GivingTuesday reported “…a sharp decline in donor participation in 2022, marking a long-term trend that began in 2012.” This means there is less money available to support the causes that you, I, and others care about most! It is commendable that so many funders feel innate excitement for specific causes and interventions. Everyone should indeed feel excitement and have targeted goals that allow them to witness impactful, gratifying results. However, I urge all of us not to lose sight of the bigger picture. When we fail to also contribute toward fortifying social impact infrastructure – when we fail to unlock critical pools of regenerative resources such as increases in global generosity – all our efforts are compromised.
As another illustration, the number of retiring people with free time increases every year. Conversely, Fortune reports that “formal volunteer participation in America fell to 23.2% between 2019 and 2021 — a 7% decline that is the largest drop the U.S. Census survey has recorded since it began tracking it in 2002.” Most likely, the nonprofits you fund could achieve greater impact by attracting more highly skilled, reliable volunteers. And to take my point further, what about thousands of other nonprofits working on the same cause?
The Infrastructure Crisis in the Nonprofit and Civil Society Sectors
Millions of nonprofits and civil society organizations worldwide are not operating anywhere near their potential. They are encumbered by persistent inefficiencies and duplicative efforts. It should alarm us when thinking that this cycle repeats itself daily, weekly, monthly, and yearly, resulting in an inconceivable, colossal waste of time and resources. Nonprofits on the front lines combating global warming, threats to democracy, childhood hunger, and many forms of injustice are constantly being held back. Most operate with pronounced deficiency in long-term, unrestricted funding— a crucial lifeline for building capacity. Conversely, with adequate resources, they could become powerful and valiant frontline forces in the battle to address the unprecedented challenges we now face.
So, what can you do? Here are two recommendations: 1) Support organizations you believe in with long-term, unrestricted funding. 2) Address the polycrisis by fueling umbrella organizations that support the entire nonprofit and civil society sectors. These organizations directly reach hundreds of thousands of social impact organizations in 236 countries, potentially expanding to millions of them over time.
The Importance of Philanthropy Support Organizations
Why do we need philanthropy support organizations (PSOs)? Many answers could be given, but here are two simple ones: Because the difference in benefits between highly strategic, evidence-based, educated giving and the way most of us do so is vast! Furthermore, the difference between giving that is done in collaboration with others that is well resourced compared to those insufficiently resourced is equally vast.
Massive amounts of ineffective giving continues because only a tiny portion of donors are educated or belong to PSOs. When the vast percentage of giving is not highly strategic, evidence based, or done alongside others, we fail to address the polycrisis we face. Again all our efforts are compromised because the amount of effective giving toward the causes you and I care about most falls far from reaching its potential. Conversely, when people join PSOs they are exposed to field experts, and the knowledge and experiences of their peers. These two factors lead to efficient, effective, ethical and equitable giving behaviors.
Given the impending transfer of trillions of dollars over the next decade, it’s crucial we seize this potential immediately. It is imperative that we equip those rising to positions of influence with knowledge, inspiration, and perspectives that encourage both the generation of resources and the fortification of infrastructure. If we fall short in this mission, we will fail to prepare for the most significant wealth transition in history.
Four Ways Funders Can Address The Infrastructure Crisis
1) Wealthy individuals can initiate independent projects to bring about broad change.
2) Collaborative efforts can undertake independent projects.
3) Donors can support SIIOs that strengthen infrastructure and unlock regenerative resources.
4) Funders can join the newly formed funder-to-funder network. My piece, Imagine the Possibilities covers ten of many approaches and can be found here.
Funders Convene to Discuss Infrastructure and Regenerative Resources Building
On May 17th, 2023, ten funders convened, ranging from those donating as little as $100,000 each year to those contributing hundreds of millions annually. We seek to deeply explore how we can engage in big, broad, bold philanthropy to achieve macro-level results such as by increasing global generosity, volunteerism, participation in PSOs, access to data, social impact investments, social entrepreneurship, participation in social impact-producing platforms, and the performance of the nonprofit and civil society sectors. To be invited, please register here. Please make sure to inform us that you wish to be invited to our funder-to-funder conversations.
Note: The decline in the number of people giving has been somewhat compensated with giving from those with greater wealth. However, a considerable percentage of this giving goes to supporting universities, museums, opera houses and the like.