Micro-Philanthropy

The future of philanthropy lies in joining the wave of open source peer-production that is enriching public assets, says Mark Surman.

In viewing philanthrocapitalism through too narrow a lens, Michael Edwards misses how a business-based philanthropy can deliver sustainable social benefits, says Stewart J Paperin of the Open Society Institute

Michael Edwards's critique of philanthocapitalism underplays how far a world of interdependency creates opportunity for civil society to force business into embracing social and legal progress, says Simon Zadek of AccountAbility.

The sceptical scrutiny of "philanthrocapitalism" by Michael Edwards is welcome. But markets and social enterprise could help realise the potential of a new donor economy, says Geoff Mulgan.

Much of Michael Edwards's critique of "philanthrocapitalism" could equally be directed at the large established foundations, says Gara La Marche, who advocates a more active role in the "evaluation" processes that can make the practical case for social-justice philanthropy.

Our social entrepreneurs and all its supporters are obsessed with something called scale. The fetishization of scaling up our work is a source of both anxiety and hope. Bringing a new innovative project to scale often feels like the only way to leave a footprint of a good kind in an afflicted world in need of good ideas... What’s been shocking to me over the past 25 years is the lightning speed at which policy makers, themselves shielded from the risks [that the poor face], decide that a complex intervention is too difficult or not cost-effective in Haiti or Africa, or not sustainable. In micro-finance parlance, many of my patients are “poor credit risks.” But aren’t they the very people we claim to serve in the first place?

Read more excerpts from Paul Farmer's closing plenary >>

The average major U.S. corporation maximizes profits as its primary goal, while paying more limited attention to social and environmental consequences. It attempts to minimize wages and the costs of material services, and does not prioritize a minimal carbon footprint and other measures of sustainability. Then, the company and its executives donate a tiny percentage of their profits to try to fix the social and environmental problems to which their business practices contribute. In the process, these donors receive sizable tax write-offs that impoverish public social and environmental programs. And most philanthropic foundations are endowed by and invest their assets in these same companies, which create the very problems the foundations address.

Undoubtedly, most philanthropists mean to make the world a cleaner and more equitable place. Yet it’s like trying to reduce your sugar intake by eating 125 chocolate bars every day and then swearing off the occasional Pop-Tart. It’s as if the right hand has never met the left. But here is the punch line for this argument: We can all be good citizens much, much more effectively in the course of making money than in the course of giving money away.

Continue reading "Against Philanthropy: The business of giving is doing more harm than good" >>

A new movement is afoot that promises to save the world by revolutionizing philanthropy, making non-profit organizations operate like business, and creating new markets for goods and services that benefit society. Nick-named “philanthrocapitalism” for short, its supporters believe that business principles can be successfully combined with the search for social transformation.

There is no doubt that this is an important phenomenon. Very large sums of money have been generated for philanthropy, particularly in the finance and IT industries. But despite its great potential, this movement is flawed in both its proposed means and its promised ends. It sees business methods as the answer to social problems, but offers little rigorous evidence or analysis to support this claim, and ignores strong evidence pointing in the opposite direction.

Business will continue to be an inescapable part of the solution to global problems, and some methods drawn from business certainly have much to offer. But business will also be a cause of social problems, and as Jim Collins, author of “Good to Great,” concluded in a recent pamphlet, “we must reject the idea—well intentioned, but dead wrong—that the primary path to greatness in the social sectors is to become more like a business.”

Philanthrocapitalism’s other promise is to achieve far reaching transformation by resolving entrenched social problems. Yet its lack of understanding of how change occurs makes it unlikely that this promise will be achieved. There is a huge gulf between the hype surrounding this new philanthropy and its likely impact. Some of the newer philanthropists have come to recognize this—and have shown both humility and a readiness to learn about the complexities of social change. But too many remain captivated by the hype.

Download Just another Emperor? The Myths and Realities of Philanthrocapitalism >>

Decisions to rely on networks to more effectively generate social change are not new to philanthropy and nonprofits. Foundations have funded the civil rights, feminist, and consumer movements for decades. More recently, many have assembled “learning networks” of grantees that work together to innovate and improve their practices. And, as Jon Pratt, executive director of the Minnesota Council of Nonprofits, points out “community organizers and grass roots organizations have applied network concepts for years.”

But something new and important is afoot. The nonprofit and philanthropic sectors are under growing pressure to do more and to do better. The number of nonprofit organizations is expanding substantially, as are the tasks the civil sector undertakes in light of government downsizing. “We’re seeing growth of nonprofit organizations, but not much change in the systems they are trying to impact,” says one foundation executive. Nonprofit capacity is a “chronic problem,” writes Jonathan Peizer of the Open Society Institute. “The sector must embrace new paradigms.” In an intriguing online paper about the environmental movement, Gideon Rosenblatt, executive director of a Seattle nonprofit and former Microsoft senior manager, notes that “many environmental leaders are questioning whether the environmental movement has the right strategies and organizational structures in place.”

