Small foundations tend to target local issues, rather than chase large scale national impact. There is a different dynamic in their engagement with beneficiaries and therefore the impact of their work needs to be considered from a broader and a more simple angle. It is often the personal motivation of an individual, who, with small and modest resources in money and capacity starts an initiative.  

As a contribution to the European Day of Foundations and Donors 2015, SwissFoundations was invited for the third time to the Zurcher Foundation Dialogue. This year’s topic, Switzerland engaged – Civil Society Engagement in Transition, was inspired by the recently published Conditions, Opportunities and Challenges of the Swiss Civil Society, and was introduced in a short and passionate key note by Prof. Dr. Helmut Anheiner, Dean of the Hertie School of Governance, Berlin, who shared some thoughts and key figures about the topic. The following panel discussion looked at the dynamic of small foundations and their impact and later opened the discussion to the audience.

Professor Anheiner’s core message was that the role of small foundations is not recognised enough, and they are often unjustly criticised and dismissed for their moderate capital base and donation size. The reality is that the majority of registered foundations are small or even tiny. In Germany only one tenth of charitable foundations have a budget of more than € 1 million per year, with comparable amounts in Switzerland.

Most small scale private foundations operate locally, often with a strong community engagement and sensibility for unexpected problems. They act passionately and pass on a fire that encourages others to join in. In this context volunteering is key to make such activities possible. Voluntary work sets an example for others and research has shown that via the personal network volunteers encourage their peers to also become active.

So size makes a difference here: the smaller a foundation is the more likely it will be able to identify service gaps in their local community, which the state is not providing for or aware of. They are not the guys who come up with innovative solutions or attempt to foster social or political change. From their very independent perspective they clean up a river bed or refurbish the local school court yard. They can be very flexible and therefore capable of organising quick fixes in their local communities. They can simply jump in where the government fails to provide consistent help. This way civil society gains something that the state fails to deliver. Basically it is not about being strategic or administratively overloaded, it is rather about taking immediate action and social change than purely generating impact.

Anheiner points out that sometimes it is more important that something is done, rather than something is achieved, because the inherent impact lies in the mobilisation of people. By empowering people new ideas emerge. Civil society in general can be negative but this approach is the fertilizer for new ideas – bumpy, often improvised but innovative. It is also the antithesis of coated measurement goals in the professional philanthropy sector. A reason why we don’t see much measurement of impact documented for small foundations activities. Nevertheless one of the added values of small foundations or associations is their network within the community, amongst each other, and their leverage through cooperation and influencing others.

The majority of charitable activity comes from the middle classes when people have earned their own money and wish to become engaged in philanthropic endeavours. In comparison the wealthy do not commit themselves as much to philanthropy. With this in mind, the philanthropic sector should better target smaller wealth by encouraging potential donors to support a specific charitable cause. Giving practices need to be designed in a way that individual contributions are recognised and other potential donors are inspired to give.

What is missing? The wide range of small and smallish foundation could be better encouraged through new models to support such activities and the implementation of more practical rulings and legislation. Communities should create a dialogue that allows local charitable players to know what the urgent needs in the community are.

This homage to small scale voluntary engagement and the successful work of small foundations should make us realise how powerful the initiating founder with their small-sized entities actually are.

To act as an individual in an ‘I-do-now’ mentality is very powerful and becomes the nucleus to create change on a different level, with different consequences and different counterparts. It is about taking responsibility as an individual. This creates a role model and a resonance which inspires others to reflect upon their own activity. This eventually can reach tipping point in civil society, change behaviour of the population, and enable new ideas to solve pressing problems.

Through their particular engagement in society, small foundations are very important in the philanthropic landscape.

Heiko Specking, founder and partner of specking+partners ltd.