Professional Documents
Culture Documents
Philanthropy
Technology and the
Future of the Social Sector
Lucy Bernholz
with Edward Skloot and Barry Varela
Center for Strategic Philanthropy and Civil Society
Sanford School of Public Policy
Duke University
1
Authors
Lucy Bernholz is the Founder and President of Blueprint Research
& Design, Inc., a strategy consulting firm that helps philanthropic
individuals and institutions achieve their missions. Bernholz is
the publisher of Philanthropy2173, an award-winning blog on the
business of giving. She is currently the HAND Foundation Fellow in
Philanthropy at the New America Foundation and a visiting scholar at
the Stanford University Center on Philanthropy and Civil Society.
Cover image “5076 backlit leaves” by Flickr user arthurcoddington licensed under Creative
Commons Attribution 2.0 Generic.

ISBN TK
Funding for Disrupting Philanthropy was provided by the John D. and Catherine T. MacArthur
Foundation.
Contents
Summary 1
Introduction 3
Stories of Change 16
Resources 47
Summary
This monograph explores the immediate and longer-term implications
of networked digital technologies for philanthropy. Our claim is that
information networks are transforming philanthropy. Enormous
databases and powerful new visualization tools can be accessed instantly
by anyone, at any time.
We provide a brief overview of the philanthropic landscape,
followed by an explanation of the “long tail” of giving and receiving.
Case studies of FasterCures and the Edna McConnell Clark
Foundation show how information networks have transformed the
grantmaking strategies of some institutional funders. Next, we examine
how networked technologies are affecting five philanthropic practices:
• Setting goals and formulating strategy: how funders and
enterprises make decisions about what to do, where, and how.
• Building social capital: how funders and enterprises support one
another, cooperate, and collaborate.
• Measuring progress: how funders and enterprises set
benchmarks, measure outputs, and make course corrections
along the way.
1
Disrupting Philanthropy
2
Introduction
A decade ago, the landscape of philanthropy was relatively simple. There
were foundations—private, community, and corporate—that awarded
grants to nonprofits. Some of the larger staffed foundations also offered
“technical assistance” to their grantees and undertook other activities
such as convening meetings, engaging in advocacy, and financing
litigation. Community foundations administered unrestricted,
restricted, and donor-advised funds. Individuals gave money to
nonprofits as well, mainly through personal checks or cash (while living)
and bequests (upon death).
Ten years ago, givers both institutional and individual gathered
information about nonprofits mainly through word-of-mouth. There
was no easy way for foundation executives, let alone average citizens, to
compare the financial health or budget-allocation practices of different
organizations. Today, ratings services like Charity Navigator and
Charity Guide assemble, analyze, and make available data on tens of
thousands of organizations.
Ten years ago, commercial investment firms were small players
on the philanthropic landscape. Today, companies like Charles Schwab
and Fidelity Investments offer wide ranges of products for donors,
including advised funds, foundation management services, and socially
responsible investment vehicles.
3
Disrupting Philanthropy
4
Introduction
As we scan the landscape of philanthropy, we’ll see these
themes—the importance of nonmarket, nonproprietary motivations and
organizational forms and the emergence of effective, large-scale cooperative
efforts—lurking constantly just below the surface.
The widespread availability of broadband Internet access and the
near ubiquity of SMS and 3G cell phone networks give everyone the tools
of both production and consumption. They expand individuals’ sense of
empowerment and lead to profound changes in expectations and norms.
What information matters to funders and nonprofits? Who has it? Who
owns it? How do we share it? How do we collaborate around common
issues? How quickly can individuals and groups act when information is
accessible 24/7?
In 1911, Andrew Carnegie created a general-purpose
philanthropic entity—the foundation in its modern form. Two years
later, John D. Rockefeller established the Rockefeller Foundation. Both
men found that, to provide money and know-how in support of the social
good, they needed to create centralized, vertically integrated institutions
modeled on the big businesses (steel, oil) from which their fortunes
derived. This institutional structure has remained the predominant model
for organized philanthropy for almost a century. Today, peer-supported,
data-informed, passion-activated, and technology-enabled networks
represent a new structural form in philanthropy, and the institutions
that support them will need to be as flexible, scalable, and portable as the
networks they serve.
