What's Next In Philanthropy? Decentralized Models And Smarter Giving

Forbes

3 days ago

What's next for philanthropy?
Philanthropy is in a tough spot.
Across the nonprofit world, the recent shakeup by the current administration is sending shockwaves through the grantmaking ecosystem. Government funding, once a dependable cornerstone of many nonprofit budgets, is suddenly under existential threat, and the effects are already visible.
According to The Urban Institute, 90% of nonprofits with over $10 million in annual expenses receive government support, with those funds making up more than half of their total revenue. Smaller nonprofits, those with budgets under $100,000, are far less reliant, with only about half receiving grants, and even then, those grants comprise just 13% of their revenue.
This time, it's the big players who are most at risk, but the small fry aren't out of the pan either.
Over the past weeks we have seen programs that once depended on multi-year commitments are suddenly scrambling for bridge funding. Hiring is frozen, expansion shelved, and in many cases, survival itself is up in the air.
Nonprofit leaders now face a binary choice: adapt or fade out.
There aren't many of us looking out for silver linings in an existential catastrophe like this for good reason.
However, necessity has always been a powerful catalyst, and the question of how the field will evolve in response to the shockwaves is a fascinating one .
The economic and political volatility is putting Schumpeter's creative destruction on steroids across the entire philanthropic landscape, and one result of the shakeup will be that outdated models are rapidly being discarded in search of more agile, resilient approaches that are emerging in their place.
What's rising in the aftermath is a new breed of giving that is leaner, faster, and built on the principles of decentralization, distribution, and data.
Not out of ideological preference, but out of sheer, unrelenting necessity to stay the mission.
A Thinning Herd, But a Stronger Breed?
Periods of extreme contraction do one thing exceptionally well: they force us to come to terms with our shortcomings and build on only that which works.
In biology, bottlenecks can concentrate adaptive advantages for those who survived. For example, many of us are still carrying latent resistance to the bubonic plague centuries after the precipitous event. What doesn't kill everyone, can make the rest of us stronger.
Giving is no different.
As dollars dry up and public scrutiny increases, only the most efficient, transparent, and impact-driven organizations are likely to make it through intact, alongside those that are most adept at playing the political game of musical chairs.
Karen Kardos, Head of Philanthropic Advisory, Citi Wealth, sees this shift as a moment of accountability for nonprofits.
'There's pressure, yes,' she says, 'and that is forcing nonprofits to stay squarely on mission to generate impact. Funders are moving on from simple metrics like saying, 'We funded X' to 'We moved the needle on Y'.'
For organizations backed by traditional funding sources, grants, CSR arms, endowments, the pivot to emphasizing effectiveness and efficiency isn't optional.
Donors want to see dashboards that prove that the dollars they give pack a punch, not just stories and case studies.
'One thing we are seeing is the acceleration of a cultural shift that has been long in the making,' Kardos adds. 'The old model was report-based. The new model that is quickly becoming the must-have is iterative, responsive, and grounded in outcomes, not just expenditures.'
And yet, a number of valuable interventions and nonprofits will be left behind as there are more recipients seeking fewer dollars. There's no downplaying the tragedy this can entail for the beneficiaries and our society at large, and yet, the upside of this forced molting is equally clear: a sector that is emerging leaner, sharper, and more willing to test the boundaries of what giving can look like in a modern, data-literate age.
Constraints make better designers.
In philanthropy, they may also be making better leaders.
Just ask Lurein Perera, co-founder of GiveCard, who built a direct-to-recipient philanthropy model designed to cut out layers of bureaucracy.
'We build and maintain the infrastructure by which nonprofits are giving money directly to people, including those experiencing homelessness, via our debit cards,' he explains. 'It's traceable, fast, and goes straight into the hands of those who need it.'
The system includes usage monitoring and the ability to set smart restrictions, but it avoids the kind of paternalism that often plagues aid models.
'We're not trying to control people,' Perera clarifies. 'We're trying to support them, and hold ourselves accountable for doing that well.'
GiveCard is lean by necessity, but Perera doesn't see that as a limitation.
'In scarcity, you're forced to be resourceful,' he says.
'You test faster. You talk to users more. You measure everything. That's how you build models that scale, not ones that collapse under their own weight.'
This sense of agility is showing up across the board now much more than ever.
Clay Dunn, CEO of VOW for Girls, has spent the past few years building a giving engine for a cause that doesn't always get the headlines, ending child marriage.
But instead of focusing only on large institutional gifts, Dunn's team has prioritized partnerships, creativity, and distributed donor bases.
'Some of the most effective campaigns we've run have been through small business networks and grassroots ambassadors,' Dunn says. 'People want to give. They just need to feel like what they give matters.'
To that end, VOW for Girls emphasizes transparency in how funds are distributed and impact is tracked.
Their model allows 100% of public donations to go directly to the field, something that's only possible through rigorous operational design. 'We had to be intentional about the structure,' Dunn explains. 'We made hard choices early so that we could have trust at scale later.'
