Sam Caplan (@samcaplan) shared an article on LinkedIn that I had to check out. The article covered predictions for philanthropy in the 2020s.
Normally I’m done with “predictions” articles soon after January 1st. But I wanted to read the predictions for philanthropy in the 2020s because I’ve been wondering about what venture capital can illuminate for the philanthropy sector.
Predictions for Philanthropy in the 2020s
Here’s the TL:DR list of predictions from the article.
- Big philanthropy will get bigger.
- Small philanthropy will get smaller.
- Government will get smaller.
- Public-Private partnerships will spread.
- Intermediaries and PSOs will become even more important. (Ya, I had to look up PSOs as well!)
- High impact philanthropy will grow.
- Donors will save millions of lives globally…
- But face frustration at home.
- Giving will become even more politicized.
- Bigger scandals will hit the charitable sector.
- The backlash to philanthropy will grow.
- Donors will hide more, making philanthropy even less transparent.
- Fundraising will become more difficult.
- Changes in laws (mostly) won’t happen.
- The philanthropy sector will engage in growing self-regulation.
- A major crisis will catalyze dramatic change in philanthropy.
I like predictions that take external factors into account; they just seem smart. So, the predictions about big philanthropy getting bigger (and small philanthropy getting smaller) ring true, since they’re driven by changes in the flow of capital. US tax law changes that send more money to the wealthiest means that the rich will have even more money to disburse going forward. There’s also a bit of millennial or generational change thinking here: younger wealthy people will be looking for philanthropic approaches that mirror these donors’ experiences in generating their wealth. Things are approached differently at places like the Chan Zuckerberg Initiative than they are at the Ford Foundation, I would imagine.
Some of the other predictions about philanthropy in the 2020s reflect more reliance than I would like to see on what’s happening in the US. They also reflect an assumption that political and social trends in the US will continue in their current direction—decline of government being one example. I’m not sure that’s a valid assumption.
Will Program Officers Become More Like Venture Capital Investors?
Let me say up front that I probably understand the work of Program Officers less than any other role in Foundations. But recent discussion/focus on “impact investing” as well as “making bigger bets” got me thinking about how Program Officers might be like VC’s.
I view Program Officers as smart people that know “the theory of the case” for the social change they’re trying to bring about. They use that knowledge to connect funding with nonprofits that can take the actions needed to enact that change.
That description sounds like how I view VC’s. They connect funding with startups that can bring about some change. VC’s generally invest in a limited set of domains, so they have some knowledge of the technology and market dynamics in that domain.
VC’s are measured by return on invested capital. Program investments have been more difficult to measure, given that “impact” is not as easy to define as ROI. Still, it’s possible that Program Officers would begin to think about the grantees they fund as “social startups” and look for ways to assess their performance.
Will Program Officers Adopt Portfolio Management Techniques?
VC’s operate on a portfolio basis. They know that not every investment is going to pay off with outsized financial returns. In fact, they know that the majority of their investments won’t pay off at all. A few will make a modest return on capital invested. And (they hope) one will make a 10X or 100X return.
Philanthropy in the 2020s will see investments getting bigger, public-private partnerships flourishing, and high-impact philanthropy growing. I’ll be curious to see if Program Officers start adopting the portfolio management techniques of VC’s. Will they start with smaller investments and increase them over time as they see goals being met by nonprofits? Will they invest in multiple, competing approaches to solving given problems?
I’m not sure. But if these predictions for philanthropy in the 2020s are accurate, I see change coming for Program Officers.
How Will IT Change in the 2020s?
What do these predictions about philanthropy in the 2020s mean for IT? I have a couple of thoughts.
- It’s no secret that technology has become entrenched in our lives. Think smartphones, web apps, social media, etc. I’m not that surprised when I find that a grantee has done more to adopt technology than their funder. People are more familiar with the available tools, and willingly adopt the ones that help them do their work without spending a lot of money. As a result, IT staff are going to be asked to provide in-house technical consulting for Program staff. How do we work with this grantee’s video conference service? How do we share files? These questions are already being asked. It’s easy to imagine this trend continuing.
- Scale effects (larger philanthropies, larger endowments, larger investments) will all strain the data and processes used to support the business of philanthropies. IT will want to be thinking about how systems, data and processes can be scaled 10X or 100X.
- Perhaps IT Managers will, in some limited way, take on Program responsibilities. Ideas for social change that are technology-led might best be evaluated by those who are most comfortable understanding the technology. I’ve already seen some movement along these lines with respect to improving grantee cybersecurity.
As an IT leader, if you’re nodding your head right now it means you’re already experiencing these changes. My advice? Ask yourself what kinds of skills you will need to move further in this direction. How can you center yourself as the go-to person for technology in philanthropy in the 2020s?