On the cusp of the first modern foundation’s centennial, we may
be looking at the dawn of a new form of organizing, giving, and governing
that is better informed, more aware of complex systems, more collaborative,
more personal, more nimble, and ultimately, perhaps, more effective.
1
Benkler, Yochai, The Wealth of Networks: How Social Production Transforms Markets and Freedom. New
Haven and London: Yale University Press, 206, pp. 3-4.
5
The Philanthropic Landscape
Philanthropy is the donation of money or labor toward the production of
social good.2 The vehicles through which Americans give include:
• Private foundations, ranging from small, unstaffed family
foundations to large, professionally staffed multibillion-dollar
institutions.
• Corporate foundations.
• Unrestricted, restricted, and donor-advised funds held by
community foundations.
• Unrestricted, restricted, and donor-advised funds administered
by religious, ethnic, or racial community groups such as the
Jewish Federations.
• Donor-advised funds administered by commercial institutions
such as Fidelity, Schwab, Vanguard, and National Philanthropic
Trust.
• Donor-advised funds administered by freestanding institutions
such as the American Endowment Foundation.
2
In the American tradition (less so in the British), a distinction is drawn between charity, which seeks to
alleviate immediate human suffering, and philanthropy, which seeks to solve or mitigate complex social
problems that neither governments nor markets have been able, or seen fit, to fix. For the purposes of this
monograph, “philanthropy” will be understood to include both impulses.
6
The Philanthropic
Landscape
3
GivingUSA Foundation, http://www.philanthropy.iupui.edu/News/2009/docs/GivingReaches300billion_06102009.pdf
7
Disrupting Philanthropy
4
There is no single industry standard for defining or measuring socially responsible investment. See the
discussion at http://philanthropy.blogspot.com/2009/09/impact-investing-index.html.
8
The Philanthropic
Landscape
9
Philanthropy’s Long Tails
The long tail is a marketing strategy that connects products that have
relatively small customer bases to those customers. Large companies such
as Amazon and Netflix service the long tail by stocking not only very
popular titles like the latest Dan Brown novel or Jim Carrey movie—
products that may have millions of customers—but also thousands of
things like poetry collections and documentaries: products that may have
only a few hundred customers each. Cumulatively, the long tail of books
sold by Amazon—ten copies of a scholarly study here, twenty copies of a
memoir there—exceeds the sales of best-sellers.5
In the same way that Amazon allows the 200 individuals in the
world who are interested in reading about some esoteric topic find the
10 books written on that topic, online philanthropy marketplaces allow
individuals to find, evaluate, and invest in or fund the small enterprise or
project that is of interest to them. And conversely, online marketplaces
allow the small enterprise to find the few individuals willing to invest
in or fund it. The long tail of philanthropy describes this dispersion of
resources contributed for social good: millions of people, each providing
small amounts of money to tens of thousands of enterprises.
Figure 1, “The Long Tail of Giving,” shows how the funder market is
organized. In 2008, the 400 largest foundation givers ranged from the Gates
5
Brynjolffson, Smith, and Hu, in “Consumer Surplus in the Digital Economy: Estimating the Value of Increased
Product Variety at Online Booksellers” (2003), calculated that about 48% of Amazon’s book sales came from
titles outside the top 40,000 sellers. Since “best-seller” is usually taken to mean only the top 100 sellers, it’s
safe to say that more than half of Amazon’s sales come from non-best-sellers.
10
Philanthropy’s
Long Tails
Foundation, which gave $2.8 billion, to the Greater St. Louis Community
Foundation, which gave $14.4 million; cumulatively, the 400 gave $22.2
billion.6 The 60 largest individual donors ranged from the late Leona
Helmsley, who left $5.2 billion to create a charitable foundation, to Oscar
Tang, who gave $25 million to Phillips Andover Academy; cumulately, the
60 gave $10.6 billion. Together, the 400 foundations and 60 individuals gave
about $32.8 billion to charitable causes in 2008—a small portion of the
$307.7 billion given by all donors.
Online information exchanges focus on the long tail that makes
up the right-hand side of Figure 1: the millions of smaller donors who,
cumulatively, account for about eight times as many dollars as do the very
biggest institutional and individual givers. It is the similarity between
marketing on the long tail (poetry chapbooks v. best-sellers) and giving on the
long tail (you and I, each with $200, v. the Gates Foundation) that is crucial to
understanding one feature of the new philanthropic landscape.
