Untapping the potential of European philanthropy

June 2, 2021
SwissFoundations Symposium 2021 «Tous Ensemble».

by Carola Carazzone, Secretary General of Assifero and Chair of Dafne – Donors and Foundations Networks in Europe

It is a great honour for me to address the 20th anniversary assembly of SwissFoundations and it is deeply humbling to speak after Michelle Bachelet, who has been an outstanding role model for me throughout all my life and is such a hero for millions of women all over the world.
My contribution this morning explores the deep meaning of collaboration: why collaboration matters for foundations today – at the threshold of a new era, what its potential is, what it entails.
By ‘collaboration’, I do not mean a list of activities to do together.
I’m interested in exploring the meaning of collaboration as a core value, a guiding principle, an attitude, a way of thinking, a collaborative mindset in the way we approach any decision or action, a feeling to embed in our daily work.

As a human rights lawyer, I decided to study development economics and spent the first 15 years of my professional life working in international cooperation in different countries around the world.
I thought that I was someone who knew the deep value of collaboration. But I was wrong.
It was only in March 2020 when Covid hit Milan and Lombardy – the richest, wealthiest, fashionable region in Italy – was on its knees, desperately needing medical equipment, doctors and nurses that I came to realize the real meaning of Ubuntu in African philosophy. ‘I am because we are’. “Umuntu ngumuntu ngabantu” in Bantu language means: “I am what I am by virtue of what we all are”.
All things are interconnected: humanity and nature. Trust, loyalty, mutual relationships between people. Empathy, compassion, respect for the other and the planet.
The urge to collaborate is to become aware, not only of our rights but also of our duties, a desire for peace and harmony also with nature as a value towards the whole of humanity.
Collaboration in the framework of Ubuntu philosophy is not only cooperation.
When cooperating, people perform together, working on individual yet common goals.
Collaboration happens when people recognise themselves in the same values, embrace the same guiding principles, share a vision and can co-create something.
There is an intrinsic value, not just an instrumental one, in collaboration.

“Collaboration happens when people recognise themselves in the same values, embrace the same guiding principles, share a vision and can co-create something. There is an intrinsic value, not just an instrumental one, in collaboration.”

Collaboration for foundations: Going to the heart of essence and identity

Choosing collaboration as a mindset challenges our essence.
It raises the questions:
Who are we?
Who we want to be?
Why do we do what we do?
What is the difference we want to make for ourselves, for the missions we care for, for the community we live in, for humanity, for the planet?

In theory, foundations by their own nature can survive without collaborating with anyone. Foundations do not need to collaborate.
In theory, foundations could stay years, decades, maybe in perpetuity, in solipsism, on their own in an ivory tower.
Foundations are financially independent: differently from NGOs and all other non-profits, foundations do not need partners for the survival of their organisation, to access funds and realise their projects. Foundations have their own endowments, their own spending, their own resources.
Foundations are also politically independent: in contrast to any other public donor, which is tied to politics and blame avoidance and short-term horizons, foundations can embrace long-term visions and support lasting processes for social change.
Differently from almost any other economic or social actor, foundations have freedom. The unique value of foundations lies in the private wealth that they can make available for the common good, in the quality of their assets (even more than the quantity, the amount of them).

Foundations can choose to collaborate.
Far from the old model of foundations as owners of endowments that distribute donations and grants from the revenues of endowment management in ivory towers, foundations today know that they can unlock different kinds of resources, different kinds of capital, beyond their financial capital.
Foundations display their full potential when they untap their intellectual, social and relational capital, on top of their economic, real estate and financial capital.
Foundations’ power lies in their enormous strategic freedom as well as their ample flexibility and agility in action. Differently from governments and companies, foundations can take risks, experiment, can try and fail, which is the only way how innovation can happen.
Foundations today – far from being mere “buffer funders” reacting to emergencies – are probably among the actors most capable of innovation and social change, in putting the future at the centre of political and social action.
40% of the philanthropic foundations that exist today at a global level were established after 2000, demonstrating that foundations can foster partnerships and collaboration capable not only of managing responses but also of innovating and building the future.

“Foundations’ power lies in their enormous strategic freedom as well as their ample flexibility and agility in action. Differently from governments and companies, foundations can take risks, experiment, can try and fail, which is the only way how innovation can happen.”

The world has changed, and this is our life chance to shape the future we want.

