We recently hosted a webinar with our Head of Philanthropic Advisory Services Elizabeth Wong and Senior Philanthropic Director Robyn Hullihan to get their insights on the trends they’re seeing that are shaping the future of philanthropy. From family transitions that are bringing new philanthropists into the fold to efficiencies that are evolving as key components towards impactful giving, checkout the key takeaways from their discussion or watch the webinar here.
Trend #1: Next-Generation Transitions
Family transitions are bringing new philanthropists (and new ideas) into the fold.
- The new generation of foundation leaders is joining boards as the previous generation shifts their level of involvement, and they’re interested in putting their own mark on how foundations operate.
- They don’t necessarily want to do things the way they’ve always been done, and they’re looking inward and contemplating what role they might play in the sector.
- They’re committed to learning about the issues they want to support, and they’re considering themselves as actors in that space, whether that means conducting more site visits, applying their own professional expertise or volunteering.
- Foundation boards are taking a closer look at the impact of their practices on their nonprofit partners. What application information is necessary versus nice to have? Can the board or foundation staff play a role in collecting information rather than asking the nonprofit to provide it?
- Similar questions are being asked about post-grant reporting and evaluation. When a foundation requests updates about the use of grant funds, is there a purpose beyond holding the grantee accountable? Do those performance questions benefit the nonprofit itself as it considers its own internal metrics of success?
- New foundation decision makers are exploring risk and their own willingness to make bets on new and possibly unproven interventions in order to seed and support innovation.
- Well-established boards are finding various ways to involve family members. Initially, this can mean talking about the work of the foundation and seeking input from the kids around the dinner table. Are there issues or causes they’d like to support and why?
Trend #2: Giving Approaches Are Changing
Funding approaches are adapting to a changing nonprofit ecosystem—and there’s a lot of momentum behind re-imagining the funder, grantee relationship.
- Funders hold tremendous power and nonprofits often feel compelled to shape their work into what is fundable (what the funder wants). Increasingly, this dynamic between the foundation and its grantees is shifting to one of partnership.
- The funder is often asking more questions about what is important, what needs to be funded, and how their dollars can help most, as opposed to how the nonprofit can shape its work around the priorities of the funder. The paradigm where the funder is the sole decision maker is shifting.
- While foundation boards retain fiduciary responsibility to their entities, they’re also acknowledging the expertise of nonprofit leaders and turning to them to help define what communities need and what solutions will have the greatest impact.
- Partnerships are happening among funders. Funders recognize that not only can they learn from their grantees, but they can also learn from other grantmakers. We’re seeing more foundations investing in their own education and looking to leverage the support they offer to communities alongside what other funders are doing.
- Changes in a board’s makeup also leads to a reconsideration of what foundations want to achieve and aligning their grantmaking practices with those objectives.
Trend #3: Efficiencies and How They’re Evolving
Tools, services and technology (efficiencies) are evolving as key components towards impactful giving. They’re making giving easier, involving more family members and helping to increase or streamline the ease of grantmaking.
- Foundation Source offers a grant certificate, which enables the recipient to designate a nonprofit for funding. Foundation leaders still retain the right to approve those recommendations, but it’s a terrific way to get children, family members and non-family members involved in giving.
- Another tool that truly aids in that communication process between funder and grantee is a robust grant agreement so that everyone is clear about what the intent of the grant is. It’s a great starting place and can serve as a guide.
- Other tools that foundations are utilizing might include templates for collecting information about potential grantees, particularly when you have a large volunteer board and different board members are talking to different nonprofit organizations. A template can really help streamline the information that is being collected.
- We also have services to consider as an efficiency. Foundations are working with experts in the field, so these expenditures can also count toward a foundation’s minimum distribution requirement as they strengthen a foundation’s programmatic work. They can range from engaging grantmaking experts such as ourselves or hiring researchers to conduct landscape analysis of particular social issues and potential solutions.
- Foundation management technology platforms can make all the difference in how a volunteer board spends their time. As an example, the proprietary technology of Foundation Source is designed to help address the day-to-day information needs of a foundation, allowing board members to focus on policy decisions, strategy development, grantmaking and engaging family members in building a legacy of giving.
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Our Philanthropic Advisory Services team has extensive experience in partnering with foundations. Foundation Source clients have access to customized advisory services, tools and resources that enable foundations to maximize the impact and efficiency of their philanthropy. To learn more, call 800.839.0054 or send us an email at .
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