by Kasia Moreno

5 Key Trends in Philanthropy

1. Impact investing is seen as the most promising trend by most philanthropists, 52%, worldwide, according to the BNP Paribas Individual Philanthropy Index. While not strictly philanthropy, impact investing, which prioritizes social and environmental returns before financial returns, is exciting to many people who care about philanthropy and social change. It offers the potential of unleashing a huge base of capital to fund sustainable market solutions. By investing in companies that actively contribute to society, impact investing is contrasted with socially responsible investing, which aims to avoid certain companies, sectors or regions.

One of the most vocal evangelists of impact investing is Austrian-born U.S. technology entrepreneur, Charly Kleissner. He stresses that financial returns vary by mission: currently, for instance, it’s more difficult to make money investing in projects promoting social justice than it is investing in ecological ventures. He also points out that impact investing is not an asset class but an approach that can be carried through many different classes, such as impact bonds.

Kleissner and his wife Lisa created the KL Felicitas Foundation, which blends grant making with impact investing. The Kleissners are also tirelessly traveling the world, rallying investors to impact investing. “We are not the only ones anymore, It’s a global groundswell,” says Kleissner.They now have some 50 asset owners committed to their 100% Impact Network, which demands that investors make a commitment to put 100% of the investable assets of one of their leading invest- ment vehicles into impact investments. The total amount of money committed by the 100% Impact Network members is around $4 billion. The Kleissners’ goal for the next decade: to get from $4 billion to $400 billion.

2 & 3 Collaborative philanthropy (51%) and Sharing of data, best practices, needs and skills (51%) closely follow impact investing as promising trends. This is understandable considering the large number of organizations and the resulting fragmentation of the sector. Collaboration is one way to make it effective. “I don’t have a problem with the large number of organizations as long as they talk to each other,” says Gerry Salole, chief executive of the European Foundation Centre.

Although many philanthropists see this area as important, the ability to collaborate is an Achilles heel for many foundations, according to Salole. As autonomous and independent entities, they are not naturally designed to collaborate. Fortunately, many in the sector are beginning to see the light, as several consortia (e.g., On Disability, Historical Cities Alliance and the Accessible Cities Alliance) have begun to work together more regularly as part of the Network of European Foundations.  
 
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