From Crisis to Opportunity: How Philanthropy Can Help Secure the Future

Loren McArthur
8 min readApr 20, 2022


We live in a society riven by large-scale, interlocking crises: political, environmental, economic, and social. Rapid technological change has upended the economy, disrupted social relations, and undercut our shared basis for facts and knowledge. Inequality, demographic change, and the unresolved harms of racism are shredding social cohesion. Authoritarianism is once again on the march against democracy, and climate change is threatening the ecological foundations of human society. These crises are real and existential. Together, they are pushing us toward a reckoning that will create new dangers — but that also presents opportunities to reshape our economic, civic, and political institutions and build a healthier, more resilient, and more just society.

To turn crisis into opportunity, the philanthropic sector must change the way it operates. The institutions, cultures, and practices that philanthropy has developed over decades lack the agility, capacity for scale, and risk tolerance we need to address today’s urgent challenges. The mindsets that many philanthropists have adopted — a focus on incremental progress, a fetishization of measurable outcomes, a bias toward siloed interventions that disregard politics and power inequities — are inadequate to the tasks now before us. Philanthropists must recognize that the urgency, velocity, and potential harms of the challenges we face today are an order of magnitude greater than anything we have encountered since World War II at least, and our sector must act accordingly. To help meet our current crises and fashion a stable and equitable future, we will need to put vastly more capital to work, prioritize the most urgent threats, collaborate openly and effectively, channel resources into organizing and movements that can unlock the scale and power of government, and help rebuild trust in the civic institutions upon which our collective welfare depends.

Crisis drivers

The crises we face share a set of underlying drivers — root pathologies that are themselves intertwined, and that we must understand if we are to chart a path through crisis toward a stable and prosperous future. Three of these crisis drivers are particularly potent in our present moment.

Unbridled technological change. Technological change has outpaced our ability to steer technology toward public goods, or even to guard against its obvious public harms. The internet and social media have supercharged disinformation and stoked political division and extremism. Information technology has created vast fortunes for a privileged few while eliminating millions of mid-skilled jobs that had for decades sustained a vibrant middle class in America and debasing and dehumanizing low-skilled work. Innovations powered by technologies like artificial intelligence and blockchain have the potential to improve people’s lives, but when private interests alone guide their development and application, these technologies can exacerbate inequities, undermine human rights and civil liberties, and destabilize communities and social cohesion.

Predatory capitalism. Free markets fuel innovation and prosperity and are a cornerstone of liberal societies. In recent decades, however, unrestrained capitalism in the United States has produced tremendous wealth inequality, undermined the political equality necessary for a functional democracy, and imperiled the environment. The force rationalizing and perpetuating this species of predatory capitalism is a fundamentalist market ideology that has dominated US politics and policymaking for the past four decades — one that holds markets sacrosanct (at least when they serve the interests of the powerful) and views government regulation of the economy as inefficient at best and a form of tyranny at worst.

Collapse of social trust. We are experiencing a profound crisis of trust that is damaging our capacity for collective understanding, action, and sacrifice — elements that are essential to tackle our greatest challenges. Faced with increasing economic precarity, many middle- and working-class Americans are losing faith in our political and economic institutions. As Black and brown Americans demand an adequate reckoning for the country’s long history of racial injustice, a faction of aggrieved white Americans — spurred by opportunistic politicians and media figures — is rejecting democracy and embracing authoritarianism. Meanwhile, a digital environment and media landscape that profit from outrage amplify our divisions and encourage distrust in our institutions daily.

The end of business as usual: Transforming philanthropic mindsets and practices

The mindsets and practices that have dominated the philanthropic sector for the past 25 years have left us ill-equipped to tackle our present crises and their underlying drivers. The principles of strategic philanthropy that donors have long favored encourage philanthropists to focus on specialized areas where they can bring distinctive value and to invest only in proven, evidence-based models with measurable outcomes. This paradigm has discouraged many philanthropists from investing in social movements or bolder policy-change efforts, areas in which the impact of a single donor or foundation is often modest and difficult to measure. It has also reinforced a deeply engrained culture of risk aversion that has prevented many philanthropic organizations from engaging effectively in advocacy.

Thankfully, emerging mindsets and practices are more conducive to the bold, collective action required to address the scale of today’s threats. While they show up differently in different parts of the philanthropic landscape, we can organize these mindsets and practices under six rules of thumb for effective philanthropy in our current era of crisis.

1. Spend today to save tomorrow. When confronting threats whose harms increase exponentially, a dollar spent today on prevention produces significantly greater returns than a dollar spent later on remediation — a principle I’ve described elsewhere as the time value of social investment. In the midst of the pandemic, some foundations increased their payouts, at least temporarily. Yet, even in the crisis year of 2020, a significant plurality of foundations gave away just 5–6 percent of their assets. Most foundations also eschew mission-related investment strategies that would put their endowments to work for social impact. And even the most active individual philanthropists are giving away just a fraction of their wealth. According to a recent Forbes analysis, the most generous 25 billionaires have given away $169 billion in their lifetimes, but they are still sitting on $1.1 trillion in assets, and their collective wealth grew by $150 billion in just the last year alone. (Most of America’s billionaires are far less generous: a 2021 Forbes analysis found that 156 of the nation’s wealthiest 400 billionaires have given away less than 1 percent of their net worth.) To confront challenges like climate change, donors must loosen the purse strings, spending now rather than stewarding resources for a future in which our crises have outgrown our capacity to solve them.

