COVID-19 has upended life as we know it in 2020 and it was a year unlike any other. The outbreak affected all segments of the population and is particularly detrimental to members of those social groups in the most vulnerable situations. The compounding crises in 2020 highlighted and accelerated many trends in grantmaking that have been emerging for years.
Explore six trends in grantmaking and philanthropy that will continue to make a difference this year and beyond:
1. Participatory grantmaking is helping shift the power.
Participatory grantmaking takes trust-based philanthropy to the next level by actually shifting decision-making power from funders to the individuals and organizations dealing with the issue or problem. The approach emphasizes the thinking “nothing about us without us” and requires deep relationship building, trust, and time from all parties involved.
The principles of participatory grantmaking and trust-based philanthropy have been gaining recognition as well-defined models for how to shift the power between funders and grantees. 2020’s challenges shined even more light on them.
2. Trust-based philanthropy is gaining attention as a crisis solution.
Trust-based philanthropy took center stage in 2020 as nonprofits’ urgent needs prompted by the COVID-19 pandemic meant that funding had to be distributed fast—and without a web of restrictions.
Nearly 800 funders and philanthropy leaders pledged to ease grant restrictions on nonprofits. The pledge emphasized the tenets of trust-based philanthropy.
Trust-based philanthropy allowed disaster response funds to support other nonprofits around the world with unrestricted funding.
3. Nonprofits are adapting to virtual programming and fundraising.
Although 2020 was a year marked by physical distance, it was also a year of coming together. As nonprofits adapted to the new normal, more online panels, webinars, and digital learning resources began to emerge online. This philanthropy trend helped foster relationships and connect people with shared goals around the world, and it will likely stick around after the pandemic is over.
While many feared that donations would dip amid the economic downturn, 2020 ended up being a record-breaking year of generosity. An incredible $2.47 billion was donated to U.S. nonprofits by a reported 34.8 million people on #GivingTuesday alone, a 29% increase in participation from 2019.
4. Community-led principles are challenging the status quo.
The conversation about community-led principles has reached every corner of the sector—from longstanding leaders like USAID that are testing locally-led development approaches to emerging organizations like Population Works Africa that are advocating for more equitable models of aid.
But what does community-led philanthropy look like in practice? Community-led development has local people in the driving seat. It’s focused on addressing the root causes of problems rather than meeting the immediate needs of the community.
5. Conversations about racial justice are becoming actionable plans.
As the United States reckoning with racial injustice continues, many are calling upon philanthropy to play a more actionable role in combating inequality. If 2020 was a year of building frameworks and having conversations, then 2021 might be a year of truly shifting the power.
Many organizations recognized that this work needs to be done and are pushing forward with new ways to identify, name, and address how philanthropy contributes to structural racism.
6. Giving now is gaining traction.
As the net worths of a select few skyrocketed in 2020, pressure mounted for billionaires to take action on their pledges to give away their wealth. Established initiatives like the Giving Pledge and new approaches like Forbes’ focus on actualized giving might inspire billionaires to give sooner and go further with their philanthropic efforts.
Some high-net-worth individuals, including Jack Dorsey, MacKenzie Scott, and Sara Blakey, have already taken the initiative.
The COVID-19 pandemic and movements for racial equity spurred landmark change in the philanthropic sector, change that will impact grant funding and grantmaking trends in 2021 and for years to come.
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