Private Foundations - International Development Committee Contents


4  DFID's relationship with foundations

How DFID works with foundations

58. DFID says that it "recognises the significant contribution of private foundations and individuals to development", and expects to increase its engagement over the coming years, especially where "there are mutual benefits to such collaboration".[110] It estimates that, at both policy and delivery level, there has been "significant engagement by DFID" with around 25 foundations in the last five years.[111] The Department says that it manages its relationships with private foundations "at a range of levels" within the Department, including through its London and East Kilbride headquarters and through its country programmes.[112]

THE GATES FOUNDATION

59. The Department says its most significant engagement is with the Gates Foundation, with whom it has collaborated over the last ten years on a wide range of projects and programmes, especially those in the health, agriculture, financial services and sanitation sectors. The DFID-Gates relationship has involved working together on global advocacy for international development issues, such as partnering with the UK's G8 Presidency on Africa in 2005, and launching a new push for Polio Eradication with the UK Prime Minister in January 2011.[113]

60. Collaboration has also taken place on specific programmatic and research issues (see Table 1).
Table 1: Examples of collaboration between DFID and Gates Foundation in the health sector
Name of project/programme Details
Health sector
Global Alliance for Vaccines and Immunisation (GAVI) Multi-donor fund. UK Government, followed by the Gates Foundation, were the largest contributors to the June 2011 replenishment.
Global Fund to Fight AIDS, TB and Malaria Multi-donor fund. Both the UK and Gates are significant financial supporters.
Roll Back Malaria Partnership's Global Malaria Action Plan Multi-stakeholder initiatives. Both DFID and Gates have played instrumental roles.
Global Polio Eradication Initiative Multi-donor health partnership. Partly due to DFID and Gates, the current three-year strategy includes an explicit focus on routine immunisation, improved governance and innovative financing.
Product Development Partnerships DFID and Gates co-finance a number of these to develop tools to prevent and treat infectious diseases.
Financial services
Technology Programme for Branchless Banking (TPBB) In 2010, DFID provided £8 million over 4 years to the TPBB, which until then had been funded by the Gates Foundation and the Consultative Group to Assist the Poor.
Easy PaisaGates and DFID have collaborated on this mobile banking project in Pakistan.
Financial Sector Deepening Trust, Kenya Originally set up with DFID support, the Gates Foundation is now supporting the Trust.
Agriculture
Three programmes Programmes cover covering livestock, veterinary medicines and sustainable crop production. See body of report for details.
Water, Sanitation and Hygiene
Collaboration on range of projects For example, both agencies fund Water and Sanitation for the Urban Poor, along with other donors.
Country-level collaboration
India - HIV/AIDSGovernment of India's National AIDS Control Programme III: DFID is co-funding this programme (£120m 2007-12) with Gates
DFID: Bihar, India Close co-ordination on DFID's programme to avoid duplication
Country-level work in African countries "Frequent partnership" in areas including HIV/AIDS, polio, governance, agriculture and rural finance.

Source: Ev 35-38 and ev 54-61

61. An example of how the relationship has worked in practice is the collaboration between DFID's Agriculture Research Team and the Gates Foundation on three programmes, covering livestock, veterinary medicines and sustainable crop production. DFID told us "the significance of the partnership is reflected in the commitments" (£46.2 million from DFID and US$150 million from the Gates Foundation over seven years to 2015). It said that the partnership had already generated "high quality research products". The Department said that the collaboration with DFID's Agriculture Research Team "minimises transaction costs, significantly expanding its portfolio of research programmes, gaining greater access to technological expertise, private sector linkages, and their programme management and monitoring and evaluation expertise".[114]

62. As we discussed in Chapter 3, critics of large foundations such as Gates point to the risk of creating parallel structures and skewing the priorities of other donors and importantly, recipient governments. Both DFID and Gates denied this was currently a problem. The DFID Minister said Gates' support to GAVI, for example, "complements and supplements and does not displace".[115] The Gates Foundation gave examples of the measures it took to work collaboratively with governments rather than setting up new structures.[116]

63. The Gates Foundation told us, "We have a good relationship with DFID". They emphasised the frequent contact between the two agencies, with Jeff Raikes calling it "a regular relationship, with regular interaction. Many of our staff will be in contact as regularly as weekly."[117] The Foundation told us that it and DFID had now "identified contact points to co-ordinate the relationships between our organisations".[118]

64. It is important that large bodies such as the Gates Foundation do not create parallel structures or skew the priorities of other donors and importantly, recipient governments. Both DFID and Gates denied that either of these risks pose a current problem. Based on the evidence we received, we agree. However, as foundations continue to grow in size and influence, this is a situation that needs watching.

