Philanthropic Foundations and the Government: Challenges in the Relationship

V Santhakumar¹

The general concern about philanthropic foundations is that these may have roots in corporate firms and may impose their agenda through philanthropic actions. Even when foundations are disconnected from corporate organisations, and/or are ideologically interested in pursuing an agenda which is in the interest of people at large, there are challenges in making a positive impact. This note discusses some of these issues/concerns.

Foundations, as noted in Prewit (2006), have the capacity to take a long-term view and the permanent endowment and ability to exist in perpetuity facilitate such a view. Since these organisations do not have to raise money from others, these are somewhat insulated from the market forces. They are also relatively free or autonomous in making decisions regarding the disbursal of their grants or the use of income from their endowments. Hence, they could be independent of political forces. Since most foundations derive their endowments from for-profit activities, they have more exposure to (and experience in) private-sector efficiency and task effectiveness. Hence, collaborations between foundations and governments can be seen as a way of bringing in private-sector efficiency in the social sector or the delivery of public services. Foundations are in a position to fund and steer innovative activities, which, if found useful, can be the candidates for scaling up or widespread adoption (Wolk and Ebinger, 2010). Hence, these philanthropic foundations may have certain unique advantages over government, private or those non-governmental organisations (NGOs) which depend on other sources for funds.

However, foundations have certain disadvantages too. Even if they have access to resources, they cannot match the resources available with (or to be generated by) the governments to address various requirements of society. In other words, no foundation, whatever its endowment, is in a position to substitute the role of the state in addressing the problems of even one sector (say, healthcare or education). Moreover, most of the foundations are somewhat rootless, and hence, they may not have adequate connections with the various stakeholders in society. There could be issues of legitimacy too, which a social or political movement has, but it may lack financial resources.

Governments face a number of problems in most parts of the world, especially in developing countries. Though they are supposed to take a long-term view and there should be continuity in governance, in reality, governments may take a short-term view due to political-economy pressures. This may lead to fiscal problems and create a scarcity of resources required for more critical issues for which there may not be a visible public demand. Hence, actions of the government based on these political-economy pressures, may not be welfare-enhancing for society as a whole in the long run. The agenda of one government need not be pursued by the next one. Government officials do not have support in implementing innovative approaches and are bound by rules. Governments may not have or allocate enough resources to address the issues of quality in public services.

The advantages of governments include legitimacy (through democratic or other means), possible connect with the citizenry, and; sizable machinery (even though there could be issues in its effectiveness). Moreover, governments are accountable to society at large and are subject to corrections through democracy, so, it is important to envision and sustain a much greater role for the state in the provision of public services.

Models of collaboration

There are different models of collaboration between philanthropic foundations and governments. These include the ones where governments make efforts to scale up innovations funded and tried out by foundations. Another model is where foundations attempt to influence governments to change public policies. Foundations can also (directly or indirectly through NGOs) collaborate with the community or civil society to see that the government (or a public organisation) delivers its services effectively. There are foundations which work with governments. Working with government functionaries (rather than working with communities to demand better services from the government) poses different kinds of challenges.

Partnership challenges

Some of the challenges in building and sustaining relationships between philanthropic foundations and governments are noted in the literature². There are also social or academic concerns about the possible implications of the relationships between philanthropic foundations and governments. One concern is the possible influence of corporates on the specific policies as in the case of tobacco products or other aspects of health policy. The priorities of governments may change according to their elections promises while those of the foundations may change only gradually. The latter may focus on a few issues (which they think important) but governments have to grapple with many issues. Their mutual perceptions may also influence the dynamics of this relationship. Foundations may not understand the complexities in the functioning of the government whereas the latter may view the former as just a source of money (OECD netFWD, 2017).

Although partnerships between the governments of developing countries and global foundations have been analysed, there are not many assessments of the relationship between the government and domestic foundations in the context of a developing country like India³. It is in this context that an attempt is made in this note to outline some of the challenges faced by philanthropic foundations in the developing world in working with their own governments. Discussions with the leaders of different foundations and the experience of the author inform this note.

