#NextPhilanthropy: What have we learned, and what’s next in global philanthropy?

Amy McGoldrick

The end of February saw Alliance hosting Next Philanthropy’s first ever London event, amidst both literal and metaphorical storms of change. Next Philanthropy, initiated by the German Association of Foundations (BDS) in partnership with Alliance, AVPA, AVPN, DAFNE, EVPA and WINGS, seeks to address the challenge of keeping up with the increasingly globally connected philanthropic landscape.

Some are taking note of the weather and embarking on reform and modernisation in response to concerns about a lack of internal diversity, opaque investments and undue influence. Others are looking to the future to see whether the next generation of wealth holders take philanthropy in new and potentially more progressive directions.

We brought together a panel of five: Felix Oldenburg, Secretary General of the Association of German Foundations and chair of DAFNE; Kurt Peleman, European Representative of AVPN; Kristina Johansson, managing director of the Solberga Foundation and Nadya Hernandez, programs manager for WINGS, who was speaking live from Brazil. The discussion was moderated by Alliance editor Charles Keidan.

Oldenburg was the first to speak to an eager audience at The Foundry, South East London. ‘There’s a tension between what the field currently does in its institutional shape and form, and what the forces outside of it will require of it in the future. We are at a moment of industry change.’

Next Philanthropy was created as a way to channel this into an open conversation. ‘It’s not how it should change; we’re not talking about personal opinions or recommendations necessarily, but about all the different forces that we can identify.’ These forces are truly global in a way that is completely new to philanthropy.  ‘Most of us as support organisations are set up domestically, with a limited geographic focus. Whereas if you follow the news about philanthropic initiatives over the last few years, a lot of it now has a global reach. It also will be far more digital, in ways that existing organisations aren’t and may not ever be.’

Oldenburg cited two examples of what he considers new ‘puzzle pieces’ to philanthropy: the first is Dominik Schiener (IOTA Foundation), working on internet architecture, setting up a micro currency for transactions between autonomous devices (such as a car paying a lamppost for its parking spot). ‘This will be fundamental architecture to the way our world is going to work. Who should own that architecture? …This next generation philanthropist has decided on a foundation as the ownership structure. I thought this was really inspiring, and digital in a way that our field isn’t, currently.’

The second example is Ise Bosch (Dreilinden), who works amongst international LGBTQ communities. Her work ‘was certainly outside of the mainstream then, and it’s not exactly mainstream now, but she has now got a major foundation with a lot of women collaborators and co-founders… it’s become a collaborative, global effort and it’s very aware of the implicit power and gender dynamics in traditional philanthropy.’ Since winning a major German award, several dozen major foundations have joined her ‘in a transformational philanthropy project in which foundations reflect their own implicit power and gender dynamics. Looking at these two examples,’ said Oldenburg, and putting these puzzle pieces together, ‘you will come to a field that will look very different to the field we have today.’

‘foundations need to grapple with investing in a way that really, truly builds regenerative and democratic economies while ensuring that our investments are providing more value than they extract.’

Understanding what comes next is critical. Through a commissioned study from McKinsey looking at the wealth increase over the past decade compared against the increase in philanthropic endowments – ‘at least in Germany, there is a big gap between the two. In a way, philanthropy is underperforming its market potential. It’s underperforming generosity. But that tells me that we haven’t come up yet with the ideas that can mobilise private funds in the way that we could. I’m hoping that this continued conversation about Next Philanthropy can cover more ideas that will inspire and organise more folks to give more, and give differently.’

Keidan asked how BDS members in Germany, the biggest foundation sector in Europe, are responding to these questions. Oldenburg replied that whilst generally ‘our members will say that the Association should provide them with the insight into the field… you will lose some of your members because they will feel an implicit criticism in there.’ Oldenburg puts this down to a sense of unease within the field, as things are changing. ‘If you’re leading an organisation that has limited degrees of freedom – and a foundation does have typically limited degrees of freedom – it’s very easy to lead this discussion in a way that will leave some people alienated or even offended.’

Johansson was next to speak, as someone new to the world of institutional philanthropy, and began by explaining that her family felt they had a moral responsibility to redistribute their wealth. They focus on supporting climate and social justice movements. There were three points they had been grappling with over the last eighteen months:

Firstly, ‘we can no longer treat our investments of our endowments as separate from our grantmaking… We can see this in the US, foundations only have to give out 5 per cent of their philanthropic dollars every year, which means 95 per cent of their philanthropic dollars are often being invested in direct opposition with their mission.’ Johansson went on to say that she believes ‘foundations need to grapple with investing in a way that really, truly builds regenerative and democratic economies while ensuring that our investments are providing more value than they extract.’

