January is a month that allows us to take stock of the year that has passed, and set our goals for the year to come. With that in mind, it's helpful to take a look at what happened in the philanthropy world in 2024 and see what that might mean for foundations, charities and grantmakers in 2025.
What happened in 2024?
The philanthropic landscape was influenced by technological advancements, evolving donor behaviours, and pressing global challenges:
Integration of Artificial Intelligence (AI) and other tech in Philanthropy: The adoption of AI and big data analytics has enabled philanthropists to make more informed decisions and effectively track the impact of their contributions. Ft.com
The use of crowdfunding platforms and blockchain-driven transparency, enhances the reach and impact of charitable activities. PhilanthropyAsia
Collaborative Funding Initiatives: Philanthropists increasingly embraced collaborative funding models to amplify their impact. By pooling resources, donors were able to support high-impact initiatives across various sectors, achieving significant milestones in funding allocations. Financial Times
Generational Shift in Giving: Generation Z has begun to redefine philanthropy by integrating giving into various aspects of their lives. Studies indicate that a significant portion of Gen Z prefers impact investing, aligning financial returns with social and environmental good. Ft.com
Emphasis on Gender Equality and the environment: Global philanthropy has increasingly focused on investing in the environment, women and girls, recognizing it as crucial for societal progress. Despite these efforts, women's rights organisations still receive a minimal fraction of global aid and philanthropic grants. Time.com For decades, efforts have been under way to address these issues, but the capital committed from global governments, NGOs, and non-profits so far (roughly 1 000 milliards de dollars per year) is estimated to be only a sixth of what is required. Time.com
Rise of Donor-Advised Funds (DAFs): Well-developed in the US and UK, DAFs have become increasingly popular, offering donors flexibility and anonymity. In 2024, DAFs were utilized in various philanthropic activities, including grant-maker collaboratives and impact investing, reflecting their growing influence in the sector. This comes however with a caveat, in that US DAF’s don’t have to follow the same legislation as foundations, and thus often payouts are slow, preventing the funds from landing with non-profits and thus impacting their work. Philanthropy.com
Decline in European Development Aid: European countries, historically leaders in development aid, have reduced their contributions, often under pressure from the extreme right. For example, France announced a reduction of €1.3 billion in its aid budget for 2025, reflecting a broader trend of decreased support to poorer nations. Le Monde.fr
Decline in Donor Participation: Despite an increase in total charitable contributions, the number of individual donors and volunteers declined, raising concerns about the sustainability of nonprofit support. This been seen around the globe, not just in the USA, but in France and other countries.
Philanthropy's Role in Democracy: while we won’t talk about the US elections, other philanthropic organizations emphasized their role in strengthening democratic institutions. Initiatives were launched to address global challenges such as food security and women's health. Associated Press
So. What does all this mean in terms of philanthropic trends in 2025?
As we look ahead to 2025, the changing economic and political landscape is likely to further transform the ways foundations and grantmakers operate…the question is, what impact will that have on philanthropic trends in 2025?
Some philanthropic trends I hope we see in 2025:
Expansion of Locally Led Initiatives: The success of grassroots efforts, such as Sudan's Emergency Response Rooms feeding over 177,000 people daily, underscores the effectiveness of community-driven responses. While the example is from Africa, this is valid in the US, Europe and around the world. It’s something we can see in our local communities. In 2025, I hope we see a greater emphasis on supporting local organisations that possess contextual knowledge, have the expertise and can mobilize resources efficiently.
Growth of Collaborative Philanthropy: The complexity of global challenges is prompting foundations to collaborate more extensively, pooling resources and expertise to achieve greater impact. This trend will need to strengthen in 2025, and foundations need to continue to foster partnerships with other funders, and also other sector actors, across sectors and borders.
Increased Focus on Equity and Social Justice: Philanthropic efforts are needed to prioritize addressing systemic inequalities, with a particular emphasis on racial and gender equity. We all need to play a role, and we could do with being led by the values of younger generations. ThePostAthens
Enhanced Digital Transformation: The integration of AI and big data is expected to deepen, and with tech such as BlockChain, enable more efficient grantmaking processes and better impact assessment. And with new initiatives such as She Shapes AI, here’s to more Tech for Good in 2025!
Adoption of New Tax Policies: Potential changes to tax laws, including the those impacting charitable deductions for taxpayers, could influence giving behaviors and strategies. While we can hope for positive change, encouraging giving, there are risks (as we look to DAF’s and Elon Musk… ) that this can go the other way. Chronicle of Philanthropy
More Trust-Based Philanthropy and systemic change philanthropy: These two trends have already made great headway (emphasizing building relationships with grantees, providing multi-year unrestricted funding, and streamlining reporting requirements. this approach is often used in systemic change, where long-term-engagement is needed. A positive sign from Initiative Racines’ call to action this month.
As stand poised to dive in what is the year ahead, the only thing I can guarantee is that foundations, endowment funds (fonds de dotation) and grantmakers will play a pivotal role in shaping a more equitable and sustainable future.
Are you looking for someone to help accompany you with your philanthropy and grantmaking through the year ahead? Please don’t hesitate to reach out.
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