Must Read Blog January 30, 2023

Where Will Education Philanthropy Go in 2023?

When the COVID-19 pandemic broke out, I was leading fundraising efforts for the XPRIZE Foundation, a nonprofit that utilizes innovation tools to drive positive impact in the social, climate, and health sectors. Expecting the worst during a time of extreme uncertainty, we hunkered down for a rapid decline in philanthropic funding. I pushed my team to close every fundraising opportunity available before donors would pull back, up at night worried about every colleague we would lose if we couldn’t close a deal. 

I was wrong. Donors really came through. In fact, the pandemic saw an unprecedented rise in philanthropic giving, with many nonprofits as beneficiaries, including XPRIZE. Overall, giving by foundations rose by 15.6% from 2019 to 2020 and an additional 3.4% from 2020 to 2021. However, 2022, buffeted by economic uncertainty and roiling markets, shaped up as a return to 2019 levels.  

As we enter 2023, a year that more than anything is marked by extreme unpredictability, I’ve been preoccupied with three questions centered on how education philanthropy will evolve: 

Where Will Philanthropic Dollars Flow in Education?

COVID-19 has brought into clear focus one critical area of need: dramatic declines in literacy and math performance during critical schooling years. Responses from funders, such as the Bill and Melinda Gates’ Foundation’s commitment to math education to the tune of $1.1B, are promising. Will other funders follow suit? Which points of leverage are these foundations targeting? And which programs are proving not only most attractive, but most effective? 

How Will Leading Foundations Lean Not Only into the Power of Their Capital, But Also into the Power of Their Influence?

Over the past few years, we’ve witnessed a rise in more coordinated and collaborative efforts among philanthropic organizations working on a range of social, economic, and environmental issues. This matters because while the generosity of these funders cannot be understated – total foundation giving was nearly $91B in the boom year of 2021, with an estimated 14% going to education – that support is equivalent to 2% of the federal government’s annual education budget. Yet, these organizations had an outsized influence on the direction educational institutions take and their work can help shape policy, accelerate innovation, and focus efforts. I’m looking to see how over the next year, this trend toward collaboration moves in the direction of influencing policy from the top-down, not just behavior from the bottom-up. 

What Innovative Methods Are Philanthropic Foundations Utilizing to Catalyze Systems Change and in Which Areas Are They Focusing These Efforts?

Over the past few years, incentive prizes have become a favored tool for philanthropists to drive innovation in areas that need it or to identify opportunities to scale methods that work – a trend to which I had a front-row seat at XPRIZE. For example, after launching its first 100&Change competition in 2017, the MacArthur Foundation’s Lever for Change has already galvanized over $1B in philanthropy for bold solution. Lever for Change has deployed its methodology across a range of issues and I am looking to see how other organizations use similar efforts in education. Similarly, in 2022, SchmidtFutures introduced another innovative approaches to driving change through philanthropy, Convergent Research, a Focused Research Organization (FRO) seeking to tackle large-scale, tightly coordinated, technically ambitious non-profit projects with a finite-duration, after which the FRO disbands and deploys its technology into the real world. Are there similar potential efforts that can be carried out in the educational sphere?  

How philanthropic organizations address these three questions promises to reshape education philanthropy in the post-pandemic era. Investing intentionally and methodically in specific programs, collaborating across the sector to scale promising initiatives, and using innovative methods to catalyze change can alter both the means through which philanthropic impact happens and its ends.  

2023 will be an inflection point for education in the United States. Foundations in particular among philanthropists can play an outsized role in shaping the conversation. I’m looking forward to seeing how they do so, the impact these efforts will have, and together with my colleagues at Tyton Partners continuing to help them in the process.