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Working together to improve philanthropy practices

The Foundation Practice Rating (FPR) has published the results of its second year of assessment of UK foundations.  Foundation Practice Rating (FPR) is a project supported by thirteen charitable foundations, (one of which is Barrow Cadbury Trust).  Led by Friends Provident Foundation the project aims to increase and improve practice on accountability, transparency and diversity in the sector and to provide tools to make this happen.

One hundred trusts and foundations in the UK drawn from the largest 300 in the Association of Charitable Foundations’ Giving Trends 2019 and all community foundations, were rated from A to D on accountability, transparency and diversity practice represented in information available to grant-seekers or the public.

The FPR is a crucial tool for grant-making foundations to understand our strengths and weakness in reporting on diversity, accountability and transparency, and helps to identify areas for improvement. It annually assesses foundations’ practices. The findings of this second year report show that while some foundations are making great strides in these areas, there is still work to be done to increase transparency, improve diversity, and to ensure we are accountable.

Barrow Cadbury Trust is pleased to see our rating has improved since the first year’s report.  We are currently overhauling our website and one of our priorities is to make sure we are communicating on those three areas, putting front and centre how thinking about and being committed to diversity is an integral part of how we work, alongside being transparent in how and what we fund, as well as accountable.  The new website, which we hope will be completed in the autumn, will contain more information on the three areas and be easier to navigate.  We hope it will raise our rating further.

The FPR encourages foundations to engage in regular self-reflection and analysis of practices, to be transparent about diversity, accountability and transparency practices, and to seek feedback from stakeholders. Foundations have also been sharing best practices and learning from each other’s experiences.

The FPR is an important step towards greater diversity, accountability, and transparency in the foundation sector. By working together, foundations can help build public trust and ensure that resources are being used in the most effective and impactful way.  Its approach is unique in the foundation sector because of the mandatory inclusion of foundations in the sample, setting it apart from other initiatives where foundations must opt in. In this way the FPR aligns with other sectors such as education and business which have their own rating systems.

How does the FPR work?

The FPR assigns a rating of A, B, C or D to each of the three ‘pillars’ of diversity, accountability and transparency, and an overall rating is also given. Giving Evidence, a philanthropy research consultancy, undertook the research process.

The sample included:

  • the 13 foundations/partners, including Barrow Cadbury Trust, funding this work;
  • the five largest UK foundations by giving budget; and
  • a random sample of community foundations and charitable foundations, as listed in the ACF’s ‘Giving Trends report 2021’. That latter includes only the top 300 largest UK charitable grant-making foundations.

Foundations were assessed using over 90 questions relating to criteria developed through a mix of existing standards, those suggested by charities through a consultation in 2021 and those developed through the research process.

All trusts were sent their scores to check for accuracy in November/ December 2022; we were allowed three weeks to raise any questions, corrections, or concerns.  A complex but transparent system of exemptions was applied to ensure the most accurate application of criteria to the many ways foundations work.

Overall report findings

  • Seven foundations received an A rating overall, an improvement over the previous year when only three foundations received this rating. Those foundations are diverse in size and structure. They include a community foundation (Oxfordshire Community Foundation), a large foundation (Wellcome Trust), and smaller endowed foundations (Blagrave Trust). The other foundations who got an A are: Esmée Fairbairn Foundation, John Ellerman Foundation, Paul Hamlyn Foundation and Walcot Educational Foundation.
  • Transparency was the best-performing pillar, with 57 foundations, including Barrow Cadbury Trust, receiving an A.
  • No foundation received an A for Diversity with almost half (48%) receiving the lowest rating of D.

Foundation websites

One finding was that foundation websites played a crucial role in communicating foundations’ mission, with information typically published about funding priorities, eligibility criteria, and information about what we have funded.  Disappointingly, the report found that 22 foundations in the sample had no website and for those which did have websites many were difficult to navigate and lacked a  search function, making it hard to find information quickly and easily.  And the cluttered design of some websites made the search process challenging.  Some websites only shared limited information, while others were difficult to find on the internet. Surprisingly, the website of one of the five largest foundations (by giving budget) was not found on Google and was only discovered by using a different search engine.

Conclusions

Overall, the report illustrates the need for foundations to improve their communications in relation to diversity, accountability and transparency. Read a copy of the report.

The FPR has been positively received by foundations and has the potential to drive positive change in the sector. The FPR website provides resources to guide and support foundations in improving their practices.

Twitter: @FPracticeRating
Contact Danielle Walker Palmour to join the funding group. Email:[email protected]