What's Next for Philanthropy in the 2020s - Jane Searing Jennifer Holk - Deloitte
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What’s Next for Philanthropy in the 2020s Jane Searing Jennifer Holk
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What’s Next for What’s Next for An Event or an Era?
Philanthropy (2010) Community Philanthropy? Decision-Making in the
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Context of COVID 3
4 | Copyright © 2022 Deloitte Development LLC. All rights reserved.
Dimple Abichandani, Executive Director (General Service Foundation) Kevin Leonard, Executive Director (Echo Foundation)
Shahira Ahmed Bazari, Managing Director (Yayasan Hasanah) Ken Leong, Head of Strategy and Partnerships (Yayasan Hasanah)
Rebecca Aird, Director of Community Engagement (Ottawa Community Foundation) Michael Lerner, President and Co-founder (Commonweal)
Natasha Alani, Chief Operating Officer (McConnell Foundation) Michael Lesnick, Senior Partner (Meridian Institute)
Ivye Allen, President (Foundation for the Mid South) Ken Levit, Executive Director (George Kaiser Family Foundation)
Ana Marie Argilagos, President (Hispanics in Philanthropy) Okendo Lewis-Gayle, Author (Harambeans)
Carrie Avery, President (Durfee Foundation) Philip Li, President & Chief Executive Officer (Robert Sterling Clark Foundation)
Sharon Avery, President & Chief Executive Officer (Toronto Community Foundation) Supriya Lopez Pillai, Executive Director (Hidden Leaf Foundation)
Leena Barakat, Director, Strategic Partnerships (Tides) Bruce Lourie, President (Ivey Foundation)
Eric Barela, Director, Measurement & Evaluation (Salesforce.org) Mario Lugay, Senior Innovation Director (Justice Funders Network)
Lucy Bernholz, Director, Digital Civil Society Lab (Stanford PACS) Graham Macmillan, President (Visa Foundation)
Dave Biemesderfer, President & Chief Executive Officer (The Forum (formerly United Philanthropy Forum)) Allison Magee, Executive Director / Board Chair (Zellerbach Family Foundation / Northern California Grantmakers)
Ian Bird, Ex-President (Community Foundations of Canada) Aditi Malhotra, Head, Monitoring, Learning and Evaluation & Knowledge (Yayasan Hasanah)
Andrew Blau, Managing Director (Deloitte and Touche) BJ (Goergen) Maloney, Executive Director (JP Morgan)
Jason Born, Vice President for Programs (National Center for Family Philanthropy) Jean-Marc Mangin, President & Chief Executive Officer (Philanthropic Foundations Canada)
Amit Bouri, Co-Founder & Chief Executive Officer (Global Impact Investing Network (GIIN)) Laura Manning, Executive Director (Lyle S. Hallman Foundation)
Wanda Brascoupé Peters (Indigenous Peoples Resilience Fund) Jason Mark, Chief Executive Officer (Energy Foundation)
Tim Brodhead, Ex-President & Chief Executive Officer (McConnell Foundation) Tony Mayer, Board of Directors (Anthony and Delisa Mayer Family Foundation)
Jeansil Bruyère, Director, Policy & Communications (Philanthropic Foundations Canada) Lauren McCann, Executive Vice President (Stand Together Foundation)
Phil Buchanan, President (Center for Effective Philanthropy) Heather McCleod Grant, Co-Founder (Open Impact)
Chris Cardona, Program Officer (Ford Foundation) Kevin McCort, President & Chief Executive Officer (Vancouver Community Foundation)
Kara Carlisle, Vice President of Programs and Policy (McKnight Foundation) Patricia McIlreavy, President & Chief Executive Officer (Center for Disaster Philanthropy)
Cathy Cha, President (Evelyn Walter Haas Junior Fund) Jonathan McPhedran Waitzer, North American Steering Group (EDGE Funders Alliance)
Rini Chakraborty, Senior Program Officer (NEO Philanthropy's Four Freedoms Fund) Sonia Melendez Reyes, Senior Media Advisor (Hispanics in Philanthropy (HIP))
Leong Cheung, Executive Director of Charities & Community (Hong Kong Jockey Club) Frances Messano, Senior Managing Partner (New Schools Venture Fund)
Jennifer Ching, Executive Director (North Star Fund) Tony Mestres, President & Chief Executive Officer (Seattle Foundation)
Julia Chu, Senior Philanthropy Advisor (JP Morgan) Adam Meyerson, President (Philanthropy Roundtable)
Andrew Chunilall, Co-Chief Executive Officer (Community Foundations Canada) David Miller, Director of Marketing and Communications (Southeastern Council on Foundations)
