Predictions for 2022: Philanthropy

Maree Sidey, chief executive officer of the Australian Communities Foundation, looks at giving in Australia in 2022: the trends, anti-trends and what might surprise us.

The past two years have shown how vital it is for our country to have our funders and grant partners working in close partnership and speaking the same language. In an election year, this is going to be even more important to help keep public attention on the two biggest challenges facing our country: tackling inequality and climate change. 

Here are my top four trends for philanthropy/giving in 2022 and why we should celebrate incremental, but important, changes.

Philanthropy v giving

My first thought when asked to share my predictions for philanthropy in 2022, was that the word philanthropy itself seems to be facing reduced usage and that’s a change I’m all for. 

More often than not, high net worth (HNW) and even ultra-high net worth (UHNW) Australians don’t see themselves reflected in these categories and are unlikely to identify with the term “philanthropist”. Philanthropy, for better or worse, is a term that has a stronger and richer cultural tradition in other countries, where public giving is not only lauded but expected. This creates a problem of cultural dissonance between the language of the sector and the understanding of those we are trying to attract.

It has been interesting to see more foundations and organisations that are in the business of growing giving in Australia, replacing the word philanthropy with giving, as a more accessible and relatable term. It is a smart move because there are many people who don’t know how to talk about their giving aspirations to their peer group and are sensitive to the cultural tradition of tall poppy syndrome. 

Fortunate Australians

If we are going to tackle what appears to be an overall decline in giving in Australia, we need to come to terms with when and how high net worth Australians want to give, and that is usually without much fanfare. Promoting big names and big philanthropy to this group, potentially only emphasises the mystique/barriers that surrounds philanthropy in this country. 

To activate more givers and more giving, we need to tell the much more common story of the fortunate Australians who have inherited wealth, sold a business, created savings, or are about to comfortably retire. There are many in these fast growing and high tax paying groups who care deeply about our country and want to understand how they/their family can make a difference. And while tax advantages will always be important, there is a growing group of younger givers who are less motivated by this.

Not for profits tip: Try and find the people who do not traditionally see themselves as philanthropists and invite them to care about your cause. They are a potentially untapped source of revenue, and if you have the privilege to introduce someone to giving, it is often a strong and enduring relationship. 

Giving trends

There has been much talk and various reports about giving in Australia being in decline. This is contradicted by what I see and experience on a daily basis running a fast-growing national foundation supporting both aspiring and experienced givers. I would like to put forward a different proposition: that giving in Australia is in transition and we haven’t yet learnt how to track the changes. 

Here are some tips on what to look for:

• As mentioned above, Fortunate Australians are potentially the least activated segment in philanthropy. There is a large opportunity to find and connect with them, help them become loyal givers and significant bequestors. I’m talking about the doctors, teachers, lawyers, social workers, small and medium business operators, executives etc.
• Corporate giving is growing fast: Savvy Australians expect authenticity and a demonstrated social and environmental commitment from their suppliers and employers. This means that businesses are increasingly moving beyond CSR to introduce a philanthropic arm to their business. This might be a workplace giving fund, a corporate foundation, or a hybrid entity.
  Not for profit tip: This is one of the fastest growing philanthropic categories in Australia and offers a huge opportunity for the right grantee, particularly if you have the ability to harness professional volunteering from corporate partners as well as financial giving. Get in early, paint a picture, tell your story and secure those relationships over the longer term.
• Younger givers: From my perspective, this is the most fascinating category and one in which change is fast paced. Whether it be young entrepreneurs, inherited wealth, or activists, this category is the canary in the coal mine for future philanthropic trends. This group takes no prisoners and authenticity is key.
  Not for profit tip: Responsible investing and impact investing is a key driver for this group, as is taking a whole-of-portfolio approach to grants and investments. To attract this generation, it’s also important to extend your thinking into less traditional forms of giving – limited liability corporations, non-tax deductible giving, social enterprises, crowdfunding platforms and the social experience of giving.
• Responsive, respectful and agile funding: In the wake of government funding cuts, multiple crises (bushfire, floods and COVID), our charitable sector is hurting and many organisations are struggling to survive. What our NFP sector and NFP leaders need now more than ever is untied multi-year funding, and capacity building support.
  Not for profit tip: Be honest with your donors about the real costs of the work you do. If your funders are still trying to dictate appropriate levels of operational overheads, they are potentially out of touch with current best practice and perhaps not the most appropriate donor for you. Equally beware of the donor/funder that is wanting to be too involved, hands on, or prescriptive when it comes to understanding your strategy and operations. You are the expert!

In summary

Traditional categories and tropes for understanding funders and grantees are dissolving and dissolving fast. The lines between the groups are blurring and we are seeing the rise of the donor activist who seeks an authentic experience both as a funder and as a grant seeker. 

My hope for 2022 is that we continue to break down the myths that persist around giving, but more importantly, that we continue to build a strong and vibrant civil society together. 

This is particularly important in a year in which we must decide the best outcome for our country and the people in it.

See also

Predictions for 2022: Impact investing

Predictions for 2022: Charities

Predictions for 2022: Social enterprise