Category Archives: Chronicle of Philanthropy Column

Philanthropedia: Capturing Expert Recommendations of Nonprofits

March 9, 2010 – 9:15 am

This is my newest column for the Chronicle of Philanthropy. You can find the archive of my past columns here.

A Philanthropic Network Passes On Recommendations of Worthy Charities
March 7, 2010 | Chronicle of Philanthropy

In all the talk about measuring results in philanthropy and how best to determine which nonprofit groups are effective, a simple fact is often overlooked. All across the country, foundation program officers, senior nonprofit staff members, and academic researchers know which nonprofit groups are doing great work.

Now a new group called Philanthropedia is working to capture this knowledge about top nonprofit groups and make it available to everyone.

This sort of information, personal recommendations from people in a good position to pass judgment, is a fundamental process that people use to make decisions.

Getting recommendations from experts can mean asking your friend who loves to eat out what she thinks about the new restaurant in town or consulting a book review in The New York Times before choosing your next novel. Recommendations from trusted experts are so valuable that we often pay large amounts of money to gain access to them before making critical investment, legal, or medical decisions.

Philanthropy itself is largely built on recommendations. Studies show that one of the main reasons donors give to certain groups is that a friend asked them to do so.

When those friends are fellow supporters of organizations and not professional fund raisers, they are in effect recommending a group that deserves support. But while those sorts of recommendations motivate action, they are not unbiased or delivered by an expert.

Philanthropedia is working to make expert recommendations of nonprofit groups as accessible as the expert recommendations that help shape our decision making about which movies to see, restaurants to patronize, or retirement strategies to deploy.

Working with a quickly expanding network of experts that includes grant makers, nonprofit staff members, scholars, and other experts, Philanthropedia is making available expert recommendations on topics that include organizations working to curb climate change, improve education, extend small loans to struggling entrepreneurs abroad, and reduce homelessness in the San Francisco Bay area.

Co-founded by Howard Bornstein, a former employee of the Bill & Melinda Gates Foundation, and Deyan Vitanov, an entrepreneur who had previously built an online community for computer programmers, Philanthropedia began operations last year with extensive support from the William and Flora Hewlett Foundation.

The Philanthropedia team uses a survey methodology similar to one developed by the RAND Corporation to use expert recommendations in situations involving a large degree of uncertainty.

Given the nonprofit world’s current inability to systematically measure the effectiveness of nonprofit programs or even agree on what attributes make for a well-run organization, Philanthropedia’s approach makes a lot of sense.

The big weakness in Philanthropedia’s model is that the recommendations it offers are only as valid as the expertise of the organization’s network.

Because so much of philanthropy is not based on evidence, it is quite possible that the nonprofit groups recommended by the organization’s experts are not truly the most effective ones. It could be that the people in the network have biases that produced flawed ideas about what makes a nonprofit group successful.

However, in a recent background paper, Philanthropedia showed that the nonprofit groups it recommends have little in common based on how much money they raise, how well known they are, and their age, number of employees, and accountability ratings from Charity Navigator.

This means that the experts are picking up on something else. Given that the experts are foundation employees whose job it is to analyze nonprofit groups, researchers who have spent years studying conservation, education, poverty, and other topics, and nonprofit senior staff members who see firsthand the activities of their peers, it seems likely that many of the groups Philanthropedia recommends are among the best.

In the wake of the Haitian earthquake, the Gates foundation, the Ford Foundation, the charity research group GiveWell, the University of Pennsylvania’s Center for High Impact Philanthropy, and the nonprofit Acumen Fund all made grants or offered recommendations of which organizations were in the best position to help.

Each of them listed Partners in Health as one of their choices. While this fact does not guarantee that Partners in Health is the most effective nonprofit organization working in Haiti, it does offer a useful piece of information for donors trying to decide what groups to support.

Philanthropedia offers the potential to gather this sort of information for different causes and to offer recommendations that are international, national, or local in scope.