SMALLER FOUNDATIONS

65. Gates' experience of regular contact with DFID was not shared by smaller, UK-based foundations. The Baring Foundation said DFID "has tended to concentrate on relationships with the largest funders such as the Gates Foundation, the Wellcome Trust and Comic Relief".[119] The Children's Investment Fund Foundation (CIFF), whilst in many ways highly complimentary about DFID as an organisation,[120] highlighted a problem raised by a number of other foundations: the availability of DFID staff time to engage with them. They said

    Navigating DFID has been difficult, especially given the changes DFID itself has gone through in the last couple of years [...] Their own internal capacity, given those internal management reorganisations, to engage externally has been a little compromised. The lack of staff on some of the areas now is beginning to show. [...] DFID has very sophisticated partnership modalities with NGOs and partners. I think it is probably with the newer beasts like the private foundations that it is a little bit more challenging than for some of the traditional members.[121]

Sarah Lock, Co-convenor of the Association of Charitable Foundations' International Development Issues-Based Network, said

    We have had Ministers come to talk to us. At the ministerial level, there seems to be quite a lot of interest in liaison with foundations but, at the civil servant level, particularly when everyone is very stretched at the moment, that is not following through.[122]

The Nuffield Foundation agreed, saying

    There is at present little liaison between DFID and the mid-sized Foundations. We believe that both sides would gain from better contact. For example, most Foundations do not have an in-country presence and could benefit greatly from DFID's technical expertise. Similarly, DFID could find reports from work that the Foundations are funding of interest.[123]

Nuffield suggested that DFID "explore with a wider group of private foundations how they might share information about their respective work and plans".[124] The Baring Foundation said information-sharing could include: DFID advice on in-country needs; details of what DFID is already supporting within countries; and co-funding opportunities such as 'pots' for specific issues.[125] Christian Aid agreed, saying that co-ordination with UK foundations is "ad hoc" and would benefit from the formation of a collective group among larger foundations. They said "This would help to prevent duplication but would also promote learning, best practice, emerging issues and greater understanding of dangers and threats".[126] This kind of role is currently undertaken by the Association of Charitable Foundations' International Development Issue-Based Network.

66. Matthew Bishop and Michael Green said that "many foundations and businesses feel that the door to the UK government is closed and that partnership opportunities are being missed because of the continued focus of DFID on working primarily with other official donors. This needs to change."[127] Some UN agencies and bilateral donors such as USAID have opened 'partnership offices' to facilitate joint working with private actors such as foundations.[128]

67. Ian Curtis, Head of DFID's Global Partnerships Department, said he "took the point on smaller foundations" and "recognised that [engagement] might be an issue". He offered to organise an annual roundtable meeting for a group of smaller foundations. The Minister said he would "happily attend" such an event.[129] However, the Minister was cautious about what DFID could realistically offer smaller foundations, saying

    Any foundation can have access to us and officials will always be available to talk to them, but as their scale gets larger so their importance for us will grow […] We have to rank them a bit and have an evaluation process in respect of how useful they are going to be.[130]

68. DFID's relationship with foundations appears to be somewhat ad hoc. The Gates Foundation spoke of having an identified contact in the Department, and of interaction on a weekly basis. Meanwhile, smaller foundations held a widely-shared view that it was difficult to have any kind of regular contact with DFID staff. We recommend the Department become more outward-facing in its approach to foundations, although we accept that DFID officials cannot meet regularly all the foundations that would like to meet with them. DFID has responded to our concerns and the Minister has offered to offer to host an annual meeting of a collective group of smaller foundations. We recommend that, in addition to the Minister-hosted annual event, DFID officials host meetings with foundations at more frequent intervals (at least bi-annually or even quarterly). We recommend that DFID identify a named contact point, probably within its Private Sector Department or Global Partnerships Department, with whom all foundations—large or small—can engage on a regular basis.

DFID'S FUNDING RELATIONSHIP WITH FOUNDATIONS

69. DFID told us that it did not normally provide funding directly to Foundations, but that funding arrangements were normally on the basis of co-funding programmes with foundations:

    DFID currently provides funding of over £2.3 billion, alongside other donors, on programmes with the involvement of, and investment from, private foundations. GAVI is the largest, with £1.5 billion from DFID (2011-2015), £2.3 billion from 19 further sovereign donors and four private contributions (including La Caixa Foundation), and £0.86 billion from Gates. Besides GAVI, DFID has committed over £250 million to programmes in collaboration with other private foundations (including £13.9 million so far agreed for the Girl Hub with Nike and over £200 million for the Global Partnership for Education, on whose board the Hewlett Foundation sit, for example).

