The author and anthropologist Zora Neale Hurston once wrote: “There are years that ask questions and years that answer.” For grantmakers processing the impact of a three-year global pandemic while rebounding from it at the same time, 2023 was a bit of both.
In 2023, emotionally charged giving declined, data-informed grantmaking increased, and there was a shift in disaster funding. There was also an uptick in new funding collaboratives dedicated to broad-scale change, such as The Audacious Project and the Michigan Justice Fund.
Grantmakers in 2023 were passionate about developing impact-driven solutions and partnerships, and GivingData is equally passionate about delivering purpose-built solutions to help grantmakers achieve their goals.
We're only a month into the new year, but we're already seeing trends that will be critical pulse points across the sector. Here are three that stand out.
Although it’s not new new — it’s been a source of buzz and debate since 2020 —trust-based philanthropy will continue to garner attention as an approach to equitable grantmaking. Its advocates are all about side-stepping the burdensome processes and requirements imposed by traditional philanthropy, and instead foster a culture of partnership, open communication, and trust between grantees and grantmakers.
In its second annual survey, the Trust-Based Philanthropy Project reports that 52% of the 400 responding foundations either already practice or are in the process of implementing trust-based practices.
So what does that look like in real life? It means funding more multi-year, unrestricted grants and giving grantees the flexibility to decide where those dollars are most needed. It also means trusting organizations to innovate and respond to constituent needs as they arise.
At a practical level, it means stripping away unnecessary application and reporting requirements, and focusing instead on building deeper relationships and mutual accountability between funders and grantees. In addition to grants, we expect to see more funders offering to provide non-monetary support to grantees, particularly for organizations led by or serving marginalized communities.
Trust-based philanthropy has its challenges, but funders will continue to adapt and course correct as they apply lessons learned. When we sat down last year with Shaady Salehi, executive director of the Trust-Based Philanthropy Project, she made clear that adaptability is key. “We’re continuing to be responsive to what we're hearing from the field in terms of what will be needed to sustain the movement,” Shaady said.
As 2024 takes shape and more grantmakers adopt flexible funding structures and longer-term commitments, TBP may be the big, impactful shift the sector needs.
Between 2023 and 2030, AI is projected to see an annual growth rate of 37%, yet fewer than 30% of nonprofits have started exploring AI's applications in philanthropy. Those that have could help shape the adoption wave that we expect to see in 2024. Artificial intelligence will be everywhere. It will be a year in which Funders and their nonprofit partners will have a lot to figure out.
The Technology Association of Grantmakers has advised us to watch for “continuous change management” in 2024 as cross-functional leaders steward technology, operations, and programming. Even as popular philanthropy AI tools like Raise, Iwave, ChatGPT, and Grantable become more intuitive, grantmakers will have to stay vigilant to remain human-centered in their application of the technology.
Leadership will be expected to prioritize transparency, accountability, and inclusivity in their AI initiatives. They'll also be called upon to diversify perspectives in their decision-making processes, manage concerns about the use of AI, and improve language models known to use historic data sets with hidden biases related to gender, race, or sexual orientation.
On the practical side, the rollout of A.I. will also mean maintaining privacy and safeguarding sensitive information, a potential challenge especially for small family and community foundations with limited technical staff.
The McGovern Foundation has provided over $66 million in grants for A.I. in the last year alone. Vilas Dhar, president of the McGovern Foundation, believes we’ll make strides in A.I. governance in 2024 and better understand perspectives on participation and equity.
Is DEI a trend or a movement? Some experts are reserving judgment. The question is the same for equitable grantmaking. The pledges, equity statements, and realignments promised by philanthropy in previous years have come due in 2024. There's strong evidence that targeted funding can help correct and heal disparities affecting marginalized communities.
In 2023, GivingData integrated with Demographics via Candid to give grantmakers real-time access to nonprofits’ demographic information. Demographics via Candid spares grantseekers from filling out duplicate data requests and helps funders get the information they need to identify more diverse and BIPOC-led/BIPOC-serving partners.
In November, GivingData's Chief Innovation Officer, Roberto Cremonini, sat down with leaders from Candid and the Siegel Family Endowment to look at what collecting this data looks like in action and how to use these tools to create a diverse grantmaking portfolio without burdening grantees or staff.
“The eyes of our grantees are on us right now, and even more so their constituents and those that they're serving, the people that are at the core of our work,” said Kyla Stewart, Senior Knowledge and Impact Associate at Siegel Family Endowment. “I look forward to what the field can do with this moment and how we can continue to push in the right direction and develop and learn together.”
At GivingData's 2023 annual conference, trust-based philanthropy, A.I., and equitable grantmaking were popular topics among the client- and partner-led sessions. If there was a common thread connecting them together, it was a shared recognition there's still much to learn.
As 2024 unfolds, we'll be following these trends closely. We look forward to engaging with our community, learning with you, and sharing those learnings here on our blog and elsewhere.