Home › Blog › On Effective Philanthropy: Donors are Making These Five Shifts
Strategic philanthropy used to be a concept mainly discussed among large foundations. Today, however, individual and family donors are immersing themselves in the art of giving and pushing the envelope of philanthropy to make a difference in our local community and around the world.
This was the topic at a recent convening, where I joined panelists and audience members to discuss the many ways donors are engaging in strategic philanthropy to make their giving even more effective. We agreed that though this is a time of immense need, it is also a time of immense know-how. There are winning approaches that donors can embrace to expand their impact.
Here are five practical shifts donors are testing today:
Many donors begin their giving journey by supporting organizations and issues that they care about, but our dollars go farther when we focus on the systems that impact conditions in our community. Donors can ask: What is the change I want to help bring about? Which groups of organizations are working thoughtfully toward changing those conditions?
For example, instead of funding meals through an organization like a local food bank, donors are also looking at how to tackle the root causes of food insecurity and providing funding to groups that are focused on solving those bigger social challenges.
Nonprofits often face instability from year to year, never knowing if key funding will return. When donors shift from one-time or annual support to multi-year commitments (one of the goals many committed to through last year’s DAF Partner Agency Matching Program!), they give nonprofits the runway they need to plan and execute the strategies that work. Long-term partnership tells nonprofit leaders: We’re in this with you. We want to see what’s possible when you don’t have to start from scratch each year.
Restricted gifts can meet important programmatic needs. But when every dollar is tied to a specific line item, organizations are left scrambling to cover salaries, rent, or infrastructure—the very things that make mission delivery possible. Like multiyear gifts, unrestricted gifts say: We trust your leadership. We want to invest in your capacity.
Donors have found that the more they listen to their partners and understand the needs of an organization, the more effective their gifts become. Some donors are experimenting with setting aside a portion of their giving for unrestricted grants, allowing the organization’s leaders to decide how best to deploy them in service of their mission.
No donor will be in deep relationship with every organization or initiative they fund. However, when trying to solve a problem or seed change over the long-term, donors will find it both helpful and rewarding to invest in a few core relationships. That means spending extra time to listen to, support, and offer expertise and thought partnership to the leaders and organizations doing the work that inspires them most. As Liz Dunst, founder of the Shards of Light Foundation, shared with us, “To make change you have to be present and in an ongoing relationship with one’s community and with the populations you are working with.” Liz is one of a growing number of donors who are prioritizing relationship-building as a pathway to change.
Beyond financial gifts, donors can help by lending organizations introductions, expertise, and access to their networks. Many donors are also seeing how fruitful it can be to introduce their kids to the organizations they support so that the next generation can continue a family legacy of giving and establish their own working relationship with nonprofits. Strategic shifts take time and practice to develop, but donors today are uniquely positioned to be intentional with what they support, how they support it, and how they show up.
You can align your giving with the outcomes you hope to see. And we can help! If you have questions about how to evolve your giving or would like philanthropic advisement, please reach out to us at foundation@shalomdc.org.
READ MORE: Revisit our five tips for making your gifts go further in times of need.