future of high impact philanthropy - updated view

Future of High Impact Philanthropy An Updated Perspec.ve 11 April 2017 The world’s leading open foresight program

Context This updated perspec.ve builds upon an ini.al point of view authored by Prof. Cathy Pharoah and precedes a series of global discussions that are taking place through 2017. It is a view to be shared, challenged, built upon and enhanced.

Strategic Philanthropy Funders are shiGing from reac.ve, responsive grant-‐making towards pro-‐ac.ve and impact-‐driven ‘strategic philanthropy’

which drives spending decisions towards outcome achievement.

Source: IP (Cathy)

Heightened Scru:ny Philanthropic involvement will be increasingly vulnerable to the public distrust and scep.cism of the post-‐truth society which

has followed the major financial and corporate governance crises.

Source: IP (Cathy)

Systems Change To solve complex social problems, founda.ons’ funders shiG to an

emergent model that takes on board the mul.ple systems and contexts of social depriva.on, and iden.fies the gaps in policy and prac.ce.

Source: IP (Cathy)

Open Public Services Open Public Services will increasingly offer ambi.ous social

purpose ventures more scope to develop and expand through, for example, delivering local statutory services.

Source: IP (Cathy)

Direct Philanthropy A growing opportunity is to use social finance to tackle poverty and financial exclusion at source. Micro-‐finance products coupled with

mobile phone and smart card technologies will be increasingly powerful.

Source: IP (Cathy)

Speed to Scale Greater global connec.vity, access to capital and broader reach

all accelerate the .me to impact 100m beneficiaries (or equivalent). Internal and external governance and bureaucracy is challenged.

Source: JA Skoll World Forum

Subsidised Investment Social investment remains heavily subsidised by philanthropic and public

funding. This will con.nue to be needed to develop the capacity of small-‐medium social ventures reliant on reducing statutory grant support.

Source: IP (Cathy)

De-‐risking Social Investment A key barrier to social investment for social ventures

with few assets and limited track record is risk. Innova.ve prac.ces, structures and partnerships emerge.

Source: IP (Cathy)

Poli:cal Philanthropy As more poli.cal systems are seen to be failing society and inhibi.ng social progress, increasing philanthropic aXen.on is focused on reforming them or searching for alterna.ves.


Entrepreneurial Talent Iden.fying, suppor.ng and enabling

more effec.ve social entrepreneurial talent becomes an important focus for donors.


Partnerships for Impact To achieve leverage and impact many agencies will expand cross-‐sector and cross-‐na.onal partnering. Founda.ons increasingly co-‐fund with each other.

Source: IP (Cathy)

Philanthropic Disintermedia:on Digital technology challenges established structures and reveals

new philanthropic pathways. One consequence is a trend towards reducing the number of intermediaries in philanthropy.

Source: IP (Cathy)

Fragmented Philanthropy Major new philanthropic giving investment is likely to be donor-‐mo.vated, driven and directed, bypassing charitable structures. An issue is how large-‐scale private donor engagement relates to exis.ng philanthropic ini.a.ves.

Source: IP (Cathy)

Inves:ng in Philanthropy Capacity Philanthropy invests liXle in its own development, always priori.sing front-‐line

services. A future challenge is to find resources for its own infrastructure development, par.cularly in building business and enterprise capacity.

Source: IP (Cathy)

Compe:ng Frameworks Mul.ple new compe.ng frameworks emerge -‐ all seeking to provide

standards and so help decrease the confusion between, for example, social and environmental returns and the non financial impact of philanthropy.

Source: TJ desk research

Micro Social Finance Larger-‐scale successful social business is increasingly well-‐served by social

finance. The challenge is to make it work for the specialised, smaller-‐scale, and less marketable but vital, purposes which philanthropy contributes to society.

Source: IP (Cathy)

Missing Middle We see increasing focus on bridging the gap between tradi.onal philanthropy and mul.na.onal aid. Targeted investment from both venture philanthropists

and impact inves.ng funds on boXom of the pyramid ini.a.ves grows.


Unleashing the 1% The richest 1% in society now own around half of the world’s wealth

and could choose to contribute much more than they do. Unlocking this poten.al becomes a key focus.

Source: IP (Cathy)

JA added last sentence April 2017

Integrated Giving Individuals seek to do more and have an expanded view of giving.

New collabora.ve pla]orms and philanthropy vehicles enable donors to holis.cally integrate their giving into their financial and life planning.


Increasing State Influence As the impact and expecta.ons of philanthropy grows, more

states seek to be involved in cura.ng areas of focus. Regula.on increasingly steers where and how funds can be directed.


Data Driven Philanthropy Donors are increasingly able to follow their money, see change, and directly link results to the dona.on. Greater transparency enables

more focus on where they can make the most difference.


Self-‐Directed Millennials Millennials are more recep.ve to cause marke.ng than previous

genera.ons. As the largest giving demographic they believe in more self-‐directed dona.ons and so drive further growth in micro-‐funding.


NB overlaps with IP Fragmented Philanthropy

Manda:ng Dona:on Founda.ons are required to share the power and decision-‐making

over where and how their philanthropic dollars are spent with those who are directly affected.

Source: TJ desk research JA changed mada.ng to legi.ming

Distributed Philanthropy Founda.ons and others shiG from centralised control to a more distributed model empowering trusted

front-‐line employees and intermediaries.


Donor Advised Funds Donor-‐advised funds con.nue to grow, providing financial planning services and giving vehicles. These offer ways for individual donors

to be more though]ul and strategic about their giving.


Digital Engagement High impact philanthropy will need to capture the personal

ini.a.ve and engagement which digital technology enables to drive growth and new ways of targe.ng social needs.

Source: IP (Cathy)

Story Time New narra.ves to support and encourage more and

beXer philanthropy are built and deployed, replacing increasingly out of date social norms and memes.


