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An Opinion Piece in the Guardian UK Online by Susan V. Berresford

Raising the Bar

Philanthropy today is grabbing headlines, due in part to the rapid growth of the giving pool along with the celebrity and generosity of some of its newest donors. In Spain, which this week hosts the European Foundation Centre's annual conference, there has been remarkable growth in philanthropy over the past decade, with an average of 400 new foundations appearing each year. Philanthropy made the cover of the Economist not once but twice last year and countless column inches have been dedicated to the topic in the major dailies on both sides of the Atlantic – not all of it flattering.

Media scrutiny of what private institutions do for the public good has thrown a very bright spotlight on questions of regulation and accountability, of investment practice and good governance, and the sector, at times, has been found wanting. We should not be surprised. As with business and government, the performance bar has been significantly raised.

Good intentions – and almost all foundations have them – do not trump lax governance or weak accountability. The flaws and failings of a few in the sector, whether intentional or rooted in ignorance, can damage the field just when the potential for good is growing. So it is imperative that philanthropy is on the front foot, setting its own standards for transparency and accountability and abiding by them.

In the United States, foundations have learned some tough lessons, but our sector is stronger and better for it. The Council on Foundations, an umbrella group representing tens of thousands of donors, has developed principles of accountability, best practices in grant-making and a code of ethics (www.cof.org). And thanks to Independent Sector, a leadership forum for donors and non-profit organizations, we will soon have guidelines to strengthen the governance, ethical conduct, and accountability of charitable organizations of all types and sizes. As someone who was part of both organizations' efforts, I can say that this was not an easy exercise but it was overdue and worthwhile.

Europe, whose philanthropic traditions stretch back to the middle ages, now has some 200,000 organizations that call themselves foundations. It faces a unique set of challenges, not least because any talk of harmonization of laws and regimes for accountability will be politically charged. But a process is underway. Over the past five years, the European Foundation Centre (EFC) has done an excellent job on draft legislation to support a European Statute on Foundations. This is no mean feat for an organization that draws together thousands of nonprofits from more than 40 countries, with vastly different tax codes and modes of operation.

EFC guidelines reinforce the importance of good practice, openness and transparency and with its U.S. counterpart, the Council on Foundations, has developed accountability principles for international philanthropy. Voluntary and aspirational, these principles nonetheless reflect the new imperatives of this increasingly global and high-profile sector. It is vitally important that the momentum continue, in Europe and in the US.

But who is ready to join in the effort? It should not be left to a handful of organizations to develop infrastructure and standards. Nor should it be left to a handful of donors to pay for the process -- to fund the research and institutions that develop norms and principles on philanthropy's behalf. In both the US and Europe there are still too many free-riders watching from the sidelines. A far broader coalition should take ownership in and responsibility for these efforts.

With the opening of today's meeting in Madrid we have a perfect opportunity to move the European process forward and help raise the bar for other regions around the world where philanthropy is just beginning to grow.

Link to the Guardian UK Online

The Ford Foundation is an independent, nonprofit grant-making organization. For more than half a century it has been a resource for innovative people and institutions worldwide, guided by its goals of strengthening democratic values, reducing poverty and injustice, promoting international cooperation and advancing human achievement. With headquarters in New York, the foundation has offices in Africa, the Middle East, Asia, Latin America, and Russia.