We’re at a crossroads in the nonprofit sector. As many people realize, the traditional framework doesn’t work. In fact, we’re starting to see a new kind of donor emerging in philanthropy. In short, it’s tech money coming into the space. Looking at The Chronicle of Philanthropy’s top donor list for 2014, we see a pattern.
According to the article, three tech entrepreneurs, all under 40, donated at least $500 million each to nonprofits. These people include the founder of WhatsApp, Jan Koum, and Sean Parker, who founded Napster. Technology is a force that’s going to disrupt the industry, and we’re starting to see its influence.
The Emergence of Philanthrocapitalism
Since the time of the Robber Barons, there’s been a more egalitarian view of philanthropy. In other words, in the truest sense of the word, anyone can be a philanthropist. However, there’s been tension about nonprofit donations and their impact for decades. People want to see results and not unending appeals for money.
That’s where philanthropcapitalism comes into the picture. Nonprofit giving is no longer the domain of foundations or corporations that paid it lip service. What’s happening now is that corporations are aligning their business models with social good and impact. They, too, want to get past galas and check-writing to address systemic issues.
Technology: The Great Equalizer for Nonprofit Fundraising
The idea of philanthropy wasn’t something intended for billionaires or millionaires. The word comes from the Ancient Greeks. The word philanthrōpía means “love of humanity.” Philanthropy refers to goodwill and a broad desire to ensure everyone is doing well.
In the early 20th Century, the Robber Barons contorted the meaning. Charitable giving became the purview of the wealthy. However, technology allows nonprofits and almost anyone to become philanthropists in the truest sense. For instance, tech has brought us crowdfunding platforms like GoFundMe for small dollar donations.
Further, technology allows nonprofit organizations to become borderless. Fundraising should no longer be viewed as a purely local effort. Technology brings the ability to transcend geography, allowing social good leaders more bandwidth to address system issues like climate change or poverty.
The Next Generation of Donors to Nonprofits
Technology also allows nonprofits to do something that hasn’t truly been done before at the scale that’s coming. Data is becoming the currency for making a difference and impact. As the philanthropy sector ushers in platforms like Donorbox, data will allow fundraisers significant insights in minutes that may have taken weeks to assess.
Yes, gut feelings are great because they come from experience. But, what’s emerging with technology is data that’s backing up human instincts. As a result, it’s essential for nonprofit leaders and fundraisers to embrace data because new donors to philanthropy will want to see impact measurements.
The next generation of donors isn’t just going to be wealthy tech leaders. They will also be Millennials who have grown up with technology for most of their lives and future generations who will not have too many analog experiences. There’s going to be a shift to greater transparency and impact.
Collaboration Over Competition
The seeds of nonprofit change are already here. I don’t have a crystal ball, but we know enough now that technology has changed things significantly. For instance, let’s take Facebook and social media. The company started to gain traction in 2007. In less than 10 years, social media has become a significant challenger to traditional media.
My guess is that, in time, things may become more fractured or niche-driven. However, there’s likely going to be more collaboration. Again, if you look at social media, this is becoming the sharing economy. The challenges of analog and borders will continue to disappear for greater nonprofit sharing and collaboration.
In sum, the idea of philanthropy is evolving. Technology and new generations are focusing the nonprofit sector on innovation. More importantly, it’s pushing us all to measurable impact. So, the question is not if, but when? When will every nonprofit leader be ready to embrace what’s sure to be a new way of doing things?
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