As we round out the first quarter of 2023, we need to consider economic, social, and technical currents impacting foundations and grant managers. The external environment weighs heavily on operations and financial choices, setting the course for a challenging year. Here are four trends affecting charitable growth in 2023.

Inflation
Inflation is impacting all industries, and foundations are not immune. So how does this impact affect current and ongoing funding? Increasingly, an institution will hold back earnings to account for inflation (e.g., a 10% return on an endowment may only allow the foundation to support giving of seven percent while holding back three percent to protect the investment power of the asset overall). Due to the pressure to preserve the endowment, many foundations are decreasing future-year funding for ongoing support and, in some cases, cutting funding altogether.

Transparency
In the past, foundations were not required to disclose much information about operations or funding activities. However, as the philanthropic sector has grown, there is an increasing demand for greater transparency. This has led to changes in regulations and increased pressure from stakeholders to provide more information about activities.

Shifting Award Requirements
The philanthropic sector is constantly evolving, and foundations are under increasing pressure to demonstrate the impact of giving and be accountable for funding activities. This has led to a shift in pre- and post-award requirements as foundations seek to ensure that funding has the greatest possible impact.

Sustainability
Sustainability is a growing trend in the philanthropic sector, as foundations seek to ensure that giving has a lasting impact. The concept of sustainability in philanthropy refers to the ability of a community or organization to continue functioning and delivering benefits over time without relying on continued outside support.

Read the full article about charitable growth trends at Fluxx.