What is fascinating about Philanthropedia is that its process is not only effective but it is also inexpensive to run and easy to expand.

Other organizations working to identify outstanding nonprofit groups by conducting original research may offer some advantages compared with Philanthropedia.

But Philanthropedia’s system allows it to analyze far more nonprofit groups by simply bringing to light what experts already know.

Philanthropedia could quickly become a great way for donors to learn from the people in the best position to know which organizations are the most effective.

Sean Stannard-Stockton is chief executive of Tactical Philanthropy Advisors in Burlingame, Calif., and author of the Tactical Philanthropy blog. He is a regular columnist for The Chronicle of Philanthropy.

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By Sean Stannard-Stockton | Also posted in Cross-Disciplinary Conversations, Effective Giving, Evaluation, Information Sharing, New Philanthropy, Philanthropy | Comments (0)

Twitter, Philanthropy & Influence

November 10, 2009 – 7:29 am

This is my newest column in the Chronicle of Philanthropy. You can find an archive of past columns here.

Twitter Presents a Chance for Savvy Charities to Reach More People
November 12, 2009 | Link of Chronicle of Philanthropy

Late one Friday afternoon this fall, Matt Flannery, the co-founder of Kiva.org, posted a message on Twitter: “It seems like my Twitter account is getting attacked by spam. 500 new followers a minute. Anyone else experiencing this?”

In fact, a small group of people who use Twitter to talk about philanthropy had also been inundated with followers. But the reason for the instant increase wasn’t anything as spurious as a spam attack. All the people who suddenly attracted new followers had just been added to Twitter’s official “suggested users” list of people worth following. Traditionally, Twitter’s suggestions have included celebrities like Al Gore, Shaquille O’Neal, and Oprah Winfrey, so adding the likes of Matt Flannery and other stars of the philanthropy world represents a big shift.

Twitter’s decision to elevate people in philanthropy to its list of those worthy of watching is important for the nonprofit world. It gives people at foundations and other nonprofit organizations a new platform to attract supporters and discuss important issues — but people in philanthropy will need to change their ways if they plan to capitalize on this important moment.

It is easy to dismiss Twitter, since it requires that people post their thoughts within a limit of 140 characters at a time. Many press releases put out by foundations feature headlines two or three times longer than an average “tweet.”

But this has been the year for Twitter to enter the mainstream of online social networks. While President Obama was considered cutting edge when he released his choice of a running mate in 2008 via text message, it’s clear he would have used Twitter to make such an announcement if he were trying to stir the same kind of excitement this year.

Twitter allows people who broadcast messages to get the word out to anyone who has signed up to listen. And reading the messages doesn’t require any special access; just sign up to follow someone and you can get all the public messages the person sends.

Twitter has also gotten some attention in philanthropy this year. At the annual conference of the Council on Foundations this spring, people were using Twitter to post messages about many of the sessions, in part because the council created an official Twitter account from which it encouraged conference goers to chat about sessions they attended.

But to a large degree, Twitter posts about philanthropy end up circulating within a small group of people who are passionate about the subject. While a hot topic might capture the interest of a small number of Twitter posters, those tweets rarely if ever “go viral” and branch out to reach the millions of people who use Twitter for reasons that go well beyond philanthropy.

However, that could soon be changing, as Matt Flannery learned.

When Twitter decided to add a group of philanthropy-focused people to its suggestion list, it vastly expanded the number of people who now get updates on nonprofit issues.

In addition to adding Matt Flannery, Twitter highlighted organizations like the Skoll Foundation and the Acumen Fund as well as individuals like the nonprofit-social-media expert Beth Kanter and the social entrepreneur Kjerstin Erickson.

The results of getting on Twitter’s suggested user list are phenomenal.

Since he was added, Mr. Flannery’s follower count has ballooned from a couple thousand to more than a hundred thousand. If the experience of the past is a guide, then the new philanthropy-focused members of the list can expect to add half a million or more followers over time. The exposure is seen as being so valuable that the Internet entrepreneur Jason Calacanis once offered Twitter $250,000 if it would add him to the list.

