A few concurrent powerful trends are profoundly transforming the nature and impact of philanthropy globally.
These trends include the racial reckoning that followed the murder of George Floyd, which has pushed donors to take a more trust-based approach and earmark more of their funding to support communities of color; the decolonization of the philanthropy sector movement, which is shifting decision making and leadership to communities proximate to the challenges being addressed; and an increasing interest in working at scale to achieve durable systemic change.
The 2023 Skoll World Forum featured a panel discussing these and other emerging trends and their impact on philanthropy, with the Chandler Foundation’s Tim Hanstad moderating. The panel, Leading Philanthropy: Emerging Trends and the Future of Giving, included Zimbabwean philanthropist and executive chair and co-founder of Higherlife Foundation Tsitsi Masiyiwa, David and Lucile Packard Foundation president and CEO Nancy Lindborg, and Surdna Foundation CEO Don Chen.
The world has just witnessed what Chen called, “the largest mobilization across the globe, with Black Lives Matter and the racial justice movement.” The philanthropy sector helped support this mobilization and, Chen said, the data indicates it is sticking with its commitment to racial equity.
That commitment to racial equity is amplified by growing interest in decolonizing philanthropy. At the 2016 World Humanitarian Summit, development leaders pledged to direct 25 percent of humanitarian aid to local humanitarian organizations by 2020. Progress on localization, as this has been called, has been painfully slow. Today, an estimated 2.1 percent of international government aid goes directly to front-line local organizations.
Today, we see continued interest in executing on this pledge, said Masiyiwa. “We see a lot of listening, at least on websites and brochures,” said Masiyiwa with a laugh. “People are using the right language and terms. But it takes time to change the mindset.”
Masiyiwa shared an overview of her philanthropic journey, which started as an emotional response to the HIV crisis and over the next 25 years evolved into a more strategic and data-driven approach to partner with governments to achieve change at scale. There is a need, the panel agreed, to help newly emerging philanthropists in Asia and Africa leapfrog this learning process to more quickly recognize the potential of strategic, systems change philanthropy.
This does not, added Lindborg, mean that philanthropists must drop responsive, direct assistance philanthropy. While much has been written about strategic versus responsive philanthropy, it is a false dichotomy. Instead, said Lindborg, strategic social investors need to listen to communities and help local people influence their responsive strategic giving and look for partnerships and collaborations to achieve impact at scale.
Chen related that he was hopeful when he first entered philanthropy in the early 2000s and noticed that many people were starting to question the old traditions of philanthropy. Those old traditions of donor-driven, one-issue funding were not working anymore, and he is hopeful that self-reflection in philanthropy continues.
Creating a better culture within philanthropy must start with admitting one thing: that northern donors do not have it all figured out.
The panelists also highlighted two emerging trends that will change the culture and impact of philanthropy in fundamental ways. First, is the risk of philanthropists in the global south. Those philanthropists, who are often working in environments that offer them no tax incentives and no structures, and taking ownership of problems in very challenging environments need to be connected and supported so that they can work on systems change approaches.
Second is the trend of increased giving from the diaspora. Masiyiwa shared that in 2021, overseas direct assistance to Africa totalled $35 billion. That same year, foreign direct investment to the continent totalled $85 billion. Giving from the diaspora, to support school fees, new homes, and the like, dwarfed both at $95 billion.
“If anyone is asking, ‘Are Africans giving?’ Of course they are.” said Masiyiwa. But no country climbs out of poverty based on funding from its diaspora.
Lastly, the panel reiterated the need for philanthropists to focus on generous, flexible, long-term funding. Just like any other established organization, nonprofits need steady and secure cash flow. Funders should trust the ability and integrity of the organization they support, and fund their initiatives to accommodate the long-term needs of the organization, and of the people it serves.
Watch Leading Philanthropy: Emerging Trends and the Future of Giving at the 2023 Skoll World Forum below.