The European foundation sector has come a long way

The early days

I am somewhat in awe of the pioneering vision and optimism shown by the foundations that came together to found the EFC in 1989 and also of the ones that gave it a physical permanence and home in the form of Philanthropy House in 2013. As with all such endeavours it is as much about the people and leaders that gave these ideas form as the foundations which allowed and supported them to do so. Many (if not most) of these individuals remain an active part of the EFC community and continue to serve and to lead in various committees or the governing institutions. They were and are the Changemakers for the sector and are our own “EFC Fellows”.

As a relative newcomer to the EFC I enjoy and am inspired by hearing the stories about how all of this happened and the characters that were involved. Part of it almost sounds like myth with clandestine meetings in dingy bars with hidden entrances – or perhaps that is just my mind distorting a story I heard after a few glasses of wine at an AGA! Whatever the truth of the matter, the EFC and the community have come a long way since then to the impressive annual conference held in May 2019 in Paris where one of the founding members – the Fondation de France celebrated its own 50th anniversary.

What a difference a decade makes

My own story with the EFC starts in 2007 with a visit to Brussels accompanying my boss Brad Smith, then President of Oak Foundation, to meet with Gerry Salole, then and current Chief Executive of the EFC. Brad and Gerry had both been at Ford and I realised how close-knit the philanthropy sector can be as they caught up on what was happening at various foundations and with common acquaintances. They spoke a language that I was yet to become familiar with, and I wondered if I would ever be quite the insider these two were. The purpose of our visit was to get connections with other foundations in Europe from whom we could learn more about operating models, systems, and processes as Oak Foundation was on a rapid growth trajectory.

Four months later not much had come out of our efforts in Europe so we decided to change course and set off to the US where Brad had a lot of contacts, and organised philanthropy was well established. The welcome and openness of our US colleagues to sharing information and lessons learned was heart-warming and something I had never seen in any other sector. What an incredible opportunity to save time, energy, and useless effort. How wonderful to be able to collaborate on common objectives. We were after all seeking similar social outcomes grounded in “rights”, “justice”, and “liberal values”. It was going to take a village of foundations to make a difference and we had to work together to achieve it.

The sector in Europe did not seem quite there yet. There was a greater sense of discretion and with it a paucity of information. It was difficult to make connections and networks were weaker. As I flew back from the US I felt strongly that the foundation sector in Europe needed to develop stronger collaborations both within Europe and across the Atlantic. In my personal experience, much has changed since that time in 2007 with the EFC acting as a catalyst or facilitator. European foundations have become more comfortable being in the limelight and more transparent about the work they do. They have signed on to the Principles of Good Practice of the EFC as well as similar charters established by their national associations. They are more engaged with global issues such as climate change and pan-European issues such as immigration which demand greater scale and require collaboration. The EFC has filled a need in creating space for these collaborations. Oak is an active participant in many of the EFC’s thematic networks and considers collaboration with peers to be essential to its programmatic work and its own organisational effectiveness. We have for instance worked with like-minded foundations and the EFC to establish the Operations Professionals and the Communications networks and continue these efforts in other domains.

Future philanthropy

Global megatrends suggest that both the concentration of wealth and the need for private money to address societal issues will increase.

A couple of the drivers for wealth concentration are:

1. The digital revolution and financialisation continue to create massive wealth concentrated in the hands of a few.
2. A vast inter-generational transfer of wealth is underway. Estimates show that $16 trillion of household wealth will transfer between generations in the next 30 years.

Private resources will be needed due to:

1. The impoverishment of governments as neo-liberalism continues to dominate and result in a downward spiral of competitive corporate tax cuts.
2. Increasing migration from the Global South to the Global North because of the concentration of wealth in the rich world (North America and Europe represent 64% of global net wealth while being home to 15% of global population). As the Global South experiences growth in youth populations with a lack of correlation between GDP growth and job creation, migration is likely to further increase.
3. Increasing impoverishment of the lower and middle classes in the rich countries due initially to a shift in manufacturing jobs to Asia followed by the disappearance of numerous jobs because of technological evolution (AI, robotics and other technologies). An Oxford study from 2016 predicted job loss rates of up to 47% in developed countries within the next 25 years.

Philanthropy is clearly a growth industry and an essential one. It must be stronger and better organised to face the challenges that we already see on the horizon. It is likely that many more philanthropists and foundations will be established in the coming years and the community must proactively reach out so that we stand shoulder to shoulder.

There is much to celebrate for the EFC and its members in this anniversary year and as the pendulum swings back from where it was in 1989 when Francis Fukuyama wrote his essay “The End of History?” even more reason to come together to fight for the values that EFC members stand for.