Those kinds of numbers make Twitter a key forum for discussions of philanthropy, in many cases outstripping the number of people who subscribe to print and online publications about nonprofit affairs.

But what is even more important about Twitter’s decision to highlight nonprofit leaders in its list is that it is yet another sign that philanthropy itself is becoming more and more a part of mainstream culture. News organizations are devoting more attention to nonprofit affairs, Product Red made giving a prominent part of the consumer world, and the NBC drama The Philanthropist brought the topic to prime time.

As a result, philanthropy is no longer a topic of discussion reserved for the ultra wealthy, nonprofit executives, or academic researchers. As with any topic that goes mainstream, many insiders will complain that the subject is too nuanced for the masses to understand.

But the people and organizations that can figure out how to speak authentically about philanthropy to a mainstream voice — without dumbing down the subject or talking over the heads of the newly formed crowds — will dominate the discussions about the nonprofit world in the coming months and years.

For the most part, people in philanthropy have a tradition of speaking in jargon-filled messages to other philanthropy insiders.

But preaching to the choir never changed the world.

While it might be a strange new world for philanthropy, unless more people at foundations and charities learn to speak to the newly gathering mainstream audiences, they may blow a huge opportunity to radically expand the influence of the nonprofit world.

Sean Stannard-Stockton is chief executive of Tactical Philanthropy Advisors, in Burlingame, Calif., and author of the Tactical Philanthropy blog. He is a regular columnist for the The Chronicle of Philanthropy.

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By Sean Stannard-Stockton | Also posted in New Philanthropy, Philanthropy, Social Media | Comments (4)

Philanthropists as Investors

September 29, 2009 – 7:29 am

This is my most recent column from the Chronicle of Philanthropy. You can find an archive of past columns here.

Providing the Capital Organizations Need to Run — and Grow
By Sean Stannard-Stockton
October 1, 2009 | Link to Original Article

According to Paul Brest’s excellent book Money Well Spent, strategic philanthropists devise ways to solve problems and select grant recipients who can best carry out the approaches donors think will work best.

Another breed of donors is growing — people I refer to as tactical philanthropists.

While strategic philanthropists seek to solve social problems, tactical philanthropists are social investors.

Investors, in both the for-profit and the nonprofit contexts, provide capital to organizations that solve problems. Good investors take great interest in the solutions deployed by the organizations they finance, but they themselves are not problem solvers.

As many philanthropists have rushed to use the currently trendy vocabulary of financial investments when they talk about giving, the meaning of the word “investment” has become confused. A true investment is not defined by whether the investor earns a profit — whether and how much money is returned are just terms of the deal — but the intention of the transaction.

Tactical philanthropists view their grant-making activity as investing in nonprofit organizations because they are not simply paying organizations to carry out programs, they are providing the capital needed to operate and expand a great organization.

Venture philanthropists represent one approach to tactical philanthropy. They provide capital to support a portfolio of nonprofit groups the way a tactical philanthropist does, but a venture philanthropist generally gets very involved in how an organization works. Venture philanthropists may expect a seat on the board for large capital commitments or expect that the nonprofit organization be receptive to extensive nonmonetary support, such as management training.

Venture philanthropy done well and with nonprofit organizations that welcome a highly involved supporter can produce outstanding results.

But getting donors involved is not automatically a panacea. According to “More Than Money,” a report by the Center for Effective Philanthropy, most foundations that provide assistance beyond a grant provide only limited support.

“Providing just two or three types of assistance to grantees appears to be ineffective,” the report says. “It is only in the minority of cases when grantees receive either a comprehensive set of assistance activities or a set of mainly field-focused types of assistance that they have a substantially more positive experience with their foundation funders than grantees receiving no assistance.”