Zita Cobb, Founder & Chief Executive Officer (Shorefast Foundation) Oronde Miller, Program Officer for Racial Equity (W.K. Kellogg Foundation)
Willa Conway, Founder (Weaver Fellowship) Tulaine Montgomery, Managing Partner (New Profit)
Terry Cooke, President & Chief Executive Officer (Hamilton Community Foundation) La June Montgomery Tabron, President & Chief Executive Officer (W.K. Kellogg Foundation)
Sarah Cotton Nelson, Chief Philanthropy Officer (Communities Foundations of Texas) Ciciley Moore, Program Officer, Office of the President (W.K. Kellogg Foundation)
Flozell Daniels, President & Chief Executive Officer (Foundation for Louisiana) Ify Mora, Director of Program Operations (Margaret A. Cargill Philanthropies)
Jara Dean-Coffey, Founder and Director (Equitable Evaluation) Selma Moreira, Executive Director (Baobá – Fundo para Equidade Racial)
Chris Decardy, Vice President and Director of Programs (David and Lucile Packard Foundation) Valerie Mosley, Chairwoman (Valmo Ventures)
Arelis Diaz, Director, Office of the President (W.K. Kellogg Foundation) Mary Mountcastle, Board member (Mary Reynolds Babcock)
Tim Draimin, Senior Advisor (McConnell Foundation) Khalil Muhammad, Professor of History, Race and Public Policy at Harvard Kennedy School (Harvard Kennedy School)
Andrew Dunckelman, Head of Impact and Insights (Google.org) Colette Murphy, Executive Director (Atkinson Foundation)
Annie Dwyer, Director, Civil Society Fellows Program (Manhattan Institute) Kaberi Banerjee Murthy, Director of Program Strategy (Meyer Memorial Trust)
Lenore Ealy, Senior Fellow, Communities (Stand Together Foundation) Lisette Nieves, Founding Partner (Lingo Ventures)
Farhad Ebrahimi, Founder and Chair (Chorus Foundation) Allan Northcott, President (Max Bell Foundation)
Elizabeth Ellison, Chief Executive Officer (Lobeck Taylor Family Foundation) Richard Ober, Chair / President (Community Foundation Opportunity Network / New Hampshire Charitable Foundation)
Jayne Engle, Director, Cities & Places Portfolio (McConnell Foundation) Grant Oliphant, President (The Heinz Endowments)
Kathleen Enright, President & Chief Executive Officer (Council on Foundations) Clotilde Perez-Bode Dedecker, President & Chief Executive Officer (Community Foundation for Greater Buffalo)
John Esterle, Co-Executive Director and Trustee (Whitman Institute) Jim Pitofsky, Managing Director, Strategic Alliances (The John Templeton Foundation)
Bridgit Antoinette Evans, Executive Director (Pop Culture Collaborative) Louise Pulford, Chief Executive Officer (Social Innovation Exchange)
Evan Feinberg, Executive Director (Stand Together Foundation) Dorothy Quincy Thomas, Independent consultant (Independent)
Tyrone Freeman, Assistant Professor (Indiana University) Brian Quinn, Associate Vice President, Research-Evaluation-Learning (Robert Wood Johnson Foundation)
Ellen Friedman, Executive Director (Compton Foundation) Carlos Rangle, Vice President and Chief Investment Officer (W.K. Kellogg Foundation)
Stephanie Fuerstner Gillis, Director, Impact-Driven Philanthropy Initiative (Raikes Foundation) Favianna Rodriguez, Executive Director and Cultural Strategist (Center for Cultural Power)
Katherine Fulton, Independent consultant (Independent) Carmen Rojas, President & Chief Executive Officer (Marguerite Casey Foundation)
Tony Fundaro, Chief Executive Officer (Philanthropy Southwest) Katherina Rosqueta, Founding Executive Director (University of Pennsylvania Center for High Impact Philanthropy)
Glen Galaich, Chief Executive Officer (Stupski Foundation) Diane Roussin, Project Manager (Winnipeg Boldness)
Martin Garber-Conrad,
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Executive Officer (Edmonton Community Foundation)
rights reserved. Adene Sacks, Co-Founder (Within/In Collaborative) 5
Meg Garlinghouse, Head of Social Impact (LinkedIn) Joe Scantlebury, Vice President for Program Strategy (W.K. Kellogg Foundation)
Sarah Gelfand, Vice President, Social Impact Programs (Fidelity Charitable) John Schnur, Chairman & Chief Executive Officer (America Achieves)
Philanthropy is often
insulated from change
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Philanthropy is often
insulated from change,
but the past two years
have shown that is it
not immune.
