Grantmaking Predictions for 2019

As 2018 comes to a close, I feel fairly confident that there are some trends gaining momentum that should be noted by those of you trying to secure funding in 2019 and into 2020.

Obviously, I don’t have a crystal ball but I do have something almost as good – my staff.

Our researchers are entrenched in the day-to-day changes happening in the world of philanthropy – particularly grantmakers – so I turned to them and asked for their insights on the direction grantmaking may take in 2019.

Let’s look at their responses, as well as my own thoughts, and see what trends might influence your grantseeking this coming year.

• There is clearly an increase in connecting a cause or social issue to a product. Now this is not really new, NIKE, LEGO, Ben and Jerry’s, and other businesses have been doing this for years, but more and more corporations are engaging in this approach to marketing. I think this trend will greatly increase in 2019 and into 2020. The consumer will demand that their purchases make a social statement or add to the social good in some way. If your mission aligns with some of these companies, then working in tandem with them to reach your audience could propel your grant request over the top. 

• We continue to see social movements spring up, gain momentum, and then slowly fade into the background. I predict this will not happen with the #MeToo Movement, as it continues to gain both momentum and the support of numerous funders who are looking at the issue from many different facets such as sex education in the schools.  

• Money managers are among those businesses interested in supporting social and environmental causes. Today there is “$12 trillion in money being managed in the U.S. with an eye to Environmental, Social and Governance (ESG) criteria,” according to the Report on U.S.  Sustainable, Responsible, and Impact Investing Trends (2018) by US SIF, a nonprofit hub for sustainable investing. I predict, despite the fact that we are inching toward a recession, that this trend will continue.

• As current government policies are fueling the volatility of the stock market and investment portfolios, I can see funders becoming more cautious. This could result in the size of awards staying about the same, or even decreasing.

• The current trend toward nationalism, isolationism, and the reduction of programs for the poor will continue. If the decrease in federal programs for healthcare funding, food programs, etc. continues, many organizations will be forced to look to both regional and state government and private foundations to meet these needs. I foresee much greater competition for limited funds.

• Funding collaborative efforts will continue to grow in importance. Although the Spring 2018 State of Grantseeking data shows that medium and small nonprofits have few resources for participation in collaborative grantseeking, they may find they have no choice but to combine with other NPOs to show a greater scope of reach. The good news is there are a growing number of funders interested in funding the development and maintenance of collaborations addressing social or environmental issues such as Hellman Foundation’s Collaborative Change Initiative, which funds both launch and growth efforts around building collaborative efforts.    

• Another type of collaborative effort that will start to receive funding in 2019 will be projects that focus on building integrated data systems. There was an intriguing report published in February 2018, called “Collaborating for Greater Impact: Building an Integrated Data Ecosystem” that notes this important new trend in the area of collaborations. This study, published by the Mowat Centre in Ontario, focuses on “a wealth of data on a wide range of issues - everything from environmental sustainability to homelessness and poverty reduction” and how that data can be used in tandem with government agencies to address these issues.
   
• On the grantmaking strategy front, we’ve noticed that more funders are either going the invitation only route or developing long-term relationships with organizations and putting a substantial amount of their money towards these partnerships. This approach reflects the importance funders put on showing results for their investments.

• The role of local and regional funders will increase dramatically. We will see an upturn in the number of in-kind gifts of products and services, as well as cash, being donated via local businesses and associations.

• Participatory grantmaking will gain momentum throughout 2019, and I predict will truly take off in 2020. Participatory grantmaking covers a range of activities, but simply defined it is a philanthropic approach that engages constituencies in the grantmaking process. Acceptable practices around this concept are still being tested but it is a new way of awarding grants that you want to keep tabs on. Deciding Together: Shifting Power and Resources Through Participatory Grantmaking, published by GrantCraft this past October, features insight from a variety of participatory grantmakers and shares the benefits, challenges, and strategies for engaging in this practice. It is a good read for those of us trying to understand this new approach to grantmaking.

• The list of “mega givers” will continue to grow. Many of these efforts, such as the Zuckerberg Initiative, the Ballmer Group, Good Ventures, and Bloomberg Philanthropies, are already on your radar screen. Although I believe there will be a bit of a slow-down in this area of philanthropy, I do think we will see a few more mega givers pop up in 2019. I also think that there will be an increase in collaborative efforts via mega givers, and that could be a very interesting development this coming year.

• Corporate funders will want to see deeper employee involvement as a condition of giving money. A new aspect of this somewhat traditional idea is the employee actually making recommendations regarding funding of a nonprofit to the corporate offices or the corporate foundation.

Issues That Will Attract Funding

• One of my predictions is that with the United Nation's report on the progression of climate change, many grantmakers will introduce new funding programs to help attack this issue head on. I also believe that many grantmakers will be looking closely at requests - whether they address health, community and economic development, the arts, education, etc. - to see if the work proposed is being done in an environmentally friendly way.
   