Tactical philanthropists can also be investors who do not focus on providing assistance beyond a grant. Warren Buffett, one of the greatest investors of all time, is known to ask many questions of the companies he is invested in, but does not dictate how they run their businesses. He invests only in organizations where he thinks management is competent and knows best what decisions to make. Mr. Buffett has said, “When you have able managers of high character running businesses about which they are passionate, you can have a dozen or more reporting to you and still have time for an afternoon nap.”

Both venture philanthropists and social investors who take a hands-off approach have something in common. They put their energy into choosing the organizations in which they invest rather than the problems they wish to solve. Tactical and strategic philanthropists both seek a better world in which the problems we face have been solved, but tactical philanthropists see their role as supporting organizations that can achieve social change rather than solving problems themselves.

As one tactical philanthropist told me recently, “I don’t know how to fix the problems in our city, but I know who knows how to fix those problems and it is our job to support them.”

There is no doubt that we need both strategic and tactical

philanthropists. But in recent years, the phrase strategic philanthropy has begun to be used as shorthand for “effective” philanthropy.

We do not all need to be problem solvers. Many outstanding problem solvers are hard at work in nonprofit organizations around the world. In many cases, the best approach might be for philanthropists simply to invest in these organizations and provide them the capital they desperately need to carry out their solutions and grow.

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By Sean Stannard-Stockton | Also posted in Capital Market Philanthropy, Philanthropy, Tactical Philanthropy | Comments (8)

Why We Need Philanthropic Equity

August 17, 2009 – 8:18 am

My newest column in the Chronicle of Philanthropy appears below. You can find an archive of past columns here.

Charities Should Be Held to ‘Philanthropic Equity’ Standards
By Sean Stannard-Stockton
August 20, 2009 | Link to Chronicle of Philanthropy

It is time for nonprofit accounting standards to recognize the concept of "philanthropic equity."

For too long, donors have looked at nonprofit financial statements and believed that as much money as possible should be spent on programs and as little as possible should be spent on the organization itself. This logic is fundamentally flawed because, no matter how great a program is, only a high-performance organization can deliver, expand, and improve effective programs.

The fact is nonprofit groups need two kinds of cash flow: revenue and equity. Recognizing the distinction between revenue and equity is critical to building great organizations. Revenue is cash flow delivered to an organization in exchange for execution: delivering goods and services.

Equity is cash flow delivered to an organization for the purpose of building the organization. Without the ability to account for philanthropic equity, it is simply not possible to distinguish between donations that keep a nonprofit running and those that are intended to build the organization.

Like a for-profit company that offers a great product but doesn’t have the resources to invest in great management, technology, and infrastructure, a nonprofit organization without equity is doomed never to fully realize its potential. Just as some people are customers of a company and others are investors in it, donors can play the role of providing nonprofit organizations either revenue or equity, or both. But for donors to evaluate a nonprofit group’s need for equity and the effectiveness with which it uses that equity, the two forms of cash flow must be recognized separately. The current nonprofit accounting standards ignore the existence of equity and treat all cash flow as revenue.

High-performing nonprofit groups need equity to grow and improve. Unfortunately, nonprofit groups are systematically starved for equity capital. Since we tend to get those things we measure, it is critical that we begin to explicitly measure equity on nonprofit financial statements.

A new equity-like methodology, called the "sustainable enhancement grant," has already been deployed successfully among several high-performing nonprofit groups to help shed light on their finances in a way that allows them to attract equity-like philanthropic donations. The system was developed by the Nonprofit Finance Fund and it has been well vetted by leading law firms and accounting firms. Now it is time to build those concepts into standard nonprofit accounting guidelines.

Warren Buffett is known to believe that evaluating the amount of profit a company makes (what we in the nonprofit world might refer to as results) is not enough. To truly understand how well a company is performing, Mr. Buffett looks at the return on equity. This measure reveals the performance of a company in relation to the amount of capital invested in building the organization. The nonprofit world needs a similar measure. If we hope to encourage donors to truly invest in nonprofit groups, they must be able to understand how their "equity investments" are performing.

