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22 March 2007

The democratization of philanthropy

Among the many fascinating talks at TED 2007, Katherine Fulton, president of social consulting firm Monitor Institute, gave an overview of what she called “The democratization of philanthropy”.

Her talk confirmed that some key Small-Big trends are not just fundamentally altering traditional commerce but making an equally significant impact on the business of non-profits...

  • Mass collaboration: people donating time and skills to causes greater than themselves (e.g. Wikipedia).
  • P2P philanthropy: micro-donations via sites like globalgiving.com and      changingthepresent.org.
  • Innovation competitions: large cash prizes as incentives to solve social problems (e.g. Earth Challenge).
  • Social investing: venture capital and private equity financing for social businesses who contribute to society while they make money. Sites like Xigi.net are trying to map this emerging social capital market where, unlike traditional investing, a community tends to form around the funds.

Of course, the internet has always been a perfect fit for these kinds of collaborative volunteer labour donations. The ‘network of networks’ was built on free, openly shared code – from Perl, Linux and Apache software to sendmail and the web itself.

As for “P2P philanthropy”, Howard Dean’s 2004 presidential nomination campaign was a watershed in this kind of decentralised giving. Before an army of Dean supporters raised over $50 million dollars mostly from donations of $100 or less, political fundraising happened mainly at $10,000 a plate fundraising dinners. For that matter most of Wikipedia’s annual operating budget is funded by individual contributions of up to twenty dollars.

Backing up her point about the democratization of philanthropy, Fulton used Clay Shirky’s observation
that in the past only small things could be done for love, while the big things were motivated by money: today, big things can also be done for love.

My point would be that these ‘big things’ are entirely composed of many smaller things: individual volunteers, donated computing resources, and so on. These can now be wired together and amassed in new, electronic ways. A world of networked information is creating a more powerful, connected individual which makes many different forms of co-operation possible, philanthropic or otherwise. 

Fulton sees these trends as evidence of a growing new moral hunger. I think there are a variety of non-commercial motivations which make us participate in a range of online activities as diverse as creating new encyclopaedias and operating systems to reviewing different brands of carpet cleaner. But Fulton’s moral hunger is actually part of a broader search for meaning in our lives.

However many holidays we take or cars, iPods and stainless steel hobs we accumulate, Nobel Laureate economist Robert Fogel’s words keep coming back to haunt us:“People have enough to live, but nothing to live for; they have the means, but no meaning.”

Despite fifty years of GDP growth, says economist Richard Layard, surveys in Britain and American consistently report back that we haven’t got any happier. Quite the opposite, mounting evidence of unhappiness like rising crime (one in three young British males are convicted of a crime before their thirtieth birthday), alcoholism (since 1950, more and more people are dying from liver cirrhosis everywhere except France), clinical depression (on the up since World War II), youth suicide or days off work is all around us.

As a result, more people are trying to find meaning in social contribution. According to Charles Leadbetter and Paul Miller’s Demos report, The Pro-Am Revolution, volunteering in Britain nearly doubled between 1994 and 2004. In the order of 23 million adults contribute around 90 million hours of voluntary work each week. In those seven days: 18,000 Samaritan counsellors give over 51,000 hours of emotional support, nearly 175,000 Meals on Wheels are delivered by the 95,000 members of the Women’s Royal
Voluntary Service
 and 43,000 St John Ambulance volunteers provide first aid training for the best part of ten thousand people. 

Volunteering in the Information Society, a paper by Manuel Acevedo for the World Volunteer Web, cites research showing this is a global phenomenon.

  • Between a third and half the population of the European Union are members of voluntary organizations, or approximately 100 million people. There are more than two million volunteering organizations in the European Union as a whole. Operating expenditures of voluntary organisations as a percentage of GNP ranged from 4.8 percent in the UK to 2 percent in Italy [O’Donnell 2001]
  • Research coordinated by Johns Hopkins University estimated that the 'voluntary sector'accounted for around 4.6 per cent of the GDP of the 22 countries initially surveyed. The research revealed, moreover, that in addition to paid staff (19 million), the sector was sustained by voluntary labor equivalent to a further 10 million full time employees, excluding volunteers in religious organisations. [Pratt 2002].
  • In 1997, the National Survey of Giving, Volunteering and Participating in Canada showed that 7.5 million Canadians volunteered, or 31.4% of the population aged 15 and over. The aggregate hours of volunteer time amounted to an equivalent578,000 full-time jobs. [Industry Canada, 1998]

Now we have a vastly expanded range of ways to make these meaningful contributions online. A range of communications technologies which amplify individual voices in the public sphere make it quick and easy to donate anything from spare computing cycles to help cure Cancer or take part in the world’s largest experiment to forecast the effects of global warming, to time answering questions in medical support forums, and helping mobilise the masses to “Make Poverty History”.

Not only are there many new, global channels to find meaning by giving, but people can see the cumulative effects of their participation as it happens. This is an entirely new and extremely powerful combination: the collective power of connected individuals; ‘network effects' making the whole ever-greater than the sum of the individual contributions; and people perceiving the  growing force of their individual contributions massed together, which stimulates more of the same behaviour.

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