A recently-published study by CEFIS UAI and the Hauser Institute for Civil Society at Harvard University notes three major challenges facing the Chilean foundation sector if it is to make a significant contribution to the country’s development: the level of giving, methods of operation and its systems of governance and transparency.

According to the study, Filantropia Institucional en Chile, the amount spent on programmes by Chilean foundations in 2015 was just $83 million, or 0.03 per cent of the country’s GDP. Comparative figures for the US are 0.35 per cent of GDP and, nearer home, for Brazil 0.05 per cent. As seriously, Chilean foundation spending is lowest where it is most needed – only 5 per cent of foundation spending, for example, went to the Arica region, which is among the poorest in the country.

In terms of modes of operation, the study found that only 18 per cent of Chilean foundations operate solely by making grants to third sector organisations while 24 per cent give some grants and operate their own programmes. Conversely, 58 per cent run their own programmes. One explanation for the relative lack of grant making is a shortage of trust in the capacity and transparency of third sector organisations. This inhibits the development of a strong NGO sector and puts greater strain on the resources of the foundations themselves, necessitating greater human resource expenditure and potentially less to spend on social investment, notes the report.

The study also highlights a lack of public access to information about foundations. Only 29 per cent publish reports of activities on their websites and only 24 per cent provide information on their financial position and programme expenditure. The report argues that greater transparency and communication would enable opportunities for collaboration, strengthen the foundation sector’s credibility and help the public understand the role the sector plays in Chile’s development.