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Future-proofing philanthropy by institutionalising best practice

29 April 2021

The article at a glance

By Clare Woodcraft, Executive Director for the Centre for Strategic Philanthropy The world of philanthropy is changing. The global pandemic has rendered …

Category: Insight

By Clare Woodcraft, Executive Director for the Centre for Strategic Philanthropy

The world of philanthropy is changing. The global pandemic has rendered this scarce but innovative and risk-friendly resource ever more valuable but ever more scrutinised.

The opportunity for philanthropic donations to help contribute to the aftermath of the crisis, support the drive to fund the UN’s Sustainable Development Goals and encourage the private sector to embed social purpose into its DNA has never been stronger. COVID-19 (coronavirus) revealed a lot that was wrong with the sector – too many conditions, short time horizons, not enough listening and ironically (for a sector that is ostensibly well-positioned to be entrepreneurial), too much bureaucracy. However, the crisis revealed that when philanthropists do unite, they can be a powerful force for good and for change.

Our research during the pandemic showed that many philanthropists did respond quickly to COVID-19 redeploying funds to support the health sector, reducing earlier restrictions on the disbursement of grants, engaging more effectively with their grantees and generally taking a more strategic approach to ensure that their philanthropic investments generate maximum impact. But the sector still struggles to apply such flexible behaviour consistently with practices varying widely from country to country and institution to institution.

This lack of recognised best practice creates a real challenge for those seeking grant finance who may have limited resources available to navigate a complex and heterogenous system. This is especially the case in the Global South where institutional voids may further exacerbate the challenge of sourcing grant funding and building organisational resilience. This issue could be addressed through improved governance of the philanthropic sector, regulation that facilitates the flow of philanthropic capital and digitisation that facilitates data collection and sharing.

To support this process, advocates for change also call for stronger professional infrastructure in emerging markets where it is needed most. With greater knowledge acquisition and sharing, a professionalisation and harmonisation of practices and standards and the deployment of professional networks to drive scalable outcomes, philanthropists can likely significantly improve impact. Indeed, without this, Charles Keidan, the editor of the philanthropy-focused Alliance magazine argues, philanthropy simply “can’t function”, let alone maximise impact.

Professional competence development is a fundamental part of this infrastructure and can help identify and build a core set of skills and competences that are prerequisites for philanthropic practitioners to progress in the sector. While maximising impact is a common refrain, many working in the sector struggle to find a cohesive range of tools and knowledge to help them do so. While some standards are emerging around measuring such as IRIS and SROI, still many organisations struggle to align their in-house metrics with global parameters such as the UN’s Sustainable Development Goals.

Reputation management and strategic communications are gaining in importance in the third sector but brands are not systematically leveraged for fund raising or partnership building. Research and data are recognised as critical to building interventions that deliver real system change but not all programmes are ‘evidence-based’. Philanthropists are keen to move beyond grants and explore other financial instruments but may not have the expertise to do so.

These challenges are just some of the reasons why the Centre for Strategic Philanthropy was established – to help build sector-agnostic competences and share examples of best practice to help further institutionalise the third sector in emerging markets. Indeed, our executive education programme is dedicated to exactly this mission with a view to driving greater collaboration across sectors and across borders, uniting like-minded social change makers in their quest to deliver sustainable social impact while also building sectoral resilience post COVID-19. Only greater alignment around what works and what doesn’t – notably in markets challenged by institutional voids – can help to drive system change in the Global South while also bringing much needed coalescence around what constitutes best practice – a challenge that the pandemic has already brought to the fore.