In a recent paper, “The imaginary crisis (and how we might quicken social and public imagination)”, Geoff Mulgan argues that the world today is facing an unprecedented deficit of “social imagination”.
Social imagination is not the ability to plan economic recovery nor to program, restore, or develop the dominant production and consumption systems, nor envision new generations of technology. The “capacity of social imagination” is the ability to imagine a different and better society 30 or 40 years into the future: more equal, more inclusive, much happier, characterised by new forms of well-being with ourselves, with the communities we live in, with the rest of humanity, with the planet.
Social imagination is never the product of a stand-alone hero, it is a collaborative process.
The changing power of social imagination does not lie in a solitary genius, but in the co-creation of incubating environments, in the “collective genius”, collaborative processes where the capacity of social imagination can be mutually learned and experienced.
Edgar Morin, the father of complex thinking, for the last 40 years, kept pointing to the obsolescence and inadequacy of the current systems of knowledge and education to face the uncertainty, scale, speed, interconnection of today’s challenges.
Morin theorises the importance of teaching uncertainties, asking questions rather than giving answers and changing perspectives to be able to face the unexpected.
As foundations, we realise that to embrace complexity and being able to foster social imagination and shape the future we want, we need to collaborate today with many different stakeholders, public and private actors, building strategic partnerships and unusual alliances to unlock all possible resources.
We do know that we will only untap all our full potential for humanity and the planet if we do not stay in solipsism, in an ivory tower.
If we acknowledge why the value of collaboration is so important for foundations today, there will be many implications.
Collaboration is not just a beautiful word or wishful thinking.
If we embrace collaboration as a mindset, it entails a whole world of new approaches, new tools as many of the tools from the past appear inadequate or obsolete.

Among the many implications for foundations in embracing collaboration as a mindset, allow to choose two fundamental ones:

1. with grantees and so-called “beneficiaries”
2. with foundation peers and philanthropy networks.

Collaboration with grantees and so-called “beneficiaries”

Adopting collaboration as a mindset with grantees implies changing the relationship with them, including how we fund and what we expect in terms of reporting.
Too often and for too long grantees have been considered based on an implicit bias of control and a cultural paradigm of competition.
If we want to chart new strategies according to a new paradigm of collaboration, we should start looking at “grantees” as partners, as co-creators of impact.
Respecting them as true strategic partners (and not mere recipients of funding), we should have the courage to completely overturn the donor-beneficiary power dynamics typical of the current system funding practice.
We want our partners to be strong and effective and bold and visionary and capable and creative.
But this is not the case for philanthropy today.
Unfortunately, the current mainstream modalities of funding practice across our continent are project-restricted and do not enable capabilities and creativity. Foundations seem reassured as long as grantees are restricted by a list of predetermined activities and micro-outputs.
In reality, the current funding practice keeps grantees dependent on projects and unable to untap their full potential.
Civil society organisations are weakened and disempowered by decades of a mainstream funding practice that combines several false myths – non-profits should cost very little, all funding must be allocated to activities and projects, the path to greatness in the social sectors is to become ‘more like business’.
Even before the pandemic, grantees were strangled in what is known as the “starvation cycle”.
The spiral of producing projects for the calls for proposals (a competitive mechanism) by public and private funders, together with the perpetuation of chronic under-investment in the organisations, skills and staff.
Lack of trust and collaboration are among the main reasons why foundations mostly give only short-term project-restricted support, with no or extremely limited possibility to cover staff, communications, digitalisation, management, advocacy, and lobbying costs and use overhead ratios as the main indicators of efficiency (not effectiveness) to select non-profits.
Adopting a collaborative mindset entails changing the funding practice towards more enabling approaches such as programmatic core support and participatory grant-making to empower non-profits to develop to their full potential.
To be resilient, bold, and influential agents of change, non-profits need flexible, long-term, mission-oriented core support. The complexity of assessing non-profit effectiveness does not make assessment any less important. Quite the opposite: it is crucial to collaborate to decide key measures to evaluate impact.
It is actually shifting from a paradigm of controlling the inputs to one of assessing collective impact.
Civil society organisations need flexible support that is robust, predictable and sustainable, and not necessarily just grants, but instead a portfolio of monetary as well as non-financial support, such as relationships, connections and other types of contributions (for example, use of spaces, loans, guarantees for obtaining loans).
In any case, a kind of flexible support that can give them the confidence to seize new opportunities and create greater impact while strengthening their capabilities as change-makers to collaborate with other civil society organisations and partners.
In the context of the emergency responses to Covid-19, there were several initiatives to encourage more flexible funding practices. In particular, two important pledges were initiated by Dafne – Donors and Foundations Networks in Europe and the EFC, European Foundation Centre, in Europe and by the Council on Foundations in the USA:
• In Europe reaching 186 signatories foundations
• In the US reaching almost 800 signatories foundations.
Over a few short weeks in March 2020, some funders overhauled their processes, dismantling onerous reporting structures and proactively offering a range of financial and flexible support.
My hope is that these funder commitments and the Covid-19 experience will accelerate the process and contribute to changing funder practice in Europe.

