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Emerging Trends

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Presentation for Children's Hospital Association Conference - Creating Connections 2012
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  • Whats Trending in Philanthropy: Information and Innovation

    2012 Creating Connections Conference Shelley Brown

    Christopher Maddocks

  • (we)areinaconuenceoftwosectors(healthcareandphilanthropy)undergoingprofoundtransforma:on,eachthefocusofextensivedebate.

    EmergingTrends:TheChangingLandscapeof HealthCarePhilanthropyAHP2010

  • OurPhilanthropicLandscape

    Volatility investment RECESSION transformation cost containment Vigilance ROI donor-centric IMPACT compliance

    COLLABORATION Competition transparency metrics INNOVATION

    ACCOUNTABILITY May we live in interesting times. Confucius

  • TodaysChallenges Risingnancialobliga0ons,shrinkingpublicsupport(nancialandmoral),increasedneedforunrestricteddollarsandtransparency

    Goingglobal:morecompe00on,moreopportuni0es,greatersophis0ca0on

    ShiBindonormo0va0onfromdoinggoodtoinves0ngincommunity/cause

    Thenewimpera0ve:transforma0on

  • OurBestResponse

    Keeptothebasicprinciplesbuildthebase,deepenrela0onships,makethecase

    Usenewmediaandmethodsinserviceofthoseprinciplestoextendreachandshapecontent

    Informdecisionmakinganddonors:knowyourdonorsandletthemknowyou

    Investinnewideasandcreatetransforma0onalopportuni0esfordonors

  • TodaysConversa:on

    Sharethegoodnews:revenueinhealthcareupby8%in2010(childrenshospitalsamongthegreatestsuccesses)!

    Highlighttrendsandexperienceshapingourbestresponseinforma0on,innova0on,investment

    Sharesuccess(andnotsomuch)stories Ques0ons???

  • INFORMATION:TRENDSANDEXPERIENCE

  • INFORMATION:TRENDS

  • Genera:onalShiKsTechnologyusageisthemostcommonthemeforhowtheemerginggenera0ons(GenX,Millennial)denethemselves

    Source: Pew Research Center - http://pewinternet.org/Presentations/2012/Feb/National-Religious-Broadcasters.aspx

  • GadgetGenera:ons

    Source: Pew Research Center - http://www.pewinternet.org/Presentations/2012/Jan/The-New-Environment-for-Advocates--NGOs.aspx

  • MobileRevolu:on83%ofalladultsaremobilephonesubscribers

    45%usesmartphones

    Source: Pew Research Center - http://www.pewinternet.org/Presentations/2012/Jan/The-New-Environment-for-Advocates--NGOs.aspx

  • OntheirMobiles

    63%ofAdultsarewirelessInternetusersIncreasedby26percentagepointsinjust3years

    Source: Pew Research Center - http://www.slideshare.net/PewInternet/state-of-social-media-2011

  • FromMobiletoSocial50%ofalladultInternetusersareonsocialnetworks

    Source: Pew Research Center - http://www.pewinternet.org/Presentations/2012/Jan/The-New-Environment-for-Advocates--NGOs.aspx

  • SocialRevolu:onAdultsaged5064arethefastestgrowingpopula0on,Havinggrownfrom25%to52%adop0onin3years

    Source: Pew Research Center - http://www.pewinternet.org/Presentations/2012/Jan/The-New-Environment-for-Advocates--NGOs.aspx

  • Halfofadultsaged1849usesocialmediaonadailybasis

    Systema:callySocial

    Source: Pew Research Center -http://www.slideshare.net/PewInternet/state-of-social-media-2011

    AccordingtothePewProjectforDigitalandAmericanLife

    Forsocialnetworkusersbetween18and49yearsold,theprimaryreasontousesocialmediaistoconnectwithfriendsand

    groupstheylike.

    Forusersover50,thetopreasontoistoconnectwithfamily.

  • AFriendlyBunchSocialmediausersaged1834havetwiceasmanyfriendsasusersaged4756andfour0mesasmanyasusersaged6674.

    Source: Pew Research Center - http://www.pewinternet.org/Presentations/2012/Jan/The-New-Environment-for-Advocates--NGOs.aspx

  • Butwhataboutthewealthy?

    Itturnsout,theyrenotthatdierent

  • TheWiredWealthy

    Atandemofresearchstudiesexaminedtheonlinehabitsoftheauent.

    OneresearchprojectbyEdgeResearchandConviostudiedtheonlinehabitsof3,443majorgiBdonorswithincomegreaterthan$200,000

    ThesecondstudybyMcKinseyandCompanyandtheHewlelFounda0onexaminedonlinebehaviorsandinforma0onneedsformajorgiBdonors.

  • OnlineHabits

    40

    donations. Looking forward, 46 percent said that they expect to make a greater percentage of their charitable gifts online within the next 5 years.34 While our focus in this paper is on more af!uent donors, this trend is certainly encouraging and supports our belief that online platforms will increasingly be an effective channel.

    Barriers to greater impact

    While the trends described above are promising, nonpro"t market intermediaries have yet to realize their full potential. Many intermediary organizations are subscale and offer limited products, services, and value. They could be doing much more to disseminate the valuable information generated by foundations and others and to facilitate collaboration and partner-ships. Lastly, intermediaries could add signi"cant value to the nonpro"t market by shining an objective light on nonpro"t performance.

