Center for Social Innovation

Stanford Social Innovation Opinion Blog, Dec 08, 2008

Ah, December. The anticipation of snow, unless you’re already several feet under. The warmth of a fire, unless you live in the south.  The excitement of winter holidays, unless you’re a grouch. Don’t forget the thrill of reviewing the year gone by and the accuracy of previous prognostications, while also prepping for the foolhardiness of sticking your neck out yet again and claiming trends, key changes, and buzzwords for the year to come. Ah, December.

Last year at this time on this very site I made several rather rash predictions. Briefly, they were:

1. One of the many philanthropic prizes launched in 2007 will succeed in motivating the solution it seeks;
2. At least one-third, and maybe as many as one-half of the world’s top 10 largest gifts in 2008 will be made by non-Americans to non-American institutions;
3. The lines between political giving, embedded giving, and giving will continue to blur;
4. Half of the glossy magazines dedicated to giving, launched in 2006 or 2007, will fold in 2008; and
5. Nothing significant will happen to the regulatory structure that shapes philanthropy in 2008.

My full accounting of these predictions can be found here in this article, “Alliance Magazine You can find additional discussion of it here and here .

In brief, I was right on numbers three and four, wrong on number one, and we don’t have the data yet to assess number two. Number five was so poorly worded (my fault) that I can claim to be correct simply by being selective about which regulatory frames I meant. Apologies—I’ll do better next time. In that same post I also identified six trends or events that would matter to philanthropy in 2008. They were:

1. The economy
2. Health care finance will start down the same slope as subprime mortgages
3. Metrics
4. Markets
5. Bill Gates will go full-time
6. Race and age will matter

It is pretty clear in December 2008 that the economy and health care finance have profoundly shaped the direction of philanthropy in the last year—to say nothing of their effect on the U.S. presidential election. Discussions of metrics and markets were plentiful and some progress has been made—from the Acumen Fund’s Portfolio Data Management System and mainstream media’s attention to metrics to conferences on Social Capital Markets and the buzz around philanthrocapitalism. Bill Gates as philanthropist has garnered attention from his speech on creative capitalism to his retirement in June to his launch of a new company to the rapt attention paid to the Foundation’s investment policies and grants budgets. And, finally, the sector is beginning to pay real attention to racial diversity of leadership, grantmaking, encore careers, and next generation leadership issues—plenty more to be done, but I’d argue these issues have moved out of the wings and into the center of the room.

So what about 2009? Here are some thoughts. I’ll be back with more:

1. I’m going to recycle prediction number two from 2008—big giving is going to come from off America’s shores in 2009—we’ll see at least 30 percent of the year’s biggest gifts coming from/going to non-Americans. And we’ll have data to show this.
2. The number of nonprofit organizations in America will shrink through mergers and organizations going out of business. Paul Light has pegged this decline at 100,000 organizations or just fewer than 10 percent of the whole. Others I know are predicting shrinkage in numbers of up to 25 percent.
3. On the other hand, social enterprises will increase. President-elect Obama is promising investment in them and has already established a working group on social innovation. Necessity is the mother of social innovation. One problem—we don’t have any accurate or longitudinal counts (or even definitions) of social enterprises—so I can’t be wrong on this, because we don’t have data. (What an opportunity….)
4. Related to number three, but not synonymous: new corporate structures, such as B Corporations and L3Cs will significantly expand in 2009. B Corps will double in number and market reach.
5. Overall giving in the U.S.A. from all sources (foundations, individuals and corporations) will drop in real dollars in 2009 compared to 2008. (There I go again, sticking my neck out.)
6. The market of online giving marketplaces will mature – we’ll see this in shrinkage and consolidation (there are more than 120 of these now, they’ll be fewer than 100 this time next year) and the solidification of market leaders.
7. Social action by young people and elders will keep us hopeful.

What do you think? What do you predict? What will you stick your neck out about?

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Lucy Bernholz is the Founder and President of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award winning blog about the business of giving and serves as Executive Producer of The Giving Channel on Fora.tv.

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