‘We are at the beginning of the largest intergenerational wealth transfer in history to the tune of 30 trillion dollars, ten times the UK’s GDP. That’s going to be passed from boomers to the next generation and the system of ‘business as usual’, or ‘inheritance as usual’ is totally incompatible with the climate crisis and the economic system that is fuelling it

Next, there needs to be ‘an honest conversation about where the wealth comes from in the first place. Wealth within philanthropy is often created from extractive and harmful industries, and if we’re going to talk about decolonising philanthropy – which is one of the questions here today – then we really have to talk about the harm that the wealth accumulation created in the first place.’ Citing decolonisation movements in the US, ‘the movement has been calling for us as foundations to think about what it means to have a reparations lens in our philanthropy. How can we repair the damage and harm that’s been done, and truly create balance?’

Johansson noted that these are not easy questions, and that she does not have the answers, but that looking to social movements allows her to engage with these more deeply. This brought Johansson to her third point – power, ‘a real buzzword in philanthropy these days. It’s good, because we do need to talk about it, but specifically decision-making power on boards of foundations. Most boards are not representative of the communities that they’re serving, and they’re definitely not representative of the communities where wealth is being extracted from.’ Referencing commissioned research from ACF on the UK foundation space, detailing that 99 per cent of boards are white, two thirds are men and only 3 per cent are below the age of 45, Johansson believes that dealing with these issues will help tackle philanthropy winning back public support. ‘In order to sustain impact in the long term, impacted communities need to own and decide and shape and lead philanthropy. Our current top-down approaches aren’t working, and they don’t look like these communities.’

Keidan asked Johansson how far these radical critiques of philanthropy structure are shared with her peers. Johansson named Resource Generation and Resource Justice, who work on the political and peer education of young people with wealth and class privilege who are interested in redistributing wealth, land and power in an equitable way. ‘We are at the beginning of the largest intergenerational wealth transfer in history to the tune of 30 trillion dollars, ten times the UK’s GDP. That’s going to be passed from boomers to the next generation and the system of ‘business as usual’, or ‘inheritance as usual’ is totally incompatible with the climate crisis and the economic system that is fuelling it. Young people are going to have to engage with this in a way that is transformative, and philanthropy will have to transform to be more accountable in addressing the root causes that created these issues in the first place.’

Hernandez was next to speak. For WINGS, ‘what is key is that the reflections are all inter-connected with different topics, like the ones the speakers have already addressed.’ As a network, facing challenges in the future can be ameliorated by ‘being able to communicate what we do, why we’re important, and in the same way how we can think about the collective intent that we are creating around the world.’ At the same time, ‘emerging technologies like blockchain and artificial intelligence are – and will – change the field.’ In Brazil, ‘there are many technological solutions that are emerging to help people give better, to give faster and to avoid the fear of giving to traditional institutions – because something that we know… is that new generations are motivated less by institutions and way more by causes.’ Untangling the potential, reflecting on what has been useful so far from philanthropy as we know it, whilst promoting new practices, is of the utmost importance.

Keidan questioned if there is a tension between both shifting practices and promoting giving, and whether this might be questioning the practices of giving themselves. Hernandez replied that the two are not opposed. ‘Practices of giving that have been around for a very, very long time. However, there is enough room and potential to grow different paths at the same time – not quitting the traditional models, but absolutely boosting new opportunities for both individual giving and institutional philanthropy. ‘For instance, community philanthropy is key in this conversation… exploring new ways to grow from the bottom up and to deal with more participatory approaches.’

Peleman spoke last, speaking on both his experiences within Asian and venture philanthropy. He admitted he was ‘thrown’ by what Johansson had said, stating her opening remarks were strong and powerful. Keidan asked him if AVPN members would agree with it.

‘As a general principle, no. I think there are those who would agree and quite a few who don’t agree, and I think that’s fine, that’s what diversity is about. But there should definitely be more of what Kristina stands for.’ Venture philanthropy and trends in Asia are leaning more towards what Peleman called the ‘professionalisation’ of philanthropy: ‘more processes and better governance… the scaling up of individual philanthropy. It’s not about global systems change.’ Peleman acknowledged the issue of him as a white man over the age of 45, talking about Asia. ‘How colonising can you be? But Asia’s obviously not one market. There is Japan, Bangladesh and everything in between. It’s very diverse… you could say that most countries still have huge needs, but there’s also huge capital and wealth accumulation. Institutional philanthropy is building up there.

