Sean Parker's recent call to transform philanthropy in The Wall Street Journal has rightly drawn a lot of attention. There is great opportunity and need to accelerate giving beyond the 2 percent of gross domestic product it has maintained for generations, and to focus on solutions rather than treating symptoms.
What Parker calls "hacker philanthropy" is a noble and well-intentioned call to action. However, what was most striking was that I'm already seeing donors adopting many of the behaviors and actions he calls for.
From tech billionaires, to hedge fund managers, to corporate social responsibility teams, to mid-level direct mail donors, I am seeing massive change in how and why people give.
Funders are turning their backs on the transactional nature as donors and acting in more sophisticated and strategic ways as philanthropists. They are narrowing the causes they support, donating more to those causes, and doing so with a level of engagement we once saw from only a select few.
As fundraisers, we ignore these behavioral changes at our own peril. We must understand these changes and tailor our approaches accordingly.
Transformational investment requires transformational ideas
More than ever, an organization's theory of change is proving to be a catalyst for significant philanthropic investment. Brand recognition may get you initial attention, but to maintain that attention, you must be able to clearly articulate how your work will accomplish your mission.
You must also be able to prove it is being accomplished via qualitative and quantitative methods. Today's strategic philanthropists not only want to change the world, they want to be able to measure their incremental progress as they do so.
People give to people
Much of today's strategic philanthropy mirrors behaviors philanthropists first learned making for-profit investments. Investors fall in love with ideas, but they fund people. Yes, the idea is important, but so is the messenger.
Strategic philanthropists are identifying social-sector leaders and investing in them. They want to know the CEO and the program staff, and be comfortable in how they will put the funds they invest to work.
Fundraising has always been a team sport, but today, philanthropists want to know all the players and know that they not only play their position well, but appreciate and can relate to the position being played by the philanthropists. Organizational leadership has to live and exhibit a culture of philanthropy, and engage investors authentically.
Strategic philanthropists want a seat at the table
In another behavior borrowed from for-profit investing, strategic philanthropists expect to engage and participate beyond a photo-op with a giant check. Much like private equity or venture-capital investors, strategic philanthropists expect to be trusted advisors to the nonprofits they fund.
Whether as formal board members, involvement in the selection of board members, or unofficially part of a "kitchen cabinet," they expect access and they expect to be heard. Today's strategic philanthropists have enormous intellectual and financial capital to invest.
While they expect you to be open to their ideas, it is also important to be mindful that you are the expert in your chosen field. You should always be accepting of input, but also be willing to engage and push back when necessary if an idea would result in mission creep or divert resources from other mission-critical needs.
Strategic funding doesn't equal restricted funding
With all this talk of investing, seats at tables and strategic approaches, it is easy to believe these dollars come with restricted strings. While we still frequently see first-time large gifts to organizations that are restricted to specific purposes, we are also seeing far more large unrestricted gifts.
When approaching philanthropy with clear and strategic goals and investing specifically in organizations where they trust leadership and have a seat at the table, philanthropists are more likely to provide unrestricted gifts that allow the board and professional leadership of organizations to do their work smartly.
Fundraising is still more art than science, but…
It isn’t paint by numbers. Sophisticated funders expect to interact with staff at all levels that share their sophistication. While they are narrowing the organizations they support, they are more likely to have engaged with fundraising staff typically from their colleges and universities who have set a high bar of donor concierge services for us all to meet.
As the CompassPoint report "UnderDeveloped" highlighted and as we've all experienced, there are fewer talented fundraisers than there is need. As strategic philanthropy takes hold that need will only become more acute as we rush to keep up with more sophisticated partners.
Sean Parker is right to call for a shift in philanthropy. The exciting thing is I think he is giving voice to an unorganized and organic shift that is already underway. Change can be scary for nonprofits, and bigger checks with more questions can be daunting.
Moving forward with strategic philanthropists at your side rather than major donors promises to accelerate impact and forge meaningful relationships that will benefit our missions, our organizations, and our own lives as not just fundraisers, but as people who happen to be fundraisers.