• Access to governments
For a typical NGO, it is not easy to get access to important decision-makers in the government. There is an issue of asymmetric information here. How do government officials or politicians know whether the organisation is sincere in terms of its stated goals? On the other hand, foundations which are directly or indirectly linked to big corporate firms and known investors/entrepreneurs are likewise known to political leaders and senior officials, which makes it relatively easier for them to access decision-makers. Though there can be unrealistic expectations on the part of government officials and politicians on what philanthropists can (would) do, it is not very difficult to have forums where the two parties can interact. Governments are also open to the idea of partnership with foundations and they invite them to start operations in their respective states/territories.

• Points of contacts in government
The leaders/representatives of foundations are able to communicate with politicians directly. However, they need to interact with senior government officials who steer the process of the partnership even if it is driven by politicians. Directly dealing with politicians may sometimes work against getting the support of these officials, which is crucial for establishing contacts at different tiers of the government machinery. Politicians in India (and elsewhere) are busy and hence, may not be able to follow up cases of specific partnerships. However, the importance of communicating with politicians is mainly to see that there are no negative signals from them. Generally, senior officials would outline what foundations can do without duplicating the government’s actions.

Arrangements in working with governments

Foundations may work with a formal agreement with governments. These agreements are in the form of a broadly-defined Memorandum of Understandings (MOUs). No specific commitments are made in these MOUs. The actual programs are designed on the basis of mutual interactions from time to time. There could be advantages and disadvantages in this way of working with the government. For example, some of the programs may be designed due to the interest of a specific officer, and there could be a lack of interest on the part of the government once this official is transferred out. One may think that a formal agreement may alleviate this situation, but that may not be the case. Even if formally agreed upon, there can be problems in the execution if there is not enough interest on the part of those officers who interact with the external partner. They can find loopholes or delay the process through inaction, and there is very little that the external partners/foundations can do in this regard.

• Need to ground the MOUs
The MOUs are signed after discussions with top/senior officials. There is a need to translate the MOUs into creating working relationships at the district or local levels. This may not happen easily or quickly just because an agreement with the government has been signed. In certain cases, partnerships with external organisations may be new to the lower-tiers of functionaries, and they may not have adequate guidelines on how to operationalize these agreements. This requires foundations to work with these functionaries to develop such guidelines. In certain other cases, government officials at the district and sub-district levels may not be convinced initially of the need for such partnerships. Usually, agreements are vague and lack clarity on the concrete steps to be taken to facilitate the partnership. Hence, there is a need to develop connections with stakeholders at all levels if any partnership is to be effective.

It is not that the lower-tier officials would oppose explicitly the activities envisaged in the agreement but there can be indifference or delays. Hence, they have to be convinced of the usefulness of the interactions with non-governmental partners, like foundations. A letter from a higher-level functionary may not be adequate to motivate an official to collaborate with the external partner. People exercise their own discretionary powers and therefore there is a need to convince many functionaries. They may have genuine or not-so-genuine apprehensions on the role of an external stakeholder; they may have seen other such organisations coming with offers but not delivering effectively or sustainably; they may fear that someone else may take the credit for the work that they do.

Ice-breaking and trust-building require interactions not only in formal spaces but also in informal ones. People who are part of the government observe external organisations with caution. They may want to know whether the outsiders have ulterior motives. Hence, they take time to respond.

It will be difficult to get the cooperation of district- and sub-district functionaries by complaining about their indifferent behaviour (if any) to state-level officials. There may be a temptation to do so, since external organisation like foundations may have a good relationship with one or other state-level official (and that is why they could start the work in the first place). There is a need for continued communication with these functionaries at different tiers even if some of them are lukewarm in return.

