Markets And Philanthropy

Brad has a great post on the Union Square Ventures weblog about the ways in which markets are likely to impact philanthropy. Brad went back and read the entire Hacking Philanthropy transcript and is going to post some of his thoughts. This is the first of those posts. Brad observes:

Recently we have seen the emergence of a new type of charity, one that radically changes the relationship between donors and recipients. Nonprofits like DonorsChoose and Kiva behave more like marketplaces than traditional charities. This new model allows people in need to post a request for a gift or a loan to the site, and donors to chose which of those needs they would like to fund.

We spent a lot of time talking about why this is happening now, the strengths and weaknesses of this approach, and how the emergence of these markets might impact philanthropy in the future.

We have had the opportunity to experience the impact of a marketplace for philanthropy right here on this blog with the Donors Choose bloggers challenge. To date, 84 readers of this blog were able to click on a link, sift through dozens of public school classrooms in need of help, and make a donation.

My favorite moment at Hacking Philanthropy is described by Brad in his post:

Leslie Crutchfield stunned the technologists and entrepreneurs in the group when she pointed out that the in the last 40 years, only two organizations, Habitat for Humanities and AmeriCares , have broken into the top twenty five of the Chronicle of Philanthropy’s annual list of top philanthropies – the Philanthropy 400. The stability of this group was a surprise to the folks on the for profit side who are used to a world where one third of the top 25 companies on the Fortune 500 were not in business in 1965 and companies like Google that did not exist 15 years ago. The emergence of marketplace oriented nonprofits could well be the disruptive force that leads a reshuffling of the Philanthropy 400.

To me that level of stability is problem. And so I hope marketplaces start to do their thing and bring Philanthropy into the 21st century. We are doing our part and I am very pleased about that.