Formulating the Idea: The Founders (Foundation Building Best Practice Study Excerpt)

The following section examines why and how founders of foundations formulated the idea for their initiative. In these three cases different structures suited to differing local needs and opportunities were chosen.

  • Example 1: A Community Foundation
    Puerto Rico Community Foundation
  • Example 2: Private Sector Membership
    Foundation for the Philippine Environment
  • Example 3: A Coalition for the Environment
    Philippine Business for Social Progress

Why Start a Foundation?

    Summary Points

  • The case for a grantmaking foundation is usually built upon the identification of specific, unmet needs. The foundation-building effort usually rises from the identification of a particular need and the realization that a grantmaking foundation is the most effective and appropriate response. The founders of PBSP saw social unrest and the growing disparity between rich and poor as a need to be immediately addressed through the committed involvement of business in social development efforts. In the case of FPE, the need that propelled the foundation-building effort was the escalating problem of environmental depletion and degradation. Founders must also determine that the effort required to address the need is feasible.
  • Committed leadership and support are critical in the early stages. The core or founding group plays a key role throughout the period of formation of a new foundation. For the initiative to move forward, it is critical to have a group of individuals or institutions organized around the same idea and committed to ensuring the success and sustainability of the effort. The seven-member founding group of PRCF was key in defining the structure and role of the new foundation. Each member also brought his/her personal legitimacy to the process -- which proved critical to attracting funding. Building alliances with other groups and sectors can help gain broader support for the new foundation. Members of the founding group can come from the same sector of society (as in PBSP's case, where all members came from the business community) or from different sectors and professions (as in the cases of PRCF and FPE). What is vital in both cases, is the commitment of every member to the common goal of building a financing organization, and their willingness to devote their time, expertise and resources to make it happen. In the three cases in this chapter, the founding group played a critical role in engaging the support of others, giving shape to the idea of a foundation, guiding the process and defining the mission and vision of the new foundation. Involving people from different sectors also helps incorporate new skills to the process.
  • If a part of the foundation building process, local and external actors can facilitate access to expertise and resources. Local and/or international entities (Northern and Southern foundations, NGOs and aid agencies) are, in some cases, key partners in the foundation building process. They usually provide technical expertise, financial and/or political support to the initiative. In the case presented by PBSP, a Venezuelan organization provided the model from which the Filippinos defined the structure of their new foundation. PBSP also benefited from the expertise and support of a local NGO, the Economic Development Foundation, which played a critical role in organizing the professional staff. In PRCF's case, an international foundation, the Ford Foundation, provided financial and technical support and credibility to the building of the new organization.

Each foundation in this chapter was established as a strategy for addressing a deep social challenge. These challenges had wide currency (social development, community building and environmental conservation) and they were not likely to be solved in the short or medium term. The question was not only how an immediate need could be met but how financial resources could be used to promote sustained action over the long term. Timing was also a factor. For example, the Philippine Business for Social Progress owed its genesis to the perceived need of business leaders to show their social conscience and separate themselves from a dictatorial government of the time.

Who Starts Foundations?

The founders of the foundations in this chapter -- Philippine Business for Social Progress (PBSP), the Puerto Rico Community Foundation (PRCF), and the Foundation for the Philippine Environment (FPE) -- were small groups of individuals (five to ten) who were committed to finding support for causes about which they felt strongly.

Towards this end, they devoted significant time, energy and/or financial resources. Individuals came from various backgrounds including business, academia, government officials, and religious and civil society. In every case, the leadership and vision of individuals in the group was fundamental. These founders often became trustees, directors or staff, and continued to assist the development of the organization in their new roles. Founders played various roles. They:

  • Articulated the need for a foundation;
  • Contributed technical support, funding, advice and facilitation
  • Raised funding for the initiative
  • Mobilized the talents, energy and resources of others who shared their vision
  • Planned and implemented the foundation

While individuals are often the driving forces behind the development of grantmaking foundations, organizations can also play pivotal roles. In the case of PRCF, FPE and PBSP, established organizations including other foundations, non-governmental organizations, businesses and even government departments assisted in the creation of the foundation. . The support these organizations gave to the effort came in the form of access to knowledge and information, physical space, seconded staff and technical assistance.

What Skills and Knowledge Are Useful in Establishing Foundations?

Some skills founders brought to bear were:

  • Understanding of economic and social conditions and how these affect the communities they wish to serve
  • Knowledge of existing institutions and networks involved in similar issues
  • Expertise on local laws governing the nonprofit sector
  • Accounting expertise, particularly, knowledge of fund management and tax laws
  • Connections to organizations or individuals who will potentially provide support
  • Knowledge of non-governmental organizations, particularly, how they are managed, what structure they can take on and what needs they have

    What Role Can Organizations from Other Countries Play?

    Grantmaking foundations are a relatively new type of organization in many countries. Obstacles to establishing them include a lack of information and an uncertain financial context. Organizations in other countries can help to overcome some of these obstacles by providing information, good models and financial and technical assistance. This was the case in the development of PRCF where the Ford Foundation played an important support role, as well as for PBSP where the founders adopted useful approaches from another Southern foundation -- Venezuela's Dividendo Voluntario Para la Comunidad. The founders of PRCF and PBSP each worked with foreign groups to assess the need for a grantmaking organization, gain political and financial support and adapt the idea to the local context. Specialized international NGOs (such as Synergos), associations of foundations and religious institutions have also been important in the development of Southern grantmaking foundations, but they did not play a role in these cases. These organizations provided access to resources, technical support and consultants, links to other foundations, and information.

    Copyright © 2000-2006 Synergos