Former Alliance editor Caroline Hartnell first interviewed Gerry Salole 15 years ago, when he had just taken on the role of CEO at the European Foundation Centre (EFC). This interview comes at the end of those 15 years, following his stepping down from the EFC. It also marks the twilight of a long career in philanthropy. Starting in 1993 with Bernard van Leer Foundation, from 1999 to 2005 he was representative of the Ford Foundation in South Africa. This interview focuses on the key lessons learned, and the major challenges now facing the philanthropy sector.

Caroline Hartnell: In a recent blog called ‘The writing is on the wall’, written for the 30th anniversary of the EFC, you talked about reciprocity as being central to philanthropic relationships. Can you say a bit about this?

Gerry Salole.

Gerry Salole: I think reciprocity is a good way of looking at behaviour. One of the more central parts of human reality is that there is an expectation of fairness, of tit-for-tat, of ‘I do this, somebody else does that’. This is intrinsic to human relationships – in marriages, work relationships, friendships. People sometimes have unstated expectations about what the other does. If you apply this lens to philanthropy, it takes you away from the necessity of seeing one set of players as benevolent or do-gooders and another as the recipients. Instead, you ask yourself, ‘what’s being exchanged here?’.

If you look at how foundations operate, you really do see an unspoken element of exchange about it. We can begin to distinguish the different reasons why different players are practising philanthropy rather than just focusing on the relationship of giver and receiver and the size of the grants they give. Some, in the venture philanthropy world for example, want a return on investment. Or it may be that you’re exchanging karma in heaven for good deeds now. Many philanthropists have a desire to make life better for people and they are testing out their hunches about what will work and not work by actually getting engaged.

I think it’s always been implicit in philanthropy that if I give you a grant and you do something with my money, then yes, you are doing something in exchange. But it’s an unequal relationship because I’m the benefactor and the grantee has obligations. Does the reciprocity lens help us to see these relationships as more equal?

Inequality is, I’m afraid, a given. Philanthropy involves a hierarchical relationship for all sorts of reasons – although I think increasingly philanthropies are exploring ways of trying to redress the balance, for example by putting grant recipients on their boards. But one can redress the balance better by being explicit about what the terms of the exchange are.

The line between being a grantmaker and operational is also becoming much more blurred. Most players now have smaller resources and tend to be both.

Something else that could be clearer is that usually grantees are getting money to do what they think is right. Increasingly foundations would say, ‘We don’t give money to tell people what to do, we assess what people want and we try to make it possible for them to do it.’ On the grantee’s side, they can say, ‘I’m doing it because I think this is a way of solving a particular problem, and I have persuaded someone to give me resources in order to do it. So it’s not somebody telling me what to do.’

Launch of the EFC 30th anniversary book Building at the Crossroads of Royale and Treurenberg, Brussels, 2019.

Can a reciprocity lens also help mistakes to be avoided and lessons learned?

One of the glaring things about philanthropy is how bad it is at learning lessons so that mistakes are not repeated. I think it would be much easier for donor and recipient to discuss mistakes if they see themselves as being in a partnership, unequal as it may be. But such exchanges need transparency so that everybody learns from them. Supporting that is the role of infrastructure.

I know you share a lot of Europeans’ exasperation with the idea that the British-American model of philanthropy is the ‘right’ way of doing it. Can this reciprocity lens help throw a light on the value of what you have referred to as the ‘very diverse beasts’ that you find in Europe and the rest of the world?

Let’s take the African context. Across the continent, there are extremely strong, informal, village-level institutions based on poor people pooling resources in order to help each other. In South Africa they are called Stokvels. Resources might be used for a burial, or to send a child to school, or to pay for a wedding. Implicit is the idea that I do it now, and you do it tomorrow; it’s a moral obligation for everyone to participate. This is an integral part of African philanthropy.

Fifteen years ago, the prevailing wisdom was that community foundations couldn’t operate unless they had an endowment. I think what Jenny Hodgson has done with the Global Fund for Community Foundations is a recognition that you can do philanthropy, and play an important intermediate role, without building up the resources first. This pooling of resources makes sense in a resource-poor environment, rather than the model which fits in a resource-rich environment.

What about European philanthropy? 

Johns Hopkins University professor Lester Salamon has been working on this very thoughtful identification of a particular kind of organisation, the privatised foundation. His Philanthropication thru Privatization model identified where a government has assets it doesn’t want to deploy itself and instigates the creation of a foundation. Europe has a plethora of foundations – the Italian banking foundations, some German foundations such as Volkswagen, La Caixa in Spain – that are essentially privatised foundations where government has facilitated a foundation-like, independent governance using resources that could have been deployed by the state.

We’ve seen with Covid-19 that foundations have been able to pool some resources and do things together, but it does take time, and there has to be a certain surrender of autonomy for real collaboration to work.

The way people were defining foundations even a few years ago meant that they missed important differences. We kept trying to force philanthropies into four types: you were either a private, public, family or community foundation. The idea that you could be foundation-like in your governance but your resources could come from the state went unacknowledged. For example the UK’s National Lottery Community Fund, where resources come from the lottery, but it thinks and operates like a foundation because of its independent governance. I really think the exchange model better explains these differences because it provides a lens to separate governance from resources.

What effect has all this had on European foundations?

I think the most important change in European foundations over the last 15 years is they’re not as referential to the British-American model as they used to be. When I first started, people would talk about not being quite like American foundations or British foundations. There’s much less of that now. There’s a recognition that they bring different things to the table. There isn’t that nervousness about working cheek-by-jowl with government that there used to be.

The fact that King Baudouin Foundation (KBF) and others have embraced the different aspects of what they are is important. So KBF is a community foundation and a royal foundation; it pools resources and uses government resources – and they’re comfortable with it. This has empowered others to be comfortable with their hybridity. The line between being a grantmaker and operational is also becoming much more blurred. Most players now have smaller resources and tend to be both.