2. Leaders must follow. To mobilize the resources required to confront our challenges, philanthropists must suppress the impulse to chart their own courses and instead join with their peers to pool resources and unite in common action. In other words, donors must be willing to follow as well as lead. Many donors are beginning to embrace this mindset; as they come to terms with the magnitude of the threats we are facing, they are increasingly determined to work together to confront them. According to data from the National Center for Charitable Statistics, between 2010 and 2018, donor contributions to the largest fiscal sponsors — the main vehicles for pooled donor funds — increased by nearly 500 percent. Philanthropists must accelerate this trend and realize even greater strategic unity, focus, and scale of collaboration.

3. The existential is essential. Philanthropists should focus their collective investments on our greatest and most existential threats. This may seem like common sense, but it is not common practice for the sector. Climate change — perhaps the single biggest threat humanity has ever faced, and one which scientists say requires immediate, radical action across all domains of society — receives less philanthropic investment ($1.4 billion annually) than does arts and culture ($2.5 billion). The democracy field is similarly underfunded, having received an average of just $280 million per year from foundations from 2014–2018 according to an analysis by Inside Philanthropy. The Chronicle of Philanthropy recently assessed the philanthropic giving of the 50 largest megadonors in 2021 and found that “nearly 86 percent of the funds…went to…colleges and universities, hospitals, foundations, and donor-advised funds.” Health, education, and the arts are undeniably valuable. At the same time, our health and education — along with everything else — will suffer immeasurably if we are unable to stabilize the climate or if we fail to safeguard systems of democratic governance that are accountable for the welfare of the people.

4. Movements matter. Our crises are primarily sociopolitical rather than technical in nature. Reining in the harms of new technology, curbing the climate crisis — these will require policy and regulatory interventions and the political and public will to enact them. In turn, achieving transformative policy change requires bold social movements capable of overcoming the powerful interests seeking to maintain the status quo. Yet, philanthropy currently lacks the knowledge, systems, and risk tolerance to effectively support social movements. Donors must be willing to embrace direct-action tactics such as hunger strikes or civil disobedience that bring litigation and reputational risks. They must relax their insistence on measurable outcomes, as movement groups often lack capacity for reporting or data collection and the dynamics of social change are complex and difficult to quantify. And donors — especially the biggest philanthropies that are structured to support large, national organizations — need to build new competencies and systems to understand and fund movement actors, who include many small organizations and leaders outside of established institutions.

5. Structure follows strategy. Because movements and policy change are critical to addressing today’s crises, donors should structure their efforts accordingly, using funding vehicles designed with strategic goals in mind rather than suiting their strategies to their institutional structures. Donors who want to engage in political or lobbying activity, for instance, need to have the appropriate structures in place to do so. Donors should also put their investment and endowment capital to work, through impact investing and investor activism. Crucially, they must find ways to get capital into the hands of those doing the most critical work, whether these are US-based charitable organizations or foreign NGOs, individual movement leaders, for-profit enterprises, or public-sector entities. For many donors, this will require creating flexible investment vehicles that can move multiple forms of social-change capital to multiple types of actors quickly and for maximum strategic impact.

6. Trust empowers truth. An important lesson from the pandemic is that wealth and technology cannot prevent catastrophe in a society at war with itself. Consider that Vietnam, a poor country with high levels of trust, has fared exceptionally well during the COVID-19 pandemic, while the United States has the highest COVID death rate among wealthy countries. When people are isolated and distrust government and each other, they latch onto conspiracy theories and scapegoats rather than uniting around real solutions. Promoting social trust must therefore be a vital goal for philanthropy — as important as investing in technical interventions or policy measures. Philanthropists must help build civic and political institutions that promote social solidarity and enjoy broad legitimacy: public schools and universities, local news organizations, local governments, unions, and civic associations, among others. This work includes bolstering the legitimacy of philanthropy itself by making its leadership — which is overwhelmingly urban, coastal, and upper class — more representative of the country at large.

Imagining a better future

The Chinese character for “crisis” is a combination of two other characters: “danger” and “opportunity.” The dangers we confront will bring a reckoning, one that will be painful but will also create opportunities to imagine and build a more equitable and resilient society. Transforming our energy, transportation, and food economies to mitigate climate change can be a heroic, national enterprise that creates new industries and jobs, expands economic prosperity, and strengthens our social cohesion and sense of collective purpose. We can reinvent our digital spaces to promote dialogue, strengthen understanding, and expand knowledge, rather than spread division and disinformation. We can build healthy civic and political institutions that bring Americans together and provide opportunities for authentic democratic engagement.

These outcomes are not foreordained. The arc of history only bends toward justice if people make it so. But a better future is possible, and we can secure it if we have a clear-eyed view of what we are up against and act with the urgency and resolve the moment requires.



Loren McArthur

Philanthropic advisor, senior director at Arabella Advisors