New information networks like Ushahidi are changing how funders large and small are giving.
In the paper Disrupting Philanthropy: Technology and the Future of the Social Sector, author Lucy Bernholz writes that nearly one-hundred years ago Andrew Carnegie and John D. Rockefeller established the first modern foundations. These foundations were centralized, vertically integrated institutions that closely resembled the businesses that produced the surplus of wealth upon which they were founded.
These rigid, hierarchical organizations were appropriate for the time — but new technology in the form of information networks has enabled philanthropy to take on never-before-seen shapes. Empowered by more and better data than ever before, institutional funders – and now networks of digitally-connected individual donors – are making giving decisions that are transforming the philanthropic and nonprofit fields.
What do these changes look like, and how will these trends continue to transform giving? These are the questions that Disrupting Philanthropy tries to answer.
For traditional funders the report states that this new abundance of data has begun to transform how decisions are made at five key points in the grantmaking process as they:
- Set goals and formulate their strategies
- Build social capital to support one another, cooperate and collaborate
- Measure progress through benchmarks, outputs and make course changes along the way
- Quantify outcomes and impacts
- Account for their work with the public at large and to regulators
The paper includes two case studies of FasterCures and the Edna McConnel Clark Foundation that illustrate how information networks have reshaped the grantmaking strategies of some institutional funders.
Interestingly, the authors emphasize that the changes in the philanthropic paradigm are less about the new technologies themselves, which will continue to evolve and change overtime, but instead about the behavior and expectations that result from this abundance of information. No longer will funders, both individuals and institutional, be in a position where they give “blindly”. This data will allow all of us to make more strategic, informed decisions about who receives our giving dollars.
- Cary Lenore Walski, MCF web communications associate
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