6
Figures drawn from the Foundation Center’s Foundation Directory Online.
11
Disrupting Philanthropy
12
Philanthropy’s
Long Tails
13
Disrupting Philanthropy
14
Philanthropy’s
Long Tails
15
Stories of Change
To date, individual donors—those millions who make up the long tail
of giving—have benefitted the most from technological innovation,
flocking to online transaction markets to donate and invest, organizing
fundraisers and activist events through Twitter, communicating political
and social messages through texting, and coordinating disaster response
through cell phones. But some foundations have recently moved
energetically to use technology to enhance or even alter the way they do
business. Here are two examples.
FasterCures
Michael Milken’s years of experience in funding prostate
cancer research drove him to reconsider what kind of leverage an
endowed foundation could have in funding medical disease research.
He came to believe that medical research was conducted inefficiently,
even counterproductively, and that funders were part of the problem.
He chose to focus his funding on strategies that could translate basic
research into medical therapies and recognized the potential to amplify
the impact of his own funding by drawing in others. With the launch of
FasterCures and the FasterCures Philanthropy Advisory Service, Milken
expanded this strategy to other diseases and disease research projects.
At the heart of these efforts are changes to the way research institutions
develop and share knowledge and how funders do the same.
16
Stories of Change
17
Disrupting Philanthropy
18
Stories of Change
helped improve the lives of tens of thousands of young people and their
families. It has also taken the concept of funder collaboration to a new
level and brought into the field tens of millions of dollars that otherwise
might never have been forthcoming.
19
Disrupting Philanthropy
20
Five Philanthropic
Practices
21
Disrupting Philanthropy
that makes relationships between data sets easy to see—are now readily
available. Network analysis, which can help identify and depict patterns
of relationships among individuals, organizations, or funders, is another
increasingly useful means of understanding a situation.7
The availability of such useful, precise, and comparable
information can enable funders to envision strategies, time frames, and
partnerships that were unimaginable a decade ago. The new tools have
also led more funders to require “evidence-based” proposals.
Foundation professionals and social investors are slowly
beginning to seek external input into their strategy-formation practices.
For example, the Lumina Foundation for Education has posted its
strategic planning process, the plan itself, and the progress measures
being used on an interactive website to which the public can contribute
comments. The foundation also has a YouTube channel where the
public can watch and comment on video interviews with key decision
makers. The Peery Foundation in Palo Alto, California, recently
pushed its strategic planning conversations into public view using
Twitter—welcoming thoughts, sharing its planning tools, and actively
discussing its ideas with anyone who followed the foundation’s board or
staff members. The Twitter discussions prompted prominent bloggers to
weigh in on the process.
These experiments move us in the direction of using the web
to crowdsource8 strategies for giving. One well-known example comes
from Paul Buchheit, an early Google employee, who wrote a blog
post looking for advice on his donor-advised fund and then built a
series of online tools—including a Google moderated voting site and a
FriendFeed Group—enabling anyone to post suggestions. The British
Government proposed a similar project to guide some of its funding
for international aid. The John S. and James L. Knight Foundation has
used crowdsourcing tactics in its News Challenge grants program, and
7
See examples of how Oxfam has used networks of participants to spread the impact of specific projects.
8
A term coined by the writer Jeff Howe in a 2006 article in Wired magazine to describe the phenomenon
of using large, dispersed groups of amateurs networked through the web to do work that was previously
performed by solitary experts or units within larger institutions.
22
Five Philanthropic
Practices
in 2007, the David and Lucile Packard Foundation used a wiki to solicit
possible approaches to dealing with the problem of nitrogen pollution.
By availing themselves of information networks, these grant makers
increased the variety of expertise and widened the range of perspectives
that shaped their philanthropic strategies.
Another crowd-based strategy, the incentivizing prize
competition is structured to generate a solution to a specified social or
technical problems rather than to reward laudable accomplishment in
retrospect. X Prize Foundation competitions leverage philanthropic
investment by inducing participants to spend more money cumulatively
than is offered as a prize. The prize challenges extended by the
Rockefeller Foundation and administered by InnoCentive draw upon
the talents and expertise of individuals who might not otherwise devote
their time and energy to solving problems in the social sphere. More
conventional prizes, awarded on the basis of merit, include ASHOKA’s
Changemakers, the MacArthur Foundation’s Digital Media and
Learning Competition, and the Case Foundation’s “Change Begins
with Me” challenge. All engage new types of partners in both discussing
issues and developing solutions.
