Future of Philanthropy : How will we do Charity in the Future
ARTICLES | Sep 15, 2022
Writer: Nuttawut Kulkaew
Editor: Wittaya Wonglor
Giving to charity feels good, according to the image of the social group (Stereotype Content Model: SCM)
Donors feel happy to positively impact society. Charities receive donations for issues like disease (39%), hunger (38%), and healthcare (33%). There are 4 key trends in philanthropy:
1. Technology for Transparency and Convenience
Financial technology, blockchain, and digital assets make it possible to donate from all over the world without having to deal with different currencies or border transactions. A convenient, efficient, traceable, and trustable financial transaction system affects charitable donations. Nearly half (41%) of global donors expect and will donate to an organization that demonstrates tangible results. 27% said technological advances and user-centric financial tools affect the decision to donate. 18% believe financial planning strategies can help individuals make more informed donation decisions, such as having donor-advised funds.
Scheduling payment cycles, or subscription models, may also encourage charitable donations. One side is facilitating donors to systematically allocate part of their funds to charity without interfering with other funds. On the other hand, it also helps guarantee charities' income so they can plan their finances effectively.
2. Democratization of Giving
In addition to monitoring and tracking the financial path of the donation budget, future consumers also expect donor engagement and inclusion, giving all donors the right to manage their donations, e.g., through decision-making. The charitable organization should also have no minimum donation amount limit to enable non-high-income individuals to contribute to the issues they want to drive with the organizations they believe in.
3. Generation Differences: Boomers for What They Believe, Gen Y to Make a Change, and Gen Z Waiting to See
In the future, generation differences will increasingly influence charitable donation. 43% of Baby Boomers in retirement regularly contribute about $2,000 yearly to support their interests with an organization they trust. Generation Y, working-age people, donate $1,000 a year without any specific organization, more spontaneously. But they focus on testing that donations make a difference. At the same time, Generation Z's direction of charitable donations is not so prominent with financial limitations and freedoms. Nevertheless, the survey found that 58% of Generation Z people already working are willing to donate when they have the opportunity, such as issues discussed at work. The most income charity through the TikTok application also comes from Gen Z.
4. Religious Organizations and Advocacy for Sustainability and Climate Solutions
Trust in and donations to religious organizations are declining. According to the survey, 39% of donors in 2021 choose to donate to a non-profit organization - especially to organizations that play a role in driving political issues. 36% chose to donate to government-private partnership organizations, 33% to individuals or groups, while 32% chose to donate to religious organizations. According to the survey, corporate branding affects 59% and is the number 1 topic that drives people to decide whether to donate to an organization.
To adapt to the current and future social conditions, many religious organizations have chosen to bring up issues related to the world situation and support them in an allied direction with the most current, for example, climate change. As can be seen, between 2019 and 2020, global charitable donations rose by 14% when religious organizations spoke about global unrest and immigration due to environmental issues. In addition, due to the character of religious organizations, big ones, especially those that initially had an effective money management system, make the circulation of money flows and accepting donations more convenient.
Implications for the future:
- Building partnerships and collaborations between organizations across sectors will play an increasingly important role in creating social change, especially on global issues such as food security, gender equality, and climate issues.
- Strategic treasury management within a department or organization for philanthropy is a field that needs to be given more spotlight. The field extends donors' money to revolve, raise funds, invest, or grow a business to use the profits received to support, promote, and solve problems that organizations and donors focus on instead of using money from direct donations.
- On top of donations, practical charities are a viable approach at individual and corporate levels. This will result in corporate social responsibility (CSR) activities such as supermarkets donating fresh and cooked food leftovers from daily sales to create a circular economy in a community.
- Both low- and high-income consumers place greater emphasis on ethical consumers by choosing to consume or support products that align with their values, such as not buying clothing from brands that oppress workers or not buying food from brands that support unjust authority networks.
Reference:
- https://www.thefutureofphilanthropy.org/pdf/full/Future%20of%20Philanthropy.pdf
- https://www.quantumrun.com/list/charity-and-philanthropy-trends/3225/19
- https://connectassist.co.uk/blog/7-charity-predictions-for-2022-the-future-of-philanthropy/
- https://www.coindesk.com/layer2/2022/05/24/how-web-3-changes-philanthropy/
- https://www.norfolkfoundation.com/what-we-ve-been-up-to/trends-in-philanthropy/
- https://www.uc.edu/news/articles/2022/02/is-cryptocurrency-the-future-of-philanthropy.html
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