Philanthropic foundation spending reached almost £3 billion in 2015/16, its highest level ever according to the latest Foundation Giving Trends. And with the value of foundation investments hitting a record £60 billion, public expectations of what foundations can do with their money are also running high. Private grant-making is equal to around 43% of the government funds channelled through civil society, and is attracting a wave of reviews of how foundations could make an even bigger difference by spending more, better or differently. Most of the debate, however, is occurring in a relative data vacuum. Competing ideas from all-comers on ideal giving strategies and subjects jostle for space in a growing free-for-all, while the rich information on spending which could inform debate remains fragmented, and inconsistently presented in individual annual reports. Initiatives like 360Giving are attempting to address this information gap by establishing a standard way of releasing data that allows grantmakers to share information about their funding in an open and comparable way. In turn, this has led to the creation of searchable platforms such as GrantNav and Beehive, making it easier for non-experts to also use the data
Grant-makers are facing unprecedented levels of need and demand, as government budgets suffer the cumulative effect of annual reductions, and average disposable household income sees its tightest squeeze for five years (Office for National Statistics, July 2017). This means that strategic thinking about the priorities which will ultimately determine foundations’ social impact is crucial. This year’s Foundation Giving Trends shows some ways in which foundations are addressing calls on resources. Many draw on total capital return from investments as well as annual incomes to fund spending. Some use finance in new ways to achieve certain social purposes, with at least 10% of the top philanthropic foundations making social investments. A new exploration of innovation and partnership in the report shows that collaborative approaches are becoming firmly embedded, and foundations of all sizes are working with multiple partners to ensure adequate budgets, drive new ways of working, and focus on impacts.
A good multi-sector example of this is the Arts Impact Fund, a £7 million collaboration including Arts Council England, Bank of America Merrill Lynch, Nesta and Esmée Fairbairn Foundation, with additional funding from Calouste Gulbenkian Foundation. This is a much-needed addition for arts and culture, a field providing a good example of how collective foundation data can identify emerging gaps and inform decision-making. Examination of ‘spending out’ by foundations like Northern Rock, Monument, Paul Getty and Peter Moore which are (or have been) strong supporters of arts and culture indicates that, with government support also reducing, welcome increased spending on arts and culture by foundations like Sackler and Paul Hamlyn will not make up the shortfall. Moreover, long-term data in Foundation Giving Trends reveals that the increased grants spending in 2015/16 derived mainly from the market gains in existing investments, while income from major new gifts into foundations had modest growth. Today’s social needs cannot be met solely by switching existing foundation resources from one area to another, especially if asset growth slowed, and the strong message is that we need more new donors to create foundation endowments.