The Futures of Philanthropy, Fundraising, and Advertising

The futures of philanthropy, fundraising, and advertising are looking remarkably similar. In all three fields, technology innovators are turning to real people to do the hard work of moving money.

Foundations are asking non-specialists to “crowd source” their grant recipients. Development teams are using “wired fundraisers” to increase online donations. Companies are relying on “fansumers” to promote their latest products.

The online marketing guru Seth Godin first reported on this trend in a series of e-books entitled Flipping the Funnel. In three versions of the same e-book, Godin addresses companies, nonprofits, and politicians. He instructs them on how individuals can be empowered to sell products, raise money, and recruit votes respectively.

Godin could easily have written a fourth version of Flipping the Funnel, one tailored to the needs of foundations and private philanthropists. The hypothetical e-book would have emphasized the important role that non-wealthy and non-specialist individuals can play in awarding grants and redistributing wealth.

Flipping the Funnel for Foundations and Private Philanthropists would have noted that:

• Real people are often excellent judges of innovation and long-term impact;
• If provided with the right incentives, individuals may back their grant recommendations with donations of their own, resulting in larger grants and more grantees;
• People who are involved in grant-making are more likely to recognize a philanthropist for his or her contribution to the field.

Today, only a handful of nonprofits are effectively using wired fundraisers to raise money. Companies experimenting with fansumerism are drawing criticism for their attack on consumer privacy. And only a handful of foundations and private philanthropists are actually crowd-sourcing grant-making.

And yet, the innovators in these fields are continuing to experiment with new technologies that enable person-to-person communications and discernment. Overtime, the pioneers who balance privacy and fraud concerns with the opportunity for greater sales, donations, and grants will reap rewards for their early adoption.

Compared to fundraisers and advertisers, philanthropists have been the least exuberant in their embrace of the peer-to-peer economy. The sector needs leadership and technology innovation so that more wealth can be moved, and more effectively.

This post will hopefully serve as a starting point for discussing the trend as it pertains to philanthropy. Lessons from person-to-person fundraising and advertising will no doubt inform the discussion and provoke more innovation.

The following post originally appeared on Tactical Philanthropy in November 2007. Please add your comments and questions to the original post.