The movement, he says, has “over-invested in institutional overhead” and “is replicating board development, fundraising and many other functions across thousands of very small organizations.” It is essential, Rosenblatt concludes, to “un-bundle” and rebuild the environmental organizational structure using network approaches.

Foundations, a crucial capital market for nonprofits, and governments that contract with nonprofits increasingly seek improved impact, leverage, and “return on investment.” Nonprofits are routinely expected to be more strategic, entrepreneurial, and “high performing,” and to focus on producing outcomes.

In this shifting context for the civil sector, concerns expressed by the Vermont philanthropist, Lawrence activist, and Boston nonprofit director signal broader doubts about the efficiency and effectiveness of nonprofit organizations—and their decisions to rely on a network approach represent a fundamentally different response. In a similar vein, Jon Pratt argues that networks are a good fit for nonprofits:

Network strategies offer a powerful set of tools to manage the key tasks and challenges faced by nonprofits… Network thinking offers powerful analytic and strategic tools for nonprofit boards and managers to increase the stability, influence and autonomy of their organizations.

Yet another signal of an emerging deep-seated shift in the nonprofit sector may be seen in the unanticipated and rapid growth of GlobalGiving, Guidestar, Volunteer Match, and MoveOn, nonprofits that provide Internet-based infrastructure for connecting, informing, and mobilizing millions of people, and seem to do so at reduced costs.

Continue reading "Network Power for Philanthropy and Nonprofits" >>

We are the future leaders in philanthropy. By working together, we will further our careers, serve our organizations’ mission, and change the world. FLiP is dedicated to creating a community and a network where other future leaders can meet, learn, exchange ideas, and contribute to each other’s success.

Visit Future Leaders in Philanthropy >>

FLiP: You use the term "micro-philanthropy" a lot. How do you define it?

PD: That’s a good question. I wish I had a simple answer for you.

Micro-philanthropy, like micro-credit before it, encompasses many things. It’s philanthropy in the broadest sense— donating time, money, and in-kind services for social uplift—but with a twist. The “micro” part can denote the fact that it happens over the internet or that it involves a smaller-size donation than typical philanthropy.

A micro-philanthropist is someone who does not necessarily have deep pockets but want to spend his or her discretionary income on something worthwhile. Using a range of micro-philanthropy platforms, individuals can make small donations to organizations and independent projects and then pass these giving opportunities on to friends and family.

For me, the most attractive quality of micro-philanthropy is that it happens while people are living their lives (and not after they’ve amassed a fortune). For the most part, micro-philanthropy bypasses traditional institutions that are accustomed to handling the estates and endowments set up by dead or elderly people.

The impact of micro-philanthropy can be as great as the Bill & Melinda Gates Foundation, or even greater, as long as more and more people get involved and see their role on this planet as responsible micro-philanthropist as well as green consumer.

The term micro-philanthropy was coined by Tom Munnecke and Heather WoodIon of the Uplift Academy in 2002.

Continue reading this interview >>

Philanthropy is undergoing a transformational shift. While most donors continue to give in the same ways they have for 100 years, the vanguard of philanthropy is busily reforming the fabric of the charitable sector.

Often referred to as the "social capital markets" and characterised by a model of giving that mirrors the financial markets, this emerging model is still in its infancy. Since you can create only that which you imagine, I thought I would take a quick trip 25 years into the future to see what philanthropy might become.

For many donors, the year 2033 does not look a whole lot different from 2008. Many people simply write cheques to charities and devote the bulk of their giving to non-profit organisations in their community.

But for some donors, the landscape is radically different. The "social stock exchanges" that became popular between 2011 and 2019 now include all but a few large non-profits and many small but ambitious start-ups.

These exchanges compete for non-profit listings. Exchanges include big national networks with some international organisations, down to small local exchanges.

Continue reading "The donor landscape of 2033 is bright"

Blogs, wikis and other Web 2.0 accoutrements are revolutionizing the social order, a development that's cause for more excitement than alarm, argues interactive telecommunications professor Shirky. He contextualizes the digital networking age with philosophical, sociological, economic and statistical theories and points to its major successes and failures. Grassroots activism stands among the winners—Belarus's flash mobs, for example, blog their way to unprecedented antiauthoritarian demonstrations. Likewise, user/contributor-managed Wikipedia raises the bar for production efficiency by throwing traditional corporate hierarchy out the window. Print journalism falters as publishing methods are transformed through the Web. Shirky is at his best deconstructing Web failures like Wikitorial, the Los Angeles Times's attempt to facilitate group op-ed writing. Readers will appreciate the Gladwellesque lucidity of his assessments on what makes or breaks group efforts online: Every story in this book relies on the successful fusion of a plausible promise, an effective tool, and an acceptable bargain with the users. The sum of Shirky's incisive exploration, like the Web itself, is greater than its parts. (Mar.)

