The Dorothy A. Johnson Center for Philanthropy published 11 Trends in Philanthropy for 2024. This annual report looks at emerging trends impacting donor behavior and philanthropic investment. You can read the full report here. The research is based out of Grand Valley State University in Michigan and looks across sectors to factors that influence trends in education and beyond. I won’t review all 11 trends but want to call out a few that overlap with my specific areas of interest.
I’ll admit it, after reading the introduction I immediately flipped ahead to page 31 and the section on Artificial Intelligence. The majority of applications for AI described in the report center around writing. Some of the uses include proposal generation, stewardship communication, and grant writing. The one I am most interested in, but received the least visibility, is data analysis. While the report did cite SaaS solutions that harness the power of AI, there was little mention of independent use of generative AI for data synthesis and research. Based on my own use of AI for prospecting work early in 2024, I continue to see value in the use of ChatGPT 4. Compared to SaaS products, ChatGPT4 offers access to generative AI for a fraction of the cost of third party products. While use of the ChatGPT4 does not come with the features and sleek interface that SaaS products offer, it is an excellent solution for budget conscious nonprofit organizations looking to increase their capacity and sophistication without the same financial investment. It is fairly straightforward to use and can be beneficial for the purposes mentioned as well as many yet to be explored.
After my leap to the section on technological innovation I went back to read the report from the beginning. Another area of interest is the Center’s study of the population growth in the Southern United States. Researchers found that institutional philanthropy has been overlooked in the South, when compared to other regions, but grant making in the region has been on the rise. As someone who moved from Connecticut to Florida in 2021, I read this section with interest. The report points to significant investment in causes focused on human rights and economic development. One observation that stood out to me was focused on a 2017 study from the National Committee for Responsive Philanthropy and Grantmakers for Southern Progress. The report found “support for increasing both grantmaking and impact investing in the South is on the rise.” It was interesting to read that the growth in the number of nonprofits in the South has outpaced the national average by 54% between 1989 and 2022. The report also noted the average size of organizations founded in the South are comparatively smaller, though specific metrics were not noted. This point stood out as the report went on to discuss an emerging trend in organizational structure.
My interest was piqued when the report explored the rise of the fiscal sponsorship model to a level deemed to be a trend in 2024. After my research on venture philanthropy I have become increasingly interested in innovative approaches to organizational structure. Researchers at The Dorothy A. Johnson Center defined the fiscal sponsorship model as “a relationship in which an unincorporated group or project seeking to carry out charitable activities affiliates with a 501(c)3 nonprofit organization that shares a compatible mission.” The report cites the most common example of this structure is the “pre approved grant relationship [which] involves the fiscal sponsor receiving and managing funds on behalf of the project.” So why is this model something that is being reported as a trend?
The Center’s research notes the overall number of nonprofit organizations in the United States and the overlap that exists in the nonprofit sector. The fiscal sponsorship model channels resources into causes that align with investors’ philanthropic priorities while not creating mission duplication. When considering the discussion about the increase in the number of nonprofit organizations in the South, it will be interesting to see how this trend evolves geographically. The fiscal sponsorship model may be an effective tool to strengthen new organizations and provide the ongoing financial support required to advance mission-related work while not creating additional marketplace competition or duplication. This model may also create increased efficiency in administrative areas while simultaneously increasing the impact of contributions. The benefit is that more charitable dollars can directly impact mission-related outcomes.
The flexible approach to fiscal sponsorship dovetails with the examination of how Gen Z engages in philanthropy, another trend for 2024. Despite being in a more difficult financial position when compared to previous generations, Gen Z prioritizes philanthropic activity. The research noted the three T’s of giving (time, talent, and treasure) has expanded to five T’s with Gen Z, “time, talent, treasure, testimony, and ties.” Their willingness to engage and advocate for causes they care about should tell those in the nonprofit field a great deal about how to structure cultivation and engagement opportunities. Gen Z needs to feel connected to the work organizations do. As the generation accumulates wealth, embracing their enthusiasm to be active will play a key role in cultivating the next generation of donors.
While there are shifts in the tools available to nonprofit organizations, there is consistency in the primary expectations of donors. Donors are looking for transparency from nonprofit organizations. Fortunately, technology is evolving in a way that makes delivering on this expectation increasingly efficient. Understanding the needs of stakeholder groups and harnessing the power of technology to deliver on those needs will be what sets nonprofit organizations up for success now and into the future.