The need for this change is urgent. The newly created government Social Innovation Fund is designed specifically to increase the flow of equity-like capital to nonprofit groups. The bill authorizing the fund requires that the money be used to build the capacity of nonprofit groups to copy and expand proven programs. But without official accounting recognition of philanthropic equity, it will be impossible to evaluate whether those capital flows actually are used to effectively build the grantee organization or simply to finance operations.

According to the White House, the Social Innovation Fund is all about "finding and scaling the best social innovations." This is an important and achievable goal. But "scaling" a nonprofit group requires more than just making big grants. It means offering capital that is explicitly earmarked for building the organization itself, not for spending to deliver programs. But without philanthropic-equity accounting, only the handful of organizations voluntarily using the sustainable enhancement grant accounting system have the ability to actually account for how effectively they are using grants intended to help them expand.

There is too much at stake for donors to continue giving more than $300-billion a year without a better understanding of which nonprofit groups are using their money to build sustainable organizations and which are not. It is time for the Financial Accounting Standards Board to recognize philanthropic-equity accounting.

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By Sean Stannard-Stockton | Also posted in Capital Market Philanthropy, New Philanthropy, Philanthropic Equity, Philanthropy | Comments (10)

Philanthropy’s Trifecta: Information, Wisdom & Relationships

June 29, 2009 – 10:49 am

My most recent column for the Chronicle of Philanthropy, appearing in this week’s issue. You can find an archive of past columns here.

Data Don’t Tell the Whole Story of Charities’ Impact
July 2, 2009 | Link to Chronicle of Philanthropy

A week’s worth of The New York Times includes more information than the average American living in the 18th century would have encountered in his or her lifetime, according to the book Information Anxiety 2 by Richard Wurman.

As grant makers demand more data on which to base their philanthropic decisions, let’s remember that information by itself is not useful unless it is filtered using wisdom and relationships.

Philanthropy has entered an age in which information, especially quantitative data, is prized by foundations and other donors.

Many people believe that data can help us identify great nonprofit groups and effective programs.

Just as the global economy is operating in an Information Age, "knowledge workers" who seek to make available new types of information for the public good now populate philanthropy. However, information is a necessary but not sufficient condition for robust philanthropy.

That’s why it’s great that philanthropy leaders are starting to show their thought processes in regular Internet postings available for everyone to see. For example, Paul Brest, of the Hewlett Foundation, uses his blog for a rolling conversation about what makes for good philanthropy. So does Carla Javits of REDF, a group that uses innovative approaches to train needy people for jobs.

Adding to the store of knowledge through online postings are people such as Ken Berger, head of the Charity Navigator watchdog group, and Bob Ottenhoff of GuideStar, the repository of information from nonprofit tax forms.

As the amount of available information explodes, the wisdom to process it and put it in context becomes exponentially more valuable. In this environment, information becomes a resource that is valuable only when we place it in context. Access to information is no longer a competitive advantage. It is the ability to filter and process the flood of information that sets effective people apart. That is why the decision by a prominent foundation leader like Paul Brest to start a blog is so important.

No matter how wise someone like Mr. Brest is, each person has a limited capacity to understand the world around him or her.

That is why relationships are the third core element of a philanthropic trifecta — information, wisdom, relationships. Relationships, especially those with other wise people, allow grant makers to filter the information they receive through a network of expertise and place the information in context.

Wisdom allows an individual to place new information in the appropriate context and use it to make better decisions. But when wise people connect their ideas together, a communal understanding of philanthropy will sprout, and individuals can benefit from experience far beyond their own.

While these relationships are rooted in human connections, online tools like blogs and Twitter are allowing those networks to flourish without regard to geography.

Philanthropic leaders have long gathered to communicate among themselves, but the power of relationship-based networks is now being supercharged by the inclusion of people from all walks of life and geographic locations.