See this review on the Network-Centric Advocacy blog

Every day we hear news stories of the rich and powerful doing good works. What you don't generally hear about are the tens of thousands of ordinary men and women who have successfully reinvented themselves and found success in careers that allow them to make a real and lasting difference in the world. In We Are the New Radicals, Julia Moulden introduces you to dozens who have become warriors for progress and healing and shows you how to forge your own path of positive service. You will discover how to

• Take stock of your abilities and skills
• Discern how you can best help others
• Make the time you need to develop a plan
• Create a support network for yourself and your program

See this review on GiftHub

A veteran philanthropist calls for decisive, hands-on grantmaking Bill Somerville believes that foundations can do a better job Grassroots Philanthropy explains how. Endless paperwork, bureaucracy, and beleaguered foundation heads bog down many bold new ventures. The cowboy approach advocated by Bill Somerville encourages philanthropists to actively engage with the community, meet people who are doing extraordinary things, and fund those in need quickly with a minimum of process and paperwork. Somerville s style is straightforward, urgent, emphatic, and persuasive. He encourages foundations to take calculated risks and to fund ideas for actual change, rather than for fact-finding reports that exhaustively sum up what s wrong with the world. This is an illuminating book for those in the foundation and nonprofit worlds alike. With an unprecedented transfer of generational wealth expected over the next half-century, it is also a call to the upcoming generation of philanthropists to step up and use their wealth to ensure that real change happens quickly and creatively.

See this review on GiftHub

People to people fundraising is the new tool to help nonprofit organizations drive more philanthropy. Learn how to tap into the considerable opportunities of social networking on the Web with the practical, hands-on techniques and case studies found in People to People Fundraising. Written by a team of internationally respected names in the field, this valuable guide highlights great Philanthropy examples from around the world,illustrating how individuals have leveraged the power of the Internet to move great numbers of others to support a charity or cause.

Based on the authors' extensive real-life experiences as well as pertinent global case studies, this excellent how-to-guide is brimming with the critical ingredients needed to harness Web 2.0 for your charity, including mastermind strategies, clear analytical frameworks, and effective operating techniques.

See this review on Beth Kanter's blog

The first internet candidate

bama is among the first presidential candidates and potential world leaders to have integrated the web into his communications, and he is the first to have done so in a way that reflects and adapts the development of the technology itself: he has integrated social networking into his campaigning.

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The large numbers of young people who have campaigned for him have seen him for themselves: on their computers. The success of an early Obama MySpace site, run by a volunteer, was a harbinger. Today his official Facebook site has 360,000 members (and the unofficial "Barack Obama for President" has nearly 450,000); by contrast, Hillary Clinton's official Facebook site has only 88,000 members (and "STOP Hillary Clinton" has over 750,000). There are sixteen social-network groups plugged into Obama's official site, Hillary's has five. It seems a telling comparison that Facebook's "McCain for President" has just 5,500 members and there seem to be no social-network links on his official site at all.

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The web works best when it transforms by reinforcing and enhancing what people already want to do. This makes it open to incorporation by existing brands and companies even when it changes them greatly in the process. But it is very hard for individuals who were fully formed before the web to re-gear their communications. Obama, and his even younger advisors and speechwriters, are internet naturals at ease with its innovations. His website is easy to navigate (apart from the absence of a site search-engine) and itself feels at home with the medium.

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If he wins, what will President Obama make of this exceptional force of his web and internet presence? His constant refrain is that "change does not happen from the top down, it happens from the bottom up". Numerous times he has said that he cannot deliver unless the demand is there from below. While this is a wise perception, modest about his own power and inspiring for those to whom it is addressed, it is also a get-out-clause for an Obama presidency. For how can there be pressure from below? And without it, he has already declared, his promises may prove worthless.

There are steps he can take on the ground to encourage "bottom-up" pressure: by taking federal measures to ensure that all citizens have the right to vote and to prevent gerrymandering, not to speak of reforming the electoral college to prevent the scandal of 2000 from ever happening again. But a new president with the Obama team's know-how could well enable participation and organisation online. This, of course, is certain to generate its own energy and autonomy, unconstrained by beltway special interests. So there is now a way of putting pressure on Washington "from below".

Obama should be warned as well as congratulated: those who live by the web can die by it.

Continue reading "Taking Obama Seriously" >>