23
Disrupting Philanthropy
24
Five Philanthropic
Practices
{ }
A vast, previously untapped population of contributors was reached
through ubiquitous information networks. When brought together
around a single crisis, smaller
CM*Net responded to the groups and individuals
Haiti earthquake by rapidly can now play a decidedly
gathering and disseminating important role in finding
information on the location of,
and implementing solutions.
among other things, safe water
resources, disease outbreaks, A similar change is
fuel sources, and hospitals.
occurring in the ecology of
conferences. Networking
technologies encourage new kinds of collaboration at conferences
organized around topics of interest to the social sector. Whereas
these events used to be predicated on the idea that only those who’d
paid registration fees and traveled long distances would be privy to
what was discussed, many conference organizers now assume that the
25
Disrupting Philanthropy
Measuring progress
How Funders and Enterprises Set Benchmarks, Measure Outputs, and
Make Course Corrections Along the Way
Enterprises have led the way in seeking measures of progress that
help them improve their work and fund-raise in a highly competitive
grantmaking system. Facilitated by low-cost digital technology such
as identity card readers that enable better tracking of service use, the
ability to track inputs and outputs has grown more robust. With
better tracking has come improved ability to analyze, share, and jointly
26
Five Philanthropic
Practices
27
Disrupting Philanthropy
28
Five Philanthropic
Practices
29
Disrupting Philanthropy
agency efforts at outcome reporting, the social sector has been hard at
work trying to isolate, calculate, track, and report meaningful measures of
impact. For several reasons, the pace of innovation in the last few years has
accelerated.
First, singular efforts at calculating impact, such as the social return
on investment (SROI) work begun at REDF (formerly called the Roberts
Economic Development Fund) in the 1990s, have gradually gathered
attention and respect, and given birth to numerous spin-off approaches.
Second, a growing movement of social investment vehicles, run
by people who want to develop data to improve the work, from program-
related investments to social investment funds, has increased the pressure for
quantifiable, comparable measures of social change.
Finally, the maturation of independent philanthropy advisory firms
has required points of differentiation, and offering new ways to measure
impact was one area of competitive advantage. This pressure to measure
extends directly to the use of technology itself—the rapid rise of social
media is paralleled by dynamic debates and rapid innovation in ways to
measure the impact of these tools.9
The importance of measuring outcomes and impact has lately
become the mantra of most large donors and investors. Some of the push
has come from a new breed of funders who honed their skills (and earned
their millions) in venture capital and investment banking. The recent
financial collapse put more pressure on funders, who were forced to
engage in a kind of triage on their existing grantees, to determine the
quality of the grantee outcomes. The trend toward more and better
measurement appears to be unstoppable—especially since we now have
the tools to undertake it.
9
See the work of Chris Brogan, Beth Kanter, and K.D. Paine, among others.
30
Five Philanthropic
Practices
31
Disrupting Philanthropy
32
Glimpses of the Future
The technology expert Clay Shirky has observed, “Communications
tools don’t get socially interesting until they get technologically
boring.”11 This is certainly the case in philanthropy. Philanthropy is, by
its very nature, idiosyncratic and fragmented. A technology or practice
must be widely adopted, and broadly transformative of individuals’
expectations, before we can expect to see it make a real impact across
philanthropic enterprises. Email; online shopping, banking, and bill
paying; search engines; social networks; wikis; blogs; streaming music
and video; newspaper and magazine online publication; GPS and online
maps; cell phones; digital cameras—these are among the technological
innovations that, to date, have changed people’s behaviors, and most
people now view them as “technologically boring.” (Remember how
amazing GPS was the first time you saw it? That was probably less than
ten years ago. Now—yawn.)
As we have seen, networked information has already affected,
in some domains, the way philanthropy is conducted and the way social
good is produced. But philanthropy is not like the music or newspaper
industries, which have been utterly transformed—mostly against the
will of those who run record labels and newspapers—by information
11
Shirky, Clay, Here Comes Everybody: The Power of Organizing without Organizations. London: Penguin
Press, 2008, p. 105.
