Recently, I wrote an article about what the terms “disruption” and “innovation” mean. The next logical question is whether or not there is disruption happening in the philanthropic sector. We know there is always innovation in the industry, but what about disruption?
For those of you who do not know the story, I became heavily involved in the social sector after the 2004 Indian Ocean tsunami. That same year, what we came to know of as Facebook was founded. Social media as we know it today was an idea in the minds of only the inventors and innovators in Silicon Valley.
During this period of time, donors to nonprofits would write checks or make a donation by credit card on those websites where the charity was able to actually process a gift. We had not yet fully come to understand the disruptive power that technology would become within the philanthropic sector.
A couple years after the tsunami, I founded Soles4Soles and within five short years I took it from a nonprofit with a nominal budget to a $70 million organization. Since then, I established a social enterprise for-profit business working within the social sector. As I stated in my previous article, although the idea of social enterprise has been around for hundreds of years, it’s only been relatively recently that we have modern “social enterprises”. Essentially, organizations no longer have to choose between profits and social impact–they can do both.
Philanthropy is a very diverse and disparate sector. And, perhaps this might be one of the reasons why it may seem to some that disruption is not happening. For example, you have charities that are small and maybe they only have the resources to hire a grant writer. So, the way they primarily receive funding is through the traditional grant request. They don’t have the sufficient resources available to really delve into technology and use its full potential.
I can see why some of these organizations may believe there is no disruption taking place in the philanthropic sector. I can also understand why some professionals in the industry are pushing back against those who say there is disruption happening in the social field.
But, make no mistake disruption is taking place. It just may not be as evident as it is in, say, the taxi industry, which is being disrupted by services such as Uber and the new “sharing economy.” It may not be as easy to see as in the hotel and tourism industry, which is being challenged by companies such as Airbnb.
The mere fact that donors no longer have to choose between giving to a nonprofit or giving to a for-profit social enterprise in order to do something good for society is a thread in the theme of disruption. Another example is the Internet. Nonprofits and social enterprises can use platforms on the Internet to communicate with supporters, new constituencies and raise money.
Today’s donor can give to a social organization by sending a tweet in response to a campaign. They can support countless types of causes through crowdfunding using Kickstarter or Indiegogo, for example. The fact that perhaps not all nonprofits have not readily embraced this sort of technology, or have failed in their initial attempts at this type of revenue stream does not mean that it does not work and it will go away. On the contrary, what I have learned in business is when these types of campaigns fail, it was because of the planning and execution. Don’t stop, learn, do it again and succeed. Or, learn, fail better and then try it again.
How else is philanthropy being disrupted? Data.
Because of technology, organizations within the social sector have the unprecedented ability to delve very deep into data. They are able to provide funders, who are increasingly asking for this type of information, with evidenced-based measurable facts and intelligence about the impact they are having in the work. Privacy issues aside in this particular article, organizations are also able to now obtain incredible amounts of information about their donors and prospects and make more strategic decisions.
The way individuals and funders support social sector organizations is fundamentally changing, in large part, due to the efficiencies and innovations happening with technology. Technology is disrupting philanthropy.
The way we think, view, speak about and do business in the social sector is indeed being disrupted. Since those days when I started to get involved in a big way in the industry, there have been incredible developments, which are increasingly disrupting the very definition of how we view the “social or nonprofit sector”.
Author of, “The Rise and Fail of Charities In the 21st Century: How The Nonprofit World Is Changing And What You Can Do To Be Ready.” Get your copy here.
© 2015 Wayne Elsey and Not Your Father’s Charity. All Rights Reserved.