The 2010s saw profound changes in the world of philanthropy. A new class of billionaire mega-givers emerged on the scene, donor-advised funds exploded, crowdfunding soared, impact investing took off, and a backlash formed to the rising clout of private wealth over public life. Meanwhile, fresh ideas and strategies reshaped how funders worked across any number of areas—health, climate, housing, race, criminal justice and more. Oh, and don’t forget the 2016 election, which flipped out blue America and put many funders on a war footing.
In all, the 2010s were quite a ride. Now, fasten your seat belts for a decade of even greater flux ahead.
The charitable sector, and the larger nonprofit world in which it nests, is a powerful reflector of U.S. society. So it makes sense that life inside the philanthrosphere would be every bit as dynamic as life outside—channeling trends like economic inequality, rising populism, growing polarization and rapid demographic shifts.
With so much change happening right now, it can be hard to say for sure which trends will have the biggest impact on philanthropy in the coming decade. Or to make useful predictions as a result. But just for fun, let’s give it a whirl.
1. Big Philanthropy Will Get Bigger
Loads of new wealth has surged into philanthropy since 2010, the year that the Giving Pledge debuted. And more is on the way—much more. In the past decade, the combined wealth of the Forbes 400 has risen from $1.3 trillion to nearly $3 trillion, and could easily double again in the 2020s. Big chunks of those assets are in the hands of philanthropists who plan to give it all away. So far, many have moved slowly to do that, getting richer instead. But at some point, that’s likely to change as aging billionaires and other older wealthy Americans act with greater urgency to dispose of their assets. (The average of the Forbes 400 is 67.) As the greatest transfer of financial assets in U.S. history gains steam in the 2020s, eye-popping sums of money will flow for big gifts and grantmaking.
2. Small Philanthropy Will Get Smaller
The decline in giving by ordinary Americans will continue in the 2020s. Causes for the falloff in giving include the chronic financial insecurity of many U.S. households, spreading secularization, and—most recently—changes in federal tax law. While that last cause could be addressed by a new universal charitable tax deduction, an idea with bipartisan support, it’s anyone’s guess when that might happen or how much impact it would have, since the giving decline predates the 2017 tax law. Even more speculative is when and if efforts to reverse inequality will go far enough to put more discretionary cash into the pockets of Americans—some 40 percent of whom report that they couldn’t come up with $400 for an emergency. The decline of small donors means that civil society will become ever more beholden to wealthy donors and foundations—a dis-Tocquevillian future.
3. Government Will Get Smaller, Too
Big philanthropy will also wield more influence in the 2020s because of the ongoing decline of government as a result of vast debt, institutional calcification, public distrust and intensifying political attacks. To be sure, the U.S. may well yet pivot into a new era of social democracy thanks to a resurgent left, but I doubt it. Otherwise, the prognosis for activist government is grim as surging entitlement and pension costs crowd out spending for other priorities across federal, state and local budgets.
Government will always spend far more than the charitable sector, through the 2020s and beyond. But its discretionary resources for new programs and initiatives will steadily wane, resulting in further privatization of problem solving—and a growing backlash to this diminishment of democracy, as we’re already seeing.
4. Public-Private Partnerships Will Spread
Philanthropy will work ever more closely with government and business in the 2020s, continuing a trend that accelerated through the 2010s. Weakened public institutions have strong reasons to collaborate with private funders, and there is now a growing body of practice on how to make these partnerships succeed. Business will continue to be drawn more deeply into such efforts as corporations face more pressures from employees and consumers to demonstrate their social value. To the extent that the coming decade sees a flowering of equity efforts, I’d put my money on this taking the form of a robust new “tri-sectoralism” as opposed to a European-style statism.
5. Intermediaries and PSOs Will Become Even More Important
The 2010s saw a big expansion of the infrastructure that serves the philanthropic sector, and the 2020s will see more of the same. In particular, there will be strong growth among those entities that act as middlemen between nonprofits and the swelling ranks of wealthy (but busy) donors who need help giving—including community foundations, venture philanthropy outfits, and cause-focused pass-through foundations.
6. High-impact Philanthropy Will Grow
Thanks to expanding infrastructure, more individual donors and family foundations will get the help they need to give effectively in the 2020s. Generational transition will also fuel the quest for impact, as millennials focused on driving social change move to the forefront of the sector. The rise of GiveWell—which barely existed in 2010, but has now directed $500 million in gifts to high-impact charities—is one sign of a growing revolution in individual giving that will take flight in the 2020s, much as mutual funds remade the world of investing decades ago. The ongoing shift in corporate philanthropy to more focused and strategic giving will also continue in the 2020s.
7. Donors Will Save Millions of Lives Globally
A decade from now, in 2030, millions of people will be alive who otherwise would have died—especially children—because of the efforts of foundations and philanthropists. And it won’t just be U.S. givers like Bill Gates and Michael Bloomberg who provide the tens of billions of dollars to fund vaccinations, malaria nets, deworming, reproductive health, water and sanitation projects, anti-tobacco campaigns and much more. It will be a growing number of philanthropists emerging from China, Europe, India, the Middle East and Africa.
