Philanthropy Trends and Impact on Community Foundations

Philanthropy Trends

April 2016

Tony Macklin Chartered Advisor in Philanthropy®

Agenda

Our changing community & donors

Beyond grants

Beyond institutions

Beyond endowments & foundations

Beyond ‘strategic grantmaking’

Paths forward

“Your assumptions are your window on the world.

Scrub them off every once in a while or the light won’t come in.”

Isaac Asimov

I. Beyond “Community”

Definition of “Community”

Identity ≠ Geography

Community ≠ Geography

Divided Nation

Political polarization

Income and asset gaps

Racial and ethnic segregation

Opting out

Declining Trust

Informed Americans who don’t trust nonprofits to “do what is right”1/3General public less trusting

Trust declined 2008-2014

2. Beyond Grants

Definition of Philanthropy

Voluntary action for the public good

Robert Payton

Definition of Philanthropy

Social economy = all the ways we use private resources to create public benefits or public good

Lucy Bernholz

Phila

nth

ropic

Act

ion

Inve

stB

uy

Giv

e

Nonprofits Businesses Individuals

Recipient of Action

21st Century

Philanthropy

Phila

nth

ropic

Act

ion

Inve

st

Debt and equity Microfinance

Peer lending platforms

Buy

Rewards

Giv

e

Donation Donation Donation


Recipient of Action

21st Century

Philanthropy

Crowdfunding

• $9.5B in

North

America

• Social causes

~ 19%

Phila

nth

ropic

Act

ion

Inve

stB

uy

Responsible purchasing

Artist and farmer CSAs

Fair trade

Sharing EconomyG

ive

Giving Circles, Micro-grants

Giving Days




Recipient of Action

21st Century

Philanthropy

Social Giving &

Buying

Phila

nth

ropic

Act

ion

Inve

st

Green bondsCDFIsProgram Related Investments

Shareholderactivism, SRI, ESG

Mission Related Investments

Microfinance

Buy

Giv

e


Recipient of Action

21st Century

Philanthropy

Impact Investing

Now 1 in 6 $

under

professional

management

Phila

nth

ropic

Act

ion

Inve

st

B-Corps and other hybrid entities

Buy

ResponsiblePurchasing

Responsiblepurchasing & supply chain

Cause marketing

“Bottom of Pyramid” products

Giv

e


Recipient of Action

21st Century

Philanthropy

Power of the

Markets

Phila

nth

ropic

Act

ion

Inve

st

Impact investing

Community investment

Crowdfunding

Impact investing & shareholder activism

Venture funds, B-Corps

Some microfinance

Peer lending platforms

Buy

Tuition & healthcare

Products & tickets

Nonprofit social enterprises

Crowdfunding

Cause marketing

Responsible purchasing

Sustainable supply chains

Farm and artist CSAs

Fair trade purchases

Sharing economy

Giv

eCharities, foundations, DAFs, etc.

Other nonprofits

Gov’t agencies

Crowdfunding

Crowdsourcing & co-production, co-working

Remittances

Candidates & bundlers

Crowdfunding, prizes, grassroots $


Recipient of Action

21st Century

Philanthropy

Tony Macklin, CAP®, 2015

3. Beyond Institutions

Hyperagency – the inclination and

ability “to be producers rather than

simply supporters of philanthropic

projects.” – Paul Schervish

4. Volunteerism & Engagement

4. Beyond Endowed Foundations

Donor-Advised Funds

22

Community Fdn DAFs$4.2B grantedBy 66k funds

National DAFs(Schwab, Fidelity,

National Christian)

$5.5B grantedby 128k funds

Single Org* DAFs$2.8B granted by 45k funds

* hospitals, universities

Trends

•Suspicion of endowed wealth and big money power

•Tension of transparency vs. privacy (“dark money”)

•Pass-through, spend-up, flexibility

Private Foundation + DAFs

Family Foundation + 501(c)(4)

B Corp Investment Fund + Foundation

Checkbook + PAC + Community Dev Bank

Social Impact Exchange, Impact Assets 50

LLC + DAF

5. Beyond “Strategic Grantmaking”

26Philanthropy Strategy Overload

Tensions

Top-down goals and measures

Adaptive, “possibility” grantmaking

AccountabilityLearning, performance improvement

Safe, proven methodsSmart risk, fail fast, low-cost innovation

6. Possible Paths Forward

CFs in the Future

“No longer a franchise with a protected territory”

Core functions are commodities

• Managing charitable assets

• Processing gifts, grants, and scholarships

• Accepting complex gifts

• Information about causes and nonprofits

• For some people, finding peers with shared passions

Successful CFs in the Future

1. Get clear about creating value for the community and for customers (donors)

2. Shift resources spent on commodities to value creation

3. Understand

• Managing & giving money doesn’t automatically create value

• Building an institution doesn’t necessarily build community

Value Creation Option 1:

High Touch Donor Services

Financial Human

Intellectual Social

Capitals

“Your advisor for doing good”

Goal: the center for family &/or corporate philanthropy services


Host for Community Problem-Solving

Nat’l study: Donors want to be attached to CF with good community problem-solving and leadership work

• But “leadership” doesn’t mean “in charge”

Facilitation, issue analysis, innovation, assessment, collaborative funding roles, donor leadership, etc.

Goal: asset development & fundraising as purposeful result of effective problem-solving work


Catalyst for “Community Philanthropy”

“Citizens helping each other by sharing resources for the common good” - self-determination, mutual help strategies

Three core components:

• Collective financial resources

• Collective capacity – healthy civil society

• Mutual trust

Goal: unleashing generosity, increasing flow of $

How will you ensure your

community foundation will

be resilient and thrive

in the midst of unavoidable change?

Government & Nonprofit

Philanthropy Trends and Impact on Community Foundations