Chief Executive of the Association of Charitable Foundations, Carol Mack, joins Alberto Lidji for a wide-ranging conversation on the dynamics facing foundations today.
 
The Association of Charitable Foundations (ACF) represents UK-based foundations and grant-making charities, it has 380 organisational members that represent £50bn in assets and annually grant out £2.5bn.
 
ACF is a member of DAFNE (Donors and Foundations Networks in Europe) and Carol explains how she interacts regularly with her counterparts in other countries across Europe and globally.
 
Carol explains how it’s an increasingly challenging context for foundations.  Whereas in the past foundations were met with civic gratitude, today we’re increasingly seeing, globally, a rising trend for distrust of institutions and growing scrutiny of philanthropy and of foundations.
 
Society is in general asking more questions of philanthropy. People want to know where a foundation’s money comes from, where a foundation is investing, and where a foundation is giving its funding. So, ACF supports foundations as they address these challenges and helps them to be the best they can be in their pursuit of social good.
 
A good example of this is their Stronger Foundations initiative, launched about 18 months ago, to help foundations examine their own practice and welcome scrutiny positively. It’s a member-led initiative with over 80 members involved. They have 6 working groups looking at different aspects of foundations’ practice, from strategy and governance to funding practice and intentional investing.  Each working group looks at what excellence looks like in their specific topic area.  This information is available on ACF’s website and it can be a useful resource for people who are interested in foundations practice.
 
The first working group to report back was looking at diversity, equity and inclusion. ACF published the findings of this. Carol observes that, overall, the UK charity sector is disproportionately homogenous, it doesn’t reflect UK society, and foundations are even worse than the wider charity sector. Approximately a year ago, ACF commissioned some research into foundation boards and found that, in the sample, foundation boards were 99% white, two thirds male and only 3% of those boards were under the age of 45.
 
Carol sheds light on the immense financial resources at foundations’ disposal, yet notes that foundations still are a very small part in comparison to government resources.
 
Increasingly, there’s an interesting interplay between what the state will fund and what foundations will fund. The traditional model was always that foundations would fund the innovative practice – proving the need, proving an intervention that works – and then government would roll it out.  This worked well at a time of an expanding state spending, but it’s not what we’re seeing in the UK, where government has been reducing the types of services it is willing to fund. This poses some interesting challenges to foundations.
 
On the topic of social impact investing: yes, Carol notes that it is an area of much interest to foundations.  However, she suggests that, arguably, foundations have always done social impact investing, noting that if you look back at some of the charitable activity in the 1400s, some of that was about providing loans to enable people to enter a profession – arguably, that’s a form of social investment. 
 
A recent initiative that ACF has been involved with is something called the Members Policy Forum, whereby they bring together foundations with government officials on particular issues – this has been helpful in increasing the level of knowledge around particular issues across sectors.
 
When looking at success in the next 10 years, the climate crisis is front and centre in Carol’s thinking. She asks: how do we as a global community do what it takes to tackle this issue.
 
Carol’s key takeaway: what you do really matters, there are so many challenges out