Friday, October 15, 2004


Despite (or perhaps because of) my training as an historian, I spend a lot of time calling the shots about the future. So here's the big one- just make sure you remember that you read it here first.

2005 will be known as the year the software industry found and forever changed philanthropy. (see previous post - Time to learn some new dance steps)
The preceding few years were the year(s) that consulting firms found philanthropy.

(So here's the prediction....)
2006 and beyond will be known as the year that financial innovation finds philanthropy. We are about to see the introduction of all kinds of new financial products for managing your giving. There will be new ways to handle investments (donor managed investments - DMIs - have already arrived) and new ways of packaging nonprofit debt, selling equity stakes, and making loans. As an industry we will see many new products and more robust and dynamic - though not necessarily better - revenue streams for nonprofit activity.

We'll also see new ways of aligning social mission with investment strategies (investing resources for sustainable growth) and a lot of activity from new firms seeking to shift even a small portion of the hundreds of billions of endowed US dollars to new products (e.g. perpetual trusts). This will be exciting. Like all new markets, it will take some time for the clear winners to be declared and for real improvement to be seen. But we will get closer to having capital markets for philanthropy that are more visible, rational, and accessible. And it will get started in 2005. If you'd like to know more or why, email me. And, remember, you read it here, first.

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