Smaller foundations can have a structural advantage when pursuing ambitious and effective practice, says new ACF report
25 November 2021
A new report from the Association of Charitable Foundations (ACF) has found that while smaller foundations may be constrained by limited resource, capacity, and time, they can have a structural advantage in pursuing ambitious and effective practice and achieving impact in pursuit of their mission.
Smaller foundations can be:
- more agile in their decision-making
- better connected to local communities
- leaner in their bureaucracy
- able to ‘stick or twist’ with their objectives more flexibly
ACF’s Stronger Foundations initiative has found excellent and ambitious practice in every kind of foundation – from the largest and most well-resourced to the very smallest. The contribution of smaller foundations and their grant-making is of enormous importance to civil society, and their individual and collective impact on people, places and causes is invaluable.
This short report highlights 10 ‘pillars of practice’ from the Stronger Foundations initiative that smaller foundations are particularly well-placed to pursue, whatever their remit, level of resource, or operating model. These pillars were selected with input from ACF’s Smaller funders network, a community that involves nearly 150 foundation staff and trustee representatives. Examples of how smaller foundations are pursuing ambitious practice related to these pillars are included throughout.
Hazel Capper, St Giles & St George and Johanna Tompsett, SYP Trust (co-convenors of ACF’s Smaller funders network) said:
“We are very pleased that ACF has recognised that the majority of the foundation sector are ‘smaller’ grant-making charities and have developed a resource specifically for them. Especially one that celebrates the pioneering approaches by some smaller funders, as well as guiding all towards ambitious practice. We believe this will be a valuable resource for smaller foundations and look forward to sharing it with members of our network.”
ACF’s CEO, Carol Mack OBE, said:
“Smaller foundations are the lifeblood of our sector – their commitment and creativity is truly inspiring. As this report brings out so clearly, it is a complete myth that foundations need lots of staff and resources to make a difference to the communities and causes that they care about. I’d like to thank the ACF Smaller funders network for their insights which made it possible for us to develop this resource, and hope that the result is a source of both support and inspiration for the many smaller foundations we are proud to serve as members of ACF.”
The 10 pillars of stronger practice for smaller foundations are:
1. Understands its mission and the impact it is seeking to achieve
2. Thinks collaboratively to pursue impact and advance its learning
3. Identifies and selects funding practices that are most likely to fulfil its mission and designs its processes in accordance with its values
4. Seeks to achieve positive impact beyond a financial contribution
5. Is aware of the external context and its role in the wider ecosystem
6. Continually strengthens its governance, including its diversity
7. Invests time and resources in understanding and defining diversity, equity, and inclusion
8. Makes itself accountable to those it serves and supports
9. Understands that responsibility for its investments sits with each and every member of the trustee board
10. Understands the importance of transparency and engagement, and articulates its approach
In response to interest from members, a new bespoke self-assessment tool has been created to accompany this report and its 10 pillars. This enables members to consider actions relating to each pillar, reflect on performance, summarise planned actions and track progress.
About smaller foundations
There are thousands of grant-making charitable foundations in the UK, nearly all of which would be considered ‘small’ in terms of their financial turnover and number of paid staff, with many being entirely run by volunteers. More than a third of ACF members have an annual expenditure on grants below £250,000, and half give less than £500,000.
The largest 300 foundations in the UK are responsible for half of all charitable grant- making by value, with just 20 foundations responsible for around a quarter. This means that well over 90% of the foundation sector will have much smaller annual grant spend than the largest 300 foundations.
Many of these smaller grant-makers choose to award their funding as small grants, with the result that smaller grant-makers are collectively responsible for very many interactions between foundations and grant-seekers, grantees and communities. The role of smaller foundations and their grant-making is therefore of enormous importance to civil society, and their individual and collective impact on people, places and causes is highly significant.
About ACF’s Stronger Foundations initiative
Between 2018 and 2020 ACF led the largest foundation engagement initiative globally to date, examining with our members what it means to be a stronger foundation in the 2020s. Through six member-led working groups involving 100 foundation representatives, ACF facilitated 42 sessions of inquiry into aspects of foundation practice, and published six thematic reports across issues as wide-ranging as diversity, impact, transparency, investment, strategy, and funding practices. Between them, these reports set out 40 ‘pillars of practice’ that identified how foundations can be ambitious and effective with all their resources.
Subsequently, ACF created a self-assessment tool for its members to consider the pillars in their own foundation’s context and give themselves a score on the extent to which they believe the practice described is fully embedded. In the first year after its launch, nearly 100 foundations have used the tool in a variety of contexts, including board meetings, strategy reviews and team meetings. The results showed that small foundations felt just as confident and ambitious as larger foundations about many areas of practice. They also identified a range of ways to enhance their effectiveness.
The Stronger Foundations self-assessment tool is exclusively available to ACF members and can be accessed via the ACF website. It provides a mechanism through which foundations can:
- Consider the example actions and behaviours for each pillar
- Reflect on and score their own performance
- Record examples of how and to what extent the foundation is meeting each pillar
- Summarise planned future actions
Members have told ACF that the tool is quick and easy to use, and that the process and results are helpful in a variety of contexts, such as board-level discussions, staff away days, strategic reviews and team meetings. The results are anonymous by default, with users asked to give only basic information about the type of foundation they represent.
For more information please contact the ACF policy team at [email protected].