When I wrote recently in The Chronicle about the "Googlization" of philanthropy (Opinion, April 23), I argued that it would enable "collaboration and participation by unbundling the process of creating information from its distribution.

Since philanthropy is improved exponentially as more information is shared about which social-benefit efforts work — and which ones fail — this is a big moment for philanthropy."

But Pat Nichols, a management consultant to nonprofit groups, worried about the implications of my suggestion, and in a comment on my blog, he wrote, "It struck me that the capacity to Googlize philanthropy doesn’t improve philanthropy by itself. There are at least two sets of interwoven criteria at work — the criteria by which information is deemed important and, thus, selected or organized, and the criteria by which the reorganized information is applied in making giving decisions."

Mr. Nichols is exactly right and his comment gets to the core of the issue. Information is the raw material of effective philanthropy, but without the skilled processing of wise individuals and their extended relationship networks, information isn’t worth very much at all.

Gathering, filtering, and processing information is essential to great philanthropy. But this is a human-powered activity.

Computers can slice and dice the raw material of information. The Internet can provide access to the information to more people in new ways. But it is only through the skilled application of the uniquely human aspects of wisdom and relationships that we can use the information to make philanthropy more effective.

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By Sean Stannard-Stockton | Also posted in Effective Giving, Information Sharing, New Philanthropy, Philanthropy | Comments (1)

Institutional vs. Individual Philanthropy

May 18, 2009 – 9:01 am

This is my newest column from the Chronicle of Philanthropy. You can find an archive of past columns here.

Charities Should Nurture Donors’ Passion for Giving
By Sean Stannard-Stockton|Link to Chronicle of Philanthropy
May 21, 2009

In a quest to make philanthropy more efficient and effective, many organizations and individuals have sprung up to improve the process of how donors give. Most of those efforts focus on giving advice to the biggest foundations, and only a handful of services focus on coaching individuals in the art and science of philanthropy. This imbalance in the way knowledge is shared is a key reason charitable giving is not meeting anywhere near its full potential to transform society.

When the prolific bank robber Willie Sutton was asked why he robbed banks, he responded, “Because that’s where the money is.” This reply also seems to explain why professional philanthropic research and advice has focused on large foundations.

However, it is a myth that large foundations dominate charitable giving.

Foundation grants accounted for only 13 percent of total charitable giving in the United States, according to Giving USA, while donations from individuals make up 82 percent of the annual total. (Corporations give the rest.)

Unfortunately, the extensive work that has been done to make foundation giving more efficient and effective cannot be easily transferred, because it fails to take into account the reasons people give.

In his 2006 book Strategic Giving, Peter Frumkin, a philanthropy scholar at the University of Texas, argued that five elements drive people to give a large share of their money away; change, innovation, equity, pluralism, and self-expression.

At big foundations, self-expression is rarely on the agenda. In most cases, it would be wrong for foundation employees or board members to think of grant making as their own personal self-expression,

But for individuals, self-expression is a vital part of giving. You cannot understand, or influence, a donor’s wish to encourage economic equity or pluralism without recognizing the way that such grants are inextricably linked to the donor’s self-image.

That can be a tricky proposition because Americans tend to think that “good” philanthropy requires sacrifice. Donors, our culture tells us, should not benefit from their giving. Giving is supposed to be motivated by a donor’s selfless desire to help others, and so the idea that a donor may use philanthropy as a form of self-expression seems to reduce the nobility of their gift.

If we ever expect to persuade more individuals to become effective philanthropists, the first step is to break the notion that philanthropy must entail sacrifice. Instead donors need to be encouraged to think about how professionals in many walks of life start with a passion and talent, and then train themselves in the skills they need to excel in the tasks they love. We don’t discount a musician’s performance because he clearly loves playing or an athlete’s accomplishment because she loves sport. So too must the passion for giving become linked with a desire to learn how to do it as well as possible.

