Charitable foundations must do more to improve diversity, a new report has urged, finding that just one out of 100 UK foundations scored a top grade in the area.
The Foundation Practice Rating 2024 report, published by the Friends Provident Foundation, analysed a random sample of 100 UK foundations, ranking them in grades from A to D in the areas of diversity, accountability and transparency.
The grantmakers were asked to answer 98 questions, 56 of which are criteria that contribute to the foundation’s score and rating. The research is carried out by Giving Evidence, a consultancy that specialises in the production and use of evidence in charitable giving.
This year’s report – the third of its kind – found that while some strides had been made in diversity, foundations still had room for improvement.
For the first time, one foundation scored an A in diversity – the Community Foundation Tyne & Wear and Northumberland, which was ranked an A in all three areas.
But nearly one-third of the foundations analysed scored the lowest ranking of D on diversity. Out of the 100-strong cohort, 11 scored a B in diversity, 56 were rated C and 32 D.
While this was an improvement compared with last year’s report, which found that 48 foundations ranked D for diversity, the report calls for further improvements to be made.
Collectively, the foundations analysed scored the worst on having ways for people with disabilities to contact the foundation; having a plan to improve the diversity of trustees or board members with numerical targets; having a plan to improve staff diversity with numerical targets; and having various ways to contact the foundation about malpractice.
They scored the best on whether the foundation gave information on who or what it has funded; whether the foundation had an investment policy; transparency on funding decisions; and whether the foundation has a website.
The strongest area was transparency, where 63 out of 100 of the foundations were rated A, up from 57 the year before.
Of those remaining, 18 were rated B, 10 were rated C and nine were rated D.
The report says that the change in these scores over the past three years is “enough to be statistically significant” and suggests improvements have been made in this area.
For transparency, just 17 were rated A, compared with 19 the year before. Of the remaining foundations, 35 were rated B, 26 were rated C and 22 were rated D.
Danielle Walker Palmour, director of the Friends Provident Foundation, said: “We are delighted that a slow revolution is underway in the foundation world and the general trend of improvement is positive.
“However, it’s important to say even the foundations doing well have much to do to improve practices around diversity to catch up with other social purpose organisations.”
Caroline Fiennes, director and founder of Giving Evidence, added: “The foundations rated A overall were diverse in size and structure. They included community foundations, a huge foundation (Wellcome) and smaller or younger endowed foundations (eg Blagrave Trust, The Indigo Trust).
“Areas singled out for improvement include foundations’ websites, with 13 of the 100 foundations examined having no websites at all, with others being limited, poorly designed and failing to provide access to key information – a significant problem for visitors attempting to assess if a particular foundation is suitable to apply to.”