Philanthropy

Philanthropy trends today: 3 ways to supercharge your impact

Jan 17, 2023

Around the world, we’re seeing more and more donors collaborate, give while living and work to advance diversity, equity and inclusion.

Three trends have been gaining momentum across the globe—giving while living, collaborating with other donors and advancing diversity, equity and inclusion. 

Our work with donors from San Francisco to St. Louis to Singapore leads us to expect these trends to keep going strong in 2023, as more philanthropists adopt these strategies.

Might they inspire you to explore new ways of giving? See what you think.

Giving while living

Traditionally, donors made their largest contributions to charity in their wills and established private foundations or charitable trusts designed to exist in perpetuity. 

Yet, in recent years, we have witnessed a shift: “Giving while living” has become a frequent theme in our conversations with clients at the private bank.

While most private foundations are still set up to be permanent, there are an increasing number of “spend-down” foundations. Indeed, a global survey of family philanthropies found that 32% had adopted a time-limited approach, with the majority seeking to spend the entirety of their foundations’ philanthropic assets in the next one to 15 years.1

Reasons vary for accelerating giving during set time frames. Most often, we hear donors say they want to be personally involved and witness the change they seek. Many are motivated by the urgency of today’s challenges. Others want to avoid burdening future generations with interpreting their philanthropic plans.

As one client recently explained while sharing her intention to spend the entirety of her $2M donor-advised fund in the next 10 years: “My support is critical now.” Passionate about the environment and the arts, she wants to experience the joy of giving in her lifetime and make a difference sooner than later. In addition, her children have different interests, and she wants them to shape their own philanthropic plans and not feel obligated to carry out her intent. 

Donor collaboration 

Today, many donors are collaborating in an effort to amplify their impact and tackle complex issues and challenges.

This collaboration can take many forms, including donors pooling their resources or aligning their grantmaking plans to advance common goals. Working together, donors can maximize their impact and efficiency, source innovative funding opportunities, learn from peers and experts, and expand their network and try out different funding approaches while spreading the risk among collaborators.

Collaboration can be formally or informally structured. Giving circles, for instance, are a type of donor collaboration growing steadily, with more than 2,500 circles in the United States2. Giving circles are comprised of like-minded donors at all wealth levels, who pool funds and collectively decide where to give their pooled donation.

Some giving circles and donor collaboratives support communities in particular locations, for example to provide state- or city-focused COVID-19 relief funds. Others are designed to focus deeply on a specific issue or cause, such as early-childhood education.

Collaboratives can attract a valuable mix of partners who do not normally sit at the same table, including families and individuals, institutional foundations and corporate philanthropy.

For example, in 2015, JPMorgan Chase & Co and the W.K. Kellogg Foundation supported the Detroit Development Fund in launching a collaborative effort in Detroit to support entrepreneurs of color. Since then, the Entrepreneurs of Color Fund (EOCF) has grown to support entrepreneurs nationwide with hubs in nine major cities across the United States and more than 20 community development financial institutions participating. The initial funding attracted more than a dozen new partners and donors, which helped multiply the impact beyond the reach of any one of them.

 Advancing diversity, equity and inclusion

Philanthropy has always played an important role in efforts to improve society’s diversity, equity and inclusion, as donors have long focused on helping groups that have been discriminated against, ignored and/or underserved. 

Philanthropic support for racial equity, in particular, has increased in recent years. The number of funders supporting racial equity and justice in the United States grew fivefold in the last decade.3 A 2020 survey of 236 U.S.-based foundations found that more than 80% were planning to institute changes designed to incorporate racial equity into their grant-making or program strategies.4

Increasingly, donors are evaluating how their philanthropy might be more inclusive, reduce bias and promote equity. Many are examining how implicit biases might be affecting their grant making and how they might more effectively incorporate community perspectives into their decisions.

For example, young adult “third-generation” family members active in a multi-generational family foundation raised a concern that the foundation’s grant making did not reflect the equity and inclusion the family was seeking. With advice from advisors in the Philanthropy Centre at J.P. Morgan, the third generation presented options to their relatives for enhancing the foundation’s DEI efforts. Their ideas included:

  • Committing 25% of a family’s foundation funding to new, diverse organizations not previously supported
  • Training all family members in DEI principles
  • Establishing a process to include community leaders in the foundation’s grant selection

After a healthy discussion, the family members agreed to start by training all members in DEI principles and to learn about potential grantees not represented in past giving. The family will continue by assessing policies and practices at their foundation’s next board meeting. 

We can help

Whether you want to explore new approaches or stick to the tried-and-true, our advisors in the Philanthropy Centre can help you optimize your philanthropic strategies.

Your J.P. Morgan team is dedicated to helping you make a difference.

 

1 Global trends and strategic time horizons in family philanthropy 2020, Rockefeller Philanthropy Advisors and Campden Wealth Limited, 2020. 

2 https://philanthropytogether.org/directory/.

3 Malka Devich Cyril, Lyle Matthew Kan, Ben Francisco Maulbeck and Lori Villarosa, Mismatched: Philanthropy’s Response to the Call for Racial Justice, Philanthropic Initiative for Racial Equity (PRE), September 2021.

4 Foundations respond to crisis: Toward equity? Center for Effective Philanthropy (CEP), December 2020.

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