Who is this blog for: This blog is for trustees of charitable foundations.

On the 10th May we delivered a presentation as part of the London Funders’ Festival of Learning. This presentation focused on what foundations’ trustees can do to improve practice on transparency, accountability and diversity.

Overview of the Foundation Practice Rating (FPR)

The FPR is a structured assessment of foundation practices related to transparency, accountability, and diversity.

What is the aim of the FPR?

The aim of the FPR is to create a means for charitable foundations to benchmark their performance in areas of their practice that are important to grant-seekers and the wider public.

By creating peer and public transparency in the sector it incentivises greater use of available good practice advice and support. It also points them to existing sources of advice and help.

The report highlights areas of particularly good approaches in each pillar as well as areas for improvement.

Who was assessed?

The FPR  assessed foundations on their practice on transparency, accountability, and diversity. The foundations included are:

• The 10 funding organisations (partners)
• The 5 largest foundations in the UK (by grant budget)
• A stratified sample of foundations drawn from the Giving Trends (2019) report of the 300 largest trusts and foundations
• A sample drawn from the UK community foundations for whom financial information is given.
• Totalling overall 100 organisations.

How were the foundations assessed?

The 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.

The information on each foundation was gathered from public sources that would be available to potential applicants for funding, including the organisation’s website, regulatory records and accounts. Each pillar (transparency, accountability, and diversity) was assessed and rated from A-D. An overall rating was then developed based on the scores in all three pillars.

All foundations were sent their scores to check for accuracy in November/ December 2021 and they were allowed three weeks to raise any questions, corrections, or concerns. They were offered details of an explanatory webinar hosted by Friends Provident Foundation which was hosted three times in December 2021/ January 2022.

A complex but transparent system of exemptions was applied to ensure the most accurate result.

Before we elaborate on the results it should be noted that:

• Performance in these three areas was not particularly related to foundations’ size or structure.
• Practice on diversity is much weaker than that on accountability and transparency.

The results

Collectively, the criteria on which the 100 assessed foundations scored best were:

👍 those that published their investment policy and its details (note that this a legal requirement for some foundations, but not all).

👍 those that had a website.

👍 those who stated who their staff are.

👍 those who published information about their funding priorities and previous/existing grantees.

They collectively scored worst on:

👎 publishing a breakdown of the diversity of trustees/board members, and having a plan to increase that.

👎 publishing a breakdown of the diversity of staff, and having a plan to increase that.

👎 publishing in Welsh.

👎 providing contact mechanisms for disabled people  – both for funding advice and general purposes; and specifically concerning complaints and whistleblowing procedures.

Our 7 recommendations to improve your transparency, accountability and diversity

1. That you have a website that is accessible and easy to navigate.
2. You share your eligibility criteria and use different application methods: a quiz, a video, a roadshow.
3. You explain your grants process – what are the steps? How long does it take? Deadlines? Invite only?
4. You enable people to get in touch in multiple ways – email, phone
5. You tell people what has been funded in a transparent way – 360 Giving, or a grants list on your website or both
6. You disclose your organisation’s current diversity makeup and the targets you have set to improve diversity.
7. You encourage a culture of openness about diversity – DEI data standard and the Funders Alliance for Race Equality have excellent resources.