Intent, Innovation, Impact: Driving Philanthropic Vitality in the 2020s

Data tells us that philanthropy has never been as large or as visible as it is today.

According to a 2018 report from Harvard University's Hauser Institute for Civil Society, reported global foundation assets at the beginning of that year exceeded US$1.5 trillion (CHF 1.4 trillion).¹This estimate likely undercounts foundation assets in other parts of the world, as 97% of the reported amount is concentrated in the United States and Europe.

At the same time, philanthropy is facing rising expectations to show the value it adds to attempts to solve global challenges. Some even criticise philanthropists' decision-making and argue that ill-conceived donations can crowd out the role of local and governmental institutions.² It remains nevertheless undeniable that philanthropy at its best is society's risk capital for the public good—and that well-thought-out, consultative, and impact-driven philanthropic activities can play a catalytic role in making the world a better place.

Enabling Social Impact

Across the board, philanthropy is becoming more ambitious and more professional. Last year, we wanted to find out what exactly drives the vitality of philanthropy in our historical home region of Lake Geneva. In other words, how could we do better, more efficiently? On the 15^th anniversary of Fondation Lombard Odier, we led a study on measuring and enhancing philanthropic vitality in the Lemanic region, together with a funding and content partner consortium. We found both significant strengths and important areas for development.

On the positive side, the philanthropic sector scored well on policy incentives for donations, creating a propitious environment for philanthropy. In addition, the public in Geneva and Vaud expressed high levels of trust in the philanthropic sector to do the right thing and act in the public interest. To further enable social impact, a key area for improvement is the level of transparency of foundations' spending and activities, in order to maintain the public's trust. Qualifications and training of foundation board members could also be improved, as could the alignment and visibility of the activities of regulatory authorities.

Driving Innovation

Next to the focus on enabling impact, what will shape philanthropy in the 2020s is an increasing focus on innovation. The most obvious example is digitalisation. The digital transformation disrupts economies and societies, as well as philanthropy. On the capital mobilisation side, in fundraising, it is perhaps most obvious how information technology is already changing the game: the volumes are still modest, but crowdfunding platforms and campaigns are modularising philanthropy and democratising access to social change capital.

At Fondation Lombard Odier, we are committed to Tech For Good. As part of our partnership with École polytechnique fédérale (EPFL) in Lausanne, we have seed-funded ambitious new initiatives such as the Center for Digital Trust (C4DT). C4DT is a centre of expertise—a “think and do tank," really—that develops much needed open-source “trust solutions" in data security, transparency on data handling and storage, and protecting personal data. These solutions then find applications in fields including health, finance, digital information, democracy and humanitarian assistance and critical infrastructure.

Another area of innovation is finance itself. Take Sustainable Development Goal (SDG) 4, to ensure inclusive and equitable quality education and promote lifelong learning for all. An estimated US$4.7 trillion annually is spent on education worldwide. Access to education can make a powerful contribution to reducing inequality. US$3 trillion (65%) of this expenditure centres on high-income countries, while only US$22 billion (<0.5%) targets low-income countries. To make sure education reaches millions of children and adolescents and helps improve their living conditions, we will need to develop new formulas in addition to making grants. To achieve education outcomes that grants alone cannot, this may even include investing in emerging educational technology companies, supporting early-stage and innovative social enterprises or catalysing innovative funding from public and private stakeholders.

Grounding Intent in Facts

As the 2020s unfold, a commitment to social impact and innovation will keep producing efficient, effective, and ethical philanthropy. At Lombard Odier, we have the privilege of working with inspiring individuals and families who ask us to translate their aspirations to create impact through their philanthropic engagement into action—be it via a sheltered fund at our Fondation Philanthropia or a tailor-made solution, setting up or refocusing an independent foundation. In this work, we have found that on the path to high social impact and donor satisfaction, it helps to be equipped with two types of tools.

First, a set of organisational, strategic, analytical, and programmatic competencies that we offer to philanthropists, which add value regardless of the area in which they seek to intervene.

Second, an evidence-based, accessible guide of the field where the philanthropist seeks to make a difference, such as the Donor's Guide to Cancer, which we launched in 2018 with the Union for International Cancer Control to help those who want to make a difference on cancer to find inspiration, practical examples of what works, and guidance.

The Year Ahead

Next to advising our philanthropic clients on a number of topics, in 2020 we are running a similar exercise in two fields to offer interesting, concrete examples of ongoing initiatives and projects that illustrate possibilities and get potential donors thinking.

First, we are exploring the area of heritage, particularly in the form of monuments and other buildings, via an extensive white paper on the topic published in late 2019 in English, with French and German translations coming in the first quarter of 2020. The topic of built heritage has been important to Fondation Philanthropia for several years, as the foundation is the largest donor to the ongoing renovations of the Château de Versailles.

Second, we plan to launch a new Donor's Guide mid-2020 focused on nature and the environment. It is becoming evident that climate change, environmental degradation, and loss of biodiversity pose significant threats to human lives and prosperity on a global scale. More and more philanthropists are asking how they can best contribute to environment-related research, organising, and activism. Highlighting a range of exciting and impactful projects and initiatives, the Donor's Guide will equip the reader with the evidence needed to act on their intent, drive impact, and allocate funding to innovation where needed.

¹Paula D. Johnson, Global Philanthropy Report: Perspectives on the Global Foundation Sector, Cambridge, MA: Harvard University, 2018.
²See, for example, Anand Giridharadas, Winners Take All: The Elite Charade of Changing the World, New York: Knopf, 2018.