The professionalization of philanthropy has produced a large amount of knowledge about what works. Large foundations and their advisers must learn to share their knowledge in ways that meet the needs of individuals who want to give money away.

Philanthropy is not simply a lifeless transaction that transfers money from one set of hands to another. Philanthropy is an act of creation that gives form to humankind’s highest ideals. Organizations and consultants that focus on philanthropy must recognize that they are in the business of spreading ideas and rendering them into tangible results. They can’t expect good results if they focus only on helping institutions become more effective grant makers.

It is high time that more organizations begin to serve the needs of individuals who make donations. Frankly, it will not be easy. Donors are idiosyncratic and motivated by a range of needs and desires that even they do not fully understand. But it is this very idiosyncratic nature that makes individuals far more willing than institutions to give money to causes that involve experimentation, risk taking, and new ideas. Individuals are the future of philanthropy. We need to stop failing them.

Sean Stannard-Stockton, a regular columnist for The Chronicle, is a principal and director of tactical philanthropy at Ensemble Capital Management and author of the blog Tactical Philanthropy.

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The Googlization of Philanthropy

April 20, 2009 – 8:53 am

This is the newest edition of my column appearing in the Chronicle of Philanthropy this week. This column was an outgrowth of conversations here on Tactical Philanthropy and I’m appreciative to the readers who left comments on those original posts and informed my thinking on this concept. You can find an archive of my past columns here.

Philanthropy’s Information Revolution
April 23, 2009|Link to Chronicle of Philanthropy article

By Sean Stannard-Stockton

Two years ago, Carla Dearing, then chief executive of Community Foundations of America, wrote an opinion essay in Worth magazine titled, “The Schwabification of Philanthropy.”

She argued that philanthropy was going through a transformation as the Internet not only reduced the cost of making philanthropic gifts to both donors and nonprofit organizations but also made it easier for donors to do their own research on potential beneficiaries rather than seek help from community foundations, the United Way, and other long-established institutions.

Just as Charles Schwab & Company had disrupted the business of investment management in the 1970s by lowering transaction costs and unbundling financial advice from transactions, so, too, would that change happen in philanthropy, Ms. Dearing predicted

That trend has proved to have staying power, and the Schwabification of philanthropy became a reality. Online donations, commercial donor-advised funds, and Web sites like Kiva.org and DonorsChoose are all direct results.

Now a new trend has taken hold: the Googlization of philanthropy.

If Schwabification focused on automating and reducing the costs of transactions, Googlization focuses on enabling collaboration and participation by unbundling the process of creating information from its distribution. Since philanthropy is improved exponentially as more information is shared about which social-benefit efforts work — and which ones fail — this is a big moment for philanthropy.

Philanthropy is unlike industries in which the Internet has destroyed business models that relied on the information producer’s maintaining control of distribution. The very technology that is killing newspapers and record companies will revolutionize philanthropy for the better.

According to Google, the company’s mission is to organize the world’s information and make it universally accessible and useful. While it does not produce much information itself, Google is the first place many people turn when they want to find information.

Without needing the cooperation of people who produce articles and other content, Google has organized valuable information so well that seekers of information turn to Google rather than go directly to content producers. What this means for philanthropy is that as philanthropic knowledge is captured and put online, third-party groups can organize this information and make it accessible and useful.

Today both PubHub, a project of the Foundation Center, and IssueLab aggregate publicly available research about organizations that serve the social good. PubHub focuses on foundation-financed research, while IssueLab focuses on research conducted by other types of nonprofit groups

Recently, Tony Wang, an employee at Blueprint Research & Design, a philanthropy consulting firm, spent a few hours of his spare time playing with Google’s Custom Search service and created a tool called PhilanthropySearch.org. It scans the Web sites of the 100 largest foundations, philanthropy consulting firms, university research centers, and other sites about philanthropy. If a foundation or other philanthropically oriented organization posts information on its Web site, the search tool will index it.

