Unveiling the Landscape (#4): The Foundation Triangle

This four-part blog series is a deep dive into the 2024 Landscape Report, which offers a comprehensive view of Canada’s philanthropic landscape. The blog series summarizes the key findings and provides additional narratives and reflections from presentations we made about the research and feedback received from a range of stakeholders. The Landscape Report is a crucial starting point for philanthropic research conversations, and we invite you to be part of this discourse.

Exploring the purposes, approaches, and roles of Canada’s philanthropic foundations

In this fourth blog, we introduce the Foundation Triangle and how it is valuable for exploring the purposes, approaches, and roles of foundations in supporting Canadian civil society.

One of the most fascinating challenges of philanthropic foundation research is to reflect its breadth and diversity. Foundation definition, conceptualization, and typologies have continued to perplex researchers due to variations in jurisdictional regulations, historical development, and operational uniqueness. The narrative of Canadian philanthropy can be told in various ways, and the description of foundation operations varies by each foundation’s decisions. This individuation has made it difficult for research to present a holistic view. Considering these challenges, this study adopted the Foundation Triangle as a conceptual framework to explore foundations’ purposes, roles, and approaches to understand how they support Canadian civil society.

Understanding the Foundation Triangle

The Foundation Triangle, developed by sociologist Helmut Anheier, offers a simplified framework for understanding how foundations’ choices impact their role in civil society. The triangle’s three vertices represent the primary purposes of foundations: changing or reforming structures, protecting communities and practices, and providing relief in times of suffering and unmet needs.

Within the triangle, foundations’ approaches to achieving these goals are categorized into grantmaking, operating, and hybrid models. Finally, the roles foundations adopt to meet their objectives are detailed, including innovating social mechanisms, complementing other groups, substituting the role of the state, or building new facilities and methods.

Applying the Foundation Triangle within a Canadian setting helps to examine the efficacy of this framework. Using the triangle to analyze previous research and this study’s findings demonstrates how changes in the foundation landscape, such as policy shifts or investment decisions, contribute to shifts in Canadian foundations’ purposes, approaches, and roles.

The Research Application

Earlier studies have utilized the Foundation Triangle to depict the Canadian environment, revealing that most Canadian foundations focused on relief activities, with fewer dedicated to systems change. Two-thirds of Canadian foundations adopted a hybrid approach, combining grantmaking and operating programs. Less commonly, foundations solely focused on either grantmaking or operating. In their roles, Canadian foundations often complement the state more than substitute it, with building out organizational capacity being more prevalent than scaling specific interventions. Innovation is most often seen in social and organizational contexts.

Findings and Discussions

This study’s findings indicate that the story of Canadian philanthropy does not lie solely at the endpoints of the Foundation Triangle but rather in the relationships between these points. Three key relationships emerged: relief-protection, protection-change, and change-relief.

Relief – Protection

The relationship between relief and protection illustrates philanthropy as an additional societal pillar, transforming private resources into public goods. Relief remains crucial, with foundations supporting education, health, and social services. The global pandemic and cost of living crises have underscored the importance of relief, prompting foundations to balance immediate needs with long-term initiatives. This relationship reflects the traditional role of philanthropy in Canada, where it complements government efforts and helps preserve societal stability.

Protection – Change

The interplay between protection and change offers a dynamic view of Canadian foundations. Foundations are navigating changes in policy, asset investments, and grantmaking practices. They are managing increasing disbursement quotas, exploring impact investments, and engaging in trust-based and participatory grantmaking. These changes reflect a contemporary, change-oriented environment where foundations recognize previously overlooked histories and power dynamics. However, traditional investment practices and operational principles persist, highlighting the balance between legacy and innovation.

Change – Relief

The relationship between change and relief is the most nascent finding. Historically, Canadian foundations focused on relief, often leaving systemic change to the government and other elements of civil society. In today’s change-oriented environment, foundations face a conflict between their long-standing relief-based funding patterns and practices and the call to support change-based organizations. Foundations are adapting to new norms of funding, balancing their support for established welfare organizations with emerging grassroots and community-led initiatives.

Approaches in Philanthropy: New Tools and Investments

Understanding how foundations achieve their missions is crucial to grasping their impact on society. Traditionally, the Foundation Triangle categorized approaches as operating charitable programs, grantmaking, or a hybrid of both. This study expands on this by highlighting the diverse philanthropic vehicles foundations use, such as endowments, donor-advised funds (DAFs), and flow-through funds. While grant-making remains prevalent, the growing number of corporate and community foundations illustrates a broader range of tools. Corporate foundations often align their giving with business objectives, whereas community foundations focus on local distributions through DAFs and flow-through funds.

Additionally, private and public foundations engage in programming, which includes convening, sharing knowledge, and initiating new services. This hybridity between grantmaking and operations and varied philanthropic vehicles underscores the complexity of foundation approaches. Investment strategies are also a critical component of foundation approaches. The study suggests including investment priorities and practices in the Foundation Triangle framework, as these reflect foundation values and contribute to achieving their mandates. Whether through traditional investment portfolios or social and impact investments, how foundations deploy their assets is integral to their mission. This inclusion fosters greater understanding and transparency, and situates investment strategies within the context of foundations’ broader goals.

Role of Canadian Philanthropy in a Modern Social Welfare Democracy

The Foundation Triangle conceptualizes the roles of Canadian philanthropic foundations, categorizing their activities into four main types: complementing and substituting government efforts and building out or innovating. Traditionally, Canadian foundations have complemented government initiatives, particularly in local and regional services, reflecting the country’s strong social welfare model.

The study plotted these roles within a matrix to better understand the activities and foster discussion. It found that most funding flows into education, health, social services, and international development, aligning with a complementary and building-out strategy. However, innovative efforts are also evident in areas such as climate finance, gender lens investing, and social impact bonds.

The global pandemic and cost of living crisis have raised questions about whether some philanthropic activities are now substituting government roles. This shift requires active reflection on the balance between complementary and substitution and between building out and innovation. While the study did not find evidence of foundations engaging in both substitution and innovation, it highlighted the need for ongoing assessment of funding flows to understand the evolving roles of Canadian philanthropic foundations.

Conclusion

The Foundation Triangle provides a conceptual framework for viewing Canadian philanthropic foundations’ purposes, approaches, and roles. It highlights the importance of relationships between relief, protection, and change and how these relationships shape the landscape of Canadian philanthropy. As Canadian foundations continue to evolve, the Foundation Triangle will remain crucial in maximizing their impact on society. This framework offers valuable insights for both individual foundations and the philanthropic field, helping to navigate the complexities and opportunities that lie ahead.