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What are the top philanthropy trends in 2019?

Emily StubbsEmily Stubbs
June 10, 2019

Maanch is a global impact platform designed to influence the flow of philanthropic funds to worthy projects using the impact and needs assessment data from the UN SDGs. As we build the Funder side of our platform we’ve engaged multiple stakeholders across the philanthropy ecosystem to understand their motivators, needs and how their ways of giving are changing. Through all these conversations it became clear there are trends emerging in how philanthropy is evolving and the macro and micro effects of critical social and environmental challenges we are facing. We’ve taken a closer look at some of the trends we identified: 

Philanthropists moving towards funding causes

High profile philanthropists and foundations have shifted their funding from specific intervention to a systems change lens. Bill and Melinda Gates have imagined a world free of diseases. Before beginning their programme to eradicate neglected tropical diseases, their foundation undertook significant research to identify the most impactful interventions to bring the world closer to that goal. By setting a target like “the eradication of disease”, the foundation can be both nimble and systemic, addressing pressing issues and promoting interventions most relevant to their overall goal.

This represents a wider shift in focus we have seen with philanthropists, moving away from funding individual organisations and towards tackling critical causes and the interventions and solutions needed to create lasting systems change. Other examples include the MacArthur Foundation’s commitment to promote the circular economy;  the Allen Lane Foundation’s commitment to effective integration of peoples; and the Bupa Foundation focus on mid-life mental health.

In addition, there has been a growth in popularity of place based interventions. Income into Community Foundations in the UK has increased from individual philanthropists, foundations and businesses, who attempt to solve systemic problems bound by geography – for example the London Community Foundation local housing initiative co-funded with nationwide community grants.  

A call for clarity on responsible investing

Impact investment is capturing increasing attention from mainstream investors and the most recent report from the Global Impact Investing Network values the current size of the impact investment market at $502 billion. It is also a growing priority for many businesses, specifically in the financial services sector.

But this increased engagement is not restricted to the corporate world – it is also causing a shift within the philanthropy sector. Charities are coming under increased pressure to examine their investment strategies and consider how certain investments may support or undermine their public statements and charitable goals. In March this year a coalition of the UK’s leading charities and faith groups released open letters to the Charity Commission and Attorney General calling on them to seek a landmark ruling on questions from the Charity Tribunal around their investments supporting their goals and duty to provide public benefit. There is not currently a regulatory requirement for charities in the UK to have a responsible investment policy, and with Philanthropic organisations having combined investments of £63bn in the UK and $1.5tn globally, there is rightly a call for legal clarity on responsible investing.  

A focus on millennial philanthropy

The Deloitte Global Millennial Survey 2019 revealed that when millennial workers were asked what the primary purpose of businesses should be, 63% more of them said “improving society” than said “generating profit.” And the values and motivators of this generation will not just drive their decisions as employees but also as investors, with millenials already particularly engaged in impact investing.

As a generation, millennials also give at higher rates than any of their predecessors and they are on the verge of the largest transfer of wealth in history: $24 trillion from baby boomers to millennials. They place priority on their ability to create change, and believe it is their responsibility to do so. Multiple stakeholders across the Philanthropic ecosystem, from not-for-profits looking to build relationships with millenials as they inherit this new wealth, to corporates seeking ways to engage them as their future workforce, are trying to tap into this purpose driven mindset and align with their environmental and social values.

This younger generation, perhaps as a result of the wide reach and access to information technology, also apply a more integrated approach to how they apply their capital, and are more conscious of the consequences of this. Consumption choices and philanthropic choices are intertwined in the impact they want to see in the world. More than any generation before them, they want tangible evidence that their giving has an impact and we anticipate millennials to become a driving force in the future of philanthropy.

Grant making foundations have also been responding to this growing pressure, notably in the United States where innovative philanthropy is embedded in their culture. The term “impact investing” was actually coined by the Rockefeller Foundation in 2008 when there was a growing conversation around how capital could be used differently. Foundation Impact Investing is gaining momentum and we predict further engagement with this way of deploying capital as calls for greater scrutiny on investments increase.  

Private and Public Sector Collaboration

The SDGs have provided a framework that identifies the critical issues people and planet are facing, as well as increasing the focus on addressing the partnership challenge that exists between private and public bodies. There is a $2.5 trillion investment gap to fully achieve the UN SDGs, a gap that will only be filled by public, private and third sector collaboration and using the resources available in a more efficient way against aligned goals.

It is widely recognised that it is not only the role of philanthropic capital to address the pressing needs we are facing as a planet, but that businesses need to take more responsibility for their behaviours and investments. This was most recently highlighted in Blackrock’s Larry Fink’s 2019 letter to CEOs entitled ‘Purpose & Profit’ where he made it clear that businesses need to “serve a social purpose”:

“Unnerved by fundamental economic changes and the failure of government to provide lasting solutions, society is increasingly looking to companies, both public and private, to address pressing social and economic issues. These issues range from protecting the environment to retirement to gender and racial inequality, among others.”

Climate change is one of the core areas where the alignment of public and private funds needs to be used to shift the systems that perpetuate the problems rather than used to combat the problems, and reduce the damage,  these systems create. Chris Kavanagh, Goldman Sachs, Charity Investment Group, said: “Mobilising capital to address climate change will require all corners of the investment community – public, private and third sectors – to accelerate investments in projects that reduce emissions and minimise the impacts of global warming.”

While the SDGs certainly provide the framework for collaboration and alignment, the execution of the solutions falls to governments, businesses, not-for-profits and civil society. Breaking down these silos to enable cross-sector collaboration and access to impact data is the foundation of Maanch and a driving motivator behind the development of our technology.

Conclusion:

The philanthropic way of giving to not-for-profits is no longer the only way to enable positive sustainable change and there is significant movement at both a corporate and individual level towards bolstering philanthropic capital through private and business funds and behaviours to ensure our financial, investment and broader economies serve the social and environmental needs of people and planet.

The impact of millennial driven demands for responsible business practice and investment strategies will also be significant for both the private and public sector and we’re excited to see the positive change this will create.


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