We are a month into the year and already inundated by articles predicting trends and trying to help organizations forecast priorities. Truth be told, the only thing predictable in 2024 is that things will be unpredictable. “Tumultuous” might be a better word, according to the Pocket Chinese Almanac. Wars and geopolitical volatility, climate crises, discord and disinformation stemming from the rapid advance of technology… you name it, it’s coming. The year 2024 is also forecasted to be the “biggest election year in history” with more than half the planet heading to the ballot box, while in parallel global trust in government continues to plummet. And from predictions of soft landings to the “biggest crash of our lifetime,” economists seem certain about only one thing: this new year is set to be even more uncertain than the last.
In this context, financial prudence, results and resilience are paramount. For some organizations, getting out of the seesaw of budget instability needs to take center stage—whether you are a corporate foundation tethered to the whims and cycles of the business, or a public charity navigating tightened and reduced funding from corporate partners and a decline in individual donors. The pressures are real, and not just in terms of finances.
Philanthropic organizations may have never had more challenges to attend to or more reasons to broaden their scope. Yet in a moment like this, less may indeed be more. We know that impact does not come from a few drops in way too many buckets. If we are to truly make progress, we need to focus in, commit, get creative and avoid distractions.
If you’re not already heading down this path, here are a few prompts to get you started:
- Choose carefully. As resources shrink and complexities grow, stop trying to be everything to everyone. Are you seeking big, long-term strategic wins, or do you want to be more reactive to local communities or emerging situations? Are you ready to invest in deep partnerships and meaningful multi-year funding or do you need to maintain independence and flexibility? Now is the time to put a line in the sand. Determine who you want to be, choose the fires in the world that you are going to do your darndest to put out and go all in. There is no shortage of creative funds and models to consider as inspiration. The Rockefeller Foundation’s decision in 2020 to reduce their overall number of program areas and focus on fewer, more impactful “big bets” is one example. Whatever you choose, commit for the long term, find allies, learn from the bumps in the road and share your insights with those who come behind you. those who come behind you.
- Be intentional about people, structure and process. It’s not sexy nor headline-making, but ensuring your organization is truly fit for the purpose you choose is essential for success. With the pace of change in the world today, organizations of yesteryear are rarely up to the challenge. Transformation is required. And transformation goes beyond streamlining, aligning talent to task and making hard, but humane, decisions. Transformation requires at least three building blocks: a) a solid strategic vision, b) a deep look at the nuts and bolts of an organization and how that infrastructure is aligned to the way forward, and c) strong leaders, prepared and resourced, to guide teams through the hard stuff. People and culture are paramount. Here at APCO, we think about the “Six Levers” that drive this work and shape employee experience: values, energy, behaviors, symbols, systems and communication. Successful transformation begins with getting these pieces right. Learn more about the Six Levers that change everything and take a demo assessment via our friends at Gagen MacDonald.
- Seek creative funding stability. We’ve been talking to some corporate foundations about ways to stabilize funding and get out of the seesaw game of corporate performance – for instance, looking outside at co-funding models (something most corporates have been shy to do), or internally building allies in the CFO’s office that can help the foundation be first in line to receive funds whenever the company needs to move money quickly. These assets, however, can take a variety of forms and often are acquired opportunistically during major financial transactions. Examples include using the proceeds from a downsizing (e.g. selling off real estate assets) to fund the foundation, “parking” cash in the foundation’s endowment during strong quarters or allocating stock during a public offering. Perhaps one of the most notable examples, the Mastercard Foundation*, began with a gift of 13 million shares (valued at approximately USD 500M) from Mastercard International during the company’s Initial Public Offering (IPO) in 2006. Today it is one of the largest charitable foundations globally with assets of approximately USD 40 billion. Shifting to having a more active role in your own destiny instead of depending on an annual “allowance” will allow you to do your work better and be a resilient, trusted partner, especially if you are a grantmaker.
- Take advantage of emerging tech. History has shown that more tech is not always the solution to every challenge, particularly in the global development arena. But with the rapid advancement of AI, tech solutions are growing in promise. Whether it is putting data into the hands of farmers in the field, streamlining the grant application process or more rapidly capturing data for measurement and evaluation, potential use cases are proliferating. A new report by the Charities Aid Foundation notes that donors overwhelmingly support nonprofit use of AI, particularly when it leads to responding more quickly to disasters and helping more people. They also recognize that additional resources must be allocated to get the nonprofit space up to speed. As we’ve stated in these pages before, we believe philanthropy is uniquely positioned to drive AI adoption.
The outlook for 2024 is cloudy and life is getting more complicated. Yet, let’s be honest; can we even remember a time when life was simple, or the outlook rosy? Global tumult is not new and is no excuse for a lack of progress. We need results more than ever. Focus in, commit, get creative and avoid distractions.
*Mastercard Foundation is an APCO client.