Philanthropic Issue Funds: Impact Opportunities for Donors and Non-Profits
Sherry Consulting is pleased to share a major research paper co-published with the Raikes Foundation. The report focuses on the growth of philanthropic issue funds, or pooled funds, as an important vehicle for donors to learn about and support causes through a portfolio approach.
Philanthropic issue funds and newer donors
Philanthropic issue funds have been in existence for several decades at least, but as newer donors and established philanthropies look for ways to support new ideas or fields, pooled funds are becoming a larger and more attractive option. Pooled funds attract a wide variety of newer donors especially, a group that deploys 70% of philanthropic dollars.
Some funds are designed to operate online; some target small donations; and yet others look to aggregate capital between large philanthropists and institutional players. Pooled funds represent a major opportunity for individual donors and newer philanthropists to learn and engage in philanthropy as well as a way for more established funders to share their insights and knowledge with others.
10 takeaways from the report
A broad range of collaborative funding vehicles exists—reflecting the extensive spectrum of donor wishes, needs, experience levels, subject matter expertise, desired levels of engagement, and overall giving capacities.
There is consensus that the demand for pooled funds is growing; however, the funds that succeed in attracting significant dollars require certain characteristics.
Many funds that have been successful in attracting high-net-worth donors were launched by a few core donors and grew over time.
Funds that have grown successfully often have their operating costs underwritten by an individual or by several core donors.
The costs of incubating funds can be considerable, and may preclude successful maintenance absent a threshold level of investment.
The needs and desires of millennial donors are likely to influence the growth of online platforms.
Relatively fewer funds exist with predetermined portfolios. The demand for these may grow as millennial donors and corporate programs become more prevalent, but these trends remain very early-stage.
Many existing funds address education, health, and poverty domestically, while fewer target other issue areas. Many funds also address global giving, and the demand appears to be rising.
Timeliness of, and public attention to, certain issues may create significant growth opportunities for particular funds, but these factors also pose challenges to long-term sustainability.
The curatorial assumptions behind different funds deserve close examination in general, and specifically to ensure that grassroots and smaller, culturally responsive organizations are not left behind.