Winding down of philanthropic organisations to create €50m funding void

Non-profit organisations facing a €50 million annual shortfall in funding due to the winding down of two major philanthropic organisations have urged other private donors and the Government to step into the void.

Without help to counteract the departure of Atlantic Philanthropies and the One Foundation, there will be further closures and staff cutbacks, while vital programmes may be dropped, the charities warn.

Atlantic Philanthropies, set up by US billionaire Chuck Feeney, pictured above, which has poured $1.1 billion (over €800 million) into the university and non-profit sectors in Ireland since 1988, has begun reducing funding to groups and will halt all funding ahead of its closure in 2020.

The One Foundation, set up by Declan Ryan, son of Ryanair founder Tony Ryan, is estimated to have spent more than €40 million and will stop that funding at the end of this year. Together, both organisations make up 86 per cent of philanthropic foundation money going to non-profit groups.

The money has transformed the sector. Organisations have hired more staff and are now run with high standards in campaigning, fundraising and accounting.

"It brought our organisation to a whole new level," says Peter Kavanagh of Active Retirement Network Ireland, which went from 1½ staff positions to 6½ since Atlantic Philanthropies began funding it.

Both foundations also give grants to groups in the rights sector, which would normally have difficulty attracting money from the public. The Gay and Lesbian Equality Network says it has been able to use the funds it gets from Atlantic Philanthropies to carry out anti-bullying programmes in schools and mount a campaign on civil partnership and gay marriage.

“Atlantic Philanthropies funding allows us to be strategic and professional in how we engage with Irish society,” says Brian Sheehan, director of the network, which has received 50 per cent of its overall funding from Atlantic Philanthropies.

Other groups have funded programmes such as literacy projects, aimed at intervening early in disadvantaged children’s lives to help prevent social problems later in life. But there are concerns over the future of this work.

“There is a real possibility that highly successful work will be closed down if the money isn’t there and that would be a terrible tragedy,” says Fergus Finlay, chief executive of children’s charity Barnardos, which receives funding from both Atlantic Philanthropies and the One Foundation. The plan always was to identify which programmes worked and for Government then to take them on – something Finlay says is unlikely to happen given national budget constraints.

“The philanthropic groups are leaving having done their job, no one can criticise them for that . . . but Government must now lead,” he adds.

Other groups are worried that the campaigning they have been able to do on issues will have to be scaled down with the loss of funding.

“The money gave us the ability to really rattle the cage,” says Denise Charlton, chief executive of the Immigrant Council of Ireland, which receives funding from Atlantic Philanthropies. “That will be harder to do now and we may go back to doing advocacy in our spare time.”

The university sector, which has received major funding from Atlantic Philanthropies, has succeeded in getting the Government to commit to funding and has used the money to set up research centres, which is helping to attract investment.

Non-profit groups say they are in a better position to replace the funding because of the skills they have been trained in and the strategies they are being urged to adopt. “It’s been a very responsible wind-down; nobody’s going to be left in the lurch,” says Kavanagh.

Some groups are looking at corporate funding, EU grants and philanthropic sources from the UK and US. Foundations in Ireland, such as the Community Foundation, are also a valuable source of financial support, say groups.

But some in the sector are concerned at the loss of significant funding during an economic crisis. “There is an issue with two big foundations frontloading their money in that way. The money from the two groups should have maybe been much more spread out,” said an individual working with one group, who did not want to be named.

The concentration on funding some groups and not others has seen some solidarity lost in the non-profit sector, they added. Others dismiss this, saying the sector has always been competitive and Atlantic Philanthropies in particular has been focused on getting groups to work together.

There is also a concern that Atlantic Philanthropies encouraged organisations to become more professionalised, which had a knock-on effect on their contacts with communities on the ground.

“Turning non-governmental organisations into business-like models can mean a loss of impact, a loss in energy and that grassroots activism is dropping off,” says another employee of a group, who added that some salaries in the sector had been “massively inflated” in comparison to salaries in the UK.

Both foundations declined to be interviewed on the wind- downs. A report commissioned by Atlantic Philanthropies in 2009 warned that the sudden ending of funding would “fold or dramatically decrease the work” of rights groups and recommended that groups reduce their costs and train up in fundraising.

The foundation’s website says “we hope our experiences and those of our grantees will be helpful to other donors and in particular to those who might consider a giving while living approach and are interested in the areas in which we fund”.

The One Foundation’s website says its aim has been “to ensure the One Foundation’s charitable investments deliver maximum impact for disadvantaged young people”.

Not all grantees have been able to survive the loss in funding. Older and Bolder will close in June after its money from Atlantic Philanthropies comes to an end.

While the group has achieved its aim of helping to bring about a national strategy on ageing, its director, Patricia Conboy, says the closure will leave "a gap in the advocacy space at national level".
Others have begun to cut back on staff. Marriage Equality saw its funding from Atlantic Philanthropies end last year and has gone from employing three full-time staff to just one. The Migrant Rights Centre of Ireland has also laid off staff, while other groups say they are considering letting people go in the coming year.

To offset the loss in funding to the sector a drive is being mounted to encourage more philanthropy, with talks ongoing with wealthy individuals and companies. Forum on Philanthropy, a partnership between the Government and the philanthropic sector, will begin a campaign in June to raise awareness with a “week of giving” planned for the autumn. Multinationals will be a particular focus since many donate large sums in their home countries but not in Ireland.

There is a need to change the perception of philanthropy in Ireland, where there is some begrudgery towards people who display their success, says Frank Flannery, chairman of the forum and Fine Gael director of organisation and strategy.

Just 30 philanthropic foundations exist in Ireland, but when compared with the rest of Europe there should be more than 800, he says.

There are also moves to try and change the tax laws to incentivise donation. The recent budget simplified rules making it easier for charities to get the income tax already paid on donations they receive.

But it is individuals in the US who get the tax back, something some would like to see here to encourage more sustained and bigger donating. This is controversial however, because it would mean a loss of revenue to the exchequer and it could signal the State withdrawing from sectors it already funds.

Many working at attracting philanthropic funding are optimistic there is scope to grow what they say is an underdeveloped source of funding in Ireland. Caitriona Fottrell, director of the Ireland Funds, which gets donations mainly from US-based individuals, says Ireland has to "come out of the closet on philanthropy", adding "we need a whole generation of Chuck Feeneys".