The Year Ahead in Philanthropy: 2017 Trends to Watch

By Jamie Serino

According to Giving USA, 2016 was America’s most generous year ever. Total giving grew 4.1 percent last year, according to a report prepared for the nonprofit consultancy Marts & Lundy. They expect giving will grow by 4.3 percent in 2017, with foundation giving poised for the most robust growth -- predicted to increase by 6.4 percent.

What else will 2017 bring?  Here are our predictions for the coming year:

Donor-advised funds

We heard a lot about donor-advised funds (DAFs) in 2016, and we’ll likely hear more about them this year.

DAFs are becoming an increasingly popular option for making charitable donations, particularly for wealthy individuals and families.  Assets in DAFs have grown every year since 2009, reaching a record high in 2015 of $78.64 billion. Giving to DAFs is far outpacing overall charitable giving.

Per the Chronicle of Philanthropy’s annual ranking of the 400 U.S. charities that raise the most in private support, 4 of the top 10 charities named run donor-advised funds. And for the first time the sponsor of a donor-advised fund (Fidelity Charitable Gift Fund) was ranked No. 1.

As the popularity of donor-advised funds continues to grow, the push to demonstrate impact will begin to mirror the increasing expectations for traditional foundations and nonprofits – and much of that demand will come from the donors themselves.

Additionally, the ongoing debate surrounding DAFS, which includes issues around the potentially unchecked power of DAFs to influence philanthropic initiatives, will lead to external pressures for institutions running DAFs to demonstrate impact. The growing emphasis across the industry on measurement and reporting will hasten the pace at which DAFs are expected to show the results they are having on improving society.

Community foundations expanding beyond local geography

Community foundations have traditionally catered to, well, their communities. However, our world grows increasingly inter-connected, thanks to the immediate availability of information. As more communities recognize that certain issues are larger than their localities and as we continue to challenge the traditional definition of “community,” community foundations will respond by looking outside the boundary lines of their towns, cities, counties, and even our country.

Examples of community foundations expanding giving and problem-solving beyond their local communities include the Silicon Valley Community Foundation and the Community Foundation of Boone County. These community foundations are recognizing that certain issues cross local community borders and may benefit from collaboration with other community foundations, nonprofit organizations, the private sector, and other members of the social good space.

The key here is collaboration across the entire philanthropic ecosystem. And in 2017, we will certainly see a continued push for community foundations to connect and share best practices, learn from each other, and bring those lessons back to their home communities.

Measurement

The importance of measurement will continue to grow in the coming year. Donors, stakeholders, government, media, and other forces both internal and external are pushing the need for demonstrable giving results to the forefront. Reporting that goes beyond simple outputs to measuring actual outcomes will become a must in 2017, particularly with the availability of technology that enables such measurement and reporting.

Another factor to consider over the coming year is measurement against the Sustainable Development Goals (SDGs). These 17 Goals and 169 targets set forth by the United Nations seek to end poverty and hunger, achieve gender equality, and provide quality education for all, amongst other goals addressing the economic, social and environmental dimensions of sustainable development by the year 2030.

Whilst the predecessor to the SDGs, the Millennium Development Goals, focused on developing countries, the SDGs apply to and have been adopted by both developed and developing countries around the globe, including the United States. Therefore, funders will be encouraged to increasingly connect their efforts to the SDGs, both within domestic grant-making and globally.

Changing tides in government

With any change in administration, the priorities for government funding also change -- which trickles down to the foundation level as they adjust their giving to meet what they see as gaps for social, economic and environmental initiatives.

Conversations are already happening around likely changes to funding for public health, refugees, climate change and more. And with the incoming administration’s platform built on shaking things up, the philanthropic sector will be ready to act.

Technology

In 2016, we saw an increased demand for outcomes and impact measurement, and the adoption of technology began to be an imperative for foundations hoping to meet this demand and continue to drive the sector forward. In 2017, we expect to see this demand only accelerate.

Traditionally, the philanthropic sector has experienced a “technology lag." But foundations are increasingly finding that inclusive, cloud-based configurable platforms are streamlining and enhancing their collaboration and work with grantee partners. In addition, as more philanthropic organizations seek to become more data-driven, results-based and impact focused, they will increasingly eschew legacy customized products and turn to configurable, cloud-based technology platforms to facilitate grants management and outcomes measurement.

While 2017 will certainly be a challenging year for the philanthropic sector, there are also some exciting opportunities ahead.  The sector has an opportunity to work together to propel philanthropy more fully into the digital age as technology continues to play a bigger role in donor/foundation/grantee relationships. In addition, there is an opportunity for organizations to be more data-driven, to measure more and to be more outcomes and impact-focused.

Ideally, these efforts, combined with increased collaboration and partnership, will lead the entire social good sector to more effective campaigns that have greater impact.

Image credit: Flickr/asenat29

Jamie Serino is Director of Marketing at MicroEdge + Blackbaud.