• Money transactions between governments and foundations
Foundations may not take money from governments. In certain cases, foundations may also not give money to the government but may only facilitate certain activities by spending directly. This has positive implications for the sustenance of the relationship. If foundations do not give money to the government, they are not accountable to it. Otherwise, this could be a source of friction between the two partners, since government norms and procedures of accountability may not be in line with those of a foundation’s. If foundations do not take money from the government, they may not design programs on the expectation of financial support from the government. (There could be unexpected turns or uncertainties if foundations were designing programs based on government’s expectations). Hence, foundations are not compelled to meet the changing requirements of governments.

• Need to win trust of government officials
There is a need to make relationships with governments enduring and strong. Any perception that foundations are taking undue credit for its efforts or not giving adequate recognition to government functionaries, may dampen the spirit of the partnership and can create more hurdles in the implementation of joint programs. Hence, building the trust of government officials and sharing the credit for achievements liberally with government officials is required. In public functions and media briefings, the role of the government or the public system needs to be highlighted prominently. Government officials may have to be projected and given a prominent role in public functions. Even when there are the failures of the governmental system, these need to be overlooked in order to carry on the partnership.

When the task is of improving a public system through collaboration, it is better to work with the system and help in improving performance. Attacking it from outside is relatively easy and is attempted by a number of NGOs but the approach of foundations may have to be different. Without disturbing the governmental system, foundations have to attempt this by enhancing the comfort levels of government officials in working with them.

NGOs are under pressure to use their activities for their brand-building since that is one way of attracting funders and resources for their activities. But foundations are not under the compulsion to mobilise financial resources from elsewhere. This also allows them to share the credit of their work generously with government officials and other stakeholders. It is important to remember that using work as a way of brand-building can be counter-productive for foundations. And excessive use of media for own publicity can be harmful because media sensationalism may give instant fame, but it can also create unwanted, negative publicity of non-serious issues.

• Individual approach of government officials
There are enthusiastic officials who want to collaborate with foundations, who may have strong views on what needs to be done. Their opinions matter in making or breaking relationships between governments and philanthropic foundations since their decisions are crucial. The partnership may fail if foundations too hold on to their positions. There are officials who want to do something notable during their tenure to reflect on their performance record. They may not have the patience to pursue strategies which are aimed at systemic changes in the system.

The priorities and perceptions of government officials can be different from those of philanthropic foundations. Government officials may be of the view that foundations want to work at their will, carry out only those activities which they are comfortable with and are unwilling to integrate their efforts with governmental actions. On their part, foundations come with the presumption that governments lack long-term vision and strategy to use various types of NGOs for the realisation of their purpose. Also, governments’ actions are determined in an ad-hoc manner and fail because of this.

• Frequent transfer/change of government officials
There are cases where foundations have started working on a project based on an understanding with a particular official, and after his/her transfer, the new person in the same position may not want to go ahead with the program in the way it was planned. If there is a disagreement with the government in the beginning, then foundations have the option of not entering into a partnership. However, if a change occurs in the middle of the program, all the investments made by foundations are wasted. There will not be any compensation from the government since that is not usually envisaged in the informal agreements. This can be one issue affecting the effectiveness of foundations while working with governments – the uncertainty of tenure of government officials.

Difference in the culture of foundations and governmental system

There are important differences between the cultures of the two. This could be partly due to the fundamental differences in the working of private companies (which contribute resources), the top management of foundations, and governments, especially those in a developing country like India. The focus of a private company is profit and hence, they may go for whatever hierarchies that are appropriate for the specific nature of the company (or business). Here hierarchy means not only the concentration of decision-making but also the rituals associated with such decision-making. The hierarchy in a manufacturing firm with shop floors, where hundreds of skilled or semi-skilled employees work, would be different from that in an IT-services company where most of the employees are engineers or professionals with higher education. In other words, there are no fixed models of hierarchy to be followed in private firms. Though there is centralisation in terms of decision-making, companies need not follow the rituals of hierarchy for the sake of satisfying the ego of a set of individuals. Many rituals (like the welcome speech, presidential address and so on in functions) could be seen as a waste of time.

