What has (and hasn’t) changed in the EFC and the sector in the past 30 years?

The most striking change during the last three decades has been the growth of the sector. It is indeed a golden age for philanthropy. We see an increasing number of foundations in many countries, growing endowments and a rise of new forms of philanthropy. That adds to the pluralism and increases the potential of the sector.

Looking more specifically in to the EFC the most dramatic change must be the plurality of the members, now covering foundations from north to south, east to west and in all shapes and sizes and with all sorts of philanthropic missions. I admire the way the EFC has been able to incorporate this into its work over the years.

The second thing that strikes me are the new issues that have become critical to many foundations. First, the climate crisis and second the United Nations Sustainable Development Goals (SDGs). Both issues have become drivers of change – both locally and globally – that unite many foundations across borders.

What are the challenges for the next 30 years (and beyond)? And how can European philanthropy tackle them?

New role, new responsibility

With the increasing size of foundation endowments on one hand and the decreasing state budgets for key areas for foundations (culture, science etc.) on the other, the role and responsibilities of philanthropy will most likely grow in the coming years.

Even today we are no longer a sector which can act in the shadow of the market and the public sector. We cannot be the same discreet donors as foundations were decades ago. Foundations of today deliver on some of the most important issues in society. We see an increasing share of the budget costs being covered by philanthropic grants in specific areas.

By stepping forward and leading through catalytic philanthropy many foundations have taken up a new role as drivers for change. From being in the back seat, we’re now moving in to the driver’s seat, and with that, we increase our responsibility for the outcome and results.

This new role calls for: 1) Closer collaboration between the donor and the beneficiaries, 2) Closer partnerships between different types of donors across the different sectors, including the public and private sectors and civil society 3) Better tools to foresee the long-term economics and sustainability of the beneficiaries.

Private sector partnerships are necessary to reach the SDGs

At global level we find the most striking and urgent societal challenges covered by the SDGs. Reaching the ambitious targets of the Goals requires much more than political action.

In terms of financing the necessary actions, the UN makes it is clear that public and philanthropic capital will only cover half the needed investment. So, involving private companies and private investors is essential to create the change.

For foundations this will call for new strategies and open new paths for us.

First, we need to revise our investment mandates to make impact investments possible. Currently most foundations, including Realdania, have philanthropic potential in turning the endowment into a philanthropic tool by adapting new investing mandates that allow us to become more mission driven in our investment portfolios. The first step in my opinion is to know what you own as a foundation and then act to gradually make the investments more aligned to your mission.

Furthermore, I find it promising that an increasing number of private organisations such as pension funds and other long-term investors share our philanthropic ambitions. Our positive experiences with cross-sector partnerships in recent years tell me that much positive change can derive from these partnerships and that philanthropy and businesses can have a fruitful partnership. This is a path to develop further in the years to come. And we – as philanthropists – have an obligation to try to inspire and facilitate that development.

How can the EFC help be the catalyst for achieving this?

To me, the EFC is very much about exchanging know-how and peer-learning. One of the most striking changes internally in the sector has been the increasing exchange of knowledge and collaboration among foundations.

Retrospectively critics were right to describe the sector as closed and discreet, but this has changed dramatically during the last decade.

And the change has had the effect that we now have a transparent sector with no business secrets and with a mindset and an ambition to share experiences, knowledge and know-how not only between European foundations but also across the Atlantic and elsewhere in the world. All our knowledge is open source, and that gives us unique opportunities and obligations.

We have a huge philanthropic sector in Europe and in North America, and the interest in philanthropy is booming in other places too. But the sector needs good conveners such as the EFC, the Global Impact Investing Network (GIIN), and other organisations aiming to unite the different voices of the sector and lead the way forward. My hope for the next 30 years is that the EFC will remain a driving force in peer-learning and stay ambitious in improving philanthropy as a sector.

So: Happy anniversary. And keep up the good work for generations to come!!

Image courtesy of Ulrik Pedersen.