Resource Library

Contact Rina

The New Model for Private Foundations: Focused Projects and Concentrated Giving

There is something new going on in the world of large foundations.  As new private foundations are springing up, fueled by the enormous wealth of the technological boom, older foundations are finding that their model of supporting numerous causes through small grants is looking lack-luster.  The new generation of donors and philanthropists, especially millennials aged 18 to 34, are interested in results-oriented large-scale projects rather than less definitive, “fuzzier” goals.   

The charitable interests of these younger donors range from combating climate change, dealing with inequality and injustice, and looking to change underlying structures of society.  

As a result, several traditional players in the foundation world are changing their charitable focus and programs.  Just as the Gates Foundation has set big, but very focused goals of developing vaccines for HIV and malaria, other foundations are shifting their priorities as well.  The Ford Foundation, with a $12 billion endowment, has announced their plan to direct all of its giving to the single goal of combatting inequality. The John D and Catherine T. MacArthur Foundation, with an endowment of $6.3 billion, is directing its giving to two major goals; combatting climate change worldwide and reforming the U.S. criminal justice system.  The Rockefeller Foundation, with an endowment of $4 billion, is shifting their focus towards grants which will help communities become more sustainable.

This new model promises to infuse large amounts of funds into targeted programs, and measuring the impact of these programs through achievement goals set up in advance.    Still, foundations may find these outcomes hard to quantify.  While Andrew Carnegie and his foundation could oversee the building of public libraries in the last century, which were (and are), physical structures which could be displayed and appreciated, measuring a decrease in inequality or climate change may be a trickier ordeal.

Both private foundations and public charities need to be aware of these changes within the world of philanthropy and be prepared to answer questions regarding their own programs and giving strategies.  In light of these trends it may become important to revisit charitable missions in order to attract these younger donors, and to remain relevant.