"Future Agenda" is the world's largest open foresight initiative. In nine workshops around the world, they considered how philanthropy will change in the next decade. The results are summarised in the publication The Future of Philanthropy.
We spoke with James Alexander, Director of the Future Agenda Team, about the most significant findings of the study.
James, last year you held nine workshops on the future of philanthropy. What can we expect?
We have identified three interconnected drivers of change: power, knowledge and, inherently for both, trust. They will shape the development of philanthropy in the next decade. For foundations in Germany, this might imply asking a number of questions: Are we really focusing on the right big issues for the next decade? What are the most powerful roles that we can play to help set the most impactful agenda? How can we better use data to deliver more impact? How do we add human understanding to our analytical approach, and with whom should we collaborate to have greater impact in the future?
Theme 1: Power.
Exerting power and influence to create positive change has always been a key element of philanthropy. Looking ahead, the experts we spoke to expect increasing fluidity over who holds power and how it is exerted, managed and regulated. As the centre of wealth shifts eastwards and southwards a new global elite will emerge with greater female representation, and a more technological mindset. This new generation, which came of age at the turn of the century, will challenge traditional orthodoxies. Similarly, corporate interest and participation in building shared value for a wider set of stakeholders will ensure that the lines between "who does good" and "who drives profit" will become increasingly blurred. In this time of fluidity, the role of the state to provide both leadership and deliver effective regulation will be critical. In particular, a key challenge will be how to best unleash local, community-based philanthropy and sustain and grow smaller and medium-sized delivery organisations.
Theme 2: Knowledge.
Greater knowledge and understanding, together with working feedback loops, were viewed by the experts we spoke to as essential pre-cursors to more impactful philanthropy. However, while an increase in more data driven philanthropy is widely expected to deliver improvement across the board, basic human nature will ensure that emotional giving continues to mitigate the ultra-rationalist promise of effective altruism. Greater knowledge is also expected to lead to an increase in the development of collaborative solutions and an appreciation of the need to invest in philanthropic capacity. It is also expected that sharing knowledge and harnessing new media will further grow philanthropic impact.
Theme 3: Trust.
There has always been a degree of both private and public scepticism around philanthropy and philanthropists, and, as in other walks of life, this distrust has been growing in the last decade. While cause and effect is impossible to prove, it is interesting that this has occurred at the same time as the gap between the rich and the poor has increased. Perhaps this is because wealth is increasingly concentrated in the hands of the few. Indeed, some in our workshops referred to the emergence of a global philanthropic oligarchy.
What exactly do you mean when you say that the lines between for-profit and non-profit will blur?
This is really about who does good and who drives profit. To overstate the point, in the past many companies principally focused on maximising profit and most charities and not-for-profits sought to maximise societal outcomes. Of course, there have been companies both historically and today that have made huge beneficial impacts on society whilst at the same time serving their shareholders.
Experts in the workshops expect that the boundaries between state, business and charitable action will become increasingly fluid and dynamic, making it difficult for donors to understand emerging partnerships and ultimate responsibilities. The shift has well and truly begun and customers, employees, investors and the communities in which they are operating are demanding that organisations take a wider view and do good as well as drive profit. Indeed, many donors believe that business can do more to drive change. They increasingly serve as social change incubators through non-profit partnerships and prize philanthropy, and have a greater focus on socially conscious business models. The interesting question for foundations might be: How do we best collaborate with business to achieve our objectives?
Does this apply to all regions?
Broadly, this insight seems to apply to most Western democracies. For example, it was interesting talking to leaders in Ecuador where the word "philanthropy" does not even exist. There the notion of helping others in the community is baked deep into the culture.
Like many other future-oriented analyses, you think we will see a radical shift caused by the younger generation. What is special about this prediction? Don’t young people always create new shifts?
Study after study shows that millennials think and act differently. In terms of thinking, they are fed up with the profligacy of their elders and the unequal society and damaged environment that they are inheriting and they want to do something about it. They don’t see the same separation as their elders between work and non-work and want to make a positive impact through the work they do and the lives they lead. A World Economic Forum Study across 18 countries found that they believe the top priority for any business should be "to improve society".
It is easy to be cynical and to respond, "Ah yes, but when they get older, have children and wider responsibilities their attitude will change". But this does not seem to be the case and they are voting with their feet and actions in terms of who they want to work for – and who they don’t.
You also emphasise the role of women – how will they change philanthropy?
