Are we optimistic or pessimistic?

At this year’s NPC Ignites, our annual conference, we hosted a session on the future of philanthropy. This session explored a vision for philanthropy in 2030 and beyond. It was chaired by Fran Perrin, Founder and Director of the Indigo Trust and a Trustee of NPC. Our speakers were Sonal Patel, CEO of God My Silent Partner Foundation (GMSP); Anna Devlet, Head of Social Sustainability at British Land; Sir Harvey McGrath, Chair of Big Society Capital and a Trustee of NPC; and Charles Keidan, Editor of Alliance Magazine. You can watch the full recording of this NPC Ignites session here.

At its best, philanthropy is constantly evolving in both its approach and its focus in order to remain relevant. The pandemic shone a light on several areas of debate about the future of philanthropy. For example, the rise of more open, flexible and trusting approaches; greater reflection on equity, diversity and inclusion in grant-making; and wider thinking on how to improve collaboration.

Philanthropy does not operate in a vacuum, and its role to 2030 and beyond will be against the backdrop of some major external challenges—not least the long-tail of the covid recovery, climate change and the UK’s transition to net-zero carbon emissions by 2030. There are also significant changes underway amongst philanthropists themselves—including the largest intergenerational transfer of wealth in history, which will see £5.5tn of wealth in Britain alone pass from ‘Baby Boomers’ (born 1946-1964) to their children and grandchildren over the next 30 years. As we move toward 2030, there are three key questions for the philanthropy sector to contemplate.

1. How should traditional philanthropy evolve?

At a recent session at NPC Ignites 2021, our annual conference, Sonal Patel, CEO of God My Silent Partner Foundation (GMSP), asked front-line charities what they want to see from philanthropy over the next decade and beyond.

Sonal Patel, CEO of God My Silent Partner Foundation (GMSP): ‘… what was interesting is that overwhelmingly the responses were quite common. And they focused on their relationships with donors and philanthropists’ purpose. In the next ten years, they said that they hoped for donors who want to get closer to the work, they want funders working in areas that they really believe in, and deepening their knowledge of the problem and its potential solutions. They hope for donors who genuinely trust them … and they told us that they hope donors would connect with the original intention of philanthropy and its purity of purpose.’

There are five times more billionaires today than when the Alliance first started covering philanthropy 25 years ago … and that’s a problem for philanthropy.

These sentiments are in alignment with the growth in trust-based philanthropy approaches, led in the UK by IVAR’s #FlexibleFunder approach to open and trusting philanthropy. The original Greek meaning of ‘philanthropy’ is ‘love of humanity’, so to reconnect to that purity of purpose do we need to reject hierarchical power dynamics and increasingly collaborate as equals in service to humanity and the natural world? There are strong and growing signs of this direction of travel, but there are also challenges to further explore, for example how we understand impact within the frame of more flexible funding, and how can we ensure that we are embedding racial justice into grant-making.

2. How should traditional philanthropy sit alongside the growth of ethical businesses and impact investing?

Anna Devlet, Head of Social Sustainability at British Land: ‘… businesses now require a license to operate … They have to evidence and articulate their social impact, their contribution … corporately because of their reputation. And they also have to be able to evidence it to their customers, and their customers’ customers and other key stakeholders, you’re getting investor questions around this now as well … it’s really moved from being a good thing to do … to now being, I would say, an essential and an integrated part of how business operates.’

Although the growth of socially and environmentally focussed businesses is at an early stage, traditional business is evolving and the private and third sectors have the potential to integrate ever further. At the heart of this intersection are the steadily rising number of social enterprises, particularly in the B Corp model, in parallel to growing interest from philanthropy in social investment and impact investing. The lines between the for-profit and the non-profit world are blurring further with every year; the ultimate destination would, ideally, be that society takes account of social and environmental needs to such an extent that charities and traditional philanthropy are no longer required. That utopia is profoundly distant at the moment, so philanthropists and charities have a critical role to play in ensuring that gaps are addressed and opportunities for innovation are harnessed in collaboration with a wide range of partners.

By 2030, will philanthropy be spending more, spending better, and operating more systemically as an even stronger force for good in our economy, society, and environment?

Sir Harvey McGrath, Chair of Big Society Capital and Trustee of NPC: ‘[In the future] business will not simply be a source of funding via a CSR [corporate social responsibility] budget or a corporate foundation … there’s an opportunity for a much richer relationship with the communities that need served. [There is also an opportunity] in the space of contributing to solutions … the common domain of philanthropy and impact investing … that overlap should be very much built on and developed.’

The UK government is taking a largely market-driven approach to the net-zero transition, that is to say, although government grants will encourage change, their strategy is underpinned by the fundamental assumption that consumer demand will drive change. For example, in the adoption of electric vehicles or the installation of heat pumps to homes. This market-driven approach is likely to further encourage an increase in innovative financial models in the run-up to 2030. There is more opportunity therefore for collaboration between the private, public and third sectors than ever before. And the third sector needs to ensure that the voice of our most disadvantaged communities is not lost in the mix.

3. Should philanthropy increase its contribution?

Charles Keidan, Editor of Alliance Magazine: ‘The conversations about philanthropy, not just in the UK but in many places in the world … is against the backdrop of a growth in private wealth, but also of wealth inequality. [There are] five times more billionaires today than when the Alliance first started covering philanthropy 25 years ago … and that’s the problem for philanthropy in that it’s reflecting philanthropy’s being a conduit or product of the inequality and systems that create these differential potentials and wealth in the first place, and which make it hard to claim that philanthropy is a vehicle for tackling inequality. Although some would argue that’s not its primary role in any case, but … it’s a significant opportunity for the sums of money [to] be reconstituted for the public good.’

As MacKenzie Scott challenges preconceived ideas about large scale philanthropy, as growing numbers sign up to the Giving Pledge and as millionaires around the world call for higher taxes, the debate about wealth inequality and philanthropy’s role within it is alive and heartfelt, especially among groups such as Patriotic Millionaires in the USA. In parallel there is work underway to encourage better use of philanthropic resources, including by 360Giving. Some organisations are exploring how endowment investment can be better aligned with a foundation’s values and there is a raft of work being done on expanding the implementation of trust-based giving. These changes are welcomed across the sector, seen as moving toward philanthropic approaches that are more efficient, effective, and equitable.

By 2030, will philanthropy be spending more, spending better, and operating more systemically as an even stronger force for good in our economy, society, and environment? We certainly hope so and there are encouraging signs that we are heading in that direction. What is your vision for philanthropy in 2030 though, are you optimistic and what steps are you taking toward making that a reality? Get in touch and talk to us about it at NPC.

This article was originally published by NPC on 25 November 2021.

Liz Gadd is the Principle for Effective Philanthropy on NPC’s Research and Consulting team.