Impacting investing: trends, issues and capabilities
19 June 2019
This is an interview with Michael Alberg-Seberich and Filiz Bikmen on Beyond Philanthropy’s new report on European philanthropy infrastructure. The research, ‘More than the Sum of its Parts: Insights on the Future of Philanthropy and Social Investment infrastructure in Europe’ (EPSII), is the first comprehensive look at European philanthropy infrastructure.
1. How does adopting a more ‘outward engagement’ attitude in philanthropy infrastructure relate to the wider philanthropy field and social sector? Why is it important that philanthropy associations interact with those outside their direct membership or their constituencies?
To our surprise, this question came up in the interviews repeatedly. The assumption seems to be that philanthropy infrastructure mainly provides services to its members. In fact, infrastructure organisations often start out with providing legal services to their members or capacity building. But the moment you bring together donors that are interested in certain causes, like education, health or the environment, you actively start to turn to outward engagement.
There is a growing expectation, at least in Europe, that philanthropy infrastructure also represents the interests of foundations and philanthropy overall. In the EPSII study, we described this as the wish of the stakeholder interviewed to move from analysis to action. Advocacy, lobbying and communicating the sector to external parties (law and policy makers, media, thought leaders, etc.) was by far the most frequently discussed topic in this study. The strongest expression of this was the repeated wish to have ‘one voice’ for the sector. This ‘one voice’ in our study is one towards the EU, which may be a unique situation in comparison to other parts of the world, but also one towards the wider public. This shows that ‘outward engagement’ of philanthropy infrastructure is crucial to represent the sector and create new collaborations across the sector. All this should enhance the impact for philanthropy and social investing.
2. What advice would you give to countries or regions that are starting to organize their own philanthropy support systems, associations, etc.? What lessons can be learned from the
On the one hand, the European case is a unique one because of the development of a transnational philanthropy support infrastructure after the fall of the Berlin wall and the emergence of the European Union as an important political shaper. Foundations and social investors still struggle today with some rather European challenges like transnational giving or regulatory frameworks for impact investing. On the other hand, this European philanthropy and social investment infrastructure is a network of networks. It brings players together that are also involved on a local, regional and national level in the support of the sector.
This underlines that foundations and social investors in Europe do understand the reasoning and the impact behind such support systems. The European case documents the importance of a joint understanding of how to develop the sector. The challenge is to do so by also embracing the diversity of the world of giving. The quick wins for the infrastructure are the direct services to the members. Still, we should never forget the ‘one voice’ and the representation of the sector as a collective. The European case also shows that with the growth of the sector specialisations, segmentations of the infrastructure may occur. They seem to be an indicator for a strong, more mature sector. Still, even they need to ensure that they pursue joint positions for the development of the sector overall.
3. What are some concrete areas or projects that philanthropy associations can collaborate on? And related… how important is it for philanthropy associations to engage in international or cross border work with other associations?
The EPSII study shows that collaboration makes a lot of sense when you want to represent the sector with ‘one voice’. Advocacy therefore can be an important driver for collaboration. Another, especially across borders, seems to be data about the sector. In these days, and with the many technological possibilities at hand, it just does not make sense to collect and analyse data about the sector everywhere. Joint data hubs may be a solution for this.
This also indicates how important the international work is. It allows inspiration of the sector based on other associations’ work and it also helps to represent the sector in various constituencies with a joint agenda for the sector. Yes, there are local differences but in the end we all want to ensure that giving and social investing can create impact.
4. Who could be (or who already is) an unlikely suspect or supporter of philanthropy infrastructure? Are there any other players that could be brought in to the ecosystem that we are overlooking?
It may make sense to start with those closest to the field and who benefit from/have the assets to contribute to its development. There appears to be an assumption that philanthropy infrastructure work is only non-profit. While this is often the case, it may not always be. Philanthropy advisories were purposefully left out of the EPSII study, to focus on the majority of philanthropy-serving organisations (PSOs) which are non-profit and share common challenges (e.g. advocacy, membership etc.).
However, there is a growing number of for-profit service providers, many of which are ‘purpose driven’ and set up as social businesses, undertaking activities very similar to PSOs. They can and should be engaged much more actively to active funders/supporters of philanthropy infrastructure. There is some hesitation to doing so and we need to have an open and honest conversation about how to bridge this gap, since it appears that both for/ non-profit PSOs will continue to grow quite rapidly.
5. Are there any specific pieces of advice on how associations, often of limited financial resources, can go from ‘analog to digital’?
Going from analog to digital is as much of a mindset as it is a practical issue. Access to data, and developing systems to capture/analyse and share it, are the more likely and common obstacles that are not necessarily related to cost. While sophisticated systems like those powered by Candid (the new merger of Foundation Center and Guidestar in the USA) are ideal, even smaller scaled/budget PSOs can prepare a survey and a basic Excel system to capture, analyse and share data. As such, PSOs need to adopt a more digital mindset, and groups like WINGS can perhaps help to develop more simple and low-cost solutions for such purposes which they can share with smaller scale PSOs to implement.
6. What will be needed from funders, collectively, individually, funders of infrastructure, and funders not currently funding infrastructure, in order to ensure a sound and sustainable future for the field?
There are those that fund and those that do not. Moving from one side of the line to the other may not be effortless, but it’s also not impossible. Peer engagement among funders appears to be the most effective way of increasing engagement – and as such more opportunities to foster this are likely to be helpful. For funders that are already actively engaged, sustainability will not come only from multiyear grants. They have to work with PSOs to determine market strategies and alternative income streams that align with financial viability. For example, when new organisations are being formed, feasibility studies to explore who may already be doing similar work is critical, and funders, with their often expansive networks, can be very helpful in this light. Creating a new association for every new need is one way we can ensure unsustainable PSO growth. As such, creating more spaces for funders to have conversations and share experiences/reflections are extremely important.