33
Disrupting Philanthropy
networks. While no record label can operate the same way it did ten
years ago, and no newspaper can ignore the Internet, there are thousands
of private foundations, and millions of individual donors, who disburse
their charitable assets, whether money, time, expertise, or physical labor,
using no technology that didn’t exist in 1989 (or 1889, for that matter).
Nevertheless, change is inevitable, and the further penetration of
networked technologies into everyday life, among all social strata in all
parts of the globe, would seem likewise to be inevitable.
Some of the changes that networked technologies will bring
may not just fail to live up to expectations, but may also bring negative
consequences. For example, the establishment of network-driven
standardized metrics may direct resources toward easily measurable, low-
cost, low-effect interventions at the expense of less easily quantifiable, but
perhaps ultimately more important, activities. Similarly, while increased
transparency is an important goal in philanthropy, there may be a point
at which transparency limits creativity and risk taking. And there is no
agreement in the funding world on what transparency means anyway.
Some technologies—virtual worlds, gaming—play only
marginal roles in philanthropy at present. They have not yet induced
widespread interest, let alone change. But as today’s new technologies
become commonplace, the next order of change—in behaviors and
in expectations—will set in, and that is where we will see the early
indications of what the future will hold. Here are three phenomena we
expect to see more of in the future:
• New blendings of market-based and nonmarket solutions.
• Networked, boundaryless, and often temporary alliances that
call for the creation of new ways of activating, coordinating,
and governing cooperative efforts.
• More and better data, more readily available and at lower cost.
34
Glimpses
of the Future
35
Disrupting Philanthropy
ensuring that a work placed in the public domain by its creator, as well
as all works derivative of that work, remains there. In addition to texts
and images, Creative Commons licenses cover scientific data, music,
and video, and they are valid in countries all over the world. A 2009
study performed by the Berkman Center at Harvard Law School found
that while “Open licenses promise significant value for foundations
and for the public good and often for grantees as well,” they are rarely
used in the philanthropic sector, as “many grantees and foundations are
relatively uninformed and inexperienced with open licenses.”
For many tasks, nonmarket entities and the self-organizing
commons can compete with, and even outperform, the market because
market players tend to have higher overhead costs in the form of
advertising, talent recruitment, capital equipment, attorney fees, and so
on. Funders can apply tremendous leverage by making relatively small
investments in maintaining the infrastructure and information resources
that enable nonmarket players to exist and flourish.13
36
Glimpses
of the Future
37
Disrupting Philanthropy
38
Glimpses
of the Future
More and better data, more readily available and at lower cost
Here the public sector is leading the way. Governments at the
municipal (San Francisco, Washington, D.C.), state, and federal (data.
gov, the Open Government Initiative) levels are making data available
on the web. In the arena of campaign finance, the Sunlight Foundation
enables users to tease out who gives how much money to whom, when
they give it, and (by implication) why. On the Pew Charitable Trusts’
Subsidyscope website, users can track federal subsidies.
As more such data become available, new correlations and
connections will be revealed in every area in which philanthropy has
an interest, from test scores of middle-schoolers to disparities in public
health to racial discrimination in housing. The ability to mix and
remix public data will influence both governmental and philanthropic
approaches to producing social good.14
Of course, most government data are not accessible via the
web. And philanthropy (with some important exceptions) has been
even less pro-active in making data available. It’s not yet known what
force—third-party intermediaries, regulation, the market, leadership
within the field—will drive an opening-up of philanthropy, but open
access to philanthropically funded data and research is within our reach.
To the degree that new data will lead to new measurements of change,
we should also expect to see major changes in the sector.15
14
Paul Hawken, in his book Blessed Unrest, discusses systems change possibilities from this viewpoint,
focusing on nonprofit organizations with similar missions.
15
Steven Johnson, The Invention of Air: A Story of Science, Faith, Revolution and the Birth of America. New
York: Riverhead Books, 2008, p. 69.
39
Disrupting Philanthropy
40
Glimpses
of the Future
might hybrids raise to the legal systems that define and shape charitable
activity, such as nonprofit tax exemption or nonprofit status itself ? Each
of these questions has taken on much greater salience in the last couple
of years and all will put pressure on federal and state governments to
look at the sector differently.
