The philanthropic community is at a crossroads: at a time when financial crises, increased poverty, and internal strife have intensified the need for global giving, trust in philanthropies is at an all-time low.
Making matters worse, regions of the world that stand to benefit most from philanthropic donations tend to lack the administrative structures to ensure transparency and accountability in giving, which then deters international donors from focusing resources there.
Throughout Southern Europe, for example, vulnerable populations are facing a terrible recession. Public institutions and universities that rely almost solely on public money are starved for funding and confronting a brain drain of unprecedented proportion -- losing out on talent in the near term, as well as innovation for generations to come. In my native Greece, unemployment levels have reached a record high of nearly 28 percent, and more than 60 percent for Greeks under the age of 25 (Eurostat). Meanwhile, non-profits on the front line are struggling due to reduced public and private resources.
So what can the philanthropy sector do?
Though these problems are deep and systemic, a few focused initiatives could affect real change in the philanthropic landscape:
Increase transparency. It's no secret that cases of mismanagement in the past have resulted in donors losing faith in NGOs and holding back on donations. Transparency and accountability are more important than ever, not only for regaining the trust of interested donors, but also for facilitating smart, ethical and efficient giving.
Today's donors seek to spend their money more wisely by becoming better educated, and by applying business tools to their philanthropic endeavors. They look for results and want to be assured that their money is not being wasted. We're already seeing some non-profits utilize more robust monitoring and evaluation tools that emphasize operational sustainability, strategic planning, and cost-efficiency. In addition to transparent reporting, a well-structured governing body for NGOs, ethics rules and provisions, and objective criteria in the hiring process must also be in place.
Embrace digital media. Recent studies show that online donations are on the rise. Today's digital media and marketing landscape enables NGOs to create strong brands and publicize impactful giving. These are essential steps in building credibility and accountability and, consequently, securing follow-up funding. Fortunately, free social media and marketing tools allow any non-profit, regardless of size, budget, location or field of interest, to network and share information. Non-profits can interact and collaborate with NGOs, foundations and donors based thousands of miles away, advocate for their causes, and even recruit and train volunteers online.
Pay attention to young social innovators. The philanthropic model is changing, and young, social innovators and entrepreneurs are helping lead the way. They have their finger on the pulse of some of the most important -- and often overlooked -- opportunities for change. As always, it's important for donors to evaluate new charities carefully to determine which ones have reliable, effective structures in place, but greater transparency is making that information more readily available. Meanwhile, philanthropies should enlist young entrepreneurs, listen to their ideas and support their projects.
Invest in people. As large funding mechanisms are becoming increasingly bureaucratic and global, especially in Asia and the Middle East, we can deal with crises more effectively if strategic philanthropists invest in forward-thinking leaders who are associated with innovative non-profits. Those individuals can then provide capacity building to the leadership while organizing a transparency index and best practices for non-profits for each geographic region, so that funders will have a more reliable network to support.
Transparency, communication, innovation and human capital are essential building blocks of good business -- whatever the industry. Fixing challenges within the philanthropy sector isn't simply a matter of good business; donors and philanthropies must work together -- and soon -- promote wellness, democracy and equal opportunities for larger segments of our society. Our future as a global society depends upon it.
elpis (www.elpis.org.gr) is a consulting company focused on helping philanthropists, donors, and foundations develop and implement sustainable, efficient programs that build capacity, and bring together like-minded entities to solve social and economic problems. Primarily focused on issues in Greece, Southern Europe, the Balkans and the Middle East, elpis works with leading organizations around the world.