The digital age is changing philanthropy, as smaller donors use the web to pick and choose — and evaluate and criticize — the charities that matter to them.
This is shaking up the status quo for charities of all sizes, raising concerns that people might think that they’ve done enough by just clicking their mouse. But supporters say the new approaches are letting individuals to take more control of their philanthropy.
For a look at the new giving, SmartMoney focused on three individuals on the vanguard of philanthropy. Below, we tell about an approach that borrows from the world of venture capital. (For an overview and a look at how one man started up his own web-based charity to fight hunger, read part one of “The New Way to Give”; for an examination of how charities can tap virtual worlds, read part three. )
The Entrepreneurial Donor: Venture-Cap Charity
Shortly after turning 50, Sister Eileen McNerney coaxed three other nuns to move into a gang-ridden neighborhood in Orange County, Calif. The California native had read stories about rising drug use and gang violence not far from her home and felt an urgency to understand the root of it all. But the move to Santa Ana was a major adjustment and often meant rolling out of bed onto the floor to seek shelter from the sound of gunfire, McNerney says.
After listening to the wails of a woman mourning the second gang-related death of a son, McNerney snapped into action. “You couldn’t live here and just be an observer,” she says. In 1995, she started Taller San Jose to provide focused job training and placement for at-risk youth — many with rap sheets and pasts as gang members — in areas like construction. The nonprofit has helped about 4,000 young adults, with 72% attending college or landing a job paying more than minimum wage after completing the program, and 92% of the kids who had already spent time in prison stayed out of jail. There are now waiting lists for the program.
Much of the funding and support for groups like Taller San Jose comes from local donors. But thanks to its recent win in an online competition, McNerney expects to develop a much broader base. The competition, called Changemakers, is run by a nonprofit called Ashoka, which supports “social entrepreneurs” who apply business-like discipline to doing good.
The goal of Changemakers is to shake up the exclusivity and black-box nature of traditional philanthropy by pairing the monolithic philanthropic organizations with the scrappy upstarts that can use their help — and their funding. Past competitons have helped a former child soldier in Mozambique who heads a charity that exchanges guns for tractors and sewing machines get an audience with the Rockefeller Foundation and Nike executives.
“In many ways, we’re a matchmaking service,” says Changemakers executive director Charlie Brown. For some entrants, Changemakers has opened the door to foundations they have been trying to meet for years. Ashoka awards each winner with $5,000, and typically a corporate sponsor or foundation puts up as much as $5 million for proposals from all the entrants, not just winners. Each entrant also benefits from the feedback it and its rivals get, creating higher quality and more effective projects in the end, says Maria Blair, associate vice president at Rockefeller Foundation, which funds the program.
Competitions in philanthropy are nothing new, of course: Charles Lindbergh’s trans-Atlantic flight was spurred by charity’s challenge for innovative ideas. (It also won him $25,000.) More recently, foundations have offered multimillion dollar prizes for other scientific ideas. The idea is that rather than old-guard, billion-dollar foundations determining which causes or projects they want to fund, the newest endeavors take input from people in the trenches.
Anyone familiar with “American Idol” can be forgiven for questioning the wisdom of allowing the masses to determine the Next Big Thing — even if that is a charitable cause. But Jane Lowe, program officer at the Robert Wood Johnson Foundation, says online competitions generate more varied and unusual ideas. “We tend to get a lot of grant requests for more ‘mainstream’ and less grass roots projects,” Lowe says. “We miss really good ideas.”
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