Navigating a Changing Philanthropic Landscape

This article on philanthropic trends is the first part of a two-part series.

The nature of philanthropy is changing, and organizations have felt the shock globally. We can point a finger at an array of causes (the war in Europe, environmental concerns, and economic instability), but finger-pointing doesn’t provide relief for organizations in need. Wealth-X and Salesforce recently came together to field a panel of leading experts in philanthropy to help talk about and address the challenges fundraisers are currently facing.

The expert view on philanthropy

To gain a deeper understanding of the current state and trends of philanthropy, Wealth-X hosted a panel discussion in partnership with Salesforce. The panel discussion featured four experts from different philanthropic organizations:

• Rafa Carrascosa, the Head of Philanthropy for UNHCR Switzerland
• Eugenia Epars, responsible for partnerships and philanthropy at UNICEF Switzerland
• Laurent Sauveur, the Executive Director of the Foundation for the ICRC
• Ben Morton-Wright, the founder of Global Philanthropic, an international consultancy business that advises HNWIs, corporates, and fundraising organizations.

The panelists shared their perspectives on how the pandemic, the war in Europe, the economic downturn, and environmental issues have affected their work and their donors. They also discussed how they have innovated and collaborated to overcome these challenges and how they have leveraged technology to drive social change.

World-Events Impacting Philanthropy

One of the main themes that emerged from the panel discussion was how the world’s recent shocks have impacted philanthropy in various ways. The panelists agreed that these shocks have led to a rise in solidarity, particularly during challenging times, but also presented exceptional challenges for philanthropic organizations.

“I think one of the things I’ve observed in philanthropy is that you might get one shock every ten years. To get two is exceptional. But to get three or four? That is really unusual. And we’ve had really, I think, four over the last in the last three or four years.” – Ben Morton-Wright (Transcript edited for clarity)

Even still, tough circumstances have provided a lot of opportunities to learn about major gift-giving and how philanthropic organizations have responded to the shocks.

The Pandemic

The COVID-19 pandemic has been one of the most disruptive events in recent history and has touched almost every business and non-profit across the world. The pandemic has also had a significant impact on philanthropy, both positively and negatively.

The pandemic has triggered an unprecedented surge in philanthropic giving, especially in response to urgent health and humanitarian needs. According to WealthX’s report on global philanthropy, HNWIs donated over $175B, much of which went straight to supporting COVID-19 efforts. At the same time, many philanthropic organizations reported record fundraising due to their leadership role in delivering vaccines or providing emergency aid.

On the other hand, the pandemic has also created significant challenges for philanthropy. It effectively disrupted global operations, reducing income sources, increasing costs, shifting priorities, and creating uncertainty. The pandemic has also exposed and exacerbated existing inequalities and vulnerabilities in society, such as poverty, hunger, education, health, and human rights.

These issues require long-term and systemic solutions, which may not be as appealing or visible to donors as immediate and tangible results. Despite the primary “hit” of COVID-19 around 2020, the ripples still exist.

For example, Laurent Sauveur noted that philanthropy has stepped up, but it’s mostly in reactive mode and emergency funds.

“This reactive mode, mostly it’s [for] emergency funds. And I think what we’re hearing from [is that] high net worth individuals and the people who have the means and resources, they want to change the world, they want to have transformational impact. They [just] don’t want to give.” – Laurent Sauveur (Transcript edited for clarity)

To address this, organizations need to have a transformational impact beyond charity, mitigate challenges, and make the world a better place. He believes that HNWIs and people who have the means and resources to change the world want to have a transformational impact beyond charity. This, he says, is even a challenge for organizations as large as ICRC and UNICEF.

The War in Europe

In another seemingly “once in a lifetime event”, Russia invaded Ukraine in 2022, causing rippling impacts across the entire world. The war has also had a drastic effect on philanthropy, both positively and negatively.

Positively, the war has generated more awareness and support for the affected populations, especially refugees.

Still, challenges from the war have also posed significant challenges for philanthropy, including

security risks, competition, and even attention exhaustion. The war has also raised ethical questions about the role and responsibility of philanthropy in addressing political and military conflicts.

A New Generation of Donors

The philanthropic landscape is not only changing due to global factors but also the emergence of a new generation of donors. These donors have different interests, needs, and approaches to giving than the traditional donors that the nonprofit sector has engaged with before.

One example of this new generation of donors is the young crypto entrepreneurs. Rafa Carrascosa, the Head of Philanthropy for UNHCR Switzerland, met some of them at the Cardano Summit, organized by the Cardano Foundation. His takeaway? They are passionate about what they believe in (cryptocurrency) because they realize they can contribute a lot with it as a tool. Carrascosa also talked extensively about activism. The upcoming (and truthfully, the now) generation is extremely activism-oriented, often less financially so.

The younger generations have different motivations, preferences, and capacities to give. To be successful, philanthropic organizations need to spend some time identifying these factors and tailor their strategies accordingly.

Economic Downturn

Any economic issues will result in problems for those most affected, especially those with unstable or low incomes.

In economically tight situations, philanthropy can often get relegated to the backburner as extra cash is stowed and UHNW individuals brace for financial fallout. At the same time, middle-income givers who are more cash-strapped find they don’t have the capacity to give as their margins are gone.

Even outside of “the big three”, there are still new and old problems impacting giving. Political and social unrest, natural disasters, climate change, and technological challenges or breakthroughs can have mixed impacts on the philanthropic landscape.

Engaging With Donors Through Crisis

Given the changing and challenging landscape of philanthropy, it is important for philanthropic organizations and donors to adopt some best practices that can help them navigate the current situation and achieve greater impact and sustainability. The most valuable key for engaging with donors? Personal connections and valuable relationships. Who would have guessed?

Developing Personal Connections and Relationships with Donors

Connecting with donors is easy to do, but it does require intentionality. Ultimately a deep understanding of the donor’s interests, motivations, values, and goals, plus aligning them with the organization’s mission, vision, and impact, are essential. Even more, it also requires building trust and loyalty with the donor. See, simple to understand, but it takes a lot to effectively implement.

According to Ben Morton-Wright, developing personal connections and relationships with donors is essential for major gift fundraising. He said: “I always say that the money is out there – you just need to connect with it and ask for it.” He also suggested that organizations should have a dedicated person or team to manage major donor relationships and use CRM tools to track and analyze donor data and behavior.

Wrapping Up

As the panel data shows and as is clearly felt by organizations around the world, philanthropy is a bit strange right now. Things feel positive, but most of the momentum seems to be exclusively reactive and jerky. At the same time, there is an increase in giving overall, at least according to the reports, but some smaller organizations may not be feeling these increases.

The biggest impacts on global philanthropic trends include COVID-19 (even if it’s just the economic aftermath of it), the war in Europe, and some other economic trends. Even further, climate change and natural disasters, and technological advancements (think AI and ChatGPT) are changing how people work and business is done. However, even with all of this monumental change, the panel experts were united on one front and believe it’s the best way to move forward: connection.

Developing personal connections are the key to continued donor giving and further philanthropic progress. The money is clearly out there, but it requires a special connection to get it. These connections don’t come easy, however, and the organizations most likely to see success are the ones that tap into these relationships the best.

Interested in more? “New Philanthropy Problems, Age Old Solutions” is the second article in this article series. Read it here.

Valentina Guerrini is the Senior Director, Head of Philanthropy Division for EMEA & APAC for Altrata. By combining science of data with the art of relationship building, she is able to increase HNW transformational donations.