In 2017, the Raikes Foundation launched an initiative focused on increasing the impact of giving by individual donors, who are by far the largest segment of giving in this country—over 70 percent of giving is directed by individual donors. Here are some of our findings. You can find the full downloadable report below.
Philanthropic issue funds are philanthropy products that package together nonprofit organizations into “fund" portfolios. These types of products have long existed in the financial services market for managing investments (e.g., mutual funds), but are now also emerging in the philanthropy market space.
They offer unique ways for donors to learn about and support an issue or cause through a portfolio approach, rather than giving to an individual organization. They can also be an effective way for larger foundations with issue expertise to leverage additional investments toward impact. Finally, issue funds have the added advantage of aggregating flexible capital for high-performing nonprofit organizations.10 Takeaways:
- A broad range of collaborative funding vehicles exists—reflecting the extensive spectrum of donor wishes, needs, experience levels, subject matter expertise, desired levels of engagement, and overall giving capacities.
- There is consensus that the demand for pooled funds is growing; however, the funds that succeed in attracting significant dollars require certain characteristics.
- Many funds that have been successful in attracting high-net-worth donors were launched by a few core donors and grew over time.
- Funds that have grown successfully often have their operating costs underwritten by an individual or by several core donors.
- The costs of incubating funds can be considerable, and may preclude successful maintenance absent a threshold level of investment.
- The needs and desires of millennial donors are likely to influence the growth of online platforms.
- Relatively fewer funds exist with predetermined portfolios. The demand for these may grow as millennial donors and corporate programs become more prevalent, but these trends remain very early-stage.
- Many existing funds address education, health, and poverty domestically, while fewer target other issue areas. Many funds also address global giving, and the demand appears to be rising.
- Timeliness of, and public attention to, certain issues may create significant growth opportunities for particular funds, but these factors also pose challenges to long-term sustainability.
- The curatorial assumptions behind different funds deserve close examination in general, and specifically to ensure that grassroots and smaller, culturally responsive organizations are not left behind.