News

EU Referendum: what next for foundations?

In the aftermath of the vote to leave the European Union, foundations have understandably been keen to reflect on the implications, both for their work as individual funders and as contributors to a wider culture of philanthropy and grant-making.

What does the vote tell us about the issues, communities and initiatives that we support? In light of the societal divisions and instabilities the vote revealed, do our processes, governance and decision-making need to be reconsidered? What, if any, measures might we take to minimise the effects on vulnerable constituencies, whether of hate-crime, rising intolerance, or deleterious economic impact? As investors and influencers how might we best position ourselves within a near future of economic and political uncertainty?

These are among the questions that have been considered by foundations at a variety of meetings and discussions facilitated and attended by ACF since June.

Echoing the enduring diversity of the foundation sector, opinion has been expressed along a broad and plural spectrum of concerns and priorities. However, points of significant agreement and overarching interest have included:
 

VOICE:  With a voting split of 52/48, foundations, regardless of their own political views, will want to avoid alienating those who may hold opposing positions on the issue of EU membership, many of whom are likely to be represented within the communities they support.

If the vote reveals anything, it shows that a huge number of the electorate are no longer happy with the status quo. A balance must therefore be struck between the confident reassertion of existing priorities on the one hand and the willingness to listen, understand and respond deeply to these voices on the other. Are there any opportunities that a changed polity may present to be more inclusive and more deeply democratic? How can we shape that? And is this a moment in which funders can renew and deepen conversations with their grant-holders? Can they broaden engagement in the pursuit of their charitable objectives?

For some, there is also concern around the coarsening of public discourse, especially as it relates to issues such as immigration and the ongoing refugee crisis. For funders working in these areas, and in the field of community cohesion more generally, working against the legitimisation of xenophobic sentiment remains an issue of pressing importance. Diverting or increasing support towards policy, influencing and communications activity may represent a possible course of action for those foundations for whom this is a particular concern.

PLACE:  Geography played a complex role in the vote, as location intersects strongly with educational and employment opportunities as well as with a range of attendant social attitudes. What seems to be clear, however, is that a sense of feeling alienated from the opportunities and benefits of globalisation correlated strongly with the likelihood of voting to leave the European Union. Nonetheless, for those foundations working to strengthen social cohesion, how best to reach ‘cold-spots’ will remain a concern.  An allied question is how best to address need in those areas, often the poorest,  with weaker civil society, at a time when the dividing lines and fissures that concern voluntary and community sector organisations are being underscored.

Many feel that the English devolution agenda will continue apace following the referendum result, with decision-making increasingly taking place at a local level. For place-based funders, this may offer an increased opportunity to work collaboratively, both with local councils, newly devolved structures and one another, in sharing learning and good practice.  For those who fund across the UK, significant questions also remain about the impact of the vote, whether positively or negatively, on the movement for Scottish Independence as well as the political situation in Northern Ireland.  

PRACTICE: As charities themselves, foundations form part of the voluntary sector but occupy a particular position within it as a source of funding that is completely independent of the state. This means that an uncertain economic picture, coupled with continued retrenchment in Government  spending, is likely to result in a greater call on foundations resources over the coming years. ACF has previously talked about the referendum result as a chance for foundations to consider their grant-making in the light of these broader economic and social factors. Foundations themselves have echoed this call, asking whether the adoption of a Brexit-sharpened ‘lens’ through which to view decision-making processes may be appropriate.

Of course, the deep divisions revealed by the vote cannot be healed by foundations alone. But how can they avoid inadvertently exacerbating the problem? How can their practice be modified or refined to foster cross-cultural, geographic and generational exchange? How might they work actively to forge community links and build leadership and democratic capacity in marginalised groups on all sides of the political spectrum?
 

FINANCE: The exact economic impact of the referendum remains unknown, but what is already clear is that volatility and uncertainty are likely to continue. As long-term investors, foundations are well placed to cope, but as ever, good governance coupled with considered investment and spending policies will be key to weathering any storms in the service of maintaining a commitment to public good.