What is interesting about PhilanthropySearch.org is, first, how little time and money it took to create, and second, that it was created by an information seeker rather than an organization. The power of using online information tools in philanthropy is that they can organize the knowledge accumulated by nonprofit organizations and make it universally accessible.

But just as Schwabification was not an argument for one entity to dominate philanthropic transactions, the Googlization of philanthropy does not suggest that Google should come to dominate philanthropic knowledge aggregation.

The newly redesigned GuideStar Web site and the efforts of Charity Navigator to incorporate data about charities’ results in its evaluations expand on efforts to aggregate philanthropic information. But for those efforts to be successful, valuable information must be available in a digitized form.

Both groups are trying to find ways to encourage nonprofit groups to submit information that is not readily accessible. But all charities, foundations, and other organizations that serve the social good need to recognize the importance of knowledge sharing and to post as much information as possible, so that third parties can find ways to make it accessible and useful.

One group already capitalizing on the explosion of digitized philanthropic information is SocialActions.com. Its Web site aggregates more than 50 sources of online social activity, including Change.org, GlobalGiving, Razoo, and VolunteerMatch. Over time, people interested in giving money, volunteering, or taking some sort of action online may find SocialActions.com their first destination.

The Schwabification of philanthropy was about lowering the cost of administering philanthropy and thereby giving charitable financial tools to more individuals.

The Googlization of philanthropy is about organizing knowledge to allow for smarter giving by more people. Most important, the Googlization of philanthropy means that organizing the information will not be done by the information creators, but by third parties and — excitingly — the people who want to consume that information.

Sean Stannard-Stockton, a regular columnist for The Chronicle of Philanthropy, is a principal and director of tactical philanthropy at Ensemble Capital Management and author of the blog Tactical Philanthropy.

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Chronicle of Philanthropy/Tactical Philanthropy Interactivity

February 12, 2009 – 8:03 am

When I first launched my column with the Financial Times, I planned on creating some linkages between the column and this blog. For instance, when I wrote a column about giving circles I had hoped to link back to my blog where I would publish a list of similarities between giving circles and investment clubs that the head of a giving circle had sent to me. But that concept never really played out.

With my new Chronicle of Philanthropy column, I think I can build in more interactivity. For instance, I might refer in my column to a video hosted here at Tactical Philanthropy. Or I could source column ideas (as I started to yesterday) here on the blog. Or maybe we get really creative and crowdsource a column via a collaborative writing process.

Many of my readers are a lot more creative than me when it comes to understanding how to push the boundaries with social media tools. How do you think I should take advantage of the dual print/online media combination? And don’t forget that the Chronicle of Philanthropy has their own website where they’ve been hosting live chats and doing other interactive events. I’m sure they’ll be open to experimenting with new ideas as well.

How can we make this more than just another newspaper column?

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By Sean Stannard-Stockton | Also posted in Giving Blogs, Media, Philanthropy, Social Media, nptech | Comments (0)

Chronicle of Philanthropy Column

February 11, 2009 – 11:18 am

There was an unstated irony in the theme of my Financial Times column yesterday being that “the Second Great Wave of Philanthropy is alive and well.” At the end of this month, the Financial Times, suffering along with most all newspapers, will be eliminating their Wealth section where my column and all their philanthropy coverage resides. While I’m sorry to see my column go, I’m also disappointed at the loss of the outstanding philanthropy coverage being done by the staff of the FT.

But the end of one chapter is always the beginning of another. Starting in March, I’ll be launching a monthly column in the Chronicle of Philanthropy titled Tactical Philanthropy. While my Financial Times column often focused on nuts and bolts issues in philanthropy since it was geared towards a mass media audience, my Chronicle of Philanthropy column can assume the audience is well versed in philanthropy.

So as a reader of this blog, what issues would you like to see me explore in my new column?

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By Sean Stannard-Stockton | Also posted in Financial Times Column, Philanthropy | Comments (11)