THE FUTURE OF PHILANTHROPY | 10 Key Trends Reshaping Philanthropy and the Role of Advancement Leaders

As Ron Schiller observed in his opening piece, more nonprofits are putting more and more pressure on philanthropy, because it faces no intrinsic limitation on growth, unlike other nonprofit revenue sources. With nonprofits facing ever-growing financial pressure, philanthropy is one of the only go-to answers.

With that in mind, we must reflect on how we will rise to meet this increasing pressure, especially given the highly dynamic nature of the external environment. To thrive in this new era, advancement professionals must adapt and innovate—learning to leverage important trends to maximize philanthropic capacity.

In this article, we explore some of the more consequential trends impacting philanthropy in the decades ahead:

Donor Trends

The donor landscape has been evolving for years, and those changes will only accelerate over the next decade. We will continue to feel their impacts in every aspect of our work, from how we strategize and prioritize our goals, to how we build and resource our teams, to acquiring the leadership skills necessary to be effective C-suite leaders.

1. Changing wealth dynamics are creating higher concentrations of wealth among fewer families, resulting in fewer but larger gifts (increased narrowing of the gift pyramid), as well as a greater need to work with third-party intermediaries like family offices, foundations, and donor-advised funds.

2. Transfer of wealth to the next generation means engaging with potential donors who tend to view philanthropy from an impact lens rather than from an organizational loyalty perspective.

3. Diversifying the donor pool (women and people of color) will be essential to tapping new sources of funds and ensuring the long-term sustainability of advancement programs.

4. Donors’ increasing focus on impact and human transformation will create opportunities to build and grow new programs, those that change lives and solve problems. That shift may force a rethinking of how traditional needs (e.g., facilities, endowments, and unrestricted gifts) are funded.

Organizational Trends

In this new era, one of the primary ways leaders will differentiate themselves—between those who are successful and those who struggle—will be on their ability to conceptualize new and different ways of working. The old 80/20 paradigm is now 95/5, with fewer donors driving the growth in fundraising. Most programs have not shifted their workforce to reflect this change, but leaders who can shift talent and budget to their highest and best use will achieve the highest rates of success.

5. Limited resource allocation will impact team size & redefine composition. Every leader in the field wants more staff and budget to achieve new ambitious fundraising targets, but operational pressures on program budgets will limit extra resources to support advancement. The leadership challenge of the next decade will be conceptualizing a fundraising program that can raise more money within the existing envelope of resources.

6. Collaboration and integration with the entire organization is critical. Not only do advancement executives need to be respected strategic partners at the leadership table, to be successful, they will need to build a community of partners and collaborators up and down the organization, from technology, to marketing, to finance, to HR, and program leaders.

"The central imperative of our profession is no longer just raising money; it’s thinking strategically about how the world of philanthropy is changing and how to use limited resources to their highest and best use in that changing world."

Talent Management Trends

Simply put, the demand from nonprofits currently outstrips the availability of fundraising talent. As a profession, we need to focus more on talent management: attracting talent; retaining talent with training, mentorship, and upwardly mobile career paths; and solving a stubborn turnover problem by creating attractive, compelling work environments.

7. Retention is increasingly a strategic imperative, not only because it’s critical to building and retaining donor relationships, but also because in a more concentrated donor pool, more and more nonprofits will all be targeting the same pools of funds. Solid, dependable, responsive relationships will be more indispensable than ever, while a constant churn of talent will be much more harmful than ever.

8. Training, mentorship, and career development need more attention if we are to solve the twin challenges of recruitment and retention. In particular, we need stronger career tracks for professionals who don’t want to move into management, and talented fundraisers who do move into executive-level positions often need coaching and skills development to reach their full potential as leaders.

9.?Diversity, equity, and inclusion are still strategic priorities, even though the term “DEI” has become a lightning rod. Why is DEI important? Prioritizing an inclusive environment where people feel heard, empowered, and inspired leads to a more attractive and better workplace. Moreover, bringing different lenses to our work helps us see more opportunities, adapt more quickly to a changing world, and apply the best thinking available to get an advancement shop to its best and highest goals.

Technology Trends

A key challenge for advancement teams will be using the same number of staff to move larger, more complicated gifts through the pipeline at a faster pace while also casting a wider net to identify a greater number of potential donors. In this effort, identifying and applying the best available tech tools will require advancement leaders to be more tech savvy.

10. Technology can be an accelerator but only if the program is strategically focused, rather than being a scattershot acquisition of the latest bells-and-whistles without regard for the technology's longevity or its impact on productivity. We will also need to apply the right human capital against those tech investments to make sure they are put to their highest and best strategic use. That could even mean adding a strategic technology specialist who can assess options, costs, and impact.

Today’s advancement teams must be built to succeed in a world that operates according to a very different paradigm than previous decades.?

That means all leaders in the organization need to be familiar with rapid changes affecting the nonprofit sector’s donor, operational, and talent management landscapes. Hiring managers need to be well-versed in key trends to find the right leader for their advancement program. Those overseeing the advancement function—e.g., CEOs, COOs, CFOs, and Boards—cannot fulfill their obligation unless they understand the strategic challenges that advancement teams face in the real world as they work to meet the organization’s fundraising goals.

For advancement professionals, the key take away is that philanthropy's strategic importance has grown exponentially and will continue to do so. The central imperative of our profession is no longer just raising money; it’s thinking strategically about how the world of philanthropy is changing and how to use limited resources to their highest and best use in that changing world.

That will require tighter integration with other C-suite executives on strategy, deeper engagement with almost every internal constituency in the organization, and an ability to build best-fit, highly empowered teams. These are the skills of the future that will help leverage a changing landscape to the organization’s advantage and skills that will distinguish the next generation of advancement leaders.

Contributing author:

NEXT UP on October 8th: A Q&A panel discussion with advancement leaders on how these key trends are impacting their organizations, strategies, and fundraising teams.

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