State of Governance in Philanthropy - Gulf Region

This report provides a detailed analysis of the governance practices adopted by regional philanthropic organisations, highlighting both the challenges and opportunities in implementing best practices in philanthropic governance.

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In 2017-18, the Pearl Initiative undertook research understand the current state of governance in philanthropy across Gulf-based businesses.

Our research was based on a 3-pronged approach: 1) a survey to key individuals engaged in the philanthropic and non-profit ecosystem in the Gulf Region, 2) a series of focus group meeting in Dubai, Kuwait, and the Kingdom of Saudi Arabia, and 3) in-depth discussions with key experts operating across the sector.

In April of 2018, we published a report providing a detailed analysis of our findings. The report offers insight into the governance expectation of gulf-based business donors and the current governance capabilities of philanthropic organisations across the region.

Our research suggests that while both the donor and implementing organisations in the philanthropic and non-profit ecosystem show positive efforts are being made to incorporate good governance practices, all agree that there is a definite need to enhance these capabilities across the sector.

The following sections highlight some of our key findings and recommendations included in the report.

  • 100% of the survey respondents consider governance practices in the philanthropic and non-profit ecosystem need to be improved and 82% think there is a need to enhance governance practices within their own organisations.
  • 81% of the foundations surveyed not only provide grants to implementing organisations but also implement their own philanthropic programmes and activities. 60% of corporations and family offices do the same. The general perception within this ecosystem is that there is a lack of trust by the donor community in the philanthropic and non- profit organisations which implement programmes, hence why foundations and other donors often implement their own programmes.
  • The presence of a board is one of the most prevalent issues of importance for donors with over 80% indicating that this was a key factor to consider when providing funding to implementing organisations. On the other hand, 80% of implementing organisations surveyed have established a board and most of these boards are involved in strategic and annual planning activities with less focus on other areas such as diversity and succession planning. Some organisations are interested in finding ways to increase the effectiveness of their board and engagement with board members.

Alignment Between Donors and Organisations

Figure 1: Understanding the difference between a sponsorship and a grant.

Recommendations

Based on the gathered data, there seems to be an overall alignment between the

  • To increase trust and enhance transparency, the ecosystem should consider developing guidelines and best practices for reporting. Donors and implementing organisations have a shared responsibility to their beneficiaries to ensure the effectiveness of their giving. For implementing organisations, this entails effectively evaluating and reporting on the impact of their programmes and activities; and for donors, this includes disclosing information about their financial contributions and the impact of their giving.
  • To enable more efficient programme delivery and potentially lower costs to organisations, the ecosystem should encourage partnerships and collaboration based on a defined framework with clear goals and scope of collaboration.
  • All actors in the ecosystem should be engaged with each other and with regulators in an open platform to inform regional best practices and enable the continuous improvement of governance practices in the philanthropic and non-profit ecosystem.
  • Implementing organisations and the donor community should encourage greater accountability and transparency about their philanthropic programmes, activities and impact.
  • Although many organisations have established boards and are aware of the benefits of having a board, the number of non-executive board members is quite low and boards have little influence over areas such as succession planning and organisational diversity. This suggests that further research and analysis is required in the region to maximise the value and effectiveness of the board.

Based on the gathered data, there seems to be an overall alignment between the governance expectations that the donor community values when funding implementing organisations and the governance practices adopted by these organisations. The table on the left illustrates a detailed comparison between the governance expectations that donors have towards the organisations they provide funding to, and what implementing organisations report to have in place. A more detailed analysis of each governance capability is set out within this report.

While governance capabilities appear to be in place and expected by the donor community, our research shows that the donor community are not very aware of the extent to which governance practices are being adopted by implementing organisations. Moreover, these organisations want to improve the implementation of some of their governance practices, such as the way the board is engaged and the way they report and evaluate the impact of their activities. Transparency, impact evaluation and deriving value from the board were identified as the key areas that require further development across the philanthropic sector.

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