Depending on the global economic picture (and many other factors are in play besides Brexit) over the medium and longer terms, those that rely on investments to fuel their grant-making may be faced with an erosion of their asset base and a possible reduction in income. Although such an outcome is by no means certain, it is important to note that foundations, some of whom predate the Magna Carta, have historically demonstrated a willingness to uphold spending rates and face difficult decisions with creativity in order to meet the needs of their beneficiaries. In addition, some endowed funders remain committed to influencing corporate practice through a number of mechanisms of investment and engagement.  

Those foundations funding overseas have already been facing issues around the declining value of the pound, either having to increase their commitments or risk seeing the value of their grant-making reduced in real terms. Likewise, those whose funding focuses on areas that are heavily intertwined with European funding and policy practice, such as environmental conservation or Higher Education research, will be concerned with achieving clarity on what form those relationships might take going forward.

 

POLITICS: On the political front, the picture is again one dominated by uncertainty. Whatever flows from the referendum result, it is likely that Government resources and attention will be significantly diverted. Coupled with the relocation of the Westminster Civil Society brief into DCMS, many charities and umbrella bodies are concerned that there may be less emphasis on core VCS matters and less opportunity to advocate and influence in service of those they support.

Theresa May’s messaging around inequality and social cohesion may represent an opportunity, however, with funders clearly having a stake in both these areas. Post-referendum, then, is there a new window in which to confidently reassert the importance of the sector in addressing some of the divisions that were highlighted by the result? 

In addition, the point has been made that as a net contributor to the EU, there may in theory be no reduction in overall funding to be ‘played for’. If the challenges are therefore about who decides where and how funding is delivered, might foundations have a role to play in making the case for equitable settlements on behalf of their beneficiaries, or supporting them to make the case themselves, through the use of their influencing, convening and negotiating power?
 

SOCIAL TRUST: The referendum result raised more questions than it gave answers, especially for those individuals, institutions and structures that might be said collectively to make up the ‘establishment’. This arc of distrust may well be long, but for many foundations the current circumstances leave them feeling compelled to look again at how they might work to reverse its trajectory. Could foundations working within communities do more to empower their grantees? Is there a case to be made for increasing funds aimed at building leadership? How can funders leverage their role as facilitators, convenors and communicators to begin to build a genuinely collaborative discourse around social change?
 

EUROPE: The issues and dynamics underpinning the vote are not unique to the UK. Similar tensions and polarities are emerging across the continent and beyond. The way that foundations work in the immediate aftermath, then, whether in forming a new consensus or sharing intelligence and good-practice, will be instructive to colleagues elsewhere. Longer term, there may be opportunities to collaborate on methodologies designed to ‘work into’ social schisms on a pan-European level and to develop or refine practices that are genuinely experienced as empowering by those they seek to empower. Pragmatically, is there a case to be made for setting up an official group to speak on behalf of UK funders in Brussels? Or for articulating a vision for philanthropically-funded social diplomacy in the face of reduced inter-governmental collaboration?
 

ACF: What role can we at ACF play in helping foundations to negotiate these and other questions over the coming months? Challenges and opportunities will of course be felt and met differently across the membership but ACF can support funders’ varied thought and action in a number of key ways. Firstly, we will remain committed to working alongside our colleagues elsewhere in Europe and globally, developing links and facilitating discussions where appropriate. Our presence in Northern Ireland, Scotland and Wales will also allow us to monitor conversations specific to those nations and disseminate learning as and when it develops. Our research and thought-leadership around foundations’ use of their resources will continue to inform discussion and practice, whilst our expanding evidence-base will allow funders and other key stakeholders to use and access aggregated data on the activity of the whole sector.

Discussions focused on the impact and drivers of the referendum result will no doubt continue to inform the agenda across our range of networking and development opportunities for months and perhaps years to come. We are committed to curating and sharing this learning in support of UK funders and will continue to engage intensively on their behalf.

 

Keiran Goddard, Head of External Affairs.

 

This piece forms part of ACF’s ongoing work to collate, curate and disseminate information on the Referendum outcome and its implications in support of its membership.

We support UK foundations and grant-making charities