On the other hand, there may not be measurable outputs like profits in the functioning of governments. Moreover, it is not easy to improve the performance of an employee through financial incentives there (Rainey, 1982; Burgess et.al, 2003). Hence, one way to reward government employees could be to provide certain kind of privileges like the size of the office room and table, government-appointed driver and so on. Moreover, India as a society is one which is only gradually moving out of its feudal character in which hierarchies and rituals are well entrenched. British colonialism and its influence in the shaping of post-independent governments have also strengthened these hierarchies and rituals within governments.

There are also differences in the way different tiers of employees interact among themselves and how these are viewed or perceived by others within the government and foundations. Within foundations, employees are usually used to having a less hierarchical relationship among themselves. For example, each employee is likely to express his/her view in front of supervisors. There may not be rituals of hierarchy, say with regard to seating positions in meetings, the size of chair, and so on. However, these features are very pronounced within government offices. In a conference room, the top-most official sits in a specific seat (bigger than the rest), and the junior officials have to be in the outer circles and less likely to express their opinions in the meeting of government officials. Respect and obedience in governmental organisations are not organic but are somewhat imposed, mechanistic and forced upon. The job seniority and the position of an official may determine the `validity’ of his/her opinion and not its merit.

There may not be any free communication of ideas between different tiers of government officials. There may not be much focus on the substance of the work. If there is a new training program for a day, almost the first half can be used for an inauguration meeting where different tiers of officials (and sometimes politicians) talk on issues somewhat unrelated to the subject of training. Many people crave for a position in such public functions. These cultural differences may have implications for a partnering foundation and may necessitate strategic behaviour on the part of the managers of foundations.

Is it possible for foundations to influence the culture of the government? Simply accepting the practices of the government as unchangeable or a complete disregard for its conventions or norms can be problematic. There is a need to influence the culture of government without disrupting relationships. This may require a higher level of patience but a willingness to engage with government officials. There could be subtle ways of changing the culture of local government. Certain changes in the norms (say, the way a public function is organised) can be attempted. There can be some accommodation of the government’s demands if such a compromise is useful for achieving a higher goal. These may require a higher sensitivity on the part of foundations.

Do governments learn from the experience of joint programs and incorporate lessons in their own programs?

One rationale of working with the government is that it may be in a position to scale up based on the lessons from small-scale innovations carried out in partnership with external organisations like philanthropic foundations. However, such learning may happen more at the level of individuals and not at that of the system. Hence, the impact may recede when these people move out. Due to the general problems associated with governments (absence of long-term vision, or continuity of leadership for a sufficient period of time, and so on), there is no certainty that programs will run for long-term. This could be due to the lack of adequate capacity and orientation on the ground, and hence, a top-down approach of influencing or changing the system may not work well.

Competition between different foundations to work with the government

Even within India, one can see a number of funding organisations, including philanthropists and CSR organisations, which are interested in working with governments in domains, such as education and healthcare. Coordinating with these different partners and allocating responsibilities to each one of them without duplication is a challenge for governments. A few governments, not only in the developed countries but also in a few Indian states, have started an Office of Partnership for this purpose. The desirability and usefulness of such coordinating mechanisms are analysed in literature (Adil Najam, 2000; Ferris, James M., and Nicholas P.O Williams, 2012). There is anecdotal evidence on the difficulties in carrying out effective coordination in India too (OECD netFWD (2017).

The coordinating mechanisms may have to take into account the incentives and interests of philanthropic organisations. Due to the experience with the public-private-partnerships (PPP) models in other domains, governments may facilitate competition among philanthropic foundations which plan to collaborate with the governments for altruistic activities. In the case of PPP, the profit-motivation of the private firm may encourage it to go through the hassles of competition. However, a philanthropic foundation which plans to spend its own resources may not be willing to go through these troubles. It is obvious that the motivation for philanthropy is different. It could be the intrinsic motivation to do the right thing and the need to compete may dampen this intrinsic motivation.

