Trends in Philanthropy
So first of all, what are the trends?
1. Private wealth is increasing – The number of wealthy individuals, particularly those who are self-made, has increased.
2. A new type of donor is emerging, altering the giving landscape – Donors are younger, self-made and socially conscious. They want to be engaged, use their expertise and take risks.
3. More people are giving during their lifetime – They want to experience the joy of giving. More people are talking publicly about their giving, providing role models to new givers.
4. Views on the amount of wealth parents should pass on to their children are changing – More individuals are choosing to give much of their wealth ‘back to society’.
5. Givers increasingly want to see the impact of their donations – long term outcomes and not just outputs.
6. More donors are giving together – ‘giving circles’ such as The Funding Network, as well as funding vehicles such as ARK and the Private Equity Foundation.
7. Innovation in charity financing is growing – Venture philanthropy, loans and grants for charities and charitable banks are enabling social investors to help disadvantaged communities achieve sustainable economic growth.
8. There is a growing range of charitable services that help donors to give effectively – Helping donors to take a more informed and strategic approach to giving. Meanwhile, private banks are expanding philanthropy services to high net-worth clients.
9. Information flows are improving – Publicly available information on charities is more readily available to donors and potential donors.
10. Individual giving is becoming increasingly important to third sector organisations – Private individuals provide charities with unrestricted, sustainable income, playing a critical role in maintaining the independence of the voluntary sector.
So what does this mean for charities and social enterprises? Well, to begin with, organisations need to review the way they communicate the messages about their brand to make sure that it appeals to this new audience. That doesn’t mean that you should alienate your existing donors but is there potential to develop new income sources and if so, will you be in a position to do this effectively with your current donor communications. If you want to engage with new, younger donors, you may need to consider different methods and approaches to fundraising. That doesn’t mean throwing out what’s already working well for you but is about adapting to take advantage of changes.
Be flexible. Be creative. Think about how you can communicate with this new audience. Do you have existing networks – such as board members, staff or volunteers – who can help you reach these high net worth individuals. Do you need to adapt your donor communications strategy to include social media?
It is also worth considering whether your organisation and the work that you carry out could be funded differently. Many organisations have lost significant levels of public funding – either by losing public grants or contracts. Can you look to these new trends in philanthropy to help you bridge the gap? Perhaps it’s worth considering a grant or a loan to invest in a new project that will generate income for you in the longer term – effectively enabling you to pay off the loan in the future. Charitable banks and social loans can help organisations to achieve positive outcomes where traditional grants won’t necessarily provide the same level of support.
Donors are increasingly sophisticated. They want to engage with causes that they believe in and to make a difference – not just through their financial investments but through their personal involvement. They want to work with organisations that are forward thinking, take a creative approach to achieving their aims, and who have a vision and values that they believe in. Wealthy individuals have the power to make a sustainable difference to society both now and in the future. Where once public funding was the answer, in these lean times, charities and social enterprises need to develop to take advantage of the new trends in philanthropy.
Is your organisation ready to adapt to the changes in the funding landscape?