Trust and trustability – how philanthropy can help catalyse a Renewed Social Contract

Our collective ability to address the major challenges of our time depends on the health of the social contract. As major challenges are compounding, our window of opportunity to catalyse a new social contract is shrinking fast.

With six years to go to achieve the Sustainable Development Goals (SDGs), progress has been stagnant since 2020, with only 16 percent of the targets on track to be met globally by 2030. And while climate change is now impacting the world’s food and water security and increasingly threatening international peace and security, it is not too late to turn the tides – if we manage to move at scale and pace and do it now. For the scale of change needed, it must involve all elements of society and all parts of governments, from the local to global level. For change to happen at pace, the world needs strong institutions able to take innovative and brave decisions, based on a strong social contract.  

Social contracts in turn rely on the trust of citizens in those who hold the power. If anything, the recent electoral results confirmed the cracks in the social contract and the growing erosion of trust in traditional political parties and approaches by citizens across the EU. While we may have dodged the bullet of anti-democratic thinking for now, it will only have been the chronical of a death foretold if we don’t renew trust and strengthen the social contract at the heart of democracy. 

Trust has eroded, but it is not beyond repair. The history of the European Union teaches us that even after devastating wars, we can move on to focus on what unites us rather than divides us. Trust is, after all, our shared humanity and our ability to trust other human beings makes us live, grow and thrive. Only with a renewed sense of trust can we gain the buy-in from people to engage in a renewed social contract, which is so urgently needed. 

While restoring trust should be on everyone’s agenda today, Philea’s recent Forum on Trust and Philanthropy explored how the philanthropic sector in particular can be a catalyst in the envisaged renewal. With 186,000 philanthropic foundations around Europe, philanthropy can be an advocate and a bridge-builder to change existing societal norms and policies to better address contemporary challenges. It can help shape a reset, building on existing efforts to strengthen democracy, address inequalities, implement economic reforms and promote sustainable practices at various levels from canopy to grassroots. The sector’s unique characteristics put it in a good position to help unlock solutions by investing in systemic change approaches, supporting trust-based, transformative, innovative philanthropy and providing unrestricted, flexible, unearmarked and long-term funding. Sustainable investments, focusing on funding gaps, cultivating the long-term view and acting for future generations… all of these are ways in which we can, as philanthropy, play a role in restoring trust and renewing the social contract. 

But for philanthropy to play its role, it too needs to be introspective and continue on a journey of transformation observed in the sector over the past years as a response to key societal challenges. It needs to acknowledge, with humility, that it is, as a sector also under scrutiny, criticised on occasions as ineffective, as a legacy of white supremacy or even a threat to democracy. It needs to continue exploring the power of unrestricted funding and involve those it serves in defining positive impact. It needs to share power and empower communities. It needs to invest in its legitimacy by increasing transparency and accountability and walking the talk when it comes to core values.

As part of any renewed social contract, and in the hope of seeing greater progress towards the 2030 agenda, two issues stand out for philanthropic organisations to tackle in the next decade:  

 1.Climate and climate justice

Philanthropic funding going towards climate mitigation has more than tripled since 2015 but does by far not meet the demands of the scale of challenges such as reversing biodiversity loss or decarbonising our economies. And while not all philanthropic foundations may wish to become climate funders, it is everyone’s business to apply a climate lens to their work. Conversely, it is not news by now that climate action only works if it integrates a social lens to create not only a greener but also a fairer, more just and more equal world in the process.

2. Democratic backsliding and the rise of authoritarianism

The health of democracy is also declining on all parameters – and declining fast – in Europe. Despite the impact on society’s ability to address major challenges, democratic rejuvenation remains underfunded. Philanthropy is taking cautious steps in this context, including by funding free and independent media. More will be needed if we want our democracies to thrive.

In the European context, with annual philanthropic investments of approximately €55 bn in many parts of the social fabric and €645 bn in assets and endowments, philanthropy can help move the needle on the 2030 agenda. Yet, while SDG 17 puts partnerships at the heart of the agenda, the potential of partnering with philanthropy is not fully unleashed in the European Union. Legal, administrative and tax barriers at national and cross-border level impede contributions and refrain the sector from being the catalyst Europe needs. Recent foreign funding laws emerging in various countries are cause for concern and go against what is needed to invest in the renewal of a social contract.  

It all comes back to trust, and if there was ever an opportunity for philanthropy to step up and realise its true potential, it is now. With an eye on the global agenda, my hope is that – without further ado – policymakers would trust and partner with philanthropy, as explained in our European Philanthropy Manifesto, so that it can play the role it should in renewing the social contract. Secondly, philanthropy itself should continue its journey of self-transformation, to do better at being trust-based and trustworthy and to be part of the solutions needed for people and planet.   

The views expressed in this #CriticalThinking article reflect those of the author(s) and not of Friends of Europe.