Susan Raymond

In the last two decades, the number of tax exempt public charities has increased by 200 percent, now totaling nearly 900,000. Simultaneously, the inflation-adjusted value of private giving has increased to nearly a quarter of a trillion dollars. While three quarters of that giving is still by individuals, annual corporate cash contributions to nonprofits has increased by over 30 percent and giving by foundations has more than tripled.

With all this philan­­thropic gr­ow­th has come at least three challenges, all of which are knocking on the corporate door, as well as at the door of major philanthropists.

First, with growth comes attention. In the period 1970-1975, the combination of the Wall Street Journal, the New York Times, and the Washington Post published just over 850 articles on nonprofits and philanthropy; in 2000-2005, that total was over 16,000. With exposure comes expectation. American society now has great expectations of philanthropy and the nonprofits it supports, expectations actually solving problems and making the world a better place. The public awaits results.

Second, growth has led to complexity and even a redefinition of the meaning of philanthropy itself. Cause-related marketing spending, for example, now totals $1.4 trillion, compared to $13 billion in corporate cash philanthropy. The proliferation of ways in which private funding is reaching the societal commons challenges philanthropists to accommodate innovation in their giving.

Third, growth has led philanthropies, especially corporate giving programs, to seek holistic opportunities for social impact. Involvement of employees, strategies for linking customers to products and then to causes, intersections between U.S. and global operations and social problems, alignment of philanthropy with business interests – the alternatives for philanthropic intersections with corporate interests are now myriad.

Yet, in fact, most businesses are not in the business of philanthropy. Even for most individual philanthropists, philanthropy is not a full-time job. Amidst all the growth and shape-shifting in the sector, how are priorities to be chosen, how are strategies to be developed, how is due diligence to be conducted? For the foreseeable future, every day will have only 24 hours. How are philanthropic decisions to be accommodated?

In the midst of growth and change private firms have been created to provide precisely such counsel to corporations and individuals. Changing Our World and its sister company Archimede Philanthropy Partners, a member company of the Omnicom Group, is one such firm. Changing Our World, and companies like it, shoulders the time-consuming process of planning, and often executing, philanthropic strategies for companies, foundations and individuals. That process includes identifying and defining funder interests, as well as those of relevant constituency groups such as employees or consumers; sorting through giving options and partners to find ones that align with funder interests and setting policies and systems for giving.

This new industry of philanthropic counsel represents both the strategy and business planning staff to companies and philanthropists, as well as, in some cases, the back office that supports giving both in the U.S. and globally.

In a rapidly changing environment, however, no priority today will necessarily hold sway tomorrow.  In his 2000 letter to GE shareholders, Jack Welch remarked that any institution whose external environment is changing faster than it is changing internally is doomed. Similarly, philanthropy – corporate or individual – must constantly measure itself and its priorities against the future. In turn, Changing Our World and similar firms increasingly serve as “futurists” to philanthropy, projecting trends, building scenarios and testing them against philanthropic priorities, identifying and defining new trends on both the societal commons and within philanthropy. This dimension of philanthropic counsel allows philanthropies to adjust their giving portfolios periodically without sinking an often expensive internal investment in continuous strategic planning capacity.

While extremely large foundations often have all of these skills built into their staffs, corporate philanthropies which are an extension of shareholder value, and individual and family philanthropies which value low overhead do not. The new industry of philanthropic counsel brings to corporate and individual giving the depth of knowledge, breadth of perspective, and independence of thinking that contribute both to efficiency and excellence.

These two values – efficiency and excellence – are likely to be the future coin of the philanthropic realm. Media coverage and public awareness of philanthropy – and expectations about what it will accomplish – have and will continue to lead to scrutiny and skepticism. The most effective antidote will be carefully laid plans, efficiently executed with the clearest commitment to effecting change for the betterment of the common good.

Susan Raymond is senior managing director of Changing Our World Inc. She is published on philanthropy topics, including in “Mapping the New World of American Philanthropy.” She can be contacted at sraymond@changingourworld.com.