The State of Philanthropy: Why Millennials Will Revive the Nonprofit Sector
A version of this post originally appeared on LinkedIn.
The traditional model for getting a satellite into orbit can take years–and once they’re up there, the technology is sometimes already obsolete, surpassed by innovations on the ground. All this to say, if a sector is constantly looking backwards or inward rather than scoping out future opportunities, we’ll always be playing catch up. This is particularly true in philanthropy, where our awareness and ability to adapt to changing conditions is paramount to achieving impact. And so, rather than simply take a look at the state of philanthropy today, I want to look ahead.
“In philanthropy, our awareness and ability to adapt to changing conditions is paramount to achieving impact.”
Here’s five trends I see for the next five years:
- We’ll be a hub for the next wave of talent. The nonprofit sector is predicted to do more hiring than the private sector over the next five years. As more Millennials enter the workforce with the intention of doing good, the nonprofit sector will be a magnet for top-talent, creating a pipeline of future leaders who are skilled at integrating social and environmental goals with the bottom line. And we’ll be more diverse than ever—not just in terms of women and minorities in leadership positions, which we see a trend towards already, but in terms of the inclusion of more actors from emerging economies.
- We will have more private capital going towards the public good than ever before. With the acceleration of impact investing and with Millennials inheriting and creating greater wealth, more private capital will be unlocked to solve environmental and social challenges. This is a good thing, on the whole. But to ensure this funding can be translated into impact, we’ll need to ensure the social enterprises have the skills training, management ability, and innovative capacity to absorb this influx.
- Both governments and the private sector will be looking to us for innovation and expertise. The rise of shared value initiatives and a wave of B-corporations will increase demand for organizations with the issue-area expertise and social innovations businesses will need to deliver on their social and environmental goals. And with the proven pay-for-success model of social impact bonds, more governments will be looking to us to provide the preventative services, backed by private funds and saving taxpayer money.
- We’ll have a better understanding of the potential for impact before we commit funding. We now have sophisticated, well-established tools for evaluating impact after the fact—yet the sector is only beginning to think systematically about how to find opportunities for impact and assess their potential before we act. In five years, we’ll have a robust toolkit for identifying the most promising, innovative approaches to addressing problems—it will be venture capital meets impact evaluation.
- We’ll be equally focused on solving problems—and helping people rebound more effectively from them. Modern philanthropy spent its first 100 years looking at root causes because we thought if you look long enough and you work hard enough, you can solve the world’s problems. But today there is a growing recognition that the pace of change is so great that we can’t possibly solve all the problems at the rate we’ll need to do it. We’ll be focusing on interventions that help people rebound more effectively from 21st century shocks and stresses while we’re trying to solve these things. That doesn’t mean we’re giving up—rather, we’ll be working on making systems less fragile.
Indeed, we have a lot of work ahead of us to make sure we are maximizing the benefits of our 21st century world while minimizing the vulnerabilities. But we also have much to look forward to, and feel good about, when it comes to our future.