Inside Philanthropy published its Philanthropy Forecast recently (https://www.insidephilanthropy.com/home/2018/1/7/philanthropy-forecast). I am paraphrasing their excellent analysis, but here are my key take-aways – you may want to read it for yourself:
- Gains in the stock market may off-set any negative impact the recently-passed tax bill would have on 2018 giving. That said, they published this at the very beginning of 2018, when the stock market was rocketing upward and before the Administration raised the potential of trade tariffs related to steel and aluminum. That said, this underlines the criticality of major donors as a source of reliable, multi-year support for charitable organizations.
- Large foundations are starting to appreciate their own influence and consolidation efforts like the Giving Pledge are increasing their relevance. Understanding how major foundations make decisions and prioritize investment opportunities is increasing in importance for smaller non-profits that hope to receive sponsorship. Non-profits and large corporations often use the same words to speak different languages. As an advisor to non-profits, I try to help their leadership understand that foundations backed by successful business leaders will be seeking ‘return on investment’ and ‘metrics of progress’ as affirmation that their investments are well-placed in the non-profit sector. This does not change the underlying operations of the non-profit, but does mean they have to adapt to the terminology of their sponsors.
- Living donors are becoming more relevant to a foundation space that was often configured to advance the wishes of deceased benefactors. This is very important because it suggests a different type of engagement with the foundation. A creative non-profit will find ways to personally engage the foundation’s benefactors in their operations, giving them a visceral experience and appreciation for the impact they are having. At the same time, participatory grantmaking – when the recipient has a role in defining the project – is also increasing in prominence.
- Domestic challenges are gaining in prominence – perhaps because of objective need and perhaps because of domestic political issues. Causes like anti-poverty, sexual harassment, opioid abuse, racial justice, reform in the prison system, etc. are all getting more media attention than in recently years.
- Scandal continues to be a problem for the charitable sector – both on the part of the funders and the funded organizations. The case for effective and transparent governance has never been made more strongly. Whether through revelations brought about by the #MeToo movement or through regulatory enforcement or criminal prosecution, charities need to ensure that they are looking out for the long-term brand equity of their organization by vetting senior leadership, benefactors, and the entities and programs they fund.
- The line between charitable activity and political activity is diminishing as individuals seek to use non-profit entities to achieve political purposes. Some are obvious efforts to promote a candidate or politically-charged cause, but others are subtler and require that donors understand the true purpose of the entities they support.
- Foreign investment in the US philanthropic space is increasing, which brings positive benefits by putting money at work on important causes but potential risks to US non-profits associated with the source of funds. In February 2018, the New York Times reported on an $18B donation by a Chinese businessman to a US-based non-profit. But the article makes the point that the donation may have been a way of skirting US foreign financing laws: https://www.nytimes.com/2017/07/26/business/hna-group-billion-donation-new-york-charity.html