Funding the future: the crucial role of foundations

Mar 8

Hier für Deutsch - Ici pour français

Both practice and a growing body of research show that the complex challenges we are facing, such as climate change and inequality, will not successfully be addressed with current thinking. Indeed, no single organisation nor sector can hope to reach one of the goals set in the Agenda 2030 alone. Given the urgency, there is also an increased focus on how to achieve system change - a large scale change that will affect everyone - as opposed to single actions of direct help. This, again, requires cross-sector collaborations and innovation processes that shift the focus from fighting the symptoms to addressing the root causes.

This discussion has also arrived in the field of foundations in Switzerland. Nora Wilhelm, Co-Founder and Catalyst, of collaboratio helvetica, was invited to contribute to a workshop called “societal challenges need cross-sector solutions” at Swiss Foundations’ 2020 Stiftungsgespräch on the topic “Foundation for Future”. In his opening speech, Dr. Lukas von Orelli, President of Swiss Foundations, said, “if we dare to push the boundaries of what we thought possible together, we can foster systemic change”.

When it comes to realising change towards social and environmental goals that are not currently addressed by market structures or government actions, foundations play a key role. Indeed, foundations have contributed and enabled many key advancements across all kinds of social and environmental topics in Switzerland.

And they continuously reflect on how to play their role in a better way. This is exemplified by the multiple initiatives run by coalitions of foundations on key topics, such as:

Funding Organisational Development: a smart investment to multiply impact, published in 2020 by Laudes Foundation, MAVA, PeaceNexus Foundation, Stiftung Mercator Schweiz and the Oak Foundation
Doing Better, More Efficiently: measuring and enhancing the philanthropic vitality in the lemanic region, published in 2019 by Lombard Odier Foundation, Stiftung Mercator Schweiz, Ernst Göhner Stiftung, Gerbert Rüf Stiftung
Embracing Complexity: towards a shared understanding of funding systems change, published in 2020 by Co-Impact, the Schwab Foundation, the Skoll Foundation and other actors

Dr. Thomas Zwiefelhofer, President of VLGST, the association of Liechtenstein Charitable Foundations and Trusts, recently stated that “Charitable commitment and entrepreneurship are not mutually exclusive”. He makes the point that foundations are able to support projects in a more targeted and long-term manner than other stakeholders might. “Foundations have the opportunity to push controversial issues that are not (yet) societally accepted and thus contribute to change in place and society.”

Advancing system change work on issues contained in the Agenda 2030 is one such situation. At the “Foundation for Future” Stiftungsgespräch 2020, the topic was naturally part of the discussions. When Nora Wilhelm asked the panel how they are adapting their funding mechanisms and strategies to foster systemic change, Manuela Balett, Geschäftsführerin Leopold Bachmann Stiftung, replied “how to fund systemic change is a difficult questions that preoccupies us and I would wish that as foundations we would address it together, do the needed reflection work, starting with ourselves and with our partners”.

This is what the “Funding Systemic Change” team, a working group that had originated from collaboratio helvetica’s Nova Helvetia process in 2020, set out to co-initiate. To better understand this challenge, we conducted a series of stakeholder interviews with individual foundations, their coordinating associations and academia in Switzerland and Liechtenstein. This research process culminated in an online learning session with 7 foundations represented, as well as VLGST and the Center for Philanthropy Geneva. In this session, we shared some of the insights gathered so far, which we had clustered in a Mural Board, and harvested further insights on the challenges, opportunities and best practices around funding systemic change.

Based on these insights, together with different partners, we are now co-designing a series of in-depth workshops for foundations on several thematic strands identified in the process. Read on and stay tuned!

Which challenges do foundations in Switzerland and Liechtenstein experience today when it comes to making a shift towards the aspired new way of collaborating and funding for systemic change? Based on our conversations, we clustered them into five thematic areas:

A fair and efficient selection process to identify the right partners: with limited resources to allocate and to manage this allocation, foundations are challenged to design selection processes that will lead to the most impactful projects being supported. Whilst trade-offs will remain, there is potential for improving application and selection processes (e.g. to be collaborative or peer-based) to yield better outcomes.

“We need to be aware of the criteria that are really important to create impact and design fair selection processes accordingly” - Alessandro Semeraro, Board Member of Stiftung Wegweiser

“We need to focus our support on people rather than projects. In this, we may need to overcome our fetish with goals, impact and measurement, and rather support outstanding people and their ability to individually and collectively engage in fast and deep learning processes. - David Keller, Managing Director of Arthur-Waser Stiftung

Agile governance structures with diverse and forward thinking board members: the board is an important institution within a foundation. Too rigid structures and a lack of renewal and diversity amongst board members have been identified by the participants as obstacles to innovation.
“It is key that we increase the diversity in the boards, especially regarding age and mindset. We have to bring the new generation to the table” - Laetitia Gill, Executive Director at the Geneva Centre for Philanthropy, University of Geneva

“Daring to change the board can trigger change. It happened at our own foundation - and that triggered a lot.” - Katia Weibel, Deputy Managing Director of Mercator Stiftung

Adapted and innovative funding mechanisms for systemic change projects: system change is a new level of action that comes with its unique set of challenges and strategies. When seeking new solutions to a complex issue, foundations need to support innovation processes rather than focus on defining outputs. This requires a structural and mindset shift within many foundations.

“Foundations need to review some of their assumptions in order to support system change projects, and be ready to take risks. Failure is a part of the learning process and crucial for innovation” - Katia Weibel, Deputy Managing Director of Mercator Stiftung

“When it comes to funding systemic change, a business attitude and mindset is necessary to scale individual ideas. The missing point is an investors’ mindset - think differently, accept the new reality.” - Rudi Hilti, Founding Chair of THEHUS.institute and The System Change Foundation

Adequate impact and learning measurement strategies: participants highlighted that it might be necessary to review existing models to assess system change projects. Not only the targets and timelines of impact and learning measurement needs to be reviewed, but also what is considered valuable outcomes, for example valuing relationship and community building.

“Foundations do not question their own impact models enough. For example when it comes to cultural funding: what is the impact that really counts?” - Andreas Geis, Head of Funding, SKKG Stiftung für Kunst, Kultur und Geschichte

Ambitious collaborations amongst foundations: as the reports that have been mentioned have shown, much can be achieved when foundations come together. Reflecting on one’s own system and how to change it is never an easy task, and foundations will benefit from collaborating to achieve desired outcomes and learn from each other’s best practices.

“Mindset change is always a challenge and it is no different for foundations. But a coordinated effort of 2-3 bigger foundations might get the ball rolling.” - Linda Sulzer, Project Manager at Engagement Migros

Based on these multi-faceted insights, our plan is to organise, facilitate and document a series of workshops (e.g. in Basel, Zurich and Liechtenstein) between March and May 2021 to deepen the exchange on possible ways forward to overcome these challenges.

Would you be interested in becoming part of these crucial conversations or even co-hosting them? Contact any of the co-authors for further information. And a big thank you to everyone who shared their insights so far and particularly to our partner, the Stiftung Wegweiser. We are looking forward to the next steps in this inspiring and important development in the Swiss philanthropic sector!