So you think you’re ready to develop your major giving programme? Today’s philanthropists expect a different kind of relationship with the charities they support. Here’s what you need to know...
As the sector looks to diversify income in response to recent changes to fundraising regulation and the predicted fall in individual giving income, many charities are stepping up their major giving and philanthropy programmes.
According to Emma Whitcombe, director of philanthropy and partnerships at the MS Society, philanthropy is “hugely important” to charities today, “as we can see from the investments that charities are making in this area”.
This is reflected in the growing market for higher education study into fundraising and philanthropy practice, with the University of Kent’s Centre for Sustainable Philanthropy launching a Masters course in Philanthropic Studies in September 2016.
Course director Dr Triona Fitton says that although recent philanthropy shares much in common with the philanthropy of the past, “one major difference is rapid global change and unpredictability, which means that philanthropy has had to become far more responsive and reactive to the social environment”.
The current trend is towards more strategic giving, entrepreneurship and impact investing (through for example, venture capitalist models). There is also a greater focus on outcomes, along with greater personal involvement of philanthropists in charitable projects. Often, they will sit on a charity’s main board or development board for a specific programme. As Kate Hogg,director of specialist fundraising consultancy, Beneficial Fundraising, explains, “in addition to significant injections of cash, venture philanthropists expect to provide hands-on skill and input to those organisations in receipt of their cash”.
Such expectations are very different from the previous generation, says Kate. “Charity’s senior teams are expected to engage funders at a more strategic level than ever before. As donors they believe they can – and should – add value beyond giving money, such as providing pro bono expertise, technical advice and a commercial perspective. That poses challenges for charities hitherto used to keeping their donors somewhat at arm’s length.”
A more vocal younger generation
Demographics in philanthropy are changing too. Samir Savant, festival director of London Handel Festival and chair of the Cultural Sector Network Professional Development Sub-Committee, says philanthropy is “no longer the preserve of the affluent retired generation. The younger generation are being more vocal about their giving, in order to promote philanthropy and encourage others. There has also been a significant rise in inter-generational philanthropy.”
This is Emma’s experience at MS Society too. “Although we have what is historically considered a more traditional profile of leadership supporter – established philanthropists late in their careers who aren't juggling paying the mortgage and school fees – it’s really exciting to say that we’re also having more and more discussions with families, teens and young adults in their 20s about taking the philanthropy reins.”
As a sector, we are certainly starting to see much more significant giving during people’s lifetimes. “I think that our modern philanthropists really want to see what they've achieved. They want to see the impact of their giving and to have a personal and meaningful relationship with a charity”, says Emma.
The best kind of change
Many in the sector are now striving to better understand how modern philanthropists want to give, and what is it that they want to achieve. Triona says, “the most recent trend has been towards being more effective in your philanthropy, through extensive research into where your funding will have the most impact and provoke catalytic outcomes.
“What philanthropists want to achieve is not just change, but the absolute best kind of change they can possibly achieve.”
Matt Cull, deputy director of fundraising at Blue Cross and an Institute of Fundraising Convention philanthropy track board member, says that philanthropists “want to see their money spent wisely and effectively, and want transparency and honesty. They know things don’t always go to plan, but they must be told of any change to circumstances. They expect detail, to understand the point of a campaign, the challenges involved and how they can be resolved.”
Ready to engage
Matt says that as fundraising practice faces greater scrutiny, “it is vital for charities to represent themselves well to other potential sources of income. Donors are much more savvy than they were 10-15 years ago. They expect you to know more about them, to have done your research and for your approach to be well informed and evidence based.”
At MS Society, says Emma, “we're still talking about and wrestling with the excellent opportunities of venture philanthropy, and donors are – quite rightly – challenging us with new ways to engage and maximise their investments with us”.
Kate, meanwhile, predicts that the sector will start to see even more partnerships between individual, corporate and institutional donors, coming together to deliver multi-faceted programmes.
“Charities will serve as brokers and facilitators, balancing the needs of different groups of funders”, she says. “Co-creation will become the norm at the top of the major donor pyramid. Rather than design a programme and then engage donors to fund what is a fait accompli, charities will have to find their donors first, and then work with them to design projects that truly reflect the interests and priorities of both partners. That will require a significant shift in the attitude of many programme/service staff who have not had to be directly accountable to funders in this way before.”
Adapting for good
Fundamentally, Kate says, “philanthropy is still fueled by the dreams, ideals and passions of small number of rich people and organisations who have the resources and desire to change the world.” But as philanthropists become increasingly entrepreneurial, hands-on and investment-savvy, charities will need to adapt accordingly in order to harness the huge potential that this income stream can deliver.
Jenny Daw is editor of The Fundraiser