Foundations have geographical constraints

It may be that foundations may not be very interested in working in those areas where governments are reasonably functional in meeting social needs. Foundations may be keen to work in locations where there is a need for their intervention but may not be able to work in locations where their services are most needed. For example, their engagement in areas influenced by Maoist forces is minimal or non-existent. Local governance issues may discourage foundations from working in certain areas even if these require their services. This may be similar to the situation faced by international development organisations wherein these may not be able to work in some under-developed countries due to the problems of anarchy and ill-governance despite the fact these areas badly require the support of such organisations.

Holding on to non-negotiable principles

There have to be certain non-negotiable principles in the functioning of foundations, especially while dealing with the local social context. Not yielding to the demands for personal gains by specific officials or leaders could be one. Not changing the basic approaches of the organisation or accepting those approaches which it does not subscribe to, could be another. There could be some pressure to compromise on these principles for the `success’ of one or other operations defined in a narrower manner. For example, there could be a situation where the continuation of operation in a particular locality may need the acceptance of a demand which may be considered unreasonable by a foundation. This may lead to a trade-off between the (short-term) effectiveness in terms of an activity and the overall standing of the organisation.

Given the need to stick to certain principles as non-negotiable, there may be cases where foundations may not want to continue operations in an area (until there is a change in the situation). There can also be cases where specific government officials may directly or indirectly block the functioning of a foundation since it has not agreed to follow their agenda. In both these cases, the organisational mechanisms of the foundation should be prepared for stopping its activities.

Foundations should be concerned about this issue of having to end operations. If a group of employees are recruited or employed just for one location, their need to continue in the job (or to avoid retrenchment) may encourage them to compromise with the pressures of local officials (even without the knowledge of the leadership of the foundation). The local employees may not inform the leadership about pressures or difficulties so as to continue operations there. There may be an interest to continue functioning there even if there is a not-so-conducive atmosphere making the operations of the organisation ineffective. There have to be strategies to avoid situations such as these. In essence, as noted by a senior functionary of a foundation, there is the need to be passionate about a specific program, but there should be adequate detachment to kill it if it is necessary.

Epilogue

The diversity in the governmental system creates its own dynamics, and it provides a space for foundations to work with and work around its specific nodes. This would also give an opportunity to foundations to not be too bothered about the few who are adversarial or indifferent and work with those who are willing to explore the possibilities through collaboration. These people are enthusiastic in sorting out issues, if any, created by the not-so-cooperative attitude of a few others. There are always a few who can be worked with.

Influencing the government and its culture is a process that requires patient interaction over a long time. It would be incorrect for any organisation, such as a foundation, to claim that the positive change that may happen is solely or mainly due to their involvement. There is a public system on the ground, with its own character, with thousands of people even within a district of India and they belong to different cadres. They make indelible progress shaped through the socio-political processes. These may seem inadequate to outside observers. What these outsiders may achieve through their interaction with the system could be certain promising spots here and there and catching the attention of the system. Through a consistent interaction, there could be small improvements, some tangible but others not so tangible. However, without the system or the willingness of a sizable section of the people who are part of it, no improvements are possible. Philanthropic foundations have to be sensitive to this situation.

AUTHOR

V Santhakumar, Professor, Azim Premji University

References

Prewitt (2006). Foundations, in W.W.Powell, R. Steinberg (eds) The Nonprofit Sector: A Research Handbook, 2nd Edition, New Haven, CT and London, Yale University Press.