I wonder if you were ever asked what collaboration means to you personally?
If you would ask me what collaboration means to me, I would say an environment where I have the opportunity to try and fail.
A safe environment where we can combine our talents and strengths to work creatively to tackle challenges and seize opportunities.
Collaboration is the only way through the challenges we have ahead of us.

Collaboration with peers: The collective power of philanthropy networks

In the face of the complexity, scale and pace of the challenges that we are confronted with at different interconnected levels (local, national and international), philanthropy support organisations are not just networking, membership associations, supporting members in achieving their individual results anymore.
Philanthropy networks are the place where we can ask different and better questions and create a safe space for others to do the same so that we are able to create learning-driven cultures, break down siloes and frame new possibilities for our organisations, sharing compelling visions that align and inspire each other.
As Dafne and PEX demonstrate, philanthropy networks are safe spaces to share failure, a lemon, something that didn’t work… that allow all of us to learn from this. Coming from a country where failures are taboo with deep consequences in terms of constraints to innovation, I know the distinctive value of this kind of knowledge sharing.
I grew up in the Italian Alps, not far from the Swiss ones, and I always loved forests. Perhaps, I share this with many of you.
Alpine forests are the place where I feel I belong.
Differently from the homogeneous plantations produced by deforestation all over the world, an old-growth forest is much more than a collection of trees.
The scientist Suzanne Simard spent thirty years of her life to demonstrate that, underneath the soil, a vast interconnected network of life links the trees, even of different species, through their root systems.
She discovered that the trees, apparently isolated and motionless only on the surface, are all connected through a complex subterranean system of infinite biological pathways that enables them to exchange water, carbon, nutrients, hormones and warning signals: the mycorrhizal network.
The mycorrhizal network is a living system based on collaboration, negotiation, compromise, reciprocity, cooperation, connectivity. The denser, more extended and developed the mycorrhizal network is, the healthier, resilient, spectacular the forest.
I love this analogy for the power of national, European and international philanthropy networks, such as SwissFoundations and Dafne.
Philanthropy networks are today uniquely placed to make a long-lasting difference in terms of collective impact by systematically promoting collaboration and strategic partnerships, knowledge sharing and collective imagination, by facilitating the adoption of professional practices, accelerating the collective learning process and avoiding reinventing the wheel, improving the ability of philanthropy to influence policy, raising public awareness of the value and impact of philanthropy, and bridging it to influential governments, private sector actors and the media.
Philanthropy networks can make a real difference in unlocking the huge potential that lies in private resources, including strategic non-monetary support.
Philanthropy networks can be agents of change, developers, enablers, accelerators, multipliers of social change to achieve sustainable development and strengthening civil society and democracy. (See the WINGS #LiftUpPhilanthropy campaign).

It is a terrible mistake to differentiate the “real philanthropic work” of the foundations from the “network work”. It is a mistake to see the system of fees as overheads and costs; they are instead shares in a strategic investment. Even for an issue-focused foundation today, it is essential to consider the wider scenario and participate, investing in the philanthropy developers, enablers, accelerators, multipliers.
The Agenda 2030 offers a powerful framework for systemic collaboration at different levels.
There is also a huge untapped potential in European philanthropy collaborating on EU funds.
There is a huge untapped potential in pooled or collaborative funds tackling shared missions: we have a wonderful example in Dafne’s Philanthropy Coalition for Climate and NEF, Network of European Foundations, with Civitates – a philanthropic initiative for democracy and solidarity in Europe. But also in thematic networks like Ariadne – European Funders for Social Change and Human Rights.
But never forget that collaboration is an intentional process, it won’t happen by accident.
It is a process worth investing in.
Everyone is a changemaker. Switzerland is the country with the highest density of foundations on the European continent and with some of the most impactful foundations in the world.
I express my deep appreciation for the first 20 years of SwissFoundations and wish you all the best for the next 20 years.

Carola Carazzone Chairs Board of Dafne – Donors and Foundations Networks in Europe. She is Secretary General of Assifero, the Italian association of family, corporate and community foundations, since 2014. She serves as Advisory Board Member of Ariadne, the European Network of Funders for Social Change and Human Rights, as Member of the Experts’ Reflection Group of ECFI, European Community Foundations Initiative, as Member of the Alliance Magazine Editorial Board, and Ashoka Italy’s Advisory Committee.