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7 min read

8 shifts in philanthropy we’re backing for 2023

Profile of Georgia Mathews
Written by Georgia MathewsPosted on 6/2/2023

Feature image: Georgia Mathews (left) joined a NEXUS 2022 panel to explore the importance of funding advocacy with Apryl Day, Anna Brown and Saffron Zomer.

The start of another year is a great time to reflect on your giving practice and take stock of emerging trends to inform your own approach.

With many funders and philanthropy experts having recently shared their predictions for 2023, we’ve compiled a list of eight shifts in giving we’re backing this year.

1. Accelerated giving in challenging times

Last year was characterised by challenging economic conditions: rising inflation and the ongoing recovery from the pandemic and recurring natural disasters.

These challenges are set to continue, and our giving community is experienced in stepping up when needed. Last year, the ACF community gave a record $18.5 million, including $3.2 million in response to Covid, the floods in eastern Australia, and the crisis in Ukraine.

Forbes predicts that philanthropy this year will continue to provide important and “sustainable sources of support for charitable organisations during times of market volatility”.

“Donors with giving vehicles, like donor-advised funds (DAFs) or private foundations, can be a stabilising force when market fluctuations impact individual [ad hoc] giving,” Forbes reports.

“Historically, in periods of recession, total giving declines, but giving rates from DAFs remain remarkably consistent, above 20% of total charitable assets.”

Our community donated more into their ACF funds last year too, demonstrating a clear commitment to accelerated charitable giving in challenging times.

2. More ‘trust-based philanthropy’

It’s the buzzword that won’t go away, and for good reason. Trust-based philanthropy seeks to build more equitable relationships between funders and non-profits.

In Philanthropy Australia’s Better Philanthropy Telescope – a survey of the peak body’s members – addressing power imbalances in these relationships is top of the list for ‘ideas that will matter’ in 2023.

In recent years, we’ve seen our giving community embrace this approach, distributing more unrestricted multi-year funding with fewer reporting requirements, allowing grant partners to spend more time on their important work on the ground.

3. More collaboration with communities

Extending the trust-based approach, funders are increasingly recognising the value of engaging communities in decision-making.

It’s another trend high on Philanthropy Australia’s list with respondents highlighting “the need for engaging those impacted by the problems we are trying to solve” and “recognising that having lived experience in philanthropy… is integral for the future.” ‘Creating solutions together’ is also one of five trends on global investment firm UBS’s list for 2023.

At Australian Communities Foundation, we’re committed to participatory philanthropy and bringing the voices of lived experience to inform our work. As the organisation moves into a new strategy for 2023-25, we will be formalising this approach with the establishment of community-led advisory groups.

4. More collaboration between funders

The rise of collaborative funding is first on the Johnson Center’s list of 11 Trends in Philanthropy for 2023. In the broadest sense, collaborative funding, or collective giving, refers to people giving together – something that community foundations have long enabled.

While giving together isn’t new, recent growth has been unprecedented. Kiplinger’s list of 2023 predicts there is even more growth to come, owing to collaborative funding’s capacity to remedy disconnection and isolation, especially post-Covid, and the growth of technology to support collective giving.

It’s a trend that’s long been on the rise in our giving community. Last year, we celebrated the fifth anniversary of our flagship fund for collective giving, the Impact Fund, which has so far brought together over 100 funders to distribute $5 million to 40+ Impact Partners.

Australian Communities Foundation also plays host to more than 40 collective giving groups. These include Groundswell, Impact100 (SA, Sydney North and WA) and Mannifera. Community foundations will have an important role to play in supporting the proliferation of models like these in the short, medium and longer term.

5. More giving for First Nations

With the Voice referendum set for later this year, 2023 is set to be a pivotal point in Australia’s history and philanthropy has a key role to play.

More support for First Nations communities is one of the key shifts championed by respondents in Philanthropy Australia’s Better Philanthropy Telescope.

Australian Communities Foundation has a long history of supporting First Nations communities, formalised in 2009 with the establishment of the Indigenous Donor Circle and further embedded five years ago with Supporting Indigenous Self-Determination becoming one of our four key Impact Areas.

More than 25 fund holders at ACF have already given in support of the Uluru Statement. As we approach the referendum, we’ll be inviting our giving community to build on this momentum and join us in digging deep to help our First Nations partners deliver a powerful campaign in favour of the Voice.

6. More giving for the climate

Motivated by recent extreme weather events and rising energy costs, funders are directing more resources towards addressing climate change. Beyond this continued increase in giving directly to climate change mitigation, experts predict we’ll see more funders adding a climate lens across their giving without losing sight of the specific causes they’re passionate about (see Trend 4 in UBS’ list for 2023).

Last year our community gave more than ever for climate policy and strategic climate litigation, and we look forward to taking our climate giving to new heights this year. In 2023, we’re partnering with the Australian Environmental Grantmakers Network to promote the adoption of a climate lens across all giving areas. Keep an eye out for their soon-to-be-released toolkit!

7. More legacy giving

Legacy planning is on the rise as the world prepares for the largest ever intergenerational transfer of wealth.

In Australia alone, it is estimated that $1.1 trillion will be transferred across a generation between now and 2030, and $2.6 trillion by 2040 (see Philanthropy Australia’s Giving Trends and Opportunities report).

We expect to see more legacy gifts made to community foundations from donors looking to leave a lasting legacy by having their funds invested and grown into an ongoing source of funding for communities. Learn more about leaving a legacy.

8. Going beyond giving

‘Going beyond giving’ – it’s the final trend in the UBS list and it’s one we’re seeing across our own giving community.

In a shift driven strongly by the next generation, more funders are looking for ways to make a difference beyond their grant making.

Case in point: it’s increasingly important for funders that their charitable assets are invested ethically and do good in the community while they wait to be granted out. At Australian Communities Foundation, 100 per cent of our investment portfolio is responsibly invested and we will continue to grow our impact investment portfolio in 2023 (read more in our latest Annual Report).

UBS also notes a trend towards more funders sharing their expertise, insight and connections in support of grant partners, and that’s something we certainly look forward to supporting through our calendar of Learning Circles in 2023.

Resources and further reading