That clarity pays off. According to Dunn, donors, especially younger ones, are increasingly skeptical of overhead-heavy organizations.
'The cause is as important as it ever has,' he says. 'But now what matters even more is how you deliver on that cause and how the donors and beneficiaries perceive you in the process. Trust is the new currency without which nonprofits can't operate.'
What unites leaders like Dunn and Perera is a shared commitment to systemic redesign where decentralization is at the root of it all.
Decentralized Giving Models: The New Playbook for Nonprofits
For years, decentralization had been the talk of future-forward philanthropy.
Now, it's the urgent present.
In fact, it's a shift that's been quietly underway for a decade, fueled by learnings from failed top-down interventions and reinforced by the success of community-rooted organizations.
But where once decentralization was a nice-to-have, it's now a survival tactic.
Kardos reflects on this moment as an inflection point for the sector.
'We are seeing a shift to localized ownership wherever possible,' she explains. 'That's a strategic stance that is being taken by more and more international nonprofits. You don't get sustainable change by air-dropping solutions. You get it by embedding capability and agency where it's needed most, and that's where the distributed model outperforms.'
Kardos also underscores that this transformation isn't purely reactive.
The donor landscape has been evolving too.
With fewer dollars in circulation and more scrutiny from funders, nonprofits are being asked harder questions about how dollars are spent, and who gets to decide how they are spent.
That pressure is creating a donor's market, where efficiency, transparency, and measurability are prerequisites instead of perks.
'This environment forces all of us, funders, intermediaries, and frontline implementers, to ask how we can get smarter with capital,'
Kardos agrees: 'We've seen that the closer a nonprofit gets to the communities they are trying to serve, the better the outcomes. Local partners often know best what works and what doesn't. The most valuable thing funders can offer them is trust, not prescriptions.'
But decentralization doesn't mean chaos. Technology is playing a vital role in this transition too.
Digital platforms are enabling new forms of donor engagement, localized disbursement, and transparent impact tracking. It's now possible to decentralize not just funding decisions but the entire value chain, from vetting organizations to measuring outcomes in real time.
Perera's GiveCard platform wouldn't have been possible a decade ago, and it was a heavy lift even today. 'In many ways we had to reinvent the rails' he says. 'The infrastructure we needed didn't exist because it was largely built for banking, not for the work we want to do. Investing in the tech was essential for us.'
Dunn sees similar benefits in tech-enabled storytelling and fundraising.
'You don't need a 10-person team to launch a meaningful campaign anymore. You need a clear story, the right tools, and a few committed allies. It scales faster than people think.'
And with that scale, comes outcomes that are derived by means that are more efficient than those that came before, giving hope that the nonprofits left standing after the market stabilizes are in a position to grow back, better than ever.
Data-Driven Giving With Human-Centered Design: The Path Forward
While there's certainly a glimmer of hope, there's a deep sense of caution that nonprofit leaders should pay close attention to.
As data and dashboards become central to philanthropic decision-making, leaders must ensure that people stay at the center of the work.
'Measurement is a means, not an end,' Kardos warns. 'If you optimize for KPIs at the expense of communities, you've missed the point and most likely ended up with unintended consequences. This is why it's so important for funders to be flexible and use data to course correct if necessary.'
Dunn puts it another way. 'Data helps us work better and fundraise more effectively, but the individual stories, the lives we are changing, is why we are doing any of this.'
Perera agrees, noting that the best philanthropic models are those that integrate feedback loops from the people they serve. 'Our customers run surveys, collect spending data, talk to cardholders. But at the end of the day, what matters most is: did it make someone's life better?'
That grounding in human-centered design is what sets this new era of philanthropy apart.
The tools are smarter. The systems are more agile. But the heart of the work remains the same.
So what does this mean for corporate leaders, institutional funders, and nonprofit boards navigating their role in this changing landscape?
For starters, it means asking different questions.
It's no longer enough to ask 'How much are we giving?' on the donor side of the equation.
Today's donors must ask instead, 'How are we empowering?', 'What systems are we building?', and 'What power are we willing to share?'
It also means rethinking how success is defined on both sides of the table.
In the new area of distributed, decentralized giving that is ushered upon us, success is not a shiny press release or a fancy infographic.
It's a system that sustains itself beyond the grant: outcomes, not optics.
Perhaps most importantly, it means listening to new voices.
'The best thing that any leader can do right now,' Kardos says, 'is to ask: Who am I not hearing from?'
Whether that's frontline practitioners, the communities they serve, or the recipients themselves—real impact starts with inclusion.
As Dunn puts it: 'We don't need to reinvent generosity. We just need to remove the friction that's kept it from flowing freely.'
And if that sounds like a startup pitch, that's no accident. Because the future of giving isn't going to look like the past.
It's going to be faster. It's going to be smarter. And it's going to be built from the ground up, not inherited.