Moving toward EFC 3.0
This year we celebrate the 30th anniversary of the EFC. There is indeed much to celebrate: The EFC is the cornerstone founding institution of philanthropy and social investment infrastructure in Europe, and the leading connector of foundation leaders across Europe and beyond, to Africa and China. The EFC has helped and continues to build the capability of many professionals and institutions in the foundation sector. They have increased the credibility of foundations in the eyes of EU public institutions while also supporting efforts at the national level by providing critical insights, information and suggestions on better policies. It may not be possible to say exactly how and how much, yet it is safe to claim that the EFC has also contributed to increasing the capacity (volume, sustainability and strategic approach)  of the sector. So, congratulations for all you’ve done, EFC! Let us celebrate these successes, yet also, be wise and take stock of where we are now and what is needed to move the EFC to version 3.0. In order to do this, we need to look not only at the EFC, but also at the overall context as well as the ecosystem within which the EFC operates − the European philanthropy and social investment infrastructure, or EPSII for short.
The current political context places a great deal of stress on civil society actors (also referred to as “shrinking space”). Also, foundations are confronted with increased criticism for their work which partially puts into question the legitimacy of our work. There is pressure on foundations to achieve greater impact outcomes (a kind of “social profit”). Measuring and communicating this impact and new approaches for optimising foundation endowment and other financial assets (e.g. via impact investing and other tools) are all critical issues that warrant increased attention. This requires the foundation sector to strengthen its position vis-à-vis the EU institutions, to ensure a stable and open environment for our work. Unfavourable regulations could surely render foundations and social investors much less effective. Hence, policy advocacy and lobbying efforts are crucial for our sector.
The EU landscape with regards to policy advocacy is increasingly complex and undergoing transition, with more challenges facing advocacy groups in achieving successful policy outcomes. The EU’s “Better Regulation” policies aim for greater internal efficiency by reducing time needed for influencing policy and regulatory outcomes. For this reason, the EU increasingly seeks “one voice”, which in turn creates greater competition and pressure for sector organisations to re-examine the effectiveness and efficiency of their own processes as well as how to collaborate with other actors. As a result of these demands and the pursuit of greater excellence, one of the leading trends among Brussels-based lobbying organisations is a shift from traditional advocacy coalitions to quasi- or fully-formed mergers between organisations.
Over the past 30 years, the ecosystem of European philanthropy and social investment infrastructure has also changed quite significantly − and much of that thanks to the EFC but also thanks to DAFNE and EVPA. To better understand how actors in the European philanthropy and social investment infrastructure need to prepare for a changing environment and expectations, a study was commissioned in mid-2018 interviewing around 50 key stakeholders of the sector. Foundation leaders expressed that there is a fragmentation of organisations working at the sector level and in some cases, overlap in activities. They also conveyed concerns about potentially harmful regulations for foundations on the horizon, feeling unsure about how prepared sector organisations are to prevent them and/or react. They suggested collaboration and alignment, particularly between the EFC and DAFNE, but also across all EPSII organisations including EVPA, to join forces and strengthen the voice of the sector. The recently launched Philanthropy Advocacy initiative, led by the EFC and DAFNE appears to be a very good step in this direction.
But it may not be enough. According to recent surveys on governance in associations active in Brussels, there are two critical factors that contribute to strengthening impact: internal decision-making and reputation of the sector. In order for the Philanthropy Advocacy initiative and others to be successful, we first must ensure internal decision-making systems are both inclusive and efficient in our sector organisations, which is not an easy balance to strike given the diversity of approaches to philanthropy across Europe. We must also take swift action to improve the reputation of the sector, which suffers mainly due to lack of transparency. We need a central data system that gathers and reports basic data on foundation spending and other activities and use this to present ourselves more clearly to external actors and the broader public.
These are some of the critical issues requiring action to prepare for an EFC “version 3.0”. Yet we should not be thinking only about what the EFC can and should do. Instead we must consider the assets that each EPSII organisation brings to the table and facilitate alignment to serve and strengthen the impact of the sector as a whole. A first step should be to merge the EFC and DAFNE into a new joint organisation. EVPA should also be included in this conversation. Efforts to make this happen are underway and I hope that they will be welcomed and supported by all. I believe that the time has come to create one strong and aligned voice towards policymakers and reshape the European infrastructure to become more agile and effective to serve the philanthropists and social investors of the coming decades.
 Reference WINGS 4C framework – – http://wings.issuelab.org/resource/using-the-4cs-evaluating-professional-support-to-philanthropy.html
Managing Director, King Baudouin Foundation