    These are figures for current commitments and do not include upcoming agreements which are still being developed and have not had funding amounts confirmed yet, or programme payments which have now been fully disbursed.[131]

70. A UK-based foundation, The Wood Family Trust, told us that it thought DFID should do more to make funding opportunities for smaller foundations available. It said it had held "preliminary discussions" with DFID about the possibility of getting Departmental funding for the Trust's work with smallholder tea farmers in Tanzania and Rwanda, but that "frankly, we could not marry that into the kind of structure that DFID works with". The Trust said it had "accepted the understandable regulations, restrictions and constraints that [DFID] works under as a Government body" but expressed frustration that they had not been able "to get that model" that would facilitate a funding partnership between them.[132] The Nuffield Foundation shared this perspective, saying "DFID should explore collaborative funding opportunities with foundations—particularly where foundations have the human resources to manage funding too small for DFID to administer."[133]The DFID Minister said in response that "We have to abide by our standards, which are strictly laid down, of course, in terms of auditing, […] of evaluation of impact and value for money".[134] However, he said that "that does not mean that we are not flexible" and was especially interested in working more with entrepreneurs and business-minded foundations, saying that "an entrepreneur may know how to [open up markets] in a way that we, as DFID, might not do ourselves".[135]

71. Over the course of the inquiry we heard from several UK-based foundations—including those with considerable expertise in areas in which DFID is seeking to work more (for example, private sector development)—that they do not think there are sufficient opportunities for DFID and foundations to co-operate over funding. Funding co-operation between DFID and foundations could be mutually beneficial, bringing business expertise into DFID and helping transfer development-specific knowledge to foundations. Foundations may also have the human resources to manage funding too small for DFID to administer. We recommend that our suggested new contact point within DFID produce a simple publication indicating what DFID funding streams foundations might apply for and how to apply.

Working with foundations based in developing countries

72. As the Omidyar Network emphasised to us, it is important that the growing number of developing country-based foundations should also be included in DFID's attempts to improve its outreach to the philanthropy sector.[136] As we said in Chapter One, developing countries are witnessing the rise of foundations and philanthropists, as is evidenced by the formation of 'philanthropic trade associations' such as the Africa Grantmakers Network.[137] However, as the World Bank informed us, most developing country-based foundations are small.[138] In its written evidence, DFID admitted that its "engagement with foundations on the ground in Africa has mainly been with "western" based foundations working in Africa, based on the relationships around common interests at country level."[139] However, it recognised that "the new African foundations are playing an increasing role in development." It said it would be engaging with these foundations at a roundtable event organised by Business Action for Africa in late November 2011.[140] The Department also said it had held an initial meeting with AFFORD, the Africa Foundation for Development.[141]

73. At the 25 October evidence session, David McNair of Christian Aid suggested that DFID help co-ordinate philanthropy, including the work of foundations, through its country offices. He suggested DFID could follow the example of the Government of Liberia's 'philanthropy secretariat', which "engages with philanthropists on the kinds of decisions that they are making and tries to co-ordinate that at the country level".[142] Michael Bishop and Michael Green agreed, suggesting that DFID country offices should map out local and diaspora donors, particularly in countries such as India, Nigeria and Pakistan.[143]

74. The number of foundations based in developing countries is growing. This is clearly to be welcomed but it means the number of development actors with whom developing country governments must engage is also increasing. We recommend that, as part of its wider efforts to improve aid effectiveness, DFID ensure that its country offices assist partner governments co-ordinate foundations and philanthropists seeking opportunities in the country. Further, DFID is only in the early stages of engaging with developing country-based foundations. We suggest it increases its engagement in order to form partnerships with these important new philanthropic actors.


110   Ev 55 Back

111   Ev 55 Back

112   Ev 55 Back

113   Ev 36 Back

114   Ev 56 Back

115   Q 101 Back

116   Q 83 Back

117   Q 67 Back

118   Ev 36 Back

119   Ev w3 Back

120   Ev 42 Back

121   Qq 42-43 Back

122   Q 17 Back

123   Ev 51 Back

124   Ev 51 Back

125   Ev w3  Back

126   Ev 44 Back

127   Ev w25 Back

128   Ev w25 Back

129   Q 113 Back

130   Q 111 Back

131   Ev 68 Back

132   Qq 37-38 Back

133   Ev 51 Back

134   Q 114 Back

135   Qq 114-115 Back

136   Ev w32 Back

137   The Africa Grantmakers Network aims to bring together grantmaking organisations from all over Africa and to be a platform for African philanthropy. Back

138   Ev w46 Back

139   Ev 59 Back

140   Ev 60 Back

141   Ev 63 Back

142   Q 8 Back

143   Ev w26 Back


 
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© Parliamentary copyright 2012
Prepared 20 January 2012