Imagine picking up a pair of virtual-reality goggles and scouring the globe for something or someone in need. You could step deep into an ancient forest, across an Arctic tundra, through a refugee camp, or into the crossfire of a civil war. Suddenly your research on how to make a difference becomes easier and more personal, taking you to places too remote, expensive, or dangerous to realistically visit in person.
This won’t sound extreme for long. Philanthropy stands at the threshold of a technology revolution that will change how and to whom we give. And successful charities will be the ones that keep up with the changing technological tastes and options of donors.
There will always be a place for checkbook philanthropy, the sort of impulse charity that addresses immediate needs. But donors are increasingly moving toward “impact philanthropy” — being more strategic with how they apply their energy and resources to make a difference.
Technology is making this possible: It is increasingly helping with researching charities upfront, with applying strategy, and with achieving and measuring results. The power of technology is influencing philanthropy in a number of ways already:
Democratized support. Whenever there’s a natural disaster, people are touched. Individual givers — people we don’t think of as philanthropists — pick up their cellphones and donate $10 by text message to help victims of an earthquake or hurricane. If 10 million people give $10 each, their collective contributions can have the same impact as Bill Gates or Michael Bloomberg giving $100 million.
Making matching gifts more available. We know that matching is an important motivator. People are more likely to make a donation when they know it will be doubled. They also tend to give when there is a specific moment that they are asked to do so. (Having sat for years on the board of our local NPR radio station, I learned that there is a science to having regularly scheduled pledge drives and announcing that contributions from listeners will be doubled by generous donors.)
Social media is making it easier to hear about or share these giving moments and matching opportunities, and some of the biggest corporations are also getting into the game.
For example, Facebook has eliminated transaction fees for donations to nonprofits, and it has also established a $50 million annual fund to match gifts made through its site.
On Giving Tuesday, Facebook and PayPal offered $7 million in matching donations on a first-come, first-served basis, and the funds were matched “in a matter of seconds” after they became available. Salesforce.org is working with United Way Worldwide to launch a new workplace-giving platform called Philanthropy Cloud. The Bill & Melinda Gates Foundation, where I once worked, uses a similar system on its intranet that matched any employee’s charitable gifts at a 3:1 ratio. Now that was motivational.
Personalized giving. Technology can connect you with somebody you would never have a chance to meet in person. My preteen kids use Kiva, which enables them to make $25 microloans to specific people on the other side of the world to build a home or stock a store or plant a crop. People have always had a chance to “sponsor a child for the cost of a cup of coffee,” but until recently such campaigns have been general in nature — not connecting a donor with an actual child. Before long, it will be the norm for donors to hear directly from those they support. Think of making a $100 donation to a food bank and having blockchain technology track your gift to a dozen real-world individuals who received food from your gift, then getting several personalized thank-you notes or text messages from some of the people you helped nourish.
I predict several other changes as technology continues to make philanthropy simpler, safer, and more seamless:
Reduced noise. The landscape will become significantly less complex for donors. There are 1.5 million charities registered in the United States alone. Even the biggest efforts to evaluate them have rated only about 9,000 organizations — considerably less than 1 percent. And because the organizations that rate charities have historically focused largely on overhead, they are only scratching the surface of what can be shared about the effectiveness of nonprofits.
Deciding which charities to support can be overwhelming. For example, consider trying to find a nonprofit that is working on a cure for cancer. A Google search for “cancer charity” produces hundreds of millions of results. A search for “cancer” in one of the leading nonprofit databases produces over 8,500 cancer-related charities. Even a search as precise as “New York breast cancer research” produces over 500 results in that same database. Soon technology will enable sophisticated assessments of hundreds of thousands of charities, simplifying decision making. I envision donors being able to enter a keyword related to an issue they care about and receiving instant results of charities that are tailored to their particular likes and needs.
Picking issue funds, not individual charities. We will soon see a vibrant marketplace of issue-based funds that will spread risk for donors just as mutual funds have for investors. Donating to a charity today is still a lot like picking stocks — donors tend to give to charities where they have firsthand experience, such as a local hospital, an alma mater university, or a church. In the future, donors will be able to choose an issue that’s important to them and trust a professional fund manager to wisely invest their gifts in a number of related nonprofit organizations. This will make it easier to give with confidence without having to understand the ins and outs of each individual charity.
Issue-based funds are already appearing in the marketplace. A company called Bright Funds claims to let you “see what the world’s leading issue-area experts recommend for doing the most good in the areas you care about.” Its site features many issue funds that will accept donations as small as $20 to address causes such as human rights, health, and the environment. Just as the financial markets differentiate their offerings based on one’s wealth, the burgeoning world of issue-based funds also has specialized opportunities for the uber-wealthy. One such example is Blue Meridian Partners, which has raised more than $1.7 billion to date, much of which has come from “general partners” who commit to giving at least $50 million over five years.
It’s going to be fun. Philanthropy will soon become more enjoyable. In theory, giving should be a lot more fun than it is. Academic studies indicate people who spend money on others experience greater happiness than those who spend money on themselves. When we act generously, it stimulates the same “reward pathway circuits” in our brains that are triggered when we eat, procreate, or receive money. But think of the donations you’ve made in the last year. Has the process of giving left you with a spring in your step, or did your charity feel transactional and perhaps a bit like an obligation or a chore?
In the future, when you are moved by an issue, a simple search will instantly connect you with prescreened, high-quality charities that match your political and social values. You’ll be able to increase the value of your donation because your employer or perhaps a company that wants to encourage you to buy its products will match your gift. You’ll form deeper connections with family and friends as you give socially to the causes you care about. And, more important, you’ll connect with the recipients of your charity to see the impact of your gifts. Now that will be truly rewarding.
A study by NetHope indicates that roughly half of nonprofit executives believe that digital disruption will not have a significant impact on their work anytime soon. I believe they are wrong. According to “Giving USA,” Americans gave $410 billion last year, but this amount has basically been growing at pace with the economy for decades. Online giving, however, while still a small percentage of the total, surged by 20 percent.
Why is all this so important? We are in the middle of the largest wealth transfer that has ever taken place. Some $30 trillion is expected to be passed on from baby boomers over the next few decades in the United States alone. The nonprofits that will succeed in this new world order will be those that gather quality data on their effectiveness and take the time to share these results using new technologies as they arise.
Younger generations have a totally different approach to giving, because they are digital natives who are mobile and connected. It won’t be long before technology supercharges the impact of their giving, with or without the VR goggles.
Ben Klasky is the founder and principal at Seismic Philanthropy, a Seattle company that advises foundations on high-impact philanthropy.
