abandoned objective positions on some issues, the power imbalances inherent in grantmaking still persist. We still have the capacity to dispense large sums of money and are hugely influential – who will tell us we are wrong, misguided or simply naive? Our advisory groups are, by design, full of ‘fellow travellers’ – people who are keen to work with us to bring about particular change objectives. How can we build in challenge to our ideas and our activities?

We also question the degree to which our change activity affects our more traditional objective research and convener role. We may now be seen as having an agenda, where we were previously simply asking intelligent and balanced questions. Will the Foundation lose something in the long term?

These new queries mean we are alive. The potential for endowed foundations to stagnate and become self-congratulatory has been well documented – by engaging in the change process ourselves, we are open to new influences, debates and concerns. We cannot simply look inward for answers.

1 The other two are the Joseph Rowntree Charitable Trust and the Joseph Rowntree Reform Trust.

2 These include: creating methods of re-engaging local politicians with the processes of working with communities; bringing about changes in housing policy and planning practice to cope with uneven regional demand; and defining sustainable models of funding long-term care for elderly people in the UK.

Danielle Walker is the former Director of Policy and Practice Development at the Joseph Rowntree Foundation. She can be contacted at palmour@ntlworld.com. She is now the Director of the Friends Provident Foundation in the UK.

See http://www.jrf.org.uk


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