EFC Philanthropy Leadership Platform: Russia-Europe, Brussels, 2019.

In your blog you identify some of the major challenges philanthropy is facing. The first is the existential threat of climate change. Is institutional philanthropy doing enough to address this?

At the moment, there is an assumption that foundations find it easy to collaborate and that you can scale this up to face huge, wicked problems like climate change. We’ve seen with Covid-19 that foundations have been able to pool some resources and do things together, but it does take time, and there has to be a certain surrender of autonomy for real collaboration to work. The amount of pooled resources has been disappointing, at least to me.

You asked, ‘Are foundations doing enough?’. They’re doing enough in their own individual context, they’re not doing enough collectively. We need more from them as a collective group of players. We need some sort of mechanism to pool resources better. This is where I think infrastructure might come in.

Europe has a plethora of foundations that are essentially privatised foundations where government has facilitated a foundation-like, independent governance using resources that could have been deployed by the state.

But you do think that they’re doing enough individually? 

Well, there are some that are doing sterling work, those that are already committed. Then there are others on the sidelines who are hoping that they can do business as usual and not get involved. Unless you get foundations to think about the climate issue in every one of their engagements, you will have essentially what we have now: some good work, some excellent work, but not enough players, not enough resources, and not enough influence or pushback on politicians. When a politician denies that there is such a thing as climate change, we don’t react the way I would expect us to if we really believe this is an existential threat. We’re too polite.

What about your second major challenge; standing up for democratic values, which are very much under attack. Does engaging with this mean being more political than the philanthropy sector has traditionally been comfortable with? 

If you understand the beast better, you will recognise that philanthropy is political anyway – the fact that you have tax concessions, that you have entities that can exist in perpetuity which people respect and which are allowed to have ambition to do things for the public good. Increasingly, foundations are getting very serious about their particular focus. I’m struck, for example, by Wellcome Trust, with their work on disease. They’re more and more overtly saying, ‘you cannot be not-political if you’re a foundation.’ Wellcome’s director Jeremy Farrar has been very transparent about the fact that philanthropy needs to understand that it can’t avoid politics, it has to get involved.

There are some countries where foundations understand this, it’s in their bones, and they engage with politics in a visceral way. And there are other places where there is still the illusion that you can stay out of politics, especially as they always interpret politics as being party political. Nobody’s asking foundations to be party political. But especially if foundations are good at something, they ought to be able to say, ‘this is not working.’

Can you give examples of countries where foundations do viscerally understand that philanthropy is political and some where they don’t?

It’s not accidental that in Eastern Europe there is a much better understanding of how political the foundation world is and the role that foundations play. I also think it’s a South/North divide. So, for example, the people who are not comfortable with the EFC taking political positions say on behalf of open societies tend to be in Scandinavia. Mechanisms work there. If you’re living in a stable, benign society, you stay away from politics because you’re not needed.

One of the glaring things about philanthropy is how bad it is at learning lessons so that mistakes are not repeated. I think it would be much easier for donor and recipient to discuss mistakes if they see themselves as being in a partnership.

So there might be places like the UK now where we increasingly need foundations to say, ‘look, none of this is working’?

I think in the UK increasingly, as huge gaps in the healthcare system begin to show up, there has to be a role for philanthropy in critiquing and suggesting ways out of the current situation. It’s crazy that people cannot be tested in one country in Europe and in another they get tested in a couple of hours at the airport. There isn’t the pooling of experience and learning on a transparent level that I would expect. I do believe philanthropy is falling short in not making this a bigger issue.

When I first interviewed you in 2005, you acknowledged that some EFC members had a strong history of grantmaking outside Europe, but you were still hoping to encourage them to do more. Has this happened?

EFC Parliamentary Leadership Platform: China-Europe, Beijing, 2017.

No, and I’m not entirely sure I agree with myself now. I did come to the EFC hoping that I could maybe push the needle on European foundations getting involved in Africa. I failed dismally; it was something that never took off. Yes, there are new foundations and some older foundations that are putting more resources into Africa, but it had nothing to do with me. But I’m beginning to think that the best path is to support homegrown institutions. Where I see European foundations do amazing things is where they validate and recognise the things that are already happening on the ground. Take Compagnia di San Paolo, which decided to bet on African women living in Europe and follow remittance money rather than trying to do it themselves. There is a whole lot of philanthropy going on that is refreshingly different from what I was aware of when I first came to the EFC.

What about the role of philanthropy infrastructure?

I believe that infrastructure organisations can help galvanise foundations to think seriously about how to do things at scale. This is partly because I think we’re ready to talk about different kinds of institutions doing different things well, and you need the outsider, in this case the infrastructure organisation, to point this out. There may be some entities that have an ambition to do certain things, say in human rights, whose governance and decision-making process make it impossible for them to make grants quickly enough to meet the needs of human rights defenders – in which case they ought not to get involved in that area, or they could partner with intermediaries who may be better placed to respond effectively. Global Greengrants’ funding model, for example, relies on a trusted network of dedicated volunteer experts who act as their eyes and ears on the ground. This democratising of grantmaking allows them to find and invest in ideas without bureaucracy or red tape.

At the moment there is still the assumption that all players can play equally well in all sectors. I don’t think that’s true. I think the role for infrastructure now is essentially to be a critical friend to foundations, to say, ‘maybe you’re not best designed to do that.’

I guess I’m a bit frustrated that I’m leaving the stage just at a time when I think things may need to change, so I really hope my successor can move this along. I wish her extremely well. I think it’s a very exciting time to be moving into this space.

Caroline Hartnell is a former Editor of Alliance.