Foundations have 'coerced the charity sector to fit a model that suits us'

26 Feb 2020 News

Funders have been “imposing” their way of working on charities, and this has stood in the way of a fairer distribution of money, fundraisers were told yesterday.

Speaking at the Institute of Fundraising’s Trusts Conference, Fozia Irfan, chief executive of Bedfordshire and Luton Community Foundation, made the case for foundations taking a DEI (diversity, equity, inclusion) approach in their work. 

She argued that since foundations’ trustees are mostly white, they might end up developing procedures, and as a consequence allocating funds, in a way that penalises other communities.

Irfan called this effect “coercive isomorphism”.

‘Our way of working has shaped your sector’

She said: “We, the foundation sector, have coerced the charitable sector to fit a model that suits us. We want you to give us outcomes, we want you to fill in a form this way, we want you to use this language. We have imposed on you a way of working which has shaped your sector.”

She argued it is one of the reasons why funds are not distributed in an equitable and diverse way. While there is not a lot of data on the topic, a 2015 report from organisation Voice4Change found that there are fewer BAME charities and they are underfunded compared to mainstream charities. Research carried out by Cass Business School for the Association of Charitable Foundations in 2018 found that 99 per cent of trustees at foundations are white.

Irfan said foundations need to tackle both how diverse they are and how diverse their funding is.

Equity vs equality

Irfan also made the distinction between equality, an approach that treats everyone the same, and equity, an approach that allows everyone to be at the same level.

“Equity, unlike equality, recognises that people are situated differently and that what works for one person may not work for another.

"An equity approach is all about treating people fairly – not in the same way, but fairly. An equity approach looks at people’s different positions and gives them the solutions that they need in order to overcome their obstacles.”

She said taking an “equity approach” for foundations means well-targeted funding rounds instead of universal ones, and a “systemic” approach that looks at the causes of issues, rather than at funding single projects.

She said: “Foundations and trusts are often accused of just taking sticky-plaster solutions. Instead we should ask: why is this project having to come back to us again and again for funding? What is the systemic cause which is leading this project to be needed?”

She said that the DEI coalition, which had its first meeting this month and includes 17 foundations such as the National Lottery Community Fund, Comic Relief and BBC Children In Need, is trying to address these issues.

The foundations involved in the coalition have committed to implement a DEI framework within two years. This includes looking at how funding is distributed among communities, how inclusive grantmaking processes are and whether foundations’ boards are representative and diverse.

Power dynamic between foundations and charities

Other speakers during the day agreed that the “power dynamic” between charities and foundations is one of the most exciting conversations currently happening in the sector.

Harriet Stranks, director of grants at the Lloyds Bank Foundation for England and Wales, said: “I think what we’ve got at the moment and what we’ve had forever is this game we all play, where funders say ‘it’s our money and we’ll do it like this, if you want the money you’ll do that’, and we thought that that was okay.

“But there’s a collective of funders now that are thinking about what’s the aggregate impact of this on charities, with all of us having different systems, ways of reporting and so on. As funders, do we really want charities to spend their resources on filling in forms and reporting for different funders?”

Mary Rose Gunn, chief executive at The Fore, said: “I completely agree and apologise because the change isn’t happening fast enough. There is still a lot of talk among funders about collaborating and working to make charities’ lives easier, but it’s taking a long time to turn the oil tanker towards the right direction. We really need the really big foundations to think about this -  and they are, but it takes a long time to put the changes in practice.”

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