Chris Hughes is a co-founder of Facebook and the publisher of The New Republic. He is also one of the standard-bearers for a new generation of data-centric, innovative philanthropists.
Mr. Hughes and I spoke by phone about the evolution of philanthropy and how technology is changing the way wealthy donors give. The following is an edited and condensed transcript of our conversation.
Is large-scale individual giving changing?
I don’t know the data well enough to know if it is changing significantly. My sense is that there are a lot of new perspectives about philanthropy and that millennials aren’t taking what’s been done before as the conventional wisdom. That said, I’m not sure if you’re seeing a sea change in the world of philanthropy.
A group of us, including Dustin Moskovitz and his wife Cari Tuna [who run the foundation Good Ventures] and a few other people, are focused on empirical analysis of big problems. There are lots of ways to approach numbers, so it’s not just that numbers are going to give you all the answers.
But GiveWell [a charity-rating site] has brought a culture of transparency to a lot of the discussions around impact that hasn’t existed before. Whether you can say that’s shared by a lot of newly wealthy folks or tech entrepreneurs, I don’t know. You see just as many people funding causes out of passion as you do those who are embracing a new kind of methodology.
Are nonprofits changing their game significantly as they try to raise money from these new millionaires and billionaires?
I would say two things: Fundraisers are getting better, and a lot of what’s motivating that is an understanding about the need to take a more personalized, patient approach with an investor or donor.
That said, there’s been a shift in recent years to a different language around investment and social entrepreneurship and sustainability. Thirty years ago there was philanthropy and there were businesses. There wasn’t much in between.
Now we have a huge emerging field of nonprofits that are trying to be sustainable or use the language of business. You also have some businesses that are B-corps trying to frame themselves as socially responsible. There has been this huge emergence of lots of things in the middle. And I don’t think it’s just tech folks. You see a lot of businesspeople being very interested in that middle ground.
For the individual donor, what changes are still needed?
A lot of tech folks speak a language of data and analytics. There will be a more-pronounced emergence of data-based feedback loops. That kind of accountability will become more standard.
But then you get into fields where it’s difficult to quantify impact. If a donor gives money to a new center for the study of a particular topic at their alma mater, then how are you going to look into data to quantify that impact? Or if you start talking about the arts, that’s a difficult field to measure impact.
In international development, it’s much easier. You can run randomized, controlled trials and see the impact of your dollars more precisely. That’s why a group of us tech folks have become very passionate about cash transfers. A lot of tech folks have donated to GiveDirectly, in particular, because there’s data, there’s impact, you can measure it, you can compare it to other kinds of interventions, and you can see what’s going the furthest for the money. [Mr. Hughes is on the board of GiveDirectly.]
Startups are comfortable with constant change and the ability to pivot, areas that the nonprofit and philanthropic worlds have not been as quick to embrace.
Right, but you can always say, if something isn’t resonating, it’s not because it’s not a good idea. We just haven’t found the right donor yet.
So do nonprofits have to be nimble to be compelling to that segment of the donor universe?
I haven’t seen that kind of evolution yet. But as these organizations continue to develop their fundraising skills, they’ll have to become more personalized for a lot of data-driven donors.
Do you have a theory of change that you apply as you look for causes to be support?
Yeah, mine’s not that complicated. I’m looking for the most impact for the dollar to help the people who are most in need.
If you look at the 7 billion people on the planet, who are the most in need? It’s the ones who suffer from extreme poverty, who live hand to mouth. I want to measure every intervention we can. Then I’ll support the most effective interventions. Right now, the most effective intervention is cash. Direct cash transfers.
It’s also a particularly exciting field because it is being revolutionized by technology, which makes these kinds of transfers corruption free, or close to corruption free.
Are there other issues or causes that interest you?
Right now, I am a one-cause person. I still do political giving because there are lots of causes that I care about – marriage equality, for example. But over the past two years, I have become narrowly focused on cash transfers. I’m on the board of
GiveDirectly, and now I am starting a company that is building technology that international groups and maybe potentially international governments can use to do cash transfers more efficiently.
Does your position as publisher of The New Republic influence your thinking about social change?
That question goes to the heart of how I wrestle with how I spend my time. Nothing is more powerful than an idea. And the world of media and journalism is a world that cultivates new ideas and makes them understandable. They’re going to push the world forward and make all of our lives better. Being a publisher is an important way to support the best ideas.
What does the nonprofit and philanthropy world still need to learn to do better?
The first is measurement analysis. Not just creating a pretty report with how many kids’ lives you touched. I need to run something with the rigor of a [randomized, controlled trial], which doesn’t apply to all cases but can apply to many.
The second is the bridge between nonprofit and philanthropic activity and public policy. Many people think about a lot of the work that nonprofits do as if they are laboratories to develop good ideas and new solutions to social problems. But at the end of the day, donors can only help a certain number of people. The rest is up to public policy.
Charter schools are the best example of this. If we can learn what works in certain geographic and socioeconomic contexts, then it is our responsibility to try to scale that, too. That’s the hard part.
So creating some standards and some expectations that giving isn’t just about touching the number of lives per dollar but also about creating lessons that can impact the world on a broader scale through policy. That would be something great to see develop.