‘I think they have a long tradition of more community work, for example in the Philippines and Indonesia. Muslim culture also has a lot of generosity. But what you see is that through professionalisation, they are going more for processes and structures and impact measurement. I think in Europe it’s still the same. But definitely in Asia, they’re still in another phase.’

Keidan then brought in the audience to ask questions. The first was from Elle Montoya at the University of Oxford, who questioned why Johansson’s statements were perceived as so ‘radical’ by the sector. Oldenburg responded that perhaps it shouldn’t be, but that this perspective does question the root of understanding for many existing players in the field. ‘Some of these views are beginning to be shared, like the responsibility to invest endowments in responsible ways – that is becoming mainstream.’ Oldenburg continued that it is critical for institutional philanthropy everywhere to have a response to this question – ‘that is just going to be the type of scrutiny in an age of transparency and global sustainability awareness that will be asked, and foundations that don’t have an answer to that will be left behind and will have their transparency questioned.’

However, Oldenburg also conceded that the view that philanthropy is only legitimate if it gives back to communities that it has extracted from ‘is not a view that I would say is shared by the majority in our field, and we can debate it. We can also formulate the point of view that philanthropy is not itself illegitimate but is a very positive and powerful force for entrepreneurship and creativity, and that inequality can serve a purpose in our society. These are different theories for change.’

Rolf Alter, from Berlin’s Maecenata Foundation, made an observation that philanthropy, ‘like any other public institution today, it is suffering from a lack of trust.’ However, whilst the message is often that trust in philanthropy needs to be built, for Alter, it needs to be earned. ‘It’s completely different.’

Bonnie Chiu from The Social Investment Consultancy, spoke as a member of AVPN and a national from Hong Kong. Chiu noted that whilst AVPN used to feel very much like an Asian network, she and her peers now notice many more white speakers at the AVPN conference. It seems a reflection of the global majority of wealth and power owned by white people. ‘I was born under British colonial times, and colonisation needs to be looked at. But there’s not the vocabulary, not the courage to be speaking about it, because a lot of organisations depend on foreign donations. It’s important that we have people like Kristina to encourage those debates.’

Decision-makers are on the board, and that’s where I think we need to be focusing some energy. You’re paving the way for other amazing people whose voices haven’t been heard, and have the solutions, and are from those impacted communities.’

Heather Salmon from the Esmée Fairbairn Foundation, noted that the majority of the audience attending this Next Philanthropy event were white. Salmon asked the panel their thoughts on ‘how to empower white people to share their privilege so that the world works better for everyone’ and that drives them to see sharing this as an obligation, rather than something to do if they feel like it.

Johansson responded that people of colour have been engaging white people in conversations about race for a really long time, and that it has been a huge burden for communities to take that responsibility. ‘As white people, we have a responsibility to constantly be challenging ourselves in the way that institutional and systemic racism operates around us… It’s really tricky, and it’s messy, but I think if it comes from a place of love and collective liberation, and that our liberation is bound.

‘I specifically spoke about boards, because that’s ultimately where a lot of the decision-making is. Decision-makers are on the board, and that’s where I think we need to be focusing some energy. You’re paving the way for other amazing people whose voices haven’t been heard, and have the solutions, and are from those impacted communities.’

Johansson then continued on from Alter’s point about trust. ‘It’s absolutely impossible to trust these philanthropic institutions if there’s no requirement to share where your funding goes.’ Johansson then referenced Fran Perrin, who was in the audience, and her 360Giving project. ‘It’s a place where foundations can share their data about where they’re giving grants, and I think it should be a requirement, and I think many other people do, too. We should look to other ways that we can encourage foundations and make it a rule.’

Hernandez stated that data is important to untap the potential of collective impact. ‘We need more commitment inside the field to make sure that we are all walking in that direction and that we are producing data, that the data is available, and that the data is connected with reality.’

Regarding diversity, ‘I can relate to this as a non-white person. We need to recognise that different practices have been existing already for a very long time in Africa, in Latin America that are philanthropy, and probably haven’t been regarded as ‘philanthropy’ until now.’ Citing the US, Hernandez continued that there is a ‘view that African Americans are new, emerging donors and it’s not true, because if you go to the data you can see that in the last decade they have contributed the largest amount in per cent of their wealth, and they have been participating for hundreds of years. It’s more about what we’re calling philanthropy, and how we can really recognise these practices and make the topic wide enough… and that we’re not just narrowing the scope of what philanthropy is, and giving all the power to certain actors and practices.’

