The following is an extract from Kay Sprinkel Grace’s e-book – Donor-Driven Philanthropy: How the Dreams of Donors are Changing Philanthropy (and Redesigning Our Future as Fundraisers). It will form the basis of the closing plenary at the upcoming International Fundraising Congress in Amsterdam. I’ll be there, and expect to have a great deal to say on international fundraising next month.

Donors’ dreams about making the world a better place are driving their philanthropy, says Kay Sprinkel Grace, so should fundraisers become ‘dream brokers’ to manage those dreams?

None of us can fail to have noticed how philanthropy has changed over the past decade (especially the last three or four years). Donors are demanding greater levels of accountability, stewardship and transparency; and they want more direct involvement in deciding how you spend their money. They are doing this because they have their own dreams about making the world a better place and those dreams are driving their philanthropy. If those dreams are about the future, whose future are donors designing?

That seems relatively simple: while donor-investors are hoping to reinvent the future of the world, they are also redesigning our future as fundraising professionals.

So how did the reins change hands? Why are donors climbing into the driver’s seat and asking us in many cases to take the back seat? If we can’t hold the reins, we need at least to be invited into the passenger seat.

There has been a growing sense among citizens of all ages and levels of wealth of wanting to ‘do something’ to ‘fix’ so many of the world’s situations – and people are doing this at a younger and younger age. Their sense of urgency is acute: they want it done now.

The rise of citizen journalism, blogging and access to web-based information about world crises and chronic needs has created a breed of ‘citizen philanthropists’, who are hearing about the micro-economic revolution in Africa and other parts of the developing world and finding out that for very little money they can be a partner in these enterprises and speed the solution.

Twenty-first century philanthropists (givers, askers, joiners and those who serve) feel as though they can be participants in the vision of a better future for the world – and that dream is driving them to take action with or without us. The actions we take – both to guide these new donors and respond to their dreams – are increasingly critical.

Websites such as Kiva.org and globalgiving.org, which allow donor-investors to not only give directly but to get direct feedback from the projects they fund on the impact of their giving, are part of a trend that is making our organizations increasingly irrelevant to a growing group of donors.

This sense of donor independence is fueled by confusion about the proliferation of organizations with seemingly redundant missions. This has led many donors to do it themselves – creating organizations they can guide with their dreams and monitor first-hand – rather than putting their money in our hands. This is compounded by the frustration some donors feel with the pace at which we have and are confronting the world’s problems.

Finally, we still haven’t learned that donors want to know how we spend their money. In countless surveys and interviews, people still say they would give more if they “knew how it was spent”. A donor with a dream will either take on the project without our help – or hover over us to make sure we are spending the money well. We need to let them know what we have done with their money – the difference they have made through us. And we need to tell them before they ask.

How should we adapt to these changes? The argument that I’ll be making in my closing plenary at the International Fundraising Congress this year is that we must become ‘dream brokers’.

When people with dreams come to us, it is our job to try to find the opportunity within our organizations (or in collaboration with other organizations) to fulfill those dreams. They will be looking for conditions that tell them that their dream will be cherished and grown in an organization that is entrepreneurial, strong and safe.

But to allow change to dream-brokering, charities must genuinely understand and believe that the donor-investor is the center of our universe – it is not about us any more.

We are also going to have to change the way we operate and think. This will include:

• Report with transparency on our success and failures to donors and the community
• Realize that philanthropy is truly a global phenomenon
• Be open to and actively seek out change in your organization and take more risks
• Make better use of emerging techniques
• Spread leadership qualities throughout the organization into a ‘dispersed leadership’ model rather than having everything driven from the top

Donors want to be involved with their investment. They will define that involvement, such as regular reports or a seat at the boardroom table. If you want to keep them closely involved, and build a mutually-satisfying, long-term relationship, then you have to welcome them and not resent their presence. This is a tough hurdle for many organizations that are used to doing their business without involvement from people outside their organization.

We will have to go where the donors and their dreams are. They may not come to us. But if they do come to us, they will be looking for conditions that tell them that their dream will be cherished and grown. And if their dream will not work within our organization – if we cannot be the broker they seek – then we must connect them to another organization.

Part of transparency is understanding what you can and cannot do. Too many gifts in philanthropy have been taken in full knowledge that they would not be spent as the donor wished. We have passed that time in philanthropy. That is no longer conceivable or possible. The donor is looking for a return on investment. We must provide it, or suggest where they might find it through investment in another organization. Successful philanthropy is not about us or our organizations – it is about effective community investment and visible impact.

If we do not embrace this opportunity for change, we will find existing and potential donor-investors less and less willing to advance their dreams through our organizations. They will work increasingly outside of and around our organizations to launch their idea (even if it fails), and they will try to do things for which they have more passion than experience. Although they would benefit from our counsel, they may not seek it. We need to sell our sector as a solution, not a roadblock, in the fulfillment of their dreams and ideas.

Yet in spite of these developments, we persist in the belief that we can position ourselves as organizations worthy of significant investment by the wealthy in our countries – even while neglecting the profound trends that are all around us. We must understand that with few exceptions (universities, colleges, places of worship) it is the issue or dream, not the organization, that attracts philanthropists.

We will be defining our new role constantly in the next several decades. There are some who question whether our sector will even be a discrete sector in another generation or two, or whether our work will have been subsumed by operating foundations, entrepreneurial public-private partnerships and special divisions of corporations that will use their resources to accelerate the change we have begun.

Whatever the place of our sector in generations to come, those of us whose passions are tied into the work we do will want a role. Perhaps this is the biggest challenge we have: to stay renewed and focused and to remember that the accommodation of change is perhaps the biggest change we have to make.