Not too long ago I had a conversation with an old friend about philanthropy. He challenged me on one of the things I keep talking about. For a while now, I’ve been saying that the old ways of doing things are finished. Dead. Gone. The End.
Please, let’s stop looking into how we used to do things and move forward. The world has too many challenges that need resolutions. We don’t have time to debate back and forth if things should be done this or that way. Instead, what we need to be discussing is how we’re going to make things happen with all of the resources we have available today.
I’ve said it before and I will say it again. The world currently has all of the resources it needs right at this very moment to completely eradicate poverty. Poverty itself has caused so much loss, pain, and suffering. Poor education, a disease that cannot be contained, few work opportunities, and yes, even death.
So, whether it’s poverty that motivates you or some other social cause, here are what I see as the next 5 big things in the new philanthropic landscape. (By the way, some of this items you’ll probably say to me are not so new, but what is new is that they are poised to explode in importance in the philanthropic world).
This is one of my personal favorites. We know that investors have been investing in businesses and start-ups for a very long time. The primary motivator for these investors is a return on their money. And, true, these investments have not been made into nonprofits. But, things are changing.
You now have investors who are looking to invest in businesses and social enterprises (in other words, for-profit ventures) that are going to deliver a bang for the buck but are also going to make a social impact. Hence, impact investing. Why is this so important? Because impact investing stands to pour into social good hundreds of millions, if not billions of dollars for companies that are looking to make money and social impact. In my view, it doesn’t get better than that.
We live in a world of big data. Whether you like it or not, data is big money. And technology has made things so much easier now for social good. With strategic philanthropy, investors or donors use data to understand giving patterns, impact and outcomes. This is a smarter way for philanthropists to give. Decision making is better and more informed. Data provides information and knowledge that may not have been available only a decade ago. This, in turn, turns philanthropy into smarter giving.
We have too many organizations doing the same thing. With over 1.5 million nonprofits in the U.S. and the vast majority of them being very small, I think there’s a lot of opportunity to diminish redundancies. With increased data, there are going to be programs and giving. And, there are going to be more opportunities to work collaboratively. We all know when there are private and public partnerships there can be better outcomes.
We know when knowledge is shared, it brings more power to nonprofits and social good organizations large and small. With the investment of money into data, there’s going to be a greater push to share data between organizations. This can only benefit communities because superfluous programs will be significantly reduced. Nonprofits will have a clearer understanding of where they should focus and donors will be more strategic in giving to ensure that scalability is increased.
Social Capital Alignment
Many more companies and investors understand that they must align capital and social good causes. The world is looking for businesses to align their goals, objectives, money, resources, talent and work with social good. This has become a competitive reality. Therefore, with this awareness that businesses are aligning social impact with company objectives, including capital-and not simply giving it lip service, you’re going to find increased activity around how businesses can help broaden and scale up social good.
Philanthropy, Philanthropy, Philanthropy
I’ve said this a bunch of times too. The nonprofit sector has done a great job of focusing on charity. Nonprofits have been wondering about going out into their communities and offering anything needed to help. However, philanthropists at the highest levels are looking to shift things to philanthropy that is, to get to the root cause of social ills. In the early 20th Century, philanthropists such as Carnegie wanted to address these issues more consistently.
Flash forward to today. We have the ability in the 21st Century to truly be philanthropic. As I mentioned, our world has everything it needs right now to eradicate poverty and get resources to where they need to be. This has re-focused philanthropists to look carefully at philanthropy, getting to the root cause of social ills. It’s been pushed further along because of Millennials who are a socially-minded generation and technology which allows the world to communicate these ideas instantly.