THE
hilanthropy is stepping up to the challenge with overall global giving increasing in 2020 for the 6th consecutive year. Furthermore 2020 saw the highest ever levels of investment ($704 billion) committed to impact investment, which intentionally seek to achieve positive environmental and social outcomes alongside financial returns.
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There are a number of key drivers for this growth in funding for positive impact.
Growing Consciousness There is greater global awareness of social inequality and the escalating climate crisis. Key movements that have moved mainstream opinion include The Greta Effect; The Attenborough Effect; Covid-19; Black Lives Matter and #MeToo.
Technology
Alongside an awareness from the world’s Ultra High Net Worths of the importance of giving back, millennials and Generation Y are having a greater say over how families manage and allocate wealth. As ever, technology has accelerated this trend, with 51% of millenials regularly donating to charity and 43% doing so through social media. Technology is providing greater access to information, new products, visibility of real time global challenges and quicker response times. The likes of crowdfunding and curated philanthropy platforms create visibility, access, transparency and aggregation.
Boomers and millennials The largest ever intergenerational transfer of wealth is underway as Boomers express a desire to leave positive legacy using their wealth. Millennials are amongst the beneficiaries, and are largely intent on living conscientiously and making a positive impact on the world.
Innovations in Giving Giving has evolved from pure charitable and humanitarian aid, to sustainable solutions through venture philanthropy and impact investing. Mainstream asset managers and pension funds continue toward ESG compliant investments, but this is insufficient. More investment is required in deep, meaningful and measurable impact.
Page 26 Beyond 20/20 - Finance
PHILANTHROPY IS STEPPING UP TO
CHALLENGE by Justin Sykes Founder and CEO of Innovest Advisory
As the world struggles to manage a global pandemic, marked by its tragic impact on lives and livelihoods, and set against the broader existential climate crisis, there is a growing sense of urgency about the need to solve these global challenges.
The need to determine impact There is a growing desire of funders to understand the impact of their funding, an essential part of ensuring legitimacy and accountability. Prioritising rigorous Impact Measurement, the process of assessing how much social and environmental impact has occurred and can be attributed to an organisation’s actions, is therefore critical for philanthropic donors.
Despite the technology playing a central role in democratising impact, it is clear that larger private wealth structures such as Foundations and Family Offices still play a dominant role.
In the U.K., the top 300 foundations represent 90% of all giving by independent foundations. Jersey can play a vital role in this by continuing to find innovative structures that make giving more efficient, supported by the wider trend toward responsible and impact investment in the Channel Islands and U.K. At Innovest, we harness this trend to help direct philanthropic capital and impact investment to support the creation and scaling sustainable market-based solutions that address some of the world’s most pressing environmental and social challenges.
We work with impact funds, private clients, corporates and non-profits to develop innovative funding structures and development tools, and leverage our international network to contribute funding, know-how and capabilities to achieve development outcomes.
Meaningful philanthropy can have a catalytic impact in helping these inspiring organisations to succeed, either at the systemic level or in building capacity and structure to support impact investment.
However, to be meaningful, philanthropic capital needs to carefully consider how to measure impact, which creates value for both philanthropists and their wider ecosystem of impact enterprises, investors, nonprofits and stakeholders.
Innovest has developed an impact measurement approach that directly focuses on beneficiary outcomes within the context of their community, using statistical techniques to
Background image: Khalid Bashir, a fisherman in Kismayo, Somalia, KIMS Microfinance
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