Giving Compass' Take:

• Alison Powell and Susan Wolf Ditkoff examine the giving gap when it comes to social change and identify ways for family foundations to engage.

Looking back, have your donation been focused on equity and systems change? How can you improve your efforts going forward? 

• Read more about ideas for philanthropists to drive social change.

In 2017, Americans gave away over $400 billion to charity for the first time. Giving has also reached historical highs amongst America’s wealthiest families. The most recent data show that households with $500 million or more in assets contributed around $45 billion to charity in 2017.

These exciting signs mask an expansive gap. Ultra-wealthy American families donated just 1.2 percent of their assets to charity in 2017. Moreover, the majority of the ultra-wealthy families’ biggest gifts go to institutions, such as universities and hospitals. While these gifts contribute in important ways, they dwarf the gifts to funding efforts that confront pressing social, environmental, and economic challenges.

Barriers that Impede Giving to Social-Change Efforts

  • Giving to social change efforts often requires a change in mindset. Parting with hard-earned money requires a mental shift. And once one has decided to give, it can feel risky to donate to innovative social change efforts compared to more familiar, time-honored alternatives like an alma mater or a hospital.
  • The marketplace for matching funding with opportunities is fundamentally broken. Donors struggle to find the most promising giving opportunities despite the choice of over a million nonprofit organizations in the United States.

Pathways for Family Foundations to Engage

  • Investing in capacity building for nonprofits: Family foundations that are further along in their giving journey can invest in strengthening social change nonprofits that they have identified as high-performing. These capacity-building efforts can include helping them build critical capabilities around leadership and talent, technology and innovation, and operational efficiencies, which will collectively help nonprofits plan for and deploy large gifts.
  • Giving to aggregated or other collaborative funds: Family foundations could consider giving more to platforms like Blue Meridian Partners, Co-Impact, and The END Fund, which enable funders to marshal resources and invest collectively to address structural barriers to equity.

Read the full article about obstacles and pathways to greater giving for social change by Alison Powell and Susan Wolf Ditkoff at the National Center for Family Philanthropy.