The Epic Foundation, a global non-profit organsiation that works with donors and organisations and provides solutions to enhance the effectiveness of giving, launched its Epic Outlook 2018 report earlier in March and has since been on a world tour sharing insights and spurring discussions on global trends in philanthropy. Last week I attended their report launch in Dubai strategically located at Dubai Future Accelerators and facilitated by Nicola Crosta, Executive Vice President at Epic Foundation.

What are some of the global trends in philanthropy?

Nicola started the conversation with the very first trait that characterises philanthropy all over the world: the lack of data. On the subject he said, “philanthropy is a sector where everybody has an opinion about, but no data to back their opinion.”

Having acknowledged the lack of availability of data globally and in the region, the Pearl Initiative launched its own research and published findings in “The State of Governance in Philanthropy – Gulf Region” report. Our research shows that the lack of research on the philanthropic and non-profit ecosystem is a major issue in the region. Data and statistics have the potential to not only enhance transparency and accountability in the ecosystem, but also encourage stronger partnerships and collaborations.

Therefore, the first step to enhancing the effectiveness of giving is to gather data. The Epic Foundation’s research across 3,500 non-profit organisations and social enterprises reveals insights on what’s working, what needs improvement and what’s next for the sector.

What’s working and what’s not…

It is undeniable that non-profit organisations play a strategic role in the development of societies. Social activists and social entrepreneurs have come up with innovative ideas to tackle the increasingly complex nature of today’s social problems. Organisations that have been more successful in achieving their impact have clear missions, solid operations and good governance practices.

Unfortunately, not all organisations operating in the sector are robust. The Epic Foundation’s research reveals that there is a structural weakness in the non-profit sector. 31% of the organisations surveyed cannot articulate the impact they aim to achieve and 41% do not have any impact monitoring measures in place. Similarly, our research shows that stakeholders in the ecosystem have recognised the need to improve governance practices in philanthropy. However, how to improve these practices was not clear.

Moreover, 84% of non-profit organisations researched by Epic Foundation claim that the lack of sustainable, multi-year funding from donors is a key barrier to achieving maximum impact. The current relationship between donors and non-profit organisations is mostly linear where donors provide the funding and organisations report on their achievements. Given the rise of strategic philanthropy, which focuses more on long-term social impact, this model is proving to be unsustainable. All actors in the sector are somehow engaged in monitoring and evaluation practices, however inefficiencies arise due to the inefficient allocation of funding and structural weaknesses in the non-profit sector.

What’s next?

The first step to addressing this problem in the sector is to focus efforts on impact evaluation. In the world of finance, professional tools are used to assess return on investment and similarly, impact evaluation in the philanthropic sector should be assessed professionally.

In an effort to enhance the effectiveness of giving, the Epic Foundation works as an intermediary between donors and non-profit organisations. They analyse data on impact provided by non-profit organisations, validate and summarise the data for donors to ensure their giving yields the intended impact. As such, measuring social impact becomes a process that involves not only the organisations, but also the donors and intermediaries.

To read the full report visit: https://epic.foundation/impact-solutions/outlook-2018.

To find out more about the Pearl Initiative’s work with the Philanthropic and Non-Profit Ecosystem in the Gulf Region, visit: https://www.pearlinitiative.org/#!/philanthropic-and-non-profit-excellence