Philanthropy Evolves: 10 Trends for 2030

Earlier this fall, Don Fellows, consultant at Marts and Lundy, and I presented to a large mid-western University on the trends that will shape your 2030 advancement program. Some of these trends are apparent today and will continue to grow in the coming years. This Coach’s Corner brings these trends to light:

1.????Narrowing of Pyramid will Persist: Chronicle of Philanthropy showed in 2017 that 80 percent of million-dollar gifts come from individuals who are 65 and older. Another study shows that the greatest concentration of wealth is held by 70-year-olds, a demographic that continues to grow as baby boomers age through the years. It is anticipated that 30-68 trillion will be passed down or given away in the decade ahead. Meanwhile, families supporting philanthropy have fallen from 66% to 49% in the last 20 years. In sum, there will be fewer gifts but many more at higher levels.

?2.????McKenzie Scott Effect: She hired Bridgespan, a non-profit consulting firm (think of McKinsey for non-profits), to vet potential suitors for her philanthropic commitments. High-wealth individuals are increasingly creating private foundations, donor-advised funds, LLCs for personal interest projects, and trusts to support their philanthropy.?One-on-one interactions with a family will remain critically important; however, organizations will need to learn how to work more closely with these third-party participants. It will make our work more challenging and the types of gifts more complicated and require continuing education for our gift officers.

3.????Influence of Uber Wealthy Families: In the years ahead, these families will significantly influence society, similar to the Industrial Age (Carnegie/ Vanderbilt/Rockefeller). This social good, from the likes of Gates, Soros, Bloomberg, and Scott, may have a negative backlash from diverse communities that this small group of homogeneous families is driving the agenda for social justice, inclusiveness, and equity. ?Expect this to play out on a smaller scale at each of our organizations, as honoring donors publicly likely will receive increased scrutiny and make it more difficult to celebrate donors in a more traditional way.

4.????Tapestry of High-Level Donors will shift: This is already playing in the examples like the Dartmouth women’s initiative that raised over $379M, and the Northwestern Business School DEI initiative attracted $10M. This will become an increasingly common part of the philanthropic landscape. As our more diverse alumni bodies grow and age, our programs need to support these affinity groups at a higher level.

5.????Talent, Talent, Talent: The financial pressures on higher education and the desire for accountability through metrics and ROI are important; however, organizations that put human beings first and accountability second will win the day on talent and retention. The incoming labor force will be smaller and more diverse, while a large group of baby boomers will step out of the workforce, increasing the competition for workers.

Ideas:

·?????Build internship programs, develop growth ladders, promote liberally, and invest in the professional development of your team

·?????Remote and hybrid work are not going away, and we expect that technology and experience will solve the issue of the building and create stronger cultures of connection, including mentoring for new staff.

·?????Expect there will be pressure to provide greater financial rewards.

The real winners will be those organizations who provide their teams meaning and flexibility, where they like their colleagues, and where they can follow their dreams . Caring about people and finding ways to keep them connected with the mission will inspire your team to do their best work.

6.????Leadership Development: I have learned that most service-like organizations do the same thing: they put high-performing individuals into management jobs. It often takes top performers away from what they do best and can cause havoc within their teams, leading to increased turnover. We need to commit to management training and change our mindset around whom we hire to manage our teams. If Gallup has it right that only 30 percent of your team is engaged in their work, investing in management development and work cultures will add significant capacity without adding head count.

7.????The End of Checks and Cash: Today's transfer of assets through technology is remarkable. What percentage of your gifts now come to our organizations online? With Venmo, Apple Pay, and texting, how long will it be before online giving goes away and gifts are made through these other methods? Increasing the growth and adoption of blockchain technology, how will these new and different ways (i.e., Crypto/ NFTs) of giving play a role in our organizations by 2032?

8.????Governance is Job One: Most organizations have built their boards with a dual purpose to govern and give. It may not be possible for these two to co-exist in the future. Much of the wealth in the country is made through investment banking, venture capital technology, and entrepreneurship; however, excellent governance comes from having more voices from a spectrum of professions and lived experiences. We may see more organizations separating the philanthropic component by creating more presidential councils that allow proximity to leadership without the governing responsibilities.

9.????Philanthropists want to Support Human Transformation: Data suggests that philanthropists are most interested in directing their giving to initiatives that directly support a brilliant academic, a student of great potential, and/or a transformation idea that solves a societal challenge. Wonderful gifts to buildings, current use, and endowment funds will still be given; however, impact on people will be where the most transformational philanthropy will go. Ron Schiller's book Belief and Confidence will give you further insight into principal gift donors' approach to giving.

10.?Conceptual Era: Data analytics and AI will continue to drive decision-making and increase the predictive capacity of our communities. This will refine our focus on those with the capacity and inclination to make significant gifts. These improvements will speed cycle time from qualifying to solicitation, increase focus on constituents with capacity, and increase efficiency (ROI). All necessary to offset the limited investment available to development from your organization.

The great news for the profession is that significantly more philanthropic dollars will be available by 2030. Technology and our expertise will grow to allow us to focus on that community of high-potential prospects like never before and shorter cycle times to a gift. It is also apparent that we will have to learn to work more effectively with 3rd party entities for gifts, a smaller pool of donors will make the competition for donors even greater, and the concentration of giving by fewer donors will increase the influence of a few on the direction of our organizations.