My first advice to a would-be philanthropist would be to remember that everyone will tell you they love you. It’s the curse of the wealthy. Those of us who run Foundations forget it at our peril. It means we all have to dig deeply to find out how to improve. No-one walks away. No-one tells us our funding approach is counterproductive, our reporting is onerous, or we tie them in knots.

One small organisation we fund in Leeds told me they had 17 funders and 17 staff. Three of the 17 staff members spent all their time satisfying the hungry needs of funders for data they would likely never use. At our worst we operate like distance performance managers disempowering local Boards who should be accountable to those they serve. Not those who fund them.

When this trait is combined with the need to manage massive endowments the risks compound. Are we stewards of huge wealth wishing to maintain that for future generations and future needs? Or sage supporters of the needs of today?

The risk in all this is that we become deluded that we know more about the people and issues we are seeking to support than they do. This can be a particular problem for people who come from the private sector after successful careers. Who sometimes believe they can transfer this to a very different context and a very different set of issues. I can’t think of ever seeing that work for long in all my 40 years.  That’s because the answers to the problems most of us seek to support lie in the communities that experience them. Not distant wealthy privileged philanthropists.

The real question for funders then becomes – in light of the above – what can they do to ensure solutions are community driven and that funding supports this?

There are some obvious easy wins – even for the most recalcitrant. Make who and what you fund and success rates crystal clear  so people can decide whether they want to bother (and save yourself a lot of time too). Too many funders keep that as a kind of secret, or take pride in the fact they allow applications for everyone. Nonsense. What they don’t say is that your chance of success may be one in 100 or worse. Or that your application will be considered by someone who may know nothing about what you do. It demeans everyone.

But its not enough. They key is clarity of focus, unrestricted funding and long-term funding. For as long as possible. Certainly, none of the social issues we fund can be solved in a couple of years. I would advocate three years –  or better still six. The longer the time the more likely you are to build the kind of relationship that benefits both parties and helps you improve. We need to see those we fund as our customers. Not the other way around.

But relationships take time and effort and need to have a purpose that benefits both parties. That’s the argument for being specific and clear about what you fund (and don’t fund). By  concentrating on an issue (or issues) or geography you build a unique repository of information and knowledge that can be shared to mutual benefit. This shouldn’t displace the interest groups or infrastructure bodies that may do this – but it can complement it. Because, as a funder, you can deploy a degree of objectivity in reflecting back what you hear and see. This is reciprocity. They benefit. You benefit.

Which brings me to my final challenge: to use that knowledge to advocate and to support advocacy. Most of us are focused on issues or funding where we are bit players. Others need to step up if our funding is to reach beyond what we can fund directly. In the UK Local Government especially is a critical co-funder with us. And as a co-funder we should be advocating for Local Government to do its bit alongside us.

But that’s also true for those we fund. Few will meet the volume of need. However good they may be they will effectively be rationing. Most will work on issues which need systemic change to effect a lasting difference. Perhaps at a policy level with Government. Perhaps at practice level to tackle preventative or complementary work. And for that to be effective we need to fund advocacy as well as service provision.

Though of course if we give them unrestricted funding they can do what they like with it. Which is at it should be. Afterall they are the experts. We simply watch on.

Paul Streets is Chief Executive of Lloyds Bank Foundation for England and Wales where he arrived after a career which has spanned the voluntary and public sector. A link to his speech at the Bayes Business School can be found here.