Trust in charities will increase in the future as mega-charities decline and lean, single-purpose organisations come into their own, according to the academic Jen Shang.
Speaking at the International Fundraising Congress in the Netherlands yesterday, Shang, who is a professor of philanthropic psychology at Plymouth University, said that in order to survive in 20 years’ time charities will need to generate the bulk of their impact by developing innovative models that are then replicated in countries across the world by governments and private companies.
"The changing landscape will see fewer mega-organisations and more single-purpose and lean organisations that partner with all relevant parties regardless of their type," she said.
"I do not mean only government and for-profit partners. You will have to be able to work with social enterprises, impact investors, venture philanthropists and B corporations.
"Whatever form they come in, you need to fit them into the puzzle of solving the problem you want to solve."
These partnerships will rid charities of the need to scale up their own operations, she said.
Shang said the social impact that would be generated by effective collaborations of this nature would lead to an increase in trust not only in charities but also in the governments and organisations that partnered with them.
Shang was presenting research from a two-year project known as Tomorrow’s Philanthropy, which was funded by the Resource Alliance, which is the body that organises the IFC. The research, which looked at philanthropic behaviours and how they improve wellbeing around the world, included about 30 interviews with leading authorities on philanthropic innovation and a survey of fundraisers and other charity sector stakeholders.
According to the research, said Shang, the biggest challenge philanthropic organisations would face in the next 20 years was how to respond to consumer needs. Competition from other organisations and technological changes were also perceived to be major looming challenges, she said.
Shang said charities had no choice but to address these challenges to continue making an impact. This meant showing awareness of the public’s desire for transparency and accountability from the sector and offering "more direct and meaningful giving experiences", she said.
"The only way a non-profit will be able to survive, grow and lead is by meeting consumer needs better than anybody else in the market," she said. "And anybody else doesn’t just mean people who are similar to you any more. It means literally anybody."
She said the main technological changes charities had to be aware of were the drive for internet-facilitated transparency, the rising penetration of mobile technology and advances in programme delivery and fundraising technology.
She said that thus far the sector had innovated far more in terms of service delivery than in the fundraising arena.
Shang said that charities needed to anticipate the decline in traditional forms of donation, including funding from the United Nations for international development organisations and cheques from traditional major donors. "It’s going to shrink, and much faster than you think," she said. "To survive, you’ll need to have a healthy diversified fundraising portfolio to buffer you against any reduction in traditional funding and any testing you need to do to explore new ways of giving."