Context - Challenging the nature of philanthropy globally

Pre-pandemic, there was already a lot of discussion about the nature of philanthropy globally,  the challenges it was facing and the options for future development. While recipients and applicants had long vocalised the way in which philanthropic decisions affected communities and civil society, the publication of three substantive books in the US in 2018/9 (Villanueva, Giridharadas and Reich) had provided a focus for much of this discontent and challenge.

In very simple terms philanthropy was criticised for: 

• Entrenching the power of the very rich

• Providing an alternative to democratic decision making

• Entrenching racial injustice. 

And in other ways there were rumblings of challenge, occasionally publicly expressed about: 

• Imposing an unacceptable burden of the transaction costs on applicants and beneficiaries 

• Making arbitrary and unaccountable decisions 

• Demanding a template for governance and leadership that was not appropriate for complex times.

Immediate response

The global pandemic both accelerated change and focused attention in many areas. There were several well documented, quick responses from the holders of philanthropic funds. They: 

• Removed barriers to their funding and distributed grants rapidly 

• Collaborated with other funders to ensure that they maximised impact 

• Were proactive in approaching funded organisations and offering help 

• Simplified terms and conditions and other bureaucratic barriers. 

For many, these were short term responses and the global scan has noted that those with recent experience of dealing with emergency and crisis were able most quickly to adapt.

New dilemmas and increasing divisions

As the pandemic continues and the immediate crisis is replaced by continuing economic, political and social crisis, there is a new set of dilemmas for philanthropic organisations. The pandemic has exposed gross inequality, in and between countries, and has focused attention on divisions that are too often masked or dismissed. For example,, the anger and frustration  represented through Black Lives Matter during the Summer of 2020 was also powered by the sense of extreme inequality in experience of the pandemic, as well as the deep seated, long recognised inequalities. 

These inequalities and the overall emergency of the situation is still very much with us, but we found that who you are before a crisis is often what you do in a crisis, so different types of responses from crisis response, to maintaining and enabling operations to recovery and renewal, need interrogation. The response can be explained in three ways:

• Crisis response – emergency help, stabilising and prevention of loss 

• Maintenance – enabling organisations and groups to operate through the long, and multi-layered period of health, social, economic and political crisis  

• Recovery and renewal – planning for a new and different future. 

As the pandemic continues, it has become increasingly clear that the division into the above phases is not linear or neat. Plus, any pathway analysis will tell us that what is done in each phase will profoundly affect what happens next and there are already examples of how this is particularly true of this long drawn out and challenging crisis.

Issues revealed by the crisis – sending signals for philanthropy

There is a need for funding informed by racial justice. We need dedicated funds to actively redress the imbalance in the current system, and the deep divisions in funding prospects between black led voluntary organisations and others. There is a clear and well founded anger about the disparity in funding experienced by the black led voluntary sector.

Volatility and rapid change are now expected. With such rapid change, we also need and the charitable sector/ not for profit environment needs different sorts of funding to enable it to respond quickly and effectively.

Mutual aid, social solidarity can not be sustained without external assistance. Much of the rapid response to the immediacy of the crisis came from informal organisations and local networks. All the evidence is that this will not be sustained without some external assistance. This will require new infrastructure.

Extreme fragility of so many organisations, including the most established ones. Many charities have adopted business models based on a blend of trading, fundraising, and hosting events, which have forced many into extremely vulnerable positions. The result is a serious loss of capacity across the civil society sector. It is likely that this vulnerability will be shown further in the next year, as public spending restrictions affect those charitable bodies dependent upon public expenditure.

Changes happening in philanthropy during the crisis – hearing signals

There is evidence of greater collaboration between funders e.g. experience of Aotearoa New Zealand. There are huge advantages to this kind of collaboration but in some cases, it may risk pace, and potentially risk ‘group think’ and weaken radical and risk taking behaviour.

Closer working with governments which may enable greater impact but surfaces issues around independence and trust, especially if trust in government is weakened. For example the Malaysian Coordination and Action Hub (Match) was established as the first national level coordination hub in Malaysia aimed at streamlining humanitarian aid delivery.

There is more discussion about funding individuals, teams or smaller newer groups without long track records, rather than just supporting established organisations who are good at giving out grants. This is an important move towards recognising the importance of leadership and investment in it but it runs the risk of funders reverting to the sponsorship of heroic leaders only, rather than investment in deep connections into communities.

There is more investment in diversity and inclusion, and some specific programme new funds dedicated to this. Establishing any new separate fund or programme risks failing to bend and shape the main programme, but it is important in the medium term.