While industry and the public sector, especially the Department
of Defense, have for years used simulation technology and game-playing
pedagogy to test new ideas and teach new skills, philanthropic support
for games is newer and less well established. One significant example of
where games have worked is in HopeLab’s development of Re-Mission,
a video game for youth living with cancer that helps them stick to
their medicine regimens. Independent evaluations found a significant
increase of regimen adherence by young people who played the game.
Organizations such as Games for Change and the Serious Games
Initiative are helping build awareness of these “pro-social” games.
Games and mobile phones—in fact all digital technologies—readily
lend themselves to quantitative measurement.
The decentralizing effects of networked technologies are now
familiar. But there is also a counter-tendency: the creation of seemingly
“natural” monopolies on the web. Through a certain ineluctable
logic—sellers want to go where the most buyers are, and buyers want to
go where the most sellers are—the online auction business has produced
a single major player, eBay. Similar logic has produced, at times
shockingly quickly, natural monopolies among online payment systems
(PayPal), classified ad hosting (Craigslist), user-generated video hosting
(YouTube), and social networking sites (Facebook, which appears to
be in the process of dethroning MySpace). Among all the many online
giving markets, will the logic of monopoly formation—donors want
to go where the most doers are, and doers want to go where the most
donors are—produce a single dominant site with a single methodology
of operation and assessment? If a monopoly does emerge, what are the
implications?
41
Disrupting Philanthropy
How will better data sharing affect the way individuals donate?
Will people be more aware of social problems and donate more, growing
the philanthropic pie? Will “issue fatigue” set in, causing them to
donate less? Will the plethora of competing sites, networks, ratings
systems, and the like lead to data, and analytic, overload? This is a time
of great entrepreneurial activity, and claims of the “new, new thing” are
coming fast and furious. Lately we’ve begun to see some mergers and
collaborations among networking ventures, but such cooperation may
not become a trend and may not be healthy for the sector if it does.
Will more and better data raise awareness of “root cause”
problems, as with the “scientific philanthropy” of a century ago,
{ }
resulting in a redistribution of individual small donations—away from,
say, the local church and toward organizations engaged with widespread
social issues? Will donations become less focused on the local and
more toward the regional,
Some of the areas that national, or international?
philanthropy concerns itself To date we have no metrics
with are more likely to see to analyze these phenomena.
significant benefit from a
Will a generational
highly networked nonprofit
split emerge? That is, will
sector than are others.
older people, who are less
wired, remain attached to
the old ways, while younger people give fewer dollars to the Salvation
Army and United Way and more dollars to Kiva and DonorsChoose?
Such a generational pattern seems already to be emerging in faith-based
philanthropy, particularly among Jews and Catholics. Will there be a
similar class-based split, reflective of the so-called digital divide? Are
alternative giving approaches “good” for philanthropy, or will they
effectively slice and dice donations into smaller, and less effective,
pieces?
How will networked technologies affect the major volunteer
civil society organizations—Rotary, Kiwanis, Big Brothers Big Sisters,
Habitat for Humanity, and others? How will they affect donations to
42
Glimpses
of the Future
religious groups? These are the vehicles through which most Americans
donate their time and money, and they represent, in the aggregate, a
much larger segment of the philanthropic sector than do the staffed
foundations. What will it mean for these organizations if younger,
better-off individuals begin to gravitate in significant numbers away from
them and toward DonorsChoose or Kiva? What will older organizations
do with technology to stay current or even ahead of the curve?
In an analysis of the financial models of American theatre,
opera, orchestra, and dance companies, William Baumol and William
Bowen identified “cost disease” as the fundamental financing problem
that bedevils arts organizations.17 In most sectors of the economy,
Baumol and Bowen noted, technology tends to increase productivity.
There are, however, certain labor-intensive activities, such as an
orchestra’s producing live symphonic music, that undergo little or no
growth in productivity through better technology over time. Relative
to the rest of the economy, these activities become ever more expensive:
they suffer from cost disease.
Likewise, some of the areas that philanthropy concerns itself
with are more likely to see significant benefit from a highly networked
nonprofit sector than are others. For example, improved networking
will almost certainly make vaccination research more efficient. But
what of a labor-intensive human service like foster care? Technology
may improve foster child placement service around the edges, by
streamlining management and financial tasks, but at the most basic
level, foster care consists of one family agreeing to take in one child,
multiplied many times over. Though networking may spread the
acceptance of best practices more quickly, there’s only so much efficiency
new technologies can bring to this arrangement. The same is true for
homeless shelters, soup kitchens, and mentoring programs for troubled
students. Labor-intensive endeavors like these can’t be made very much
more efficient; relative to medical research, human services will become
17
Baumol, William J., and William G. Bowen, Performing Arts: The Economic Dilemma. New York: Twentieth
Century Fund, 1966.