Wolk, A. and Ebinger, C. (2010). Government and Social Innovation: Current State and Local Models, Innovations, vol. 5, no. 3, 135.
https://www.mitpressjournals.org/doi/pdfplus/10.1162/INOV_a_00034

OECD netFWD (2017), Bringing Foundations and Governments. Closer: Evidence from India, OECD Development Centre, Paris, pp-17 & pp 20.
https://www.oecd.org/site/netfwd/Bringing_Foundations_and_Gov_Closer_India.pdf

Chew. Celine & Osborne, Stephen P. (2007). Identifying the Factors That Influence Positioning Strategy in U.K. Charitable Organizations That Provide Public Services: Toward an Integrating Model, Nonprofit and Voluntary Sector Quarterly, Vol 38, Issue 1, pp. 29 – 50 https://doi.org/10.1177/0899764008315180

Ferris, James M., and Williams, Nicholas P.O (2012). Philanthropy and Government Working Together: The Role of Offices of strategic Partnership in Public Problem Solving. Discussion Paper. Los Angeles, CA: University of Southern California, The Centre for Philanthropy and Public Policy. www.isgimpact.com/wp-content/uploads/2013/03/PhilGovtWorkingTgthr.pdf

Dennis, Young R. and John, Casey (2016). Supplementary, Complementary or Adversarial? Nonprofit –Government Relations in Nonprofits and Government: Collaboration and Conflict edited by Elizabeth Boris, C. Eugene Steuerle.

Buchanan, J. M., & Tullock, G. (1962). The calculus of consent. Ann Arbor: University of Michigan Press.

Azim Premji Foundation (2017). Teacher Absenteeism Study. Research Group, Azim Premji Foundation. Field Study in Education. http://azimpremjiuniversity.edu.in/SitePages/pdf/Field-Studies-in-Education-Teacher-Absenteeism-Study.pdf

National Employability Report- Engineers, (Annual Report 2016), Aspiring Mind
http://www.aspiringminds.com/sites/default/files/National%20Employability%20Report%20-%20Engineers%20Annual%20Report%202016.pdf

Rainey, Hal G (1982). Reward Preferences among Public and Private Managers: In Search of the Service Ethic. American Review of Public Administration 16:(winter): 288-302. http://journals.sagepub.com/doi/abs/10.1177/027507408201600402

Burgess, Simon and Ratto, Marisa (2003). The Role of Incentives in the Public Sector: Issues And Evidence, Oxford Review of Economic Policy, Vol. 19, No. 2, Financing and Managing Public Services (Summer 2003), pp. 285-300, Oxford University Press http://www.jstor.org/stable/23606768

Kassam, Meenaz, ‎ Handy, Femida and ‎ Jansons, Emily (2016). Philanthropy in India: Promise to Practice. Sage Publication, pp 76-77

Jansons, Emily (2014). The Business Leaders Behind the Foundations: Understanding India’s Emerging Philanthropists. Voluntas: International Society for Third-Sector Research and The Johns Hopkins University 2014. DOI 10.1007/s11266-014-9470-1

Najam, Adil (2000). The Four Cs of Government-Third Sector Relations: Cooperation, Confrontation, Complementarity, Co-optation. Nonprofit Management and Leadership, 2000, 10(4), 375–396. https://sdpi.org/publications/files/R25-The%20Four%20Cs%20of%20Government-Third.pdf

Keck, Michelle (2015). Comparing the Determinants of US-Funded NGO Aid Versus US Official Development Aid. Voluntas (2015) 26:1314–1336: International Society for Third-Sector Research and The Johns Hopkins University 2014. DOI: 10.1007/s11266-014-9464-z

Xiaoguang, Kang and Heng, Han (2008). Graduated Controls: The State-Society Relationship in Contemporary China. Modern China, Vol. 34, No. 1, The Nature of the Chinese State: Dialogues among Western and Chinese Scholars, I, pp. 36-55.

Ma, Qiusha (2002). The Governance of NGOs in China Since 1978: How Much Autonomy? Nonprofit and Voluntary Sector Quarterly, vol. 31, no. 3, September 2002 305-328.