In the past few years, the philanthropy sector has seen major changes, from greater collaboration among funders to a more investment-like approach to grantmaking. In the coming year, more change is expected. Paying close attention to trends in philanthropy is important for both nonprofits and donors. Nonprofits can attract donors by embracing these changes, while funders can ensure that they are making their money do the most good by paying attention to other funders and the impact of their work. Some of the likely trends in philanthropy for 2020 include:
Moving into the coming election season, the philanthropic sector will likely see a flood of new donations similar to what happened in 2016. As the political climate heats up, people will start putting their money behind key social issues, including civil rights, advocacy, and social action. In 2016, the number of subscription donations increased substantially, and the donors who started contributing around the election were more likely to still be donating 18 months later than typical subscribers. This fact proves especially true for civil rights organizations. Nonprofits in this sector may soon launch campaigns with a political bent to attract donors motivated by the upcoming election to make whatever difference they can. Organizations without a recurring gift program should consider starting one to make the most of the election effect.
One issue that has received attention in the past few years is financial transparency among nonprofits. In the coming year, experts expect more discussion and action in this area. Transparency can be increased through greater acceptance of technological solutions like blockchain, which creates a public, permanent, and immutable record of transactions. Blockchain has played a significant role in philanthropy for years, but it is only recently that funds using this technology have begun to make a significant impact with their beneficiaries. The issue of transparency has also been raised in relation to donor-advised funds. This dialogue has encouraged greater transparency among these types of funds, a trend that should continue throughout 2020.
Moving into 2020, nonprofits, like so many other organizations, will likely embrace more automation in their processes. Automation can boost efficiency, which is particularly important for nonprofits with limited resources to achieve their goals. Automating some processes can free up staff members to spearhead other causes or focus on higher-value work. Most organizations already use automation to some degree, such as with blast emails, but technology is enabling organizations to automate many other processes, such as internal accounts and communications. Furthermore, nonprofits can automate IT services like security checks and data maintenance to cut some costs and funnel more money toward their core causes.
Donors increasingly want an experience that feels less transactional when it comes to giving. Many individuals want to feel an authentic connection to the people they benefit with their giving. Accordingly, more nonprofits are starting to experiment with technologies like virtual reality (VR) and augmented reality (AR) to allow donors to connect with beneficiaries around the world and see the difference they have helped make possible. The conversation about long-term social impact has emphasized the need for greater connection between donors and the causes they support, but solutions like volunteerism and “voluntourism” can lead to issues with sustainability. Technology can offer solutions, however, and more organizations will likely explore how VR, AR, and other new ways of experiencing the world can create a better giving experience.
A study from the Women’s Philanthropy Institute found that women’s funds have a unique way of engaging in philanthropy. Women tend to invest in other women as a way of benefiting not only these women, but also their children, families, and larger communities. Women’s funds are engaged in a variety of causes, but the concept of investing in women to benefit society at large is a common focus among them. Women’s funds often focus on gender equity and equality, as well as generating larger social change with the potential for far-reaching impact. Women’s funds have also proven effective in achieving short-term goals along the way to broader, long-term outcomes. This model may continue to gain traction in 2020 and influence the ways other nonprofits approach their work.
As the world continues to adopt mobile devices for new purposes, nonprofits will need to expand their mobile services. Text-to-give options can be a gamechanger for many nonprofits, but more than ever before, donors are looking to engage with nonprofits through a mobile platform. More nonprofits will begin to develop apps that make it possible to make donations through the click of a button, not to mention learn more about what the nonprofit has achieved and how donations are used. Apps can easily integrate with Apple Pay and Google Pay to make donations simple and secure. Embracing mobile technology may be the next way for nonprofits to engage with everyday givers.