What is it about foundations’ role as Piggy in the Middle?

By: By Dr Alexandra Williamson   |   Postdoctoral Research Fellow, Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) QUT Business School   |   https://research.qut.edu.au/australian-centre-for-philanthropy-and-nonprofit-studies/

Philanthropic foundations in Australia can’t deliver services. So how do they go about creating public benefit? The simple answer is that they fund others. And it’s exactly this detachment – the arms’ length approach - that has foundations often referred to as intermediaries.

But intermediaries between whom or what? The obvious answer is between donors and beneficiaries. 

Yet in our research that took us beyond that first response we found many other intermediary roles that foundations may play - a total of 14 in fact - and we accept that there may be more that we’ve missed.

In this short paper that Dr Diana Leat and I published earlier this year, we tease out and describe the ways in which foundations’ multiple intermediary roles form part of their work and strategy. The origin of this paper was a combination of our curiosity about foundations’ work across the world, as well as some frustration around blanket statements about foundations as intermediaries. For obvious reasons, the work is fondly known to us as The Piggy Paper. We’re not being frivolous – intermediaries, and in this case foundations, have a significant role to play beyond the simple exchange of money and support.

Foundations’ work as “actors ‘in the middle’ is not simply transactional but is driven by and consistent with values grounded in their mission and purpose.  Intermediaries can highlight important issues, deepen relationships between donors and grantees, and broaden accepted practices” (Williamson & Leat, 2021, p.3)

We grouped the 14 roles into four themes, namely bringing parties together (5 distinct intermediary roles), capacity development and relationship building (4 roles), temporal bridging (3 roles), and sector-level or institutional intermediation (2 roles). Each of the 14 roles is described in detail in the paper itself

It is worth, however, reflecting on some of the less recognised roles. These included the role as a negotiator and translator between positions and understandings, where foundations can help parties to understand each others’ responsibilities and expectations. Other under-appreciated roles played by foundations include as an intermediary between failure and success by taking on risk and funding pilot programs; and as an intermediary in time between donation and grant, between family generations, and between eras in society. These three temporal intermediation roles are perhaps some of the most fascinating, as they raise complex questions about accountability and the assessment of foundations’ performance to explore in future studies, including not only to whom but also when or at what times foundations are responsible.

Research about foundations remains relatively rare in an Australian context.

Much of the research that is undertaken and published comes from a US context, and while this can spur ideas and research questions for Australian philanthropy, the differences in both scale and giving culture between the two countries’ philanthropic sectors are so large as to make comparisons problematic. Work by ACPNS researchers and colleagues studying Australian foundations therefore makes a valuable contribution to what is known about structured philanthropy globally.  The small but growing body of Australian research publications on foundations is helping to expand and support discussions of foundations’ broader roles (not just as intermediaries).

Writing a peer-reviewed journal article is a back-and-forward process. It also stimulates some different perspectives and reflections. One of the comments and suggestions we received in the paper’s early development was around the tension between foundation’s autonomy and their intermediary roles – how can foundations be simultaneously independent yet ‘in the middle’? There was also a question about the differences in the intermediary roles played by private and public foundations. The perspectives of different stakeholders were raised – how do donors, trustees, and beneficiaries understand foundations’ intermediary roles? We attempted to address some of these issues in the paper, but some will have to wait for future research.

We hope the description of the 14 roles will be useful to foundations in many ways.

It might serve as a checklist for strategic planning discussions – which roles does a foundation currently take on, which were past roles, and which might become future roles? It may help foundations to clearly communicate wider aspects of their work to donors and beneficiaries alike. It may spur managers and trustees to monitor their foundation’s impact in ways that may go unrecognised. It may begin to explain why some smaller foundations appear to punch about their weight, and it may help trustees and managers to explore opportunities for adding value that don’t always depend on more money.

Williamson, A, & Leat, D. (2021). Playing piggy(bank) in the middle: Philanthropic foundations’ roles as intermediaries. Australian Journal of Public Administration. doi: 10.1111/1467-8500.12461

Next week in this space, two foundations will reflect and respond to the research.

Mar. 29, 2021

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