January 9, 2019
From the President

Canadian Philanthropy: Looking Ahead

Hilary Pearson

Once again, we are at that time of year when forecasts abound. Last January I jumped on the bandwagon with some predictions for Canadian philanthropy in 2018. Wondering if any of them came true? And what does 2019 hold for philanthropy? Candidly, many predictions are more wishful (or fearful) thinking by their authors than considered forecasts. Nevertheless, it’s an exercise that might stimulate some reflection or serve as a discussion starter in your boardroom. So here goes again. If you have some to add, we’d love to hear them too.

Private philanthropy is a growth industry….

More funds will flow into private foundations: This is an extrapolation of a long-term trend.  The number of individual donors in Canada is stagnating or decreasing according to the tax filer data, but the dollar amounts given by this smaller number of donors are increasing. And larger amounts are going to private foundations. We don’t know whether this means that more large donors are starting their own private foundations (although the number of foundation registrations keeps climbing) or whether there is more going to existing foundations. But it’s a good bet that larger donors will be flowing more funds through foundation vehicles.

Donor-advised fund assets grow even faster: There isn’t much data on who gives to these funds, which are managed by community foundations or other public foundations, often linked to financial institutions, but new research in 2018 suggested that their assets are growing at an annual rate of about 20%.

…which leads to more public scrutiny of foundations: 2018 was a year in which the “big” philanthropy sector in the U.S came under much more critical public observation and even attack. Will it happen in Canada? Cynicism and mistrust of institutions, including opaque private foundations, can be easily stirred and spread through social media. It’s easy to imagine a spillover into Canada, especially if the number of foundations and DAFs continue to grow. The debate over private wealth versus public accountability is going to become more prominent.

More attention to diversity, equity and inclusion: Foundations in Canada, especially private foundations, are typically neither led nor governed by diverse people, meaning not much diversity in age, gender, race, religion or other dimensions. Given the diversity of Canada itself, the lack of diversity within foundations is an area that needs to be explored. In 2019, more foundations are going to look at how to increase the diversity of perspectives in their decision-making and governance.

Youth leadership will be a new area of focus: Millennials, the largest generation in Canada, are moving into their 30s. There are increasing calls for room and attention to this group, who have different expectations and habits from the Boomers who now dominate Canadian foundations. And the size and life stage of this group suggest that Canadian foundations can get huge leverage from a philanthropic investment in their education and work force integration. Expect to see even more philanthropic focus on this generation in 2019.

Philanthropy bets more heavily on Indigenous youth:  Indigenous youth such as the teams leading Canadian Roots Exchange and 4Rs are offering the way forward for many funders. Indigenous education developed through the work of Indspire and others is emerging as a major focus for philanthropy. Funders are going to make some big bets on young Indigenous people, the fastest growing demographic in the country.

Evidence-based giving and data-driven philanthropy: 2019 buzzwords. The perennial questions of “how do we know we are funding in the right places….what difference are we really making?” can be answered, one would think, by collecting and analyzing more data. But too many foundations are inhibited by lack of capacity, lack of time or lack of connection to data networks. We launched some new thinking about this at PFC in 2018. 2019 will be the year when we see some meaningful data sharing infrastructure built for the philanthropic sector in Canada. But it will also lead to some important and tough conversations about who owns the data and how it is used.

Impact Investing: more product, waiting for action. In 2018 we saw a significant increase in the availability of interesting new products in the impact investing space, especially in clean energy technology, affordable housing and Indigenous investment opportunities. The new Social Finance Fund of $755 million announced by the federal government will start to take shape in 2019. This is intended to kickstart the impact investing marketplace for many investors including foundations. So 2019 will be the year in which we do see a surge forward in impact investing by Canadian foundations.

Some out of the box areas where we’re still waiting for more philanthropic attention: fintech and financial solutions for marginalized people; funding in the Arctic and across northern Canada; directed funding for offshore education of refugee children; defense of international civil society space.

Some final words of advice for 2019, from our 2018 Conference Co-Chairs, Allan Northcott and Patty Faith:

  • Be modest, but bold
  • Be practical
  • Insist on evidence and provide support to collect it
  • Value debate
  • Keep the long term in mind
  • Support and engage in open and honest dialogue

Links to other philanthropy and civil society forecasts for 2019:

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