Current Trends in Philanthropy 2021

Philanthropy has undergone a significant shift over the past several years, especially during the COVID-19 pandemic. Today’s donors see the rise of alternative forms of social impact organizations shifting the traditional modes of giving and impact investing — an indicator that there was needed transformation in traditional philanthropy practices.

Many nonprofits and philanthropic organizations now recognize that tackling today’s challenges requires an intersectional perspective across various sectors. The challenges these organizations encounter are often integrated within a system, organizations or held amongst individuals.

However, these new perspectives are helping to reshape silos to enact answers throughout nonprofits, businesses and governments. Here are some of the emerging trends in education philanthropy that will help shape the sector in 2021 and beyond:

Trust-Based Philanthropy
This emerging type of philanthropy took the spotlight during the pandemic. The majority of nonprofit funding was disrupted and they looked for new ways to earn funding and without any restrictions. Over 800 funders pledged to ease restrictions on nonprofits and the initiative harnessed the power of trust-based philanthropy. This form of philanthropy is founded on power-sharing, equity, transparency and collaboration. It helped disaster relief funds like Seeding Sovereignty support food and PPE initiatives that hired people from the indigenous communities they were trying to help.

Participatory Grantmaking 
Using trust-based philanthropy as its framework, participatory grantmaking is an overarching trend in philanthropy and has become increasingly popular amongst grassroots communities. It takes trust-based philanthropy to the next level by shifting decision-making power from funders to the people and organizations who deal with the issue or problem. The approach emphasizes and empowers those who’ve experienced injustice or adversity to best understand the issue. This form of philanthropy requires fostering deep relationships, trust and individual time between all parties involved. This focus was especially emphasized during the COVID19 pandemic.

Community-based Philanthropy

In every aspect of the sector, community-based philanthropy has gained traction. Organizations like USAID are implementing locally-led development projects for other emerging organizations like Population Works Africa, which advocates for more equitable models of aid. In practice, community-led philanthropy hosts community members in the drivers’ seat. It seeks to address the cause of the problem rather than attempting to resolve the communities’ immediate needs. New research has shown that the best organizations first position themselves as facilitators of change and not just as vehicles for offering projects or initiatives. Community-led leadership isn’t really about who is in charge but how people come together to make change a reality. These community efforts require strong leadership from a collective and a commitment to sharing power.

The process has proven to be effective because the process is led by people who hold respect and knowledge for their community, culture and the context in which they operate, so that these efforts can be especially agile and effective. They also share relationships and assets, holding access to the same challenges and systems that affect them. It’s also a nurturing environment so members can learn as they go and work to their standard instead of performance indicators that are often arbitrary or ineffective. In all, the focus supports long-term capacity development.

Funders can also support community-led programs. Their help is most effective when they communicate and work in partnership, expressing patience and a willingness to learn about the local conditions and context in a humble way. To support this, flexible funding and other resources are helpful tools that successfully promote community-led initiatives. However, funds should not impose their timelines or requirements. They should also remain fully transparent and avoid changing funding priorities on a whim.

Virtual Programming and Fundraising Platforms

As nonprofits adapted to the COVID-19 pandemic, they adopted virtual programming and fundraising platforms to stay connected. Online webinars, panels and digital courses and learning resources emerged online. This trend helped build relationships and connect communities with philanthropic organizations who shared their goals across the globe. As this is a convenient and productive tool, the trend will remain permanent.

For some organizations, the pandemic also meant shifting training to virtual formats. It also meant canceling seminars and looking toward ways to remain financially stable. Although many people were anxious that donations would dip during the pandemic, 2020 broke records for the generosity donors showed others. In the United States, $2.47 billion was donated to nonprofits by 34.8 million people — and that was only on Giving Tuesday.

As the COVID-19 pandemic kept people apart, it also drove us together in many ways. With new, more effective systems that help nonprofits and philanthropic donors navigate the way we offer service to others, we can help create more valuable resources for those in need.