Is Change Coming to Philanthropy?

Hilary Pearson

Is Change Coming to Philanthropy? 

The pandemic has changed us all, at least in the short term. Is it too soon to come to conclusions on how the pandemic has changed philanthropy? 

In an interesting recent piece, Ben Soskis, a historian of philanthropy, comments on the shifts that he perceives in what he calls the “norms and narratives -  that is, the rules governing accepted or valued charitable and philanthropic behavior and the replicable, archetypal stories that have developed to make sense of that behavior.” He singles out some important trends, which were developing in the United States well before the pandemic, but which have been accelerated by its impact. Some of them drive a democratization of philanthropic giving, such as: 

  • The development of multiple centers of philanthropic power 
  • Amplification of influence of smaller foundations through social media
  • A trend towards disintermediation and alternative forms of giving
  • Intensifying public demands for philanthropic accountability
  • Resistance to the idea that philanthropy should be more like business.
  • Growth of local mutual aid as alternative to charitable giving
  • Increase in cash transfers and direct relief initiatives as well as crowdfunding often for marginalized communities

Others drive the pressure for more fundamental change in philanthropy, such as:

  • More presence and public influence of living donors 
  • The rise of DAFs as a key philanthropic instrument: the prioritization of donor control.
  • Mounting concerns about wealth inequalities and power disparities
  • Growing critique of large-scale philanthropy’s sources of wealth (the decolonization critique), freedom of choice over giving (the plutocratic power critique) and top-down grantmaking (the technocratic critique)
  • Distributive immediacy and trust-based philanthropy: giving more now to charities without conditions 
  • The rise of “giving while living”; more foundations in the 2000s established as time-limited vehicles
  • The immensity of the threat posed by climate change leading to existential dread and urge to spend down

A good deal of this has to do with the influence of digital technologies and social media. Some of it has to do with generational change in beliefs and values. Some of it has to do with the call for social justice, inclusion and reparation. All of this I would suggest is present in the Canadian philanthropic scene, just as it is in the United States.  And it is forcing a conversation about change. I have already commented, in an earlier blog on the subject of today’s crisis and tomorrow’s challenges, on how the new emphasis on “distributive immediacy” is playing into the current Canadian discussion about disbursement minimums and the urgency of spending more, faster. 

What these trends also suggest is that the institutional model of the grantmaking philanthropic foundation needs deep re-examination.  For years people have wondered when the paradigm of the grantmaking foundation, run behind closed doors, with decisions made by small and non-diverse groups, was going to be shaken up.  Perhaps the time is now? And if so, how?

In this climate, which has the potential to lead to more radical philanthropic foundation reform, the idea of participatory grantmaking has been getting increasing attention. As the term suggests, this is about including more people in the decision-making about the distribution of grants.  It can range from simply consulting or being advised by people who may be affected by the grant, to giving over entirely the decision-making power on grants to communities who will receive the funds. While it has been documented as a practice over the last decade (see Grantcraft’s 2018 Guide to Participatory Grantmaking) it has not been a mainstream practice at all, given the fear that many foundations have of losing their core function of grant allocation.  Indeed, this is the kind of change that could radically reshape the foundation paradigm.

In an indication that the trend is getting hotter, a new book, Letting Go: How Grantmakers and Investors Can Do More Good by Giving up Control, by Ben Wrobel and Meg Massey, looks at both participatory grantmaking and participatory investing approaches. The authors describe the range of ways in which foundations could build participation, moving from setting up grants advisory committees all the way to handing over decisions entirely to community partners to choose priorities and allocate funds. Wrobel and Massey also make the point that philanthropic funding can be allocated in participatory ways through investing (see Deciding Together: Flipping the Power Dynamics in Impact Investing). Seeing (or hoping for) a movement developing around this, they have partnered with a group of foundation leaders in the creation of an online community of practice for foundations and donors interested in participatory approaches. They will also donate 50% of the book’s profits to the Decolonizing Wealth Project’s Liberated Capital fund, which supports Indigenous, Black, and other people-of-color-led initiatives working for social change.

Is this something that indicates a more fundamental set of changes are coming to philanthropy? Since the pandemic began, we have seen the relaxation of funding conditions, the shift of more resources to communities excluded up to now, and the attempt to simplify language and make foundations more approachable. But the yardstick for change is also shifting. The next effort may well have to be deliberate design for more inclusivity. As Meg Massey pointed out in a recent interview, there is never really a downside to bringing in other voices and perspectives, no matter what the context or philanthropic strategy. Certainly, the legitimate concern of foundation leaders about their accountability when decision-making is shared or ceded will need to be addressed. But there are ways to move forward. Perhaps we really are at that moment of paradigm shift in the norms and narratives, as Soskis puts it, that will shape the foundation model for the future.  

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