The landscape of philanthropy is shifting as foundations and corporations take on bigger roles, and as nonprofits recognize the need to seek support beyond donations to other means—such as social enterprise businesses—to achieve their goals.

For wealthy donors, these shifts are leading some individuals and families to look at how they can leverage their resources. Those with family foundations, for instance, “are thinking more about how to align their endowment dollars with their values and with the mission of their organization,” says Karen Kardos, global head of philanthropic advisory at Citi Private Bank.

This perspective is particularly true among women and younger people, many of whom have adopted investment approaches that prioritize good practices on environmental, social, and governance matters. Kardos expects a rise in the use of endowment dollars to create change “as they become the wealth holders and the decision makers.”

This evolving change in approach comes amid findings that giving by individuals is declining. In 2022, individual donations fell to 64% of total U.S. philanthropy, from 70% in 2018, according to an annual report from the Giving USA Foundation and Indiana University’s Lilly Family School of Philanthropy.

During the pandemic, individual donations fell about 4.5%, but the average amount of each gift surged more than 200%, according to a University of Pennsylvania study, an indication that individual wealthy donors are filling the gap, according to “Philanthropy and the Global Economy v3.0: Perspectives on the Future of Giving,” a report published earlier this fall by Citi Global Perspectives & Solutions. At the same time, foundations and corporations are taking on a bigger role.

As a result, “philanthropy is becoming more affluent and more institutional, with consequences for both society and individual nonprofits,” according to the Citi GPS report.

How these wealthier individuals and families choose to give could potentially be influential.

Kardos has observed an uptick in private foundations looking at how they can use their endowment assets to meet their philanthropic goals. As clients formulate investment policy statements for their foundations, for instance, a consideration now is whether to use an approach that integrates environmental, social, and governance considerations, she says.

Outside of a foundation, wealthy individuals and families can use other strategies for supporting causes they care about. A family that wants to really create systemic change on an issue such as criminal justice reform or child poverty, for instance, may want to direct some of their capital toward creating legislative change through lobbying efforts. But lobbying can’t be done through a foundation.

Read the full article about individual donations are declining by Abby Schultz at Barron's.