• More and more grantmakers will want to see requests associated with the United Nation’s 2030 Sustainability Goals. Whether you’re a small, local nonprofit or a large, international NGO, grantmakers are eager to support those goals. Any of you working in the area of poverty will find a number of grantmakers invested in addressing your mission. Each country participating in this UN initiative has begun mobilizing resources, including financing, to help achieve these goals. I predict a push by governments (regional and national) and the private sector (foundations, corporations, and faith-based grantmakers) to dedicate some of their annual funding toward achieving the number one goal of eliminating poverty.
   
• At the federal, and perhaps the state, level expect to see requests for proposals issued for funding efforts to combat opiate substance use and addiction.
   
• Diversity data is definitely a growing trend. The idea is that granting is more effective when those doing the giving can engage on a familiar basis with those receiving the funds, ethnically, gender-wise, etc. To that end there is at least one oversight group that now asks funders to reveal the make-up of their staffs and boards. It seems that diversity as it relates to perceived credibility might be more important in 2019 and going forward.
   
• More and more grantmakers will dedicate some of their funding to issues surrounding the media. An example of this is the Media Democracy Fund, which supports media and technology policy organizations working to advance the public interest and human rights in the digital age. Engaging new and underrepresented constituencies in policy debates and coordinating the strategies of existing groups and efforts are given particular emphasis.
   
• There are a number of funders who are addressing social justice issues, with emphasis on immigrant and refugee issues. The Pop Culture Collaborative is an interesting new example representing an innovative hub for high impact partnerships designed to help organizations leverage the power of pop culture for social justice goals. The Collaborative believes that we all have an opportunity, and responsibility, to create and popularize authentic, just narratives of people of color, immigrants, refugees, and Muslims that tell a new story of America’s future and how we all belong in it.
   
• LGBT issues are attracting more and more funders, specifically around transgender issues. The Groundswell Fund supports a stronger, more effective U.S. movement for reproductive justice by mobilizing new funding and capacity building resources to grassroots organizing and policy change efforts led by low-income women, women of color, and transgender people.
   
• It is becoming more and more apparent that grantmakers need to support the general operating expenses of nonprofit organizations, and not just special projects or new programs. The basic idea is to strengthen organizations so they can have greater impact. According to “Why the New Mega Givers are Big Believers in General Support,” written by David Callahan and published in Inside Philanthropy, “Michael Bloomberg has given more than $80 million to the Sierra Club to finance its Beyond Coal campaign. Julian Robertson has given more than $6o million to the Environmental Defense Fund to scale up that group.” This list goes on, but you get the idea here: general operating is no longer a bad word.

Poised for a Recession?

One of our lead researchers, Kevin Peters, shared this insight with me regarding a possible recession. I wanted to share his thoughts with you because I think what he has to say is very important.

Many economic observers feel like we're on the edge of a downturn. (If not in 2019, then soon thereafter.) These things tend to be cyclical, and we've been riding a high for a while. Combined with some less than stable policymaking, we may be looking at another recession or economic collapse in the very near future. In an economic downturn, we'll also be dealing with lower tax revenues and a rapidly increasing deficit, affecting our country's ability to cope with a diminished economy. That begs the question: how will the philanthropic sector respond?

Will donors increase their donations in the wake of a downturn, or will they hold the money close? Demand will increase for nonprofit services, pushing some organizations to capacity. Will other organizations form to deal with the overload? Or will there not be enough funding and resources to get new efforts off the ground?

Requests to foundations will increase. How many funders will close their previously open funding cycles due to overwhelming workload, and stick with invite-only programs? I think it will get even more difficult than it is now for young organizations to "get their foot in the door" with funders. 

A lot of the answers may be found by looking backward, to the response to economic crisis at the end of 2007, and how nonprofit organizations responded then and in the ensuing years. 

By looking back at recent history, we can analyze what worked, and learn from what didn't. Heeding George Santayana's warning, “Those who cannot remember the past are condemned to repeat it.”

What to do with all of these Predictions?

There are a number of things you can do to position your organization in order to take advantage of these predictions. In a few weeks, I will be writing a blog specifically addressing these predictions and actions you can take around each one, but for now I’d like to mainly address that last section about a possible recession.
 
If we are truly heading into another recession how do you prepare for it? I want to stress that smart organizations avoid knee-jerk, budget-cutting reactions and actually plan for how they will both survive and grow during these types of events. A recession may not occur but having a Plan B in place is a smart move.

To create a Plan B start by assessing your organizational current strengths and weaknesses, and begin to address those weaknesses now. Invest in tools and resources that help streamline what you do so you can cut costs before there is an urgent need to do so. Start building relationships with grantmakers and strengthening the relationships you currently have, so there is some certainty to receiving private funds even if the worst should happen.

And, in a few weeks, I encourage you to read my post addressing the numerous predictions mentioned in this blog.