What We Learned in 2021
It is hard to believe it has been a full year since we reflected on 2020 – the year that threw the world into upheaval and refocused priorities for all of us. At that time, UpMetrics CEO Drew Payne stressed the importance of the sector coming together to drive the level of change required in this blog post Data Alone Won’t Drive the Change We Need. While 2021 has been another year of grappling with the unexpected, philanthropy met these changes with changes of their own to support positive impact in areas it was needed.
In 2020 over 800 grantmakers signed a pledge from the Council of Foundations, promising to change or waive traditional giving requirements that would be blockers to the responsive grantmaking needed in today’s climate. The data we’ve seen, and collected firsthand at UpMetrics, supports the idea that many funders stuck to this commitment this year. Nonprofits are also pivoting – reimagining how to develop and deliver programs in new formats and with revised goals based on new needs. Nowhere is this more apparent than in the continued commitment to best support youth.
Localized giving also continues to rise in popularity, as funders look to issues in their backyards and pivot to allocate dollars to support community needs. Organizations like the Andrus Family Fund took a whole new approach to ensure they had a pulse on what was most pressing in their community by bringing young voices from the neighborhoods they serve into the virtual room. Not only that, but they empowered the community with decision-making power with the Visionary Freedom Fund, ensuring their first-hand knowledge was a key data point considered when it came to localized funding.
A recent article from Chronicle of Philanthropy called out another shift in behavior among the wealthiest foundations whose assets gained significant value over the last year. Instead of holding on to these funds, allocating payments over several years, grantmakers are increasing budgets today. John Powers, President of the board at Prentice Foundation, is quoted as saying they “dialed up its grantmaking because its grantees that work on climate change, reproductive rights and strengthening America’s democracy are in the midst of severe crises. It we don’t give away more now, we’ll have a much bigger mess to try to deal with later.” As Powers points out, we are in a “make or break moment”.
As of March this year, companies had donated or pledged a little over $8 billion of the $12B contributions reserved for racial equity. According to Candid, that is the “first time direct corporate giving to racial equity causes has reached this magnitude.” Companies are also giving at record rates to disaster philanthropy, fueled by pressure from employees and their commitment to community giving.
To summarize, 2021 saw trends that doubled down on responsive grantmaking, prioritized DEI and funding focused on equity, and focused on building relationships and trust with local communities that would inform effective action in areas where it is most needed.
Where we see the need for continued focus in 2022 will be around results based accountability and further strengthening those relationships between funder and grantee as well as impact organizations and their communities in general. The latter will require a continued commitment to capacity building, collaboration, information sharing and transparency. The common line between both of these areas of focus for 2022, and how we will be able to more effectively allocate resources to impact, is data.
For example, we mentioned earlier a record amount of funding allocated to racial equity. Since 2020, that funding now totals closer to $16B (Candid). However, the Center for Disaster Philanthropy and Candid found that only 23 percent of dollars distributed in 2020 were explicitly designated for persons and communities of color globally. This number drops down to 13 percent when looking specifically at institutional philanthropy (Source). The sector needs to continue to improve its ability to see where funds are going and who they’re impacting.
Focused on capacity, the Technology Association of Grantmakers set out on a mission in 2021 to collect the data that illuminates the scale of a nonprofit capacity challenge that could be rectified with funder support and coordination. We’re referring to the absence of a universal grant application template, the practice of grantmakers asking the same questions with moderate differences, taking precious time from nonprofits. Thanks to their efforts, we have data to confirm that 39% of grant applications are duplicative across funders. In 2022, we can look to impacting the remaining 61% in addition to other solutions to capacity challenges. An idea referenced in the blog above as well as in an earlier webinar UpMetrics hosted with Kauffman Foundation is around using public data sources to fill in known information for a grantee applicant.
After what we’ve learned firsthand this year at UpMetrics, through our collaboration survey, webinars with nonprofit and foundation leaders, and the response to our thought leadership focused on shifting the grantee-funder dynamic, we will be starting the new year by taking a step back. With so many resources running quickly toward impact this year, and the additional voices brought (rightfully so) into conversations, we think we need to clarify one key item. What does impact mean?
In our collaboration survey to funders and grantees, it was shown that these two stakeholders are not aligned when it comes to what “success” looks like for a “good” partnership. The driver here appeared to be a lack of alignment on initial goals or desired outcomes of a “successful” partnership. But that made us curious, so we began to ask our network: do you think everyone at your internal organization defines impact in the same way? And we overwhelmingly heard the word “no” or “I’m not sure that we do”. In fact, a recent survey to a small group of impact organizations saw 65% of 37 respondents answer “no” when asked: Does your organization have a universal definition of impact?
In a way, this should have been expected. The last few years have pushed us to enter new focus areas, shift how we deliver programs and aid, and move very fast. Baselines may not exist for these uncharted territories, and clear relationships not established between thought key performance indicators and actual positive changes you’re looking to see in the targeted community. In this recent post, we explored how we’re thinking about the definition of impact at UpMetrics and where you can start with conversations at your organization.
Learn more about what UpMetrics CEO Drew Payne views as the top thing to keep in mind when it comes to impact, as well as three key takeways from 2021 to inform your 2022 planning in this new blog post. Stay tuned for additional webinars, thought leadership and more information from UpMetrics in 2022 as we will continue to be a resource on this journey we’re on together.