By Cathy Duff
Giving is undergoing a transformation
The landscape of giving, whether in the context of philanthropic organisations or corporate social investment (CSI), is evolving. In the face of the current polycrisis, social and environmental challenges are viewed more thoughtfully While philanthropic organisations and companies have mainly operated separately with differing goals and methodologies, both sectors have felt a societal shift towards deeper, more systemic thinking, inspiring them to adapt their approaches from simple charitable donations to more strategic, impactful interventions.
“Philanthropic organisations have had a longer history to explore different approaches to giving. As they take steps towards more impact-driven models, CSI is following their lead, devising more strategic and integrated approaches to delivering social change,” says Trialogue Managing Director Nick Rockey.
As we witness the growing understanding that lasting change needs more than band-aid solutions, this evolution begs questions about the future of giving. How is CSI shifting, and what, if anything, can philanthropic organisations learn from this shift?
The transition to leveraged CSI
The evolution of CSI, outlined in Trialogue’s Business in Society Handbook article ‘The Future of CSI’, can be characterised by three phases: Charitable CSI (1.0), Strategic CSI (2.0), and Leveraged CSI (3.0).
- Charitable CSI (1.0) describes a welfarist approach, viewing corporate giving as a cost that is largely separate from the business. Such projects have limited alignment with business goals, may originate from reactive project selection and reflect minimal monitoring and evaluation.
- Strategic CSI (2.0), the current predominant approach, views CSI as an investment that is more integrated into the business. It features fewer, more strategic projects aligned with business objectives, enhanced monitoring and evaluation, and some collaboration beyond implementing partners
- Leveraged CSI(3.0) represents the future direction of CSI, where giving becomes core to the business, with strong corporate interdependence and leveraged alignment. This approach seeks to influence the broader system, moving beyond the scope of specific projects. It emphasises multi-stakeholder involvement and collaboration, focusing on fewer, more expansive programmes and collective impact initiatives, with wide knowledge-sharing and advocacy.
Acknowledging that these different approaches are not mutually exclusive milestones but interdependent strategies that can coexist within a company’s CSI portfolio, leveraged CSI represents an aspirational future for corporate giving.
Drivers behind the change in giving practices
Three significant trends are driving this change in the CSI landscape:
- Increasing integration within the company
- The move towards systemic impact in society
- Enhanced ways of working
These are shaping the future of CSI and offer valuable insights into the potential evolution of philanthropic organisations.
The first driver, increasing integration within the company, is primarily relevant to the corporate world. It represents a shift towards viewing social impact as an integral part of business operations rather than a separate function. While this specific trend may not directly apply to philanthropic organisations, it is an expression of the growing importance of strategic alignment and holistic thinking in creating social impact.
However, the second and third driverspresent compelling parallels for the philanthropic sector and offer a roadmap for evolution.
Towards systemic impact in society
The move towards creating systemic impact in society represents a fundamental change in how organisations approach social issues, from addressing symptoms to tackling root causes. It involves:
- A focus on systemic change and social justice
- Collaboration and the adoption of collective impact models with coordinating bodies
- Support for advocacy and research
- Applied research to influence changes in broader society
- Intentional knowledge sharing to amplify impact
“Philanthropic organisations are increasingly pursuing a cause at a deeper level. While this approach is not yet standard practice, the transition is easier given that philanthropic organisations are not bound by the rules or management whims that can constrain corporate giving,” says Rockey.
The move towards more systemic impact might see philanthropic organisations increasingly focusing on root causes rather than symptoms of social issues and engaging in cross-sector and other collaborations to address complex challenges. They might invest more in foundational research and advocacy to influence policy and practice and build knowledge-sharing platforms that support giving.
Enhanced ways of working
The third driver influencing CSI’s evolution focuses on adopting new, more effective ways of working, including:
- Increased use of data and artificial intelligence (AI)
- Improved giving practices
- Continuous learning through applied measurement
- Alternative sources of social funding
- Outcomes-based funding
- Increased use of innovative finance
This driver presents opportunities for philanthropic organisations, to deliver greater impact They, too, can leverage ever-improving technology to make more informed decisions about grant-making, predict the potential impact of different interventions, and measure outcomes and impact more accurately
More flexible, trust-based giving practices could deliver more inclusive, effective giving. Unrestricted funding and participatory grant-making processes might offer more sustainability for organisations and give recipient communities a voice in funding decisions.
Exploring innovative financing mechanisms offers philanthropic institutions the opportunity to experiment with impact investing, blended finance models, or social impact bonds. These approaches could allow foundations to leverage their assets more effectively, potentially creating a more significant social impact while ensuring financial sustainability.
Can CSI and philanthropy come together for “Giving 3.0”?
As companies and philanthropic organisations embrace these drivers of change, a new way of giving is emerging, one we might call “Giving 3.0”.
This new paradigm is characterised by a focus on systemic impact, innovative practices, and the commitment to continuous learning and adaptation. Giving transforms from mere funding to a catalyst for change, convening stakeholders to bring about holistic social change. Data and technology can be leveraged not just to measure impact, but also to predict and shape it.
Giving 3.0 would embrace the collaborative effort. This convergence could create space for more philanthropic and CSI partnerships that combine the strengths of both sectors.
“Such collaboratives open up exciting possibilities for CSI. Where companies may be hesitant to work directly with their competitors, partnerships with philanthropic organisations offer the chance for fruitful partnerships. Corporate funding and business strategies could be combined with a foundation’s grassroots knowledge and programme design expertise to deliver innovative, sustainable, and scalable solutions to complex social problems,” says Rockey.
He adds that such partnerships have the potential to enhance corporate giving. “Instead of isolated CSI initiatives, companies can plug into larger, more strategic efforts led by experienced philanthropic organisations. This approach amplifies the impact of corporate contributions and provides companies with valuable learning opportunities and reputational benefits.”
As philanthropy and CSI continue to evolve, Giving 3.0 presents a promising direction for private- sector giving to address the social and environmental challenges of our time.
This article was originally published in the IPASA 2024 Annual Review of Philanthropy.
