(Illustration by Stuart McReath)
Charles Darwin’s theory of evolution has rarely, if ever, seemed like an apt metaphor for the field of philanthropy.
After all, philanthropy is largely insulated from many of the forces that drive adaptation in other industries and circumstances. Permanent endowments and strong long-term investment returns have buffered funders against the financial pressures faced by many grantees and communities. The legal and regulatory frameworks for most funders in the United States haven’t changed significantly since the Tax Reform Act of 1969. And while sustained public critique has the power to change the field, it’s hard to know what will actually stick—a brief skim of the thousands of articles that assert “philanthropy must” or “philanthropy needs to” change shows that most critiques simply fade away over time.
So, with relatively low financial, regulatory, and public pressure, what’s next for philanthropy usually looks a lot like what has been.
Yet while philanthropy is often insulated from change, the past several years have shown that it is not necessarily immune. The COVID-19 pandemic and growing demands for racial justice have spurred many funders to adapt to a changing context. Decades of entrenched practices, from spending rates to grantee reporting requirements to major programming decisions, changed in a rapid period for many funders.
Which brings us back to the idea of Darwin and evolution. As part of the Monitor Institute by Deloitte’s recent What’s Next for Philanthropy in the 2020s initiative, we engaged more than 200 philanthropy executives, professionals, donors, board members, experts, and grantees in thinking about the evolution and future of the field. We found that an often-misunderstood part of Darwin’s theory of evolution can be quite useful when thinking about where philanthropy might be headed.
For decades, many people mistakenly assumed that Darwin’s concept of “survival of the fittest” meant “survival of the most fit”—that the strongest, fiercest, toughest creatures will survive.
In fact, what Darwin was trying to convey was quite different: “survival of the fittest,” means “survival of the thing that fits best”—the species that is most in concert with the external local environment. Think a snowshoe hare camouflaged in an icy field, not a massive T-Rex stomping through a valley.
For adaptation to stick, it needs to help an organism—or an organization—better respond to the shifts happening around it.
Big Shifts
While the stakes for most funders aren’t usually survival, for those looking to maximize their impact, there is a similar pattern in philanthropy. Our research suggests that a handful of powerful social, economic, and political forces will continue to put pressure on funders to change. We’ve identified seven “Big Shifts” that have the potential to influence the philanthropic landscape over the next decade:
Economic inequality, which is producing tremendous new challenges and need in communities, while also creating massive fortunes that are bolstering philanthropy at a massive scale.
Extreme political polarization that is dividing the population along partisan lines, politicizing previously apolitical issues, and making it increasingly difficult for philanthropy to remain outside the political sphere.
Shifting demographics that are literally changing the faces of communities, of donors, and of the issues they need to address. Traditional philanthropy—white, male, and older (oftentimes even dead)—is giving way to a far more diverse group poised to take up the mantle of community change.
New momentum around racial justice, which, after decades of work by activists, is driving organizations across sectors, disciplines, and geographies—including philanthropy—to grapple with systemic racism and bias in both their external actions and their internal practices and cultures.
Ubiquitous technology and access to information, which allows people to easily communicate and connect, to build and share data, and to coordinate and organize action in new ways, but also creates new challenges that philanthropy will need to address in its work.
A state of climate, health, and social emergency that can exacerbate existing problems or trump the planned agendas of a community or funder. Philanthropy can no longer escape being called upon to act and respond to what may become the “new normal” of increasingly frequent public crises.
A social compact in flux, which is fundamentally reshaping both how people relate to the institutions of business, government, and the social sector, and how the different sectors relate to one another.
While none of these forces are new, and each of them is significantly changing the social sector on its own, they are also combining, accelerating, and reinforcing one another in complex ways that are fundamentally transforming our lives and our communities. Altogether, they are creating a whole new context for the work of philanthropy.
Emerging Edges
Alongside these shifts—and in many cases, in response to them—funders are continuously experimenting with both new and rediscovered ideas. And as in Darwin’s theory, those practices that are particularly well aligned with how the world is changing will have an outsized potential to grow. Our research has surfaced four of these key “Edges” of development in philanthropy that we believe can ride the momentum of the Big Shifts and scale in a way that will allow them to influence—or even overtake—the core practices of philanthropy over time. These Edges are:
RETHINKING PHILANTHROPY’S ROLE. Many funders are reconceptualizing their role in creating social and environmental change, whether it’s MacKenzie Scott giving large, no-strings-attached gifts or the Omidyar Network ambitiously taking on the challenge of “reimagining capitalism.” Funders are getting more intentional about the different tools and approaches they can use to create impact, from getting out of the way of talented nonprofit leaders, to leading large-scale systems change, to funding innovation and agility in the social sector.