Women have always been involved in philanthropy, but there is an ongoing shift as women become more equal in society. They hold more wealth. They are more likely to be the decision makers and to have senior roles in the sector.
Quite how this will change philanthropy is not yet clear. Attendees at the workshops suggested that they are more likely to work collaboratively, with wider community engagement; that they will undertake philanthropy with a lower profile; that they are more likely to volunteer and to volunteer for more hours; and that they spread their giving over more organisations. Many participants also stated that there will likely be some shift in philanthropic priorities as a result of the greater role of women – for example, their tendency to support women’s advancement – and this will continue to build the next wave of female donors.
So far, much of our thinking about philanthropy is impacted by Western-based philanthropy. One of the trends you consider is that philanthropy will increase in the Middle East, Africa, developing countries in Asia, India, China and Latin America. What will this mean for the way philanthropy is done in the West?
As the epicentre of global wealth and power shifts both eastwards and southwards so too will the global elite and their associated philanthropic flows. Countries that in the past have been the recipients of giving are now creating their own philanthropists. For example, Africa now has around 165,000 super-rich people collectively worth over $600 billion. A similar story is true in India, with funding from private individuals recording a six-fold increase over recent years.
At the same time, the international development budgets of the West are expected to continue to decline. The rich Asian and African diaspora are placing an increasing amount of their philanthropic endeavours on their homeland in order to help others benefit from the opportunities they were given. Participants in the workshops expect that the increasingly wealthy diaspora will choose to focus on more local needs and cease to support multinational activities. The growing availability of new technology platforms, an increasingly global workforce and the ability to more easily target and engage with potential donors will all continue this trend.
The wider implications of this for philanthropy in the West are far from clear. Some suggest that the new global elite will be ever more global and connected in outlook and that this will shift flows to more long-term systemic initiatives. In addition, the tech pioneers who epitomise this new elite believe that philanthropic impact is not simply about writing a cheque, but also galvanising their considerable corporate resources and networks to help tackle major issues quickly and efficiently. While laudable in many ways, some participants asked whether this level of mega philanthropy is leading to an over-concentration of power in the hands of the few. Indeed, in our Oxford workshop it was referred to as a philanthropic oligopoly.
The 2030 Agenda’s Sustainable Development Goals were ranked among the top future shifts only by participants in the Dubai workshop. Do other regions not care about sustainability and climate change?
Other regions absolutely care about sustainability and climate change. In terms of the ranking, participants in the workshops were asked to rank according to relevance, importance and impact over the next decade – and the results simply showed that participants in other regions have a different perspective on the impact of the UN’s Sustainable Development Goals. While most agreed they help in providing a degree of alignment, there is concern that the 17 development goals and 169 targets risk reducing the strength of focus for future effective collaboration and action. In addition, many believe that that the SDGs need to better align private sector incentives with sustainable development objectives through policy, legal and regulatory frameworks. This is seen as a critical need if the required $3 trillion annual investment gap is to be filled. A final challenge for some is that an unintended consequence of the helpful focus provided by the goals could be that other important issues, particularly at local or regional levels, could be forgotten.
Is this related to your findings about faith-based philanthropy?
Perhaps it is less about faith and more about the more directive nature of philanthropy in Dubai. In Dubai aligning philanthropy with the SDGs and those goals supported by the state was seen positively, with the SDGs and state-supported goals seen as providing helpful leadership, clarity of direction and a beacon for collaboration. Elsewhere, many participants feel that government interventions are too controlling and constraining, prioritising some issues and dismissing others, and often suppressing the wishes of civil society.
You mention Schumpeter’s waves in your study. Schumpeter is renowned for the concept of creative destruction. What will be destroyed in the philanthropy world?
Digital technologies define our era and will be the major source of disruption over the next decade. As societal attitudes, behaviours and commercial common sense adjust to a connected and data driven world, so too will philanthropy. The early signs are already with us, with digital technology providing more effective mechanisms to give, delivering more impact and doing this in a way that enables deeper learning, engagement and transparency.
So what will be destroyed? Some participants in the workshops suggested lumbering large-scale international NGOs ("dinosaurs"), while others suggested philanthropic intermediaries. What is certain – and returning to the three dominant themes – is that power will shift, knowledge will become richer and more useful, with faster and more impactful feedback loops, and that building and maintaining trust will remain paramount.
What is your vision for the philanthropy the next decade?
I am a naïve optimistic Sagittarian – so I see a world of people helping one another achieve their potential in a beautiful environment.