The think tank NPC has highlighted ten philanthropic innovations from around the world that it believes should be replicated in the UK.

The report, 10 Innovations in Global Philanthropy, published yesterday, says the “ground-breaking approaches” have the potential to make the biggest difference to how the philanthropy sector works.

It recommends each is adopted or expanded in the UK to help philanthropists and foundations keep pace with the demand for funds.

NPC’s report says four of the innovations have the most potential to improve giving in this country.

Open data is one such approach, NPC says. The UK is already advanced in open data with the government releasing more data for public use and foundations starting to share grant data, led by the Big Lottery Fund and initiatives like 360 Giving, which is working on a common standard for sharing grant data.

NPC says it would like to see initiatives like WASHfunders.org, an online portal founded in the US that brings together a variety of data, research and tools on water, sanitation and hygiene, replicated across other sectors. The site’s main audience is donors, but it is also used by NGOs, policymakers, researchers and members of the public.

Another example in the report is PoweredbyData, the non-profit arm of the Canadian company Ajah, aims to increase the amount of useful data about the charity sector available worldwide, and make it more widely available.

100% impact investing

NPC recommends a ‘100 per cent impact investing’ approach, where foundations seek to use their entire asset base to achieve varying degrees of social impact.

The report says the UK is a leader in social investment, but accumulated wealth could be put to better use; there is no legal requirement for a particular percentage of a foundation’s assets to be distributed as grants each year, compared to America’s 5 per cent rule.

“We want to see more foundation assets seeking a social as well as financial return,” it says. “Of the £17.5bn of private giving last year, £1.4bn was contributed by the top 100 family foundations. Of all funders these are most likely to participate in social investment. If this group allocated just 10 per cent of its overall assets, £33.8bn, to see a social return, an extra £3.4bn would be working to contribute to social impact.”

Layered funding

Layered funding uses different sources of capital with varying risk requirements, which are brought together to fund social outcomes. An example in the UK is social impact bonds, but the report says more could be done to bring together government, corporates and individual investors in syndicates to finance new initiatives. For example, Australia’s Goodstart, an early learning initiative that create a new financial instrument, the social capital note, to secure syndicate investment in children’s centres.

Transparency, collaboration and learning from failure

The report also recommends that UK foundations become more willing to learn from failure. The Shell Foundation has been publishing and acting on information from projects that has flopped, which has helped it move from an 80 per cent failure rate to 80 per cent success rate, the report says.

Another innovative approach highlighted by the report is lean philanthropy, which originated in the technology startup industry and favours testing and experimentation over elaborate planning, and is now being applied to the charitable sector. For example, the Knight Foundation Prototype Fund in the US helps grantees explore early-stage ideas by enabling them to experiment, build and test initiatives.

NPC also highlights online giving markets, including GiveWell in the US and Germany’s betterplace.org that focuses on transparency and allows other donors to rate projects to create a review system.

Plum Lomax, deputy head of the funders team at NPC and one of the authors of the report, said: “It’s all about getting more money directed to philanthropic causes and using that money to do more than ever before. UK philanthropists are already very generous, but there is always scope to look around the world to see what else could be achieved.

“Big donors here should be getting together to collaborate, which doesn’t happen nearly enough, or to use new technology to map the areas of greatest need which they might tackle. It takes a bit of nerve to adopt new ideas, but the world is changing and UK philanthropists can’t afford to be left behind. This new and improved philanthropy can be a more exciting way to connect with the causes they support.”