    Insuf!cient scale

    The nonpro"t marketplace is served by hundreds of intermediary organizations. With few exceptions, they tend to operate as unconnected islandsdespite the fact that intermediaries by de"nition are meant to help connect those who are not yet connected. We believe that

    34 Convio, Sea Change Strategies, and Edge Research, The Wired Wealthy: Using the Internet to Connect with Your Middle and Major Donors, March 24, 2008.

    Online usage is high for affluent

    Source: Mendehlson Affluent Survey, 2006; Pew Charitable Trust; Luxury Institute; expert interviews

    Percent

    Exhibit 11

    7

    1414

    23

    1714

    22

    27

    3841

    17

    29

    24

    4445

    2325

    32

    40

    48

    Banking Made a purchaseTravel information or reservations

  • WiredWealthyClusters

    !"#$%&'(%)*+(%,-()./-0()-123,4(!2563-/6( ( %,-()./-0()-123,4(

    (

    78(

    !

    !"#$%&'()$*+,#$*($-.$/((0$#.$1).*$,2."#$#+($2(+,'&.3/$.4$#+(/($56"/#(3/7$$-.(/$0,1($,$

    5(3#,&)$,0.")#$.4$/()/(8$

    !(6.*$,3($#*.$#,26(/8$9+($4&3/#$:;&%"3($3.4&6(/$1(?$,##3&2"#(/$4.3$(,5+$.4$#+($#+3(($56"/#(3/8$

    9+($/(5.)-$:;&%"3([email protected]=$>3(/()#/$56"/#(3$23(,1-.*)/$4.3$(,5+$.4$#+($0,A.3$/(5#.3/$.4$).)>3.4/$

    *($/#"-&(-$:(8%87$B)&0,6$C(64,3(7$D(,6#+7$(#58=8$E6(,/($#,1($#+($/(5.)-$#,26($*+$,$%3,&)$.4$

    /,6#$F$#+($>3.>.3#&.)/$,3($3(46(5#&'($.4$#+($%3.">/$*+.$5+./($#.$>,3#&5&>,#(7$,)-$0,?$.3$0,?$

    ).#$3(46(5#$#+($56"/#(3$-&'&/&.)/$.4$#+,#$()#&3($/(5#.38$G."3$0&6(,%(7$&)$.#+(3$*.3-/7$0,?$',3?8$

    $

    !

    ! "#$%&'()*+',!-##.#/*!

    012!3)4!1156!

    7%*8%$!7())#9&(/*!

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    [email protected]!3)4!;@006!

    =A#/%B#!%B#! HI$?3/$.6-$ JK$?3/$.6-$ JL$?3/$.6-$

    =A#/%B#!&(&%$!B'C&!

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    N

  • HowTheyChoosetoGive

    TheHewlelresearchfoundagrowingsegmentofstrategicoroutcomeorientedphilanthropists(comprisingroughly1/3ofmajordonors)whodemandgreaterinforma0onbeforemakingagiB.

    Thesedonorsincreasinglyuseonlineinforma0onsourcestoinformkeycharitablegivingdecisions:Whichorganiza0onstoini0allysupportWhichorganiza0onstocon0nuetosupport

  • 26

    In light of this demand for more and better performance information, !nancial institutions with signi!-cant donor servicesincluding JP Morgan Chase, Wells Fargo, Bank of America, UBS, and Schwab Charitableare expanding their philanthropy-related products and advisory services, offering more donor education forums, collecting nonpro!t performance information, and/or adding professional staff with nonpro!t expertise. Several !nancial executives interviewed were enthusiastic about partnering with nonpro!t-sector intermediaries and foundations in an effort to gain access to more information on nonpro!ts and better serve their high-net-worth customer base.23

    Suggestions for improvement

    There is good reason to believe that better information would result in more impactful choices by indi-vidual donors. As one !nancial services professional put it, I believe performance information is like e-mail was in the 80s. Donors dont know they want it because they cant imagine it, but they will !nd it very useful once its widely available.

    23 As this paper was published, a severe credit crisis was roiling the !nancial markets. While it is impossible to predict how the crisis will play out, it may reduce the near-term capacity of some !nancial institutions to expand their philanthropic services.

    What motivates high-net-worth donors?*

    * Defined as households with Incomes greater than $200,000 or assets in excess of $1 millionSource: The Center on Philanthropy at Indiana University, Bank of America Study of High Net Worth Individuals: Initial Report, 2006

    Impact-driven

    Important motivations for charitable giving by

    HNW households (percent

    15

    15

    16

    20

    21

    21

    31

    35

    36

    36

    40

    47

    53

    58

    75Less money spent on admin

    Able to determine impact of gifts

    More financially secure

    Better return on investment

    Not already financially committed

    Knew of more organizations

    Able to use skills in nonprofits

    More access to research

    Understood goals of nonprofits

    More info on giving vehicles

    Name would not be made public

    More time

    Less legal red tape

    Able to compare notes with peers

    Not already leaving donations in estate1

    1

    8

    26

    27

    29

    57

    62

    62

    62

    64

    69

    82

    83

    86Meet critical needs

    Giving back to society

    Reciprocity

    Desired impact

    Nonprofits provide services

    Being asked

    Se

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