It’s the best of times for philanthropy, but it’s also kind of the worst of times. Assumptions about philanthropic giving are changing quicker than at any point in recent memory — who should lead it, who should benefit, how it’s done, how much of it should take place, and how donors should be perceived. It wouldn’t be much of an exaggeration to say we’re entering a whole new era for American philanthropy. Whether that’s good or bad remains to be seen.
As we seek to trace and understand those changes here at Inside Philanthropy, we find it helpful to organize the questions we’re asking around key themes and developments. Top stories, if you will, about the sector at large rather than any one funder. It’s something we started doing at the beginning of last year, and while these key stories don’t encompass everything we write about, they’re good points of reference that will crop up again and again in our coverage in 2023. Some of them are continuations of the main themes we were watching last year; others are new territory.
Below are some of the standout stories we’ll be following this year and beyond. It’s not an exhaustive list, nor is it arranged in any particular order. As the year progresses, we’ll likely see lots of exciting developments in these areas and elsewhere. Stay tuned.
The billionaire mega-donor arms race
Once upon a time — and not too long ago — a charitable commitment of $100 million or even $50 million would be huge news for the sector. Nowadays, those kinds of gifts seem almost quaint next to the truly big giving: billions in new philanthropy coming from the likes of MacKenzie Scott and other super-rich mega-donors.
While such monumental donors are significant enough on their own, their cumulative effect is even more noteworthy, marking an ongoing shift at the top, away from a foundation-based, project-centric model toward… something else. Whether the future looks like Scott’s Yield Giving, the Gateses’ ever-expanding philanthropic behemoth, Laurene Powell Jobs’ Emerson Collective, Jeff Bezos’ Bezos Earth Fund, or the latest escalation, Yvon Chouinard’s newly nonprofit Patagonia, it’ll look very different than what came before.
At the same time, all of this top-heaviness isn’t just concentrated at the very top. A long-term concentration of wealth among the already-wealthy is elevating the role of more “modest” living billionaires and multimillionaires who are now joining established legacy institutions on philanthropy’s middle rungs. Meanwhile, the ranks of small donors continue to shrink.
Philanthropy’s role in tackling profound global problems
With COVID diminishing from view, we’re left with mixed feelings. On one hand, philanthropy did step up in some noteworthy ways since 2020. But those early, ardent hopes that a global pandemic would revolutionize the sector have proved mostly unfounded.
The fact is that, to date, philanthropy has mostly tinkered around the edges of some of our biggest global problems — pandemics, nuclear security, threats to democracy, tensions between superpower nations, and climate change — which will probably be humanity’s paramount challenge for the next century or more. And when philanthropy does kick into gear to address these problems, it’s often reactive rather than proactive.
Over the course of this year and beyond, we’ll be watching how funders tackle these grave threats — if they do choose to tackle them — and what the impact and repercussions of their actions look like.
Changing philanthropic norms
It gets more difficult every year to talk about a standard model for large-scale charitable giving. Once the unquestioned bread and butter of philanthropy, the private foundation — with its professional staff, strategic plan, board of trustees, (somewhat) transparent records and legally mandated payout — now finds itself awash in a growing sea of donor-advised funds, LLCs, 501(c)(4)s and political operations, and combinations of all of the above.
There’s actually a lot to like about this emerging landscape. Moving beyond traditional practices, funders can push more money out the door and embrace the tools of advocacy and movement-building to multiply their impact. Meanwhile, collaborative funding, intermediaries, fiscal sponsors and new opportunities for impact investing are even further expanding what donors can do.
However, the flip side of this brave new world is a marked rise in opaque giving from funders of all ideological stripes, and an alarming level of influence over the American public square from donors both seen and unseen. Do the benefits outweigh the drawbacks? And if they don’t, is the genie already out of the bottle?
Growing backlash against the wealthy and the power they wield
Heading into the 2020s, skepticism about the super-rich was already on the upswing. The past several years have seen anti-plutocratic sentiment snowball even further, and the top targets include people we write about regularly, like Bill Gates, Elon Musk and George Soros, to name a few.
Last year, the fall from grace of would-be mega-philanthropist Sam Bankman-Fried threw gasoline on those flames, marring the reputation of not just effective altruism, but the entire landscape of big-donor philanthropy. It’s sobering but useful to remember that a large segment of the American populace thinks of SBF, or another similarly tarnished figure, when they think of philanthropy at all — morally compromised moneymen seeking to shore up their reputations as they continue to accumulate massive fortunes.
In this environment, calls for more participatory and democratic forms of philanthropy are growing. And even as actual legislative reform has failed to materialize, demands for changes to the rules that govern philanthropic practice, around DAFs in particular, continue to swell.
Rise of the far right, polarization, and cultural conflict in the U.S.
Last but not least, we have one of the most pressing debates in American philanthropy right now. What, if anything, can funders do about this country’s extraordinarily toxic civic environment?
The past couple years have made it crystal clear that far-right extremism is gaining ground in the U.S., especially as an alarming number of antidemocratic figures entrench themselves in the highest echelons of the GOP. As a result, government is increasingly dysfunctional. Meanwhile, far outside of the halls of power, culture wars rage on and political polarization is rampant.
One reason we are watching this story so closely is that philanthropy as a whole seems conflicted as to how it should respond, or even how to diagnose the problem. On one hand, some funders are backing dialogue and bridge-building in an effort to weave a frayed civic fabric back together. Others see those attempts as misplaced, focusing instead on building power in pursuit of social justice.
Racial justice funding is a crucial part of that story, particularly as it continues to evolve in the wake of 2020. So is funding for women’s rights and gender justice following the downfall of Roe v. Wade last year. Grantmakers’ ongoing failure to equitably fund rural communities is yet another dimension to consider, as is the effect of highly politicized funding across the philanthrosphere. Suffice it to say, this isn’t a nut funders seem likely to crack anytime soon.