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“Darwin’s theory, I believe, is on the verge of collapse.” Copyright © 2022 Deloitte Development LLC. All rights reserved. 8
Copyright © 2022 Deloitte Development LLC. All rights reserved. 9
9 | Copyright © 2022 Deloitte Development LLC. All rights reserved.
“All change is not progress.” Copyright © 2022 Deloitte Development LLC. All rights reserved. 10
“Better designed for the immediate, local environment.” Copyright © 2022 Deloitte Development LLC. All rights reserved. 11
Survival of the most fit
Survival of the best fit
Copyright © 2022 Deloitte Development LLC. All rights reserved. 12For adaptation to stick, it needs to
help an organism better
respond to the shifts
happening around it.
Copyright © 2022 Deloitte Development LLC. All rights reserved. 13Shifts:
Powerful social, economic, and political trends and
forces that have the potential to create fundamental
change in the philanthropic landscape
Copyright © 2022 Deloitte Development LLC. All rights reserved. 14Economic inequality Copyright © 2022 Deloitte Development LLC. All rights reserved. 15
Extreme political polarization Copyright © 2022 Deloitte Development LLC. All rights reserved. 16
Shifting demographics Copyright © 2022 Deloitte Development LLC. All rights reserved. 17
New momentum around racial justice Copyright © 2022 Deloitte Development LLC. All rights reserved. 18
Ubiquitous technology and access to information Copyright © 2022 Deloitte Development LLC. All rights reserved. 19
A state of climate and social emergency Copyright © 2022 Deloitte Development LLC. All rights reserved. 20
A social compact in flux Copyright © 2022 Deloitte Development LLC. All rights reserved. 21
Seven Big Shifts reshaping the world
NEW MOMENTUM
AROUND RACIAL JUSTICE
SHIFTING UBIQUITOUS TECHNOLOGY
DEMOGRAPHICS AND ACCESS TO INFORMATION
EXTREME POLITICAL A STATE OF CLIMATE AND
POLARIZATION SOCIAL EMERGENCY
ECONOMIC A SOCIALCOMPACT
INEQUALITY IN FLUX
Copyright © 2022 Deloitte Development LLC. All rights reserved. 22Edges:
Critical frontiers in philanthropy that are particularly
well-aligned with major societal shifts. Edges have an
outsized potential to grow and to influence and
reshape the core of philanthropy over time.
Copyright © 2022 Deloitte Development LLC. All rights reserved. 23A way to think about
the future
Copyright © 2022 Deloitte Development LLC. All rights reserved. 241 Rethinking Philanthropy’s Role 25 | Copyright © 2021 Deloitte Development LLC. All rights reserved.
Getting out of the way
Copyright © 2022 Deloitte Development LLC. All rights reserved. MacKenzie Scott
26Changing systems
Copyright © 2022 Deloitte Development LLC. All rights reserved. Stanislaus
William Community
& Flora Omidyar
Hewlett Foundation
Network
Foundation
27Innovation and agility
Supporting innovation and agility
Copyright © 2022 Deloitte Development LLC. All rights reserved. The Barra Foundation
282 Balancing Power 29 | Copyright © 2021 Deloitte Development LLC. All rights reserved.
Sharing & ceding power
Sharing and ceding power
Copyright © 2022 Deloitte Development LLC. All rights reserved. Indigenous
Missouri
Peoples
Foundation
Resilience
for Health
Fund
30Using power Copyright © 2022 Deloitte Development LLC. All rights reserved. Arnold Ventures31
Explicit focus on race and power
Copyright © 2022 Deloitte Development LLC. All rights reserved. The Chicago Community Trust
323 Catalyzing Leverage 33 | Copyright © 2021 Deloitte Development LLC. All rights reserved.
Walton Family Foundation
Influencing and partnering with business
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David & Lucile Packard FoundationRaikes Foundation
Redirecting government funding flows
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Washington State Office of Homeless Youth4 (Re)Designing the Enterprise 36 | Copyright © 2021 Deloitte Development LLC. All rights reserved.
