Philanthropy is evolving Philanthropy is evolving Philanthropy is evolving

Philanthropy is evolving in large part due to advances in technology. This has not only enabled a new channel for donations, but also a platform to expose systemic inequities, raise public awareness about the need for change and highlight global leading practices. With this awareness, generous Canadians are becoming more intentional about their philanthropy. Many feel a sense of responsibility to give back and want to learn about emerging trends in order to have the most impact. From where I sit, this might be most apparent with philanthropic family enterprises.

For instance, many family enterprises, particularly those with next-generation involvement, are serious about integrating Environmental, Social and Governance (ESG) factors into their operations. Whether it's addressing climate impacts of the business, making donations to the community, enhancing health and safety or ensuring board diversity, family enterprises are contributing in a meaningful way.

Family enterprises also weathered the pandemic better than other businesses in part by examining and improving their own Corporate Social Responsibility (CSR) practices. When surveyed by KPMG, they listed social responsibility as one of the dominant strategies they're using to address the pandemic. This means considering the needs of all their stakeholders, including employees, customers, suppliers and local communities.

Societal issues come to the fore
Meanwhile, race-based data collected on Covid-19 in Toronto confirmed concerns that both racialized and low-income residents were disproportionately impacted by the virus in the city. The murder of George Floyd, created global momentum against racial injustice and in support of the Black Lives Matter movement. The discovery of the unmarked graves of Indigenous children on the grounds of former residential schools in Canada underscored both historic and ongoing issues of racism and systemic discrimination in our society.

These issues extend to the philanthropic sector, as well. A recent report revealed Black-serving and Black-led organizations are critically under-funded. Across the 40 foundations reviewed, grants to Black-serving organizations represented a meagre 0.7 per cent of total grants during the 2017 and 2018 fiscal years. Grants to Black-led organizations were only 0.07 percent of total grants made in the same period.

As a result, some donors are reviewing their granting procedures with the aim to remove bias. One funder explained they were made aware that the online application process prevented the Indigenous oral traditions of storytelling to be communicated in the traditional way.

This has also prompted conversations about donor-centric fundraising vs. community-centric fundraising. While donor-centred fundraising aims to make donors feel good about their giving, the community-centric fundraising movement is grounded in social justice and prioritizes the community over individual donors. Donors are cautioned not only to remove bias but also to trust and empower the communities they aim to help to identify and address their own needs.

The charitable sector is becoming more aware of these issues and trying to address them. If recent online giving is any indication, donors are, too. According to CanadaHelps, the charitable focus areas that saw the fastest growth in online giving in 2020 were Indigenous peoples, social services, and health.

Making an impact
Families looking to make a philanthropic impact are advised to begin with an analysis of their philanthropic values, which can help to identify their priority issues. From there, they can embark on a learning process to understand the issues, with a particular emphasis on learning from the people or communities they're looking to fund.

As a next step, donors are advised to develop a plan to achieve their philanthropic goals. Each family's philanthropic plan is unique and might involve improving the ESG and CSR performance of the operating company, setting up a private foundation, using a donor-advised fund with a public foundation, or working collectively with other funders. It could also involve defining the roles of family members, choosing charity partners and engaging advisors.

Families are also encouraged to consider how they will identify funding opportunities and design a due diligence process for evaluating potential funding recipients. Depending on the charitable giving vehicle, there may be grant administration requirements. Donors will also want to consider impact evaluation methods which can vary in complexity.

It helps to get help
Designing a strategy and plan for philanthropy and impact can be challenging. The right advisor can help you define your philanthropic values, select an appropriate charitable vehicle, identify governance considerations and operational processes, and develop a plan for evaluation.

Want to learn more? Keep an eye on this space and, otherwise, let's talk.