4 Critical Changes Foundations Must Make To Thrive

The Times They Are A-Changin’

Why It Matters

To meet today’s challenges, philanthropic foundations need to fundamentally change how they work. We spoke to foundation leaders to find out exactly how to make that change happen, by promoting diversity, being more transparent, and more. This article is crafted in partnership with Philanthropic Foundations Canada (PFC).

In recent years, foundations in Canada have been forced to reconsider their approach to social impact. From the global climate crisis to reconciliation with Indigenous peoples within Canada, foundations are realizing that traditional, transactional ways of working are simply not going to cut it. 

Cross-sector collaboration is becoming more and more important, which is why it was the theme of last month’s Philanthropic Foundations Canada Symposium in Calgary, hosted by Philanthropic Foundations Canada (PFC); a membership association for Canadian Foundations. Working across organizations and sectors offers huge benefits, even despite its challenges.

How do foundations need to adapt, and what must they do to build and maintain legitimacy and relevancy?

“I’m getting the sense we must do better, and be open about improving practice,” said Jean-Marc Mangin, President and CEO of Philanthropic Foundations Canada, who recently completed a listening tour around Canada. “People are a bit more aware that we do have some blind spots.”

As Canada changes, foundation leaders say there are four ways foundations need to change, too. 

1. Build transformative relationships

Whether with others or on their own, foundations are realizing they need to become more relational rather than transactional. This means spending time and energy on the ground with all stakeholders, rather than conducting arms-length grant-giving. 

“You need to be a lot more connected to [citizens] to address the complexity of the issues you’re dealing with,” Mangin explained.

This is particularly important for reconciliation, where trust and communication are everything. “The days of foundations deciding what’s good and not good are over,” Mangin said. “People are quite cognizant of the fact that Indigenous people need to be at the table and set their priorities.”

In Alberta, for example, the Suncor Energy Foundation works with Indigenous communities for youth engagement, setting up the Indigenous Youth Advisory Council. As the charitable arm of an energy company — which have not traditionally been partners of Indigenous peoples – the foundation is aware of the need to build strong relationships.

“We are literally working and learning alongside elders and youth,” said Lori Hewson, Director of Community Investment and Social Innovation at the foundation. “It’s a very decentring process.” 

This is a process that takes time and attention. For example, Hewson and three of her colleagues, including a Suncor executive, recently spent a week with eight Indigenous youth from the foundation’s council. This included taking part in Indigenous ceremonies, visiting local community-based programs and initiatives, sharing meals together and discussing issues facing communities in the region.

Hewson explained that doing this kind of work is about being in a relationship — “a relationship which is asking for transformation from all involved.”

2. Promote diverse voices

To better connect to the people they serve, foundation offices and leadership need to better reflect those same people. 

“One of the criticisms of the sector is that we don’t reflect the realities of Canada,” said Mangin. “We’re very conscious of the lack of visible diversity within our teams. It’s not enough to just [have a relationship] with [Indigenous peoples]. How does it affect the culture within our team, the process? How do we start to decolonize our approach to philanthropy to be more inclusive of these perspectives?

This year, PFC released a report on diversity, equity, and inclusion in Canadian philanthropy. Unsurprisingly, the survey found that foundations are predominantly governed by older white people. Recruitment to foundation boards are often made through personal and family networks, which makes it difficult to find board members from diverse backgrounds. Meanwhile, staff are only slightly more diverse than their organizations’ boards.

According to Mangin, there are ways to ensure a diversity of voices in the short term, such as through advisory committees and proposal selection. “Programmatically, there are things we can do relatively fast,” he said. “There’s no reason you can’t bring in external voices to deepen that analysis.” 

Changes at the staff and board level, however, require much more action and time. There is a huge need for more diversity, and foundations are beginning to embrace new hiring practices and tools to bring in talent from different backgrounds. Currently, however, only a small minority of foundations have a formal Diversity, Equity, and Inclusion (DEI) policy in place.

3. Take risks and take time

Foundations should remain aware of what makes them unique: the resources to take risks, and the independence to stick to longer time horizons.

There’s certainly a need for collaboration and risk-taking,” said Mary Rozsa de Coquet, Board Chair of the Rozsa Foundation, which conducts research to strengthen the arts sector in Canada. “Research is very expensive [and] longer term. Governments do not have that license, corporations do not have that goal.” 

Even after years of work and many dollars spent, there is no guarantee of research success. “Nonetheless, you often need the data to firm up the direction in which you’re going,” added Rozsa de Coquet. 

Unlike governments and companies — whose accountability to voters and shareholders can encourage short-term thinking — foundations are able to work to long time horizons.

“Most of the things we’re supporting are for five to 10 years, or sometimes even more,” said Jean-Marc Chouinard, President of the Lucie and André Chagnon Foundation. “You can’t [support innovation processes] in a period of two or three years.”

For example, one of the foundation’s programs — professional development for a network of educators — didn’t have political support, and required significant flexibility and time to succeed. However, it has progressed successfully, now providing support to teachers in nearly 60 school boards.

“Our work is around inequities, poverty and child development,” explained Chouinard. “It relates pretty [closely] to things that are asking for risk.

4. Be more transparent

Of course, these kinds of decisions require a new level of legitimacy for foundations, who struggle with deciding how public they want to be.

“Many of our philanthropists in Canada do not want a public profile,” said Mangin. “They want to be quiet, supporting partners in the background.”

Mangin is encouraging PFC member foundations to be more visible. For example, he recommends making all information easily accessible online, and explains: “you’re playing a role as a public trustee, and probably give this information anyway.” 

Organizations like GlassPockets can help foundations become more open and transparent. Generally, across several industries, we are seeing a shift towards open data, with a new interest from the public in obtaining more information about organizations doing social impact work — such as their operating costs. 

Some foundations are becoming even higher profile by engaging in advocacy. In March 2015, foundations in Quebec banded together to write an open letter to the provincial government, warning that budget cuts would lead to greater inequality.

Chouinard was involved in the letter. “[It] did open up new channels for cooperation with government and civil society, and led to some different public policy choices,” he said.

However, Chouinard added that as foundations face greater scrutiny from the public about their role in social change, advocacy should be carefully considered and undertaken with support from others. “When we take any type of position around this, it will be in a collective – never alone.” 

Of course, there are limits to foundation advocacy, especially as they are not accountable to voters. “It’s not our business to have a voice on the collective democratic choices that are made after an election,” Chouinard explained. There’s always a tension between being too passive and too influential.” 

Conscious decisions

All of these changes point towards one major theme: openness. Openness in relationships, ideas, risk, and the public.

“I’m quite excited that there’s an openness to improve practice,” said Mangin. “People realize that there’s a mismatch between the impact we’re currently having and the expectations of our partners in government and civil society.” 

Mangin acknowledged that this mismatch also results from a lack of understanding between sectors, leading to exaggerated expectations of the role foundations can or should play.

The four aspects of openness are essential for foundations to continue expanding their active role in social change. Above all, said Chouinard, foundations must ask themselves hard questions about their work and their relationships. 

“Are we really adding value to those we are supporting?” he said. “Is our support really relevant to their work?”

If foundations are to face up to the challenges of today, they cannot afford to shy away from those kinds of questions.