Three years ago I published Creating Philanthropic Capital Markets: The Deliberate Evolution. Among other things, the book points out the role that knowledge sharing, efficient exchange mechanisms, and external awareness play in high-functioning markets. Specifically, the book outlines nine key industry elements, a set greatly informed by Michael Porter's work on strategy. I provided examples of philanthropy's industry elements that existed in 2004 and identified key gaps. (Bernholz, p. 49)
The elements are:
- Research organizations, data sources
- Industry associations, government relations
- Regulatory bodies
- Professional training and standards
- Credentialing or monitoring of practices
- Independent analysts and information brokers
- Rating organizations/metrics
- Several developments involve new kinds of firms that seek to connect firms to individuals (DonorEdge and GlobalGiving). Nonprofit stock exchanges from Altruistiq to BOVESPA to SASIX to GiveIndia are examples of new efforts at market efficiencies.
- Information sources, covered in this post on Mapping Markets, are also exploding in number. These include everything from GuideStar to GreatNonprofits, Geneva Global to New Philanthropy Capital. Many also seek to fill the monitoring, rating, credentialing role.
- The efforts to create an EU foundation, the work of Independent Sector's Panel on the Nonprofit Sector, and the continued work of the Senate Finance Committee speak to the regulatory nature of philanthropy.
- As for dedicated media, several magazines focused on philanthropy launched since 2004, including GOOD, Benefit, and Contribute. We also have more than our share of blogs and online newsletters on philanthropy.
- Although professional standards for grantmaking don't exist, the fund raising side has credentials and ethics standards and financial planners can now get certified to guide philanthropy decision-making. There are registers of philanthropy consultants, self-organized consultant associations, and a planning effort underway in the UK to consider registering charity advisers.
- There are other forms of information in development also - the University of Pennsylvania's new Center on High Impact Philanthropy is developing a metric for philanthropy called "cost of benefit." FasterCures, an initiative of the Center for Accelerating Medical Solutions, is rolling out a philanthropy advisory service to get top quality research to individual donors interested in disease research. The goal - align philanthropy dollars behind "best in class" options.
There are still important gaps. I'm working on filling some of them with a new venture, so I won't say anymore here (yet). Needless to say, at the very least it seems to be time for a new book.