I have been reading with interest and some bemusement the exchange of articles concerning the merits of external watchdog organizations. I am sympathetic to the notion of watchdog organizations and I also believe that further regulation of the foundation sector is inevitable. However, I must say that I find some of the premises and arguments that have been put forward by Rick Cohen and my good friend David Emerson to be misguided.
Rick Cohen appears to think that it is the duty of associations – presumably including the European Foundation Centre – to publicly criticize their members’ presumed accountability shortcomings. He then proceeds to suggest that the main problem is how to ‘avoid being captured by the sector that is being watched’. The rest of the article then outlines how, unavoidably, a watchdog that is financed by foundations is faced with diverse and often contradictory pressures and expectations, which he compares to ‘walking the tightrope’.
David Emerson deftly sidesteps the main issue of whether an external watchdog is necessary, and by arguing that the charity regulators in the UK are adequate, makes the valid point that foundations should continue to respond in diverse and pluralist ways that may not always be appreciated by an outsider. He seems reluctant to take a clear position on whether membership organizations should play any role in policing the foundation sector.
My position on this is simple. The arguments in favour of increased and more coherent regulation of the sector will inevitably prevail. However, it is wrong to confuse the role of an external watchdog with that of a membership organization such as EFC, which advocates on behalf of the sector as a whole while also encouraging the spread of good practice among foundations. I believe an external watchdog is both necessary and inevitable.
The EFC has developed Principles of Good Practice which members are encouraged to observe. These principles cover a range of issues including compliance with relevant legislation, good governance, disclosure and transparency. We are also leading the push for a European Foundation Statute, which would provide a framework for more coherent regulation of foundations.
This debate needs to continue. But we have to understand that the primary role of a membership organization is to act as a champion for philanthropy and foundations.
Chief Executive, European Foundation Centre