Hopes, Fears and A Wild Guess for 2023

Hilary Pearson

It’s January again, time for forward looks (and a backward glance or two). In this post, I do some of both. In a similar post at the beginning of 2022, I noted that others looking at the coming year were cautiously avoiding predictions, given the uncertainties in our world. That uncertainty dominated 2022. Perhaps 2023 will be no different. 

So, for 2023, rather than predictions, I suggest new hopes and reluctant fears for the work of philanthropy, building on what I suggested in early 2022. 

My starting point for these hopes and fears is the belief that philanthropy is an act of relationship. Not just a handover and hand-off but a mutual exchange. Not a choice between trusting or controlling but a productive combining of assets.

I share this belief with Phil Buchanan of the Centre for Effective Philanthropy. Towards the end of 2022, he described his hopes (and some fears) for grantmaking philanthropy in the United States in a long public essay.  This essay summarizes very effectively the questions posed by changes in the philanthropic landscape over the last three years. Buchanan puts his finger on an important question provoked by the calls for less control by funders over their grants. Many of these calls suggest that funders should simply trust their grantees and give with no conditions. This did not consider the need for ongoing and mutual accountability, so necessary to relationship.

Must there be a choice between trust and accountability? No, according to Buchanan. “Thoughtful donors and foundations”, he says, “reject the notion that there need be a dichotomy between strategy, assessment, evidence, and learning on the one hand and trust, listening and flexible support on the other. They recognize that trust develops over time. They embrace mutual accountability. They realize that, while the knowledge and expertise of those closest to issues should be respected, foundation staff and donors do often possess useful knowledge, too.”

The key to this is the assumption that there is value in ongoing relationship between funder and fund receiver. In the Canadian context we too hear calls for more trusting, more flexible, more responsive philanthropy. The overlapping crises of the last three years have lent urgency to these calls. Many funders have responded by providing more general and unconditional support and by relaxing their reporting requirements. These changes should endure. But there is more to do if funders are going  to build more effective relations with a broader range of communities and partners.

In that vein…. I hope in 2023

  • That more funders will direct their support to organizations working for greater social and economic equity. An example of this shift is provided by the new communities strategy of the McConnell Foundation, updated to “amplify the leadership of equity-deserving groups to address systemic barriers”. Another recent example of a new foundation focusing on equity is the Definity Foundation, which is intentional about addressing social and economic inequality throughout its funding priorities.
  • That more funders will put a priority on learning, for both themselves and their partners. A great example of leadership on this is the Lyle S. Hallman Foundation which has piloted new types of grantmaking, including neighbourhood action and general operating support grants, based on the principle of being “shameless about learning”. Even better, it shares what it learns.  The Foundation’s Executive Director Laura Manning talked about this in an informative podcast last summer.
  • That more funders will find ways to incorporate urgency around climate action into their strategies. Some, but not enough, foundations are taking climate change, and the need for adaptation and mitigation strategies, as their core mission.Many, but not enough, have signed on to the Canadian Philanthropy Commitment on Climate Change. Climate change, and the disasters it brings, will be an element that all foundations need to consider in 2023, regardless of mission.

I fear in 2023

  • That worries about inflation, recession and market uncertainty will sap the courage of foundation boards to maintain higher spending levels or to move more confidently into impact investments. Foundations will be working in 2023 with an increased disbursement requirement (although many were already at 5%) amid financial market uncertainties. Will they be more fearful or more worried about risk to the endowment under these conditions? Perhaps. But now is the time for a long view and a steady course. Trusting relationships need long-term commitment.
  • That collective nonprofit infrastructure in Canada will continue to struggle for sustainability.  I feared this in 2022 and it is still true in 2023.  Despite the demonstrated value of regional and national infrastructure bodies such as Imagine Canada and the ONN, they continue to be thinly funded and struggle to do their advocacy work for the nonprofit sector. Other collective funds and new community networks working in marginalized communities have an even harder time. Sustained multi-year funding to collective infrastructure would make a huge difference, as Mackenzie Scott has shown with her gifts to infrastructure organizations of all kinds in the United States.

A Wild Guess

Last January 2022 I guessed that the federal government would act to reform the Income Tax Act and guidance restricting the ways in which charities grant to non-charities, in Canada or beyond borders. And the government did indeed move toward change in this area, after enormous advocacy efforts by the charitable sector. My hope for 2023 is that the federal government (through the Canada Revenue Agency) will put out guidance that truly responds to the sector’s needs for clarity and flexibility and that expands accessibility to funding. A wilder guess is that the federal government will agree to have an open dialogue about the wider definition of charitable purpose, with a goal of modernizing our regulations.

Final Note: You will find many more examples of foundations changing their strategies and building more effective relationships in my new book From Charity To Change: Inside the World of Canadian Foundations, out now from McGill Queen’s University Press.

Never miss a new post. Subscribe.