‘You would never make financial investments with as little information as we make grant decisions. We can barely measure the outputs, let alone the outcomes, so we should do it for our own benefit.’

Peleman agreed with Chiu’s comment that there is an overrepresentation of white people at the AVPN conference. He noted that funders investing in building philanthropic infrastructure in Asia are mostly American and European foundations. ‘Asian foundations, they’re active in the Philippines, Bangladesh and India, there are enough needs there to focus on. They are not interested in funding a pan-Asian philanthropic infrastructure. There’s definitely a power imbalance there, and we can only appeal to the Asian philanthropists to take their responsibility in building a philanthropic infrastructure in Asia. That’s not easy either, and if the Americans and Europeans didn’t do it there would be nobody doing it. It’s all very complex.’

Fran Perrin, founder of The Indigo Trust and 360Giving, spoke from the audience to reiterate transparency. Whilst there are cases around human rights organisations and domestic violence shelters where there should be limitations on what data should be published, they are the exceptions. ‘My worry is that becomes a blanket excuse. ..If we’re building trust in philanthropy, we have to be transparent, because otherwise we can’t ever expect anyone to trust us. Why should they?’ Perrin also added that transparency is not just important because it’s right, but also because it helps efficiency. ‘You would never make financial investments with as little information as we make grant decisions. We can barely measure the outputs, let alone the outcomes, so we should do it for our own benefit.’

Oldenburg then spoke to note that ‘what we are witnessing in this room is what we are witnessing over the past few years – the sands are shifting beneath our feet. You’ve got more and more peers that are asking uncomfortable questions, and so peer expectations are changing, community by community.’ These changes aren’t happening simultaneously, but the expectation toward philanthropy is very different to what it was ten, fifteen years ago. ‘It’s no longer ‘Give me your money and I’ll be grateful and won’t ask any questions’, but instead ‘Before I even ask for your money, you have to explain where it comes from, how you have earned it, how you are spending it and who else you’re giving it to’. That is a very different conversation, and frankly not a conversation every grantee can afford to have.’ Oldenburg emphasised the need for bridge building, to help as many as possible.

One of the most complicated bridges, he said, is for people of colour. ‘The very discourse around philanthropy has been shaped by white people. Philanthropy is what defines the activity of the philanthropy of white people, it has always excluded from its lens other indigenous forms of giving.

If we want to reach the Sustainable Development Goals and solve social and environmental problems at scale, we will need to tap into the massive wealth that’s being transferred over the next decade or two. We’re not going to do that unless we come up with more compelling institutional arrangements than we are doing right now.’

Keidan told the panel that one of the new challenges increasingly mentioned is the reality of climate change, and asked what will fall on foundations around this area.

Johansson responded that from her family’s perspective, ‘our best hope to engage with the climate crisis is to build power from below.’ Solutions are available, but political will is not. It is important to look to Indigenous communities around responsible land stewardship, and to build power with social movements.

Following on from Johansson’s Indigenous comment, Keidan asked Hernandez if Brazil had played an impactful role for communities whose lives and livelihoods are threatened in the Amazon. Hernandez replied that this was the case from community foundations and community funds, but that institutional philanthropy has had a lot of challenges. ‘There are other political issues that are preventing philanthropy from fulfilling its potential… we are facing against public ideas that are fighting these communities.’

Keidan asked Peleman if venture philanthropy is addressing climate issues. He responded that there is a lot of merit for venture philanthropy in combining ‘different financial instruments – not only grants, which remain critical, but impact investing and hybrid solutions’. Venture philanthropists will also be able to quickly discover and innovations and scale them, but Peleman added that he wouldn’t ‘look to venture philanthropy for the more political, policy and systems change components.’

With this event taking place in the UK, Keidan asked the panel for their perceptions around British philanthropy, and its current role on the international stage. Oldenburg’s answer was a combined perspective of Anglo-American philanthropy. From Jeff Bezos to Mark Zuckerberg, we are ‘at a stage where we are very close to a cynical view of mega-philanthropy that is going to discredit a lot of other philanthropy, and that is going to make it hard to look beyond those big stories to the diversity, the pluralism, the wealth, the honesty, of global philanthropy.’

Amy McGoldrick is the Marketing, Advertising & Events Manager at Alliance magazine.

To watch the full recording of the panel debate, click below.


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