With the first half of 2023 now behind us, it’s a good time to assess where we’ve been and where we are going. What new trends has your nonprofit organization embraced and focused on this year? Which will you continue throughout 2023 and into 2024?
If you are looking for some inspiration or some insight on what challenges might lie ahead, we encourage you to take a look at 11 Trends in Philanthropy for 2023. The report, released by the Johnson Center for Philanthropy, zooms in on forces “rippling across our ecosystem” and how they play out at individual organizations.
The 11 trends are:
1. The Rise of Collaborative Funding
Through collaborative funding, participants with shared goals and other commonalities can magnify their impact, create meaningful change and solve complex societal issues. Collaborative funding differs from philanthropic giving in that there is an increased focus on funding systemic issues and racial justice. There is also more diverse leadership within collaboratives.
2. Rethinking What Capacity Building Should Be – and Who Should Decide
Capacity building is any action that improves nonprofit effectiveness. A growing movement seeks to center equity and power-sharing in capacity-building efforts. This involves considering the roles and responsibilities of funders, policy-making entities and ensuring that capacity-building practices are adequate and inclusive for diverse communities.
3. Disaster Philanthropy is Transitioning for the Long Haul
With the greater frequency and ferocity of disasters, the playbook for disaster philanthropy is changing with a shift to long-term resilience and preparedness. There is also an emphasis on helping low-income communities become more resilient so they are better prepared to handle the social, health and economic costs of disasters. Unfortunately, funding remains stagnant, with only 2% of total grantmaking currently funding disaster resilience and preparedness efforts.
4. For-Profit News Outlets are Exploring Nonprofit Models
The traditional journalism model based on advertising and circulation is crumbling. As a result, new models are emerging, including converting news outlets from for-profit corporations to 501(c)(3) nonprofit organizations, coming under the ownership of nonprofit organizations and philanthropic partnerships.
5. New Organizational Structure Models are Toppling the Staff Pyramid
Nonprofits are embracing non-traditional organizational structures that focus on shared leadership, worker participation and collaborative models. One emerging model is co-executive directors and co-leadership, where organizations have two or more executive directors sharing leadership responsibilities.
6. Policymakers are Paying Increasing Attention to Moving More Money Faster
As the wealth gap in the U.S. continues to widen, there are growing conversations within the philanthropic sector around moving more money from funders to operating nonprofits and moving it more quickly. There is a new urgency to encourage wealthy donors and foundations to give more and address societal issues.
7. ESG Backlash Will Affect the Future of Philanthropy and Impact Investing
ESG stands for “environmental, social and governance.” It is a set of criteria for evaluating for-profit corporations based on their environmental practices, social impact and governance structure. ESG has faced recent criticism and backlash, particularly from Republicans. There is a need for better and more long-term data on the performance of ESG investments to help navigate the complex waters ahead.
8. Will Philanthropy Stay Focused on Racial Equity?
There have always been fads in philanthropy, and there are questions about whether philanthropic trends represent real or temporary change. There is currently an emphasis on racial equity in philanthropy, but does this represent meaningful change? It may be too soon to tell, but there is evidence that this shift may endure.
9. More Nonprofit Employees are Moving to Unionize
Many nonprofit practitioners are increasingly interested in unionization not only as a way to boost salaries and workplace power but as a way to achieve social goals, including anti-discrimination and anti-harassment policies, flexible schedules, leadership development and remote work. Unionization efforts are coming from nonprofit employees eager to engage in collective bargaining and existing labor unions eager to expand membership.
10. IRS Delays and Other Barriers to Data Mean Real Risks for Nonprofits
The nonprofit sector has historically lacked accessible and comprehensive data compared to the for-profit and government sectors. Detailed information about nonprofits’ service areas, populations served and employment data is often missing. As nonprofits strive for greater accountability and transparency, the availability of up-to-date and comprehensive data remains a crucial challenge.
11. The Public is Holding Nonprofits Accountable to Living Their Mission and Values
The methods of holding a nonprofit organization accountable have not always been clear or accessible. Making annual tax returns available and creating a publicly-stated mission are two ways nonprofits and their leaders can create accountability. Nonprofits can also promote accountability by including community representatives in decision-making, embracing inclusivity and implementing strategies like participatory grantmaking.
We encourage you to view the full report at johnsoncenter.org.