Many of our traditional structures and
approaches may no longer be the best
fit for addressing today’s world.
Copyright © 2022 Deloitte Development LLC. All rights reserved. 37New functions
Copyright © 2022 Deloitte Development LLC. All rights reserved. Headwaters
W.K.
Foundation
Kellogg Foundation
for Justice
38Find your Edges Embrace Your Edges Copyright © 2022 Deloitte Development LLC. All rights reserved. 39
“When a storm subsides, the air is washed clean of whatever
particulate matter has been obscuring the view, and you can
often see farther and more sharply than at any other time.
When this storm clears, we may, as do people who have
survived a serious illness or accident, see where we were
and where we should go in a new light. We may feel free
to pursue change in ways that seemed impossible while the
ice of the status quo was locked up. We may have a
profoundly different sense of ourselves, our communities,
our systems of production, and our future.”
Rebecca Solnit
“The Impossible Has Already Happened”
Copyright © 2022 Deloitte Development LLC. All rights reserved. 40Common Unanswered Questions
How much time How much control
does the donor want What kind of social does the donor
to spend on want?
impact or difference
charitable matters? does the donor want to
make?
What type of assets
What is the donor’s does the donor have
financial outlook? to work with?
Does the donor anticipate
an income tax event that
will enhance or limit the
What is the desired tax benefit from a When does the donor
income stream to charitable contribution? need the assets to meet
donor, family, and both the charity’s and the
charity? client’s goals?
Copyright © 2022 Deloitte Development LLC. All rights reserved. 41A Few Considerations of Charitably Inclined High Net Worth Individuals
Broader social impact
with fewer restrictions
Anonymity/privacy
Short-term impact on society –
Make a meaningful impact in a
specified time period, with sunset
provisions in their giving strategy
Flexibility in investments
and business transactions
Long-term impact on
society – Leave a legacy
that will outlive themselves
Copyright © 2022 Deloitte Development LLC. All rights reserved. 42
42Spectrum of Philanthropic “Investment” Tools
Vehicles for Investment: Vehicles for Investment:
• Public Charities (including sponsored DAFs) • Anything EXCEPT a:
• Private Foundations o Public charity or
• Governments/ Tribal Organizations o Private Foundation
• Private Business (LLC, C or S Corp., Equity Line o Governments/ Tribal Organizations
Partnership)
• L3C
• B Corporation
• Benefit Corporation
• Special Purpose Corporation
Impact Investment Activities
Loan PRI Exempt Asset PRI MRI Negative Voting Enhance
Grant Debt
Guarantees Debt Acquisition Equity Equity* Screens* Proxies* Profits
PRI = Program Related Investment MRI = Mission Related Investment *Alignment of portfolio with mission
Copyright © 2022 Deloitte Development LLC. All rights reserved. 43
43Factors to Consider When Evaluating Charitable Vehicles
Private Foundation Donor Advised Fund (DAF) Public Charity
Deductible contributions? Yes Yes Yes
Contribution limit? (generally, 30% of AGI for cash contributions 50% of AGI for cash contributions* 50% of AGI for cash contributions**
exceptions apply) 20% of AGI for noncash 30% of AGI for noncash 30% of AGI for noncash
Donor controls grantmaking? Yes No, but donor can advise No
Donor controls investment Yes No, donor may choose investment No
decisions? plan, but sponsoring org. has control
Donor manages operations Yes No, donor pays a fee to sponsoring No
and administers organization? org. to provide admin. services
Annual distribution Yes, 5% of fair market value of non- No No
requirements charitable use assets
Organization subject to Yes, 1.39% excise tax on net No, unless there is unrelated No, unless there is unrelated
income/ excise tax? investment income and income tax business income business income
on unrelated business income
Organization subject to excise Yes. Potential excise tax due for Yes, potential excise tax on excess Generally, no (potential excise tax
tax for prohibited actions? engaging in acts of self-dealing, business holdings, taxable on political activities)
having excess business holdings, and distributions, and excess benefit
making jeopardizing investments or transactions
taxable expenditures
Organization required to file Yes (Form 990-PF) No, annual filing by sponsoring Yes (Form 990)
an annual tax return? organization, not each separate DAF
* In certain circumstances, the 50% AGI limitation could be increased to 60%.