8. But Face Frustration at Home
Moving the needle on tough domestic challenges like education, poverty and decarbonization will be as tough as ever in the 2020s. It’s hard to see big breakthroughs coming easily—especially in light of philanthropy’s track record in the 2010s, a decade in which a billionaire-backed K-12 reform push largely flopped, climate change giving yielded few gains, and funders only nibbled cautiously at the edges of a vast inequality problem. Foundations will continue banging away at these top-tier challenges, though, along with other critical priorities that have moved to the front burner, like housing affordability, early learning, and lifting up rural America.
9. Giving Will Become Even More Politicized
The use of tax-deductible gifts to influence public policy and electoral outcomes will increase in the 2020s, as political conflict further intensifies—continuing a trend that’s notably accelerated since the 2016 election. In a related trend, more nonprofits are setting up 501(c)(4) arms so they can engage in electoral activities. All this is hardly new, but politicized giving has expanded in the past two decades as donors have become more sophisticated and more focused on influencing government. In turn, this trend has fueled the critique that philanthropy is yet another tool of plutocratic influence over public life.
10. Bigger Scandals Will Hit the Charitable Sector
Hundreds of billions of dollars flow through nonprofits annually, and tens of billions are sheltered every year tax-free in charitable vehicles. More of this money is moving anonymously, and a growing slice is being deployed to affect elections and policy. Yet charitable oversight is notoriously lax at both the federal and state level—inviting abuses. Look for expanded investigative digging into philanthropy in the 2020s, which will turn up more abuses and bad behavior. That so many institutions took gifts from convicted sex offender Jeffrey Epstein and that Donald Trump so egregiously used his foundation for personal gain will, in retrospect, turn out to be the tip of a very large iceberg.
11. The Backlash to Philanthropy Will Grow
Americans’ faith in the charitable sector has remained relatively strong amid the decline in public trust of leading institutions in U.S. society. But that’s been changing as billionaire donors loom larger and philanthropy becomes more linked to plutocracy. Bigger scandals in the 2020s will lead to a further erosion of trust. In turn, more distrust will trigger closer scrutiny of philanthropy by various watchdogs, revealing more abuses in a sector that’s generally flown beneath the radar—which, in a negative feedback loop, will further erode public trust.
12. Donors Will Hide More, Making Philanthropy Even Less Transparent
As criticism of philanthropy rises, the donor class will increasingly go into hiding, managing their giving through DAFs, LLCs and offshore foundations. This shift will further cloak the world of philanthropy in secrecy at the same time that more Americans are becoming aware that charitable giving can be used for political influence or personal gain. Growing concerns about dark philanthropic money will fuel the backlash to philanthropy and calls for reform.
13. Fundraising Will Become More Difficult
As donors go into hiding, fundraisers will find it more difficult to do their jobs in the 2020s. Yesterday’s data tools will no longer be as useful in the cat-and-mouse game with prospects. Development researchers will need to work more like investigative journalists to learn who might give and how to reach them. Soft networking skills will also become more critical. The ongoing decline of giving by small donors will make it all the more imperative that fundraisers learn new ways to hunt big game in a changing landscape.
14. Changes in Laws (Mostly) Won’t Happen
Even as distrust of philanthropy grows, sweeping policy changes to charity regulations won’t happen in the 2020s unless there’s a much bigger populist explosion than anything we’ve seen yet. No powerful interest groups have a burning interest in whacking the charitable tax deduction or taking other dramatic steps. Nonprofit leaders across the political spectrum don’t want to bite the hand that feeds them and will remain united behind the status quo. Still, some important reform ideas will be enacted in the coming decade, including (a) a universal charitable deduction; (b) minimum annual payout by DAFs to close an obvious loophole; and (c) creation of a new national charitable regulator to address the sector’s lack of oversight, a reform that nonprofit leaders will back out of self interest.
15. The Philanthropy Sector Will Engage in Growing Self-Regulation
Foundations, donors and intermediaries will be somewhat responsive to criticism in the 2020s. Funders will be especially attuned to critiques from within their own ranks that they hold too much power and that top-down philanthropy is not only unjust, but less effective by sidelining the voices of those closest to society’s problems. Foundations will respond with a rising tempo of voluntary changes during the 2020s that help to democratize their giving. Meanwhile, the sector’s leaders will try to head off outside government oversight through self-regulation, including a new national entity similar to those that govern other industries such as securities and accounting.
16. A Major Crisis Will Catalyze Dramatic Change in Philanthropy
By many metrics, the 2010s was the best decade in history to be a human being, thanks to steady advances in global health and living standards. Let’s hope that progress continues. But the past decade also saw ominous trends gather force, and we now live in scary times. So while I don’t like saying this aloud, my prediction is that something really bad is going to happen in the 2020s—something like a paralyzing cyber attack, a devastating hurricane that takes out a major U.S. city, a constitutional crisis that ruptures the union, or a global pandemic. Hopefully, such a trauma will be contained and eventually pass. But one upside of this event will be to force the relatively staid world of giving to embrace far greater urgency in its work. Warren Buffett has called philanthropy “society’s risk capital.” In the wake of a seismic crisis in the next decade, more funders will start to act on that maxim.
Related: Philanthropy Awards, 2019