Suppor:ve Regula:on As more governments follow the UK and US lead in suppor.ng

social enterprises via CIC and L3C companies, more conducive legal environments act as catalysts for new high impact philanthropy ecosystems.


Impact First vs. Finance First As investment criteria and impact become more widely understood and

shared, the dis.nc.on between ‘Impact First’ and ‘Finance First’ inves.ng is clearer -‐ and more funds seek to operate at the intersec.on of the two.


Big Bets The availability of higher risk capital enables bigger,

bolder, and oGen longer-‐term philanthropic bets to be made on cri.cal interven.ons.


Changing Role of Business Donors believe that business can do more to drive change. They increasingly serve as social change incubators through non-‐profit partnerships, prize

philanthropy and have greater focus on socially conscious business models.


Chief Philanthropy Officers To drive broader social change, more companies appoint Chief Philanthropy Officers to both ensure sustained contribu.ons and coordinate ac.vi.es

across founda.ons, pledges, industry ini.a.ves and employee driven ac.ons.


Giving Resurgence A duty to give, rich or poor, is embedded in all the world’s great faiths

and cultures. Driven by those who have benefiXed most from the growth of global wealth we see a resurgence in social norms around giving.

Source: IP (Cathy)

Crossing the Chasm In many cases the solu.ons to societal challenges are known, so there is increasing need to provide support, both financial

and non-‐financial, to help proven interven.ons scale.


Sustainable Philanthropy Founda.ons and family offices increasingly see giving as a business with greater income genera.on as an integral part of the model.

More philanthropy gradually becomes self-‐sustaining.


Global and Local Individual donors increasingly view societal changes through an interna.onal lens -‐ and so adjust their giving por]olios to balance

input to both domes.c and mul.-‐regional priori.es.


Effec:ve Altruism A resurrec.on of u.litarian no.ons of calcula.ng ‘the greatest good for the greatest number’ replaces personal preference with scien.fically calculated maximum social impact -‐ forcing hard choices for many.

Source: IP (Cathy)

Cost and Risk of Failure As philanthropy concentrates responsibility for change in the hands of the few, failure to deliver will present

significant costs and risks to society.

Source: IP (Cathy)

Living Giving Alongside regulatory change, a shiG in aetude from crea.ng a

legacy to making impact now ensures that more capital flows faster as founda.ons and the living all accelerate spend-‐down.


Leveraging the Crowd New mobile pla]orms make it easier to engage wider audiences and share insights on organisa.ons and charitable causes – thereby enabling the collec.on of mul.ple small dona.ons from many more people globally.


Micro-‐venturing Smaller philanthropic ventures present an on-‐going market gap, and

imagina.ve re-‐thinking is needed for organisa.ons that, because of their mission or capacity, may never reach financial independence.

Source: IP (Cathy)

You Philanthropy More donors want to be more involved in their philanthropy: it is them, not the charity, that is increasingly centre-‐stage.

Fundraising becomes more individual donor-‐focused.


Social Investment Social investment is a powerful force in the future of philanthropy. It is going beyond non-‐returnable grants for charitable purposes to social

venture investment with the poten.al to grow social and financial return.

Source: IP (Cathy)

Over Overhead The debates about the appropriateness of funding overheads, and at what level, reduce as the focus shiGs to longer term organisa.onal

performance and impact. Mul.-‐year unrestricted support proliferates.


Learning Faster Individual donor journeys of philanthropic discovery are shortened, as insight and learning is shared more

clearly and made more accessible to all.


Technology Driven Transparency Increasing transparency and new technologies are reshaping donors’

approaches to giving with innova.ons providing new tools for researching and funding projects and organisa.ons.


Impact Clusters Learning lessons from the tech sector and elsewhere,

social entrepreneurship-‐focused clusters and hubs develop to help accelerate progress.


BINGO Disrup:on ‘Big Interna.onal Non-‐Governmental Organisa.ons’ are increasingly viewed as part of the problem and are challenged by the emergence

of more nimble, adap.ve and impac]ul high-‐growth start-‐ups.


Smarter Seed Capital Donors and investors develop more sophis.cated venturing

prac.ces to enable social entrepreneurs to cross the ‘valley of despair’ -‐ the gap between idea and impact.


Mission Driven BaUles Philanthropic focus shiGs from generosity to restoring a more just,

inclusive society. As such, those involved in philanthropy are increasingly in conflict with entrenched and resistant wealth, power and authority.


Appropriate Comparison A significant challenge to building investment in emerging enterprise

is to establish adequate social, financial and environmental growth indicators that can benchmark performance.

Source: IP (Cathy)

Replaced by Compe..ng frameworks

Tax Holes Philanthropic tax havens come under increasing scru.ny as debate

on the most appropriate way to transfer wealth intensifies. Founda.on pay-‐out ra.os therefore increase.


Broader Collabora:on Donors increasingly have an expanded view of which groups can successfully

develop solu.ons for society’s challenges. Businesses, universi.es and religious ins.tu.ons can work alongside NGOs and social enterprises.


Not sure this is new / different from today?

Glass Houses The legi.macy, governance and prac.ces of those involved in philanthropy comes under greater scru.ny. Accountability and governance structures

are challenged. Interna.onally recognised principles and prac.ces emerge.

Source: IP + TJ desk research + JA Skoll

World Forum

Future Discussions Over the next months events are taking place around the world to further

discuss this topic. Bringing together informed people from across government, philanthropy, business and academia new insights will then be added.

Confirmed

Being planned

Ques:ons As we share and build on this view we would like to know what you agree with, what you don’t, what is missing and, most importantly, what will

be some of the key impacts and implica.ons – both globally and regionally.

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future of high impact philanthropy - updated view

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