Foundations for the Future
17 June 2002 at 1:06 pm
The scale and pace of change for philanthropic foundations at the turn of the 21st century is unprecedented.
And according to social researcher Dr. Lucy Bernholz it is as important to consider how individual philanthropy is changing as a result of e-philanthropy, and to look for connections between individuals and institutional philanthropy, as it is to examine foundations themselves.
She says the current trend is to focus on outcomes as a way to structure philanthropy and measure its impact. The proliferation of foundation consultants and affinity associations will ensure that this is a lasting trend and there will come to be a need to differentiate between these vendors as the market grows.
Dr. Bernholz is the founder of the California Community Philanthropy Research Project and a collaborator with the Nonprofit Studies program at the University of California. Her discussion here comes from a recent paper entitled Foundations for the Future: Emerging Trends in Foundation Philanthropy.
She says another significant trend driving changes is the creation of new wealth and the transfer of wealth between generations.
One prediction estimated that the amount of wealth to be passed between American generations is somewhere between $41 trillion and $120 trillion over the 55-year period from 1998-2052.
A more conservative estimate based on a survey of US Consumer Finances calculates wealth transfer $10 trillion by the year 2040 and this averages out to about $225 billion a year for the next forty years!
Experts suggest that at this rate of growth and using the conservative estimates of the percentage that will pass to philanthropy, it is possible that the Foundation sector will double again in the next decade.
Dr. Bernholz says growth in the sector has also been stimulated by the creation of philanthropic foundations from the assets of converted Not for Profit organisations into profit-making corporations. In the US almost all of these foundations have come out of the conversion of health-related assets.
As well she says e-philanthropy is the fastest growing new philanthropic tool in the history of giving.
She says Not for Profits will need new expertise to manage these Internet systems. Foundations that support the Not for Profit shift to online fundraising are effectively subsidising the growth of the industry.
Other changes are resulting from a culture of entrepreneurship and the culture of the ‘start-up’ is now being replicated in the Not for Profit sector.
She says the public grant making charity rather than the private foundation seems to be gaining ground as a option for donors. Community Foundations are the most common version of these charities and they have been one of the fastest growing structures since the 1990’s. The is also true in Australia where organisations such as the Melbourne Community Foundation have been very successful.
Finally, she says the increasing involvement of women and young people in foundation philanthropy will change the way foundations operate. Simply through active, diverse leadership foundations should broaden their thinking about how and with whom they do their work.
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