Presented by Tim Brodhead, Senior SiG Fellow via webinar on January 11, 2012. More resources at: http://sigeneration.ca/TrendsinPhilanthropy_000.html

1. NEW TRENDS IN
PHILANTHROPY FOR
GRANT-SEEKERS
FROM A SOCIAL
INNOVATION
PERSPECTIVE
Webinar presented by: Tim Brodhead

2. EVOLUTION OF “PHILANTHROPY”
1.0 CHARITY 2.0 PHILANTHROPY 3.0 “GOOD CITIZENSHIP”
Purpose Alleviate Suffering Problem-Solving Effect change
(responsive) (analytic) (strategic)
Create Public Value
Motivation virtue generosity engagement
compassion altruism contributing to one’s community

3. SOURCES OF FUNDING
Governments 40%
Corporate 3%
Foundation 5%
Individual 25%
Earned revenue 20%

4. SOURCES OF FUNDING DIFFER
ACCORDING TO TYPE OF CHARITY
From “Not Letting a Crisis Go to Waste” (pg.19)

5. NEW CONTEXT FOR VOLUNTARY
SECTOR / NOT FOR PROFIT ACTIVITY
o Slow growth economy
o Aging population, inadequate provision for pensions
o More competitive environment
o New attitudes / expectations among donors
o Stagnating donor base
o Changed terms for federal Gs & Cs: performance-
based, leverage private funding, more ‘accountability’
o Many provinces dealing with deficits

6. EVOLVING
MOTIVATIONS / EXPECTATIONS
Old New Social Innovation
Government ‘contracting out’ / project-based pay-for performance
delivery of public accountability Leverage private Funds
services (core and social impact bonds
for results
program costs)
strategic ‘shared value’ – social
Corporate PR linked to and economic returns
‘’giving back”
corporate
CSR
Objectives
Individual charity cause-based direct, by-passing
organizational loyalty Intermediaries
Episodic
Foundations legacy, perpetuity, hands-on impact-mobilizing
project funding all assets
strategic
responsive collaborative
venture
‘funding plus’
philanthropy

7. TRENDS IN GRANTING FROM A
SOCIAL INNOVATION PERSPECTIVE
o Social Innovation: any product, process, design
, program or initiative that profoundly changes
the defining routines and laws, resource and
authority flows, cultural beliefs and practices of a
given social system. Social innovations transform
intractable problem domains.
- Slide referenced from Dr. Frances Westley

8. Social Innovation Spectrum – Canada
Local Impact System-Wide
Social innovations grouped along the spectrum
- Slide referenced from Tim Draimin

9. NEW FUNDING MODELS
FUNDING FINANCING
Problem Problem
Solution Solution
Funding (grants) Business model (for-profit,
n-f-p, charity)
Business model (charity)
Financing
(loans, equity, subsidy)

10. RESULTS-BASED FUNDING,
e.g. SOCIAL FINANCE

11. social finance
social finance
[soh-shuhl fi-nans, fahy-nans], n.;
synonym: impact investing
Social finance is an investment
approach to solve social or
environmental challenges while
generating financial return. This
includes investments that range
from only producing a return of
principal capital, to offering
market-rate or even market-
beating financial returns. Social
finance encourages positive
social or environmental
solutions at a scale that neither
purely philanthropic supports
nor traditional investment alone
can reach.
- Slide referenced from Tim Draimin

12. “Canadians have long relied on
governments and community
organizations to meet evolving social
needs, while leaving markets, private
capital and the business sector to seek
and deliver financial returns.
However, this binary system is breaking
down as profound societal challenges
require us to find new ways to fully
mobilize our ingenuity and resources in
the search for effective, long-term
solutions.
Mobilizing private capital to
generate, not just economic value, but
also social and environmental
value, represents our best strategy for
moving forward.”
Dr. Ilse Treurnicht
Task Force Chair
CEO MaRS
December 2010

13. Social & Financial Return Continuum
Social finance approaches support a spectrum
of organizational business models
Non-profit For-profit
- Slide referenced from Tim Draimin

14. Social Impact Bond 101
Payments based
Returns dependant
3 on defined 1 4
on outcomes
outcomes
Public Social Impact Bond
Investors
Sector Delivery Agency
Service Providers
2 Services
Funds
Target population Information
The Model “T”

15. TRENDS FOR GOVERNMENT FUNDING
• Reduced capacity due to deficit cutting
• Performance-based
• Leveraging private resources
• Focus on accountability
• Need to cut transaction costs
• Open to innovative approaches (social
finance, social impact bonds...)

16. TRENDS FOR CORPORATE PHILANTHROPY
• Highly competitive
• Linked to corporate objectives
• Moving beyond corporate social responsibility

17. TRENDS FOR INDIVIDUAL DONORS
• Levels of giving not growing: fewer giving more
• Donor base aging
• Less attachment to organizations rather than
'causes‘
• More concerned with 'results' and 'solutions‘
• By-passing intermediaries to be more 'hands-on‘
• Using IT and non-traditional ways of giving

18. TRENDS FOR GRANT-MAKERS/FOUNDATIONS
• Less capacity due to low market returns
• More competitive environment for funders
• Higher visibility may increase risk aversion
• Having a strategic focus - fewer responsive grants
• Greater emphasis on results
• Continued reluctance to supply operating support
• Importance of learning and knowledge development
• Use of evaluation to improve practice
• More willing to collaborate, including across sectors
• Funding + (going beyond grants)
• Growing willingness to leverage assets (eg impact investing)

19. CONCLUSIONS : GENERAL
FROM TO
Status quo Present situation not sustainable
“Doing good” is worthwhile in itself Demonstrate value
The “cause” motivates people to give Results motivate people to give
Philanthropy is purely voluntary Social change is needed; we all have a
(and dependant on emotional appeals) responsibility to engage

20. CONCLUSIONS
1. The present business model is not
sustainable
2. Funding strategy must be based on
organizational needs, mission, capacity.
3. There is a need to diversify, adapt and
innovate
4. This is as much a challenge for funders as for
grant-seekers.