The world of philanthropy is evolving at an unprecedented pace, driven by technological advancements, social movements, and shifts in donor behavior, a newly released report indicates.
The report by the Dorothy A. Johnson Center for Philanthropy and the Grand Valley State University and titled 11 Trends in Philanthropy for 2025, offers a deep dive into the key issues and transformations shaping the nonprofit sector this year.
Rethinking Traditional Philanthropy
The report says that philanthropy is no longer confined to large foundations making grants to established nonprofits. Instead, new models of giving are emerging, focusing on flexibility, community involvement, and long-term impact.
One significant shift is the rise of trust-based philanthropy, a model that moves away from the traditional, often rigid, grant application processes and focuses on providing nonprofits with unrestricted funding.
This approach acknowledges that organizations working directly within communities understand their own needs better than external funders. By removing bureaucratic hurdles, trust-based philanthropy allows nonprofits to focus on their missions rather than spending excessive time meeting grant reporting requirements.
“The last five years have been a powerful experiment in different ways of funding nonprofits,” said Tory Martin, director of communications and strategic partnerships at the Johnson Center. “We’ve seen how flexible, unrestricted funding can transform organizations,” he added.
Another growing trend, the report adds, is the increasing influence of employee-driven corporate giving.
In the past, corporate philanthropy was largely dictated by company executives or boards, but now, employees are playing a more active role in deciding which causes receive funding. Companies are empowering their workforce to direct charitable dollars toward causes they care about, leading to more diverse and community-centered philanthropy.
The Digital Transformation of Fundraising
Technology is also reshaping how philanthropy operates. Artificial intelligence (AI) is being used to enhance fundraising efforts by analyzing donor data, predicting giving patterns, and automating outreach. AI-powered chatbots and personalized emails are helping organizations engage with donors in more meaningful ways, ensuring that fundraising appeals are targeted and effective.
“We’re just beginning to see how AI can transform fundraising and donor engagement,” said Michael D. Layton, Ph.D., of the Johnson Center. “These tools allow nonprofits to be more efficient and strategic in their outreach,” he adds.
Crowdfunding and social media campaigns continue to democratize giving, making it easier for individuals to support causes they are passionate about.
These platforms have enabled grassroots organizations to raise funds rapidly, often in response to crises or urgent needs.
Digital activism and peer-to-peer fundraising efforts have also gained momentum, particularly among younger generations who prefer to give in a way that feels personal and immediate.
Addressing Racial and Economic Inequities
The call for racial equity in philanthropy remains a central issue. Many funders have made commitments to support racial justice initiatives, but there is growing pressure to move beyond symbolic gestures and take meaningful action.
Historically, funding has not been equitably distributed across communities, with many minority-led organizations receiving less financial support than their white-led counterparts. In response, some philanthropic institutions are prioritizing funding for organizations that serve communities of color, focusing on long-term investments rather than short-term grants.
“Increasing equity in philanthropy is not just about funding more—it’s about funding differently,” said Elizabeth J. Dale, Ph.D. “That means ensuring communities of color have decision-making power over how resources are allocated,” adds Elizabeth.
Economic inequality also continues to shape the philanthropic landscape. The wealth gap has widened in recent years, leading to increased scrutiny of billionaire philanthropists and their role in shaping social policies.
While major donors have made significant contributions to various causes, critics argue that philanthropy should not be a substitute for government action.
The report says there is an ongoing debate about how to balance private giving with public responsibility, particularly in areas like education, healthcare, and housing.
The Impact of Climate Change on Philanthropy
One of the most pressing issues influencing philanthropy in 2025 is climate change. Environmental philanthropy is becoming a top priority for many donors, as the urgency of addressing climate crises grows.
Funders are recognizing that combating climate change requires systemic solutions rather than isolated projects. As a result, more grants are being directed toward policy advocacy, sustainable energy initiatives, and climate resilience programs in vulnerable communities.
“Philanthropy has a unique opportunity to lead on climate action,” said an expert from the Johnson Center. “We’re seeing a shift toward funding long-term solutions that address the root causes of climate change.”
Nonprofits working on environmental issues are also adapting their strategies. Instead of focusing solely on conservation efforts, many are expanding their work to include climate justice, ensuring that marginalized communities disproportionately affected by climate change have a voice in decision-making processes. This intersectional approach acknowledges that environmental and social justice issues are deeply connected.
Challenges Facing Nonprofits
While philanthropy is undergoing significant transformations, nonprofits are facing persistent challenges. One of the biggest concerns is the nonprofit workforce crisis. Many organizations are struggling to attract and retain staff due to low wages, burnout, and increased competition for skilled professionals. The demand for nonprofit services continues to rise, but many organizations lack the resources to adequately support their employees.
The report says the nonprofit sector is experiencing a workforce crisis that is only getting worse with organizations losing talented staff because they simply cannot compete with salaries in other sectors.
The COVID-19 pandemic exposed vulnerabilities in the nonprofit sector, and five years later, many organizations are still recovering.
Emergency funding that was available during the crisis has largely disappeared, leaving nonprofits searching for sustainable revenue sources. Additionally, inflation has increased operational costs, making it even harder for organizations to meet community needs.
The Future of Philanthropy
Looking ahead, the report says, philanthropy will continue to evolve as donors, nonprofits, and communities adapt to changing realities. One key question remains: How can philanthropy be more effective in creating lasting social change? The answer may lie in collaboration—funders working closely with communities, nonprofits, and policymakers to develop holistic solutions to complex issues.
The report says philanthropy must move beyond writing checks-it must foster true partnerships with communities. Only then can sustainable and meaningful change be created.
In conclusion, philanthropy in 2025 is at a crossroads. The sector is grappling with significant challenges, but it is also embracing new opportunities. Whether through technology, social movements, or policy changes, philanthropy has the potential to drive meaningful change—if it continues to evolve and adapt to the needs of the communities it serves.