** In certain
Copyright circumstances,
© 2022 the 50% LLC.
Deloitte Development AGI All
limitation could be increased to 60%. In addition, an election to deduct up to 100% of AGI for cash contributions is available for tax years 2020 and 2021.
rights reserved. 44
44Factors to Consider When Evaluating Non-charitable Vehicles for Good
Characteristic 501(c)(4) – Social Welfare Organization Special Purpose LLC
Required to seek IRS approval of tax No – However, it may request a ruling. If it No - An LLC is utilized for employment and
status? does not request a ruling it must file a investment purposes. It has its own tax ID
notification (Form 8976) with the IRS within 60 number and is a regarded entity. It is either
days of formation. taxed as a corporation, a pass-thru entity, or a
single member LLC.
Is the entity subject to tax? No, unless there is unrelated business income Depends upon pass-thru or corporation status.
or unless engages in political activities. Then Pass-thru organizations do not pay tax;
pays tax on lower of political expenditures or corporations pay tax on net income.
net investment income at corporate tax rates.
Subject to IRC section 4958 excess Yes – on the value of excess benefits inuring to No
benefit prohibitions on transactions with a disqualified person
disqualified persons
Does the entity provide privacy to the Yes – The donors are not required to be The activities of the LLC are private and not
donors/board/organization’s activities disclosed on the Form 990; All activities of the open to public inspection.
organization are open to public inspection.
Charitable deduction allowed No No but if the LLC makes a charitable
contribution, and is taxed as a pass-thru that
deduction is allowable to the members of the
LLC.
Copyright © 2022 Deloitte Development LLC. All rights reserved. 45Making Strategic Choices
Stake holders/founders need to make critical decisions about their goals and organizational structure for a new philanthropic entity
Focus of Strategy
What are our goals &
intended outcomes?
Where will
we play?
• What are our core values? How will Focus of Org Structure &
• What is our level of we win? Compliance
ambition? What capabilities and
• Which causes and issue
• What is the overarching areas align with your vision do
vision and intended vision, values, and core we need?
outcome for the business?
• How will we select and manage
philanthropic entity? our partnerships with others? How do we execute?
• What other factors may be
• What is required to obtain of higher priority? • How will we ensure support and
• What data/technology
that ambition? buy-in across the organization?
• What themes will organize do we need to be successful?
• How will we create value? and center our strategy? • How can we effectively measure • What operating model and • What is our timeline?
• How will we define • How will we respond to the social, environmental and governance structure would • How do we maintain
success? stakeholder needs and business ROI? best serve our goals? momentum?
preferences? • What current capabilities can • Where will we invest our
we leverage? time and treasure?
• What resources do we need? • How will we formulate our
organization?
Initially, the strategy work focuses on vision, mission, and goals, as well as some of the critical structural decisions for
standing up a new philanthropic entity; future time needs to be spent “filling out” the contours of the implementation strategy
Copyright © 2022 Deloitte Development LLC. All rights reserved. 46Final thoughts and considerations for the road ahead Efficient deployment of assets leads to better
return on philanthropic/impact investment,
and higher satisfaction and overall
engagement in the philanthropic enterprise
Discovering and Embracing your
Edges to address the Shifts will
assist in crafting an effective
response
Aligning Strategy with Tax rules often
leads to outcomes which do not run
There are big Shifts to which
into unanticipated roadblocks
Philanthropy is playing a role
in responding
Copyright © 2022 Deloitte Development LLC. All rights reserved. 47www.futureofphilanthropy.org
monitorinstitute@deloitte.comQ&A
Employee
recourse
loans
Copyright © 2022 Deloitte Development LLC. All rights reserved. 49Presenter Contact Information
Jennifer Holk
Social Innovation Leader - Monitor Institute by Deloitte
Deloitte Services LP
+1.202.870.7105
jensmith3@deloitte.com
Jane Searing
Managing Director
Deloitte Tax LLP
+1.206.716.7061
jasearing@deloitte.com
Copyright © 2022 Deloitte Development LLC. All rights reserved. 50This document contains general information only and Deloitte is not, by means of this document, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This document is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this document. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms. Copyright © 2022 Deloitte Development LLC. All rights reserved.
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