43
Disrupting Philanthropy
more costly over time. Will the program areas that benefit most from
new technologies become more attractive to philanthropy? Will the least
technologically efficient and most costly subsectors see their government
funding reduced?
Finally, how will the legal and institutional structures of
philanthropy keep pace with the new modes of organizing, facilitating,
informing, and funding change that technology facilitates? What new
forms of accountability will emerge? How will institutional funders work
with distributed networks? What new policy frames are necessary to
maximize the potential impact of these new social forms and minimize
their downsides? What new governance structures may emerge?
44
Conclusion
Philanthropy in the United States is entering a new phase. Through
many independent actions we are building an information infrastructure
that will connect the long tail of donors to the long tail of doers. This
infrastructure has the potential to open up and systematize processes
and decision-making practices that have heretofore occurred exclusively
behind closed doors.
The outline of philanthropy’s future is visible in online, shared
portfolios of loans, as well as in informal networks of volunteers
working together to aid disaster relief workers. It’s visible in commercial
firms seeking social missions and in the capital they attract to the
sector. It’s visible in policy debates about nonprofit tax privileges, in
shared platforms for measures of social return, and in peer networks
of individual donors. It’s visible in foundation-led explorations of
networked governance models and in community-based experiments
with local fundraisers networked across time zones. We can see the
outline of philanthropy’s future in shared databases of scientific
research, in real-time sharing of grants data in exportable, mashable data
streams, and in small teams of app developers who find practical and
unexpected uses for these data.
How are these phenomena shaping how donors give and how
doers get things done? The forms that will animate philanthropy ten
45
Disrupting Philanthropy
years from now don’t yet exist. In the meantime, we can agree not
to fear, scorn, or ignore new technologies but to be open to learning
about them, experimenting with them, and sharing the results. We can
reconsider assumptions built into our work over decades—assumptions
that may no longer make sense, such as whether to fund informal
networks, how individual entrepreneurs fit in the ecosystem of the
social sector, and what kinds of copyrights (if any) advance the social
missions we are pursuing. We can share ideas and data from the online
marketplaces of individual givers with the large professionally staffed
foundations, and vice versa. There are innumerable strategic and tactical
approaches for us—as philanthropic institutions, as social-purpose
organizations, and as individual donors—to consider in this moment of
transition.
It is a scary time for many, a time of unprecedented opportunity
for others. Just a few years ago we could not have imagined using
dispersed networks of cell phones to report on earthquake damage
and relief operations. Doing so seems obvious now. We cannot foresee
what the next application of technology to improving social conditions
will be—we can only be sure that it will seem obvious in retrospect.
Meanwhile, what we can do is facilitate the behaviors and expectations
of sharing structured data that will make that application possible.
We cannot assume that the inequities of access and capacity
that still prevent so many individuals and institutions from using these
new tools of change will disappear on their own. We must work to set
policies and programs that will ensure connectivity for all. We must
grasp the authentic beginnings of what information networks have
enabled, and be prepared for faster, smarter, farther-reaching, and more
innovative opportunities—for a philanthropy that’s truly effective.
46
Resources
Baumol, William J., and William G. Bowen, Performing Arts: The
Economic Dilemma. New York: Twentieth Century Fund, 1966.
Hawken, Paul, Blessed Unrest: How the Largest Movement in the World
Came into Being and Why No One Saw It Coming. New York: Viking
Press, 2007.
47
Disrupting Philanthropy
Lessig, Lawrence, Remix: Making Art and Culture Thrive in the Hybrid
Economy. London: Penguin Press, 2008.
Zittrain, Jonathan, The Future of the Internet and How to Stop It. New
Haven: Yale University Press, 2008.
48
Resources
Bloggers
Lucy Bernholz
Allison Fine
The Intrepid Philanthropist
Beth Kanter
Tom Watson
Other websites
http://www.moderngiving.com/
http://www.netsquared.org/
http://nten.org/
http://networkweaver.blogspot.com/
http://www.workingwikily.com/
49