This report explores the challenges foundations and grant-giving organisations will face over the next decade in order to maintain their legitimacy and impact. At Nesta, we have taken a ‘long view’ by capturing responses to these challenges from the sector.

We worked with the Centre for Public Impact on a rapid literature review, carrying out interviews with 25 leaders in the field from the UK and internationally. Drawing on these insights, we isolated signals of change in the sector – some inevitably weaker than others – and focused on several ‘clusters’ of foundation practices. Finally, we highlighted some of the strategic choices that foundations will need to manage in the coming years. Given that foundations around the world are grappling with similar challenges, we wanted to offer up the results of this exercise back to the sector to support further conversation, inquiry and experimentation.

In that spirit, we created a worksheet to help organisations understand where they sit on the spectrum of strategic choices described in the report. We also asked several other leaders and thinkers working in and around foundations for their take on the future role of foundations over this pivotal decade. This matrix and collection of provocations are published in tandem with this report.

Taken together, we hope that the insights from this exercise will be one further contribution to the mounting international debate about the role foundations are set to play in influencing society.

Key findings

• The scan outlines a number of practices – some emerging, others more developed – that foundations are experimenting with to address the challenges they will face over the next decade in order to maintain their legitimacy and impact.
• Foundations are looking to enhance their legitimacy through a range of approaches, including aligning investments with their social mission, making data more transparent, (re)defining relationships with the public sector, and devolving power and decision-making.
• Foundations are working to increase their impact through practices such as unlocking big bets through collaboration, adopting private sector approaches, leveraging digital and data analytics and reimagining place-based approaches.
• The challenges facing the foundation sector do not have simple solutions and in devising their strategies, they will inevitably have to make trade-offs between different priorities.