BALANCING POWER. Growing awareness of economic, racial, and social disparities has shined a light on the imbalanced power dynamics that underlie philanthropy. Organizations like New Profit and the Whitman Institute are exploring how they can drive impact by directing funds toward organizations led by and working with people of color. They are also sharing power with—and in some cases, even ceding it to—those who are more proximate to community issues. Other organizations, like Arnold Ventures, are leaning into the power and influence they hold, using research, analysis, and policy advocacy to address pressing problems like gerrymandering and gun violence.
CATALYZING LEVERAGE. Philanthropy has never had the resources to solve pressing social issues alone. But funders are getting much more sophisticated in how they influence and leverage the assets of others—not only partnering with other grantmakers but finding new ways of working with business, as the James Irvine Foundation is now doing with TV and film studios in Los Angeles, or influencing government funding flows, as a coalition of other funders in LA has recently done to help address homelessness.
(RE)DESIGNING THE ENTERPRISE. Philanthropies have often been guided by a number of “default settings” for how they organize and structure their work and their people. But many funders are finding traditional organizational models and board governance approaches are no longer optimal for achieving their goals. The W.K. Kellogg Foundation, for example, has adopted “agile” practices, a methodology from software development that relies on constant collaboration across functions, which has helped the foundation integrate internal silos and flatten hierarchies as the organization moves toward more self-sufficient, cross-cutting teams. Over the coming decade, we expect to see more and more funders to experiment with new structures, talent, and governance strategies.
Finding and Embracing Your Edges
The world isn’t going to stop changing. And funders seeking to maximize their impact will increasingly be pressured to adapt. They don’t have to change—to be sure, there’s value in commitment and consistency in the midst of great dynamism. But many of the shifts impacting the world right now will be hard to ignore, even for philanthropy. It’s less about the probability of if they will affect the field; it’s a matter of when.
The events of the last few years suggest that funders who aren’t at least open to adapting their practices to match the shifting realities of their communities may be leaving potential impact on the table. They may also risk losing relevance and influence, ceding these to funders that are responding more effectively. Those who get out ahead of the changes and begin to experiment are going be better able to anticipate and deal with the shifts that are coming.
We recommend that funders begin by taking two steps:
- Find your edges. What edges of practice could help you adapt to the shifts happening in your community? What edges are your people already experimenting with? And how could they ride the momentum of the big shifts to become even more core to your work over time? Taking the time and space to reflect on these practices can help you get on your front foot and better anticipate the changes that are coming.
- Embrace your edges. The core of what you do isn’t going to change overnight—even if you might want it to. Your core work will remain just that—core to your organization’s mission. But things that are outside the core of your work now may become critical in the future, depending on how the world shifts. So set aside some time, attention, and maybe even resources to help your teams explore the edges that you are finding in your work. They can present exciting opportunities that can increase your impact, and over time, have the potential to influence or even challenge the core of how you do your work.
Or to put it more succinctly: We recommend being more like the snowshoe hare, not the tyrannosaurus. After all, we all know how things turned out for the T-Rex in the long run.
What’s Next
Our look at where the field might be headed has been informed by a mosaic of opinions from across the field. But a mosaic is made up of many different pieces. Over the course of six additional articles in this series, we invited a range of philanthropic leaders from across the field to talk about how they might answer the question: What’s next for philanthropy in the 2020s?
For Carmen Rojas, president and CEO of the Marguerite Casey Foundation, the challenges of the last few years have given funders an opportunity to rethink their role in creating a more equitable and just society. Stephanie Fuerstner Gillis and Jeff and Tricia Raikes of the Raikes Foundation highlight the many reasons for optimism—and caution—in the shifts that are already taking place. Alandra Washington of the W.K. Kellogg Foundation considers how philanthropists can make structural and substantive reforms in pursuit of racial equity. And Community Foundations of Canada President Andrew Chunilall looks back to Andrew Carnegie to explore how a return to the foundational purpose of philanthropy can help us better take on the multiple, overlapping crises we now face. Finally, Tulaine Montgomery of New Profit takes additional inspiration from the past, returning to the definitional construct of philanthropy as the love of humankind and pondering how giving truly done through that lens might look meaningfully different over the coming decade.
Our hope is that these perspectives can kick off a broader dialogue across the field not just about what philanthropy is doing now—but at where it might be headed over the next decade.
Support SSIR’s coverage of cross-sector solutions to global challenges.
Help us further the reach of innovative ideas. Donate today.
Read more stories by Gabriel Kasper, Justin Marcoux & Jennifer Holk.