Marketized giving

There is lots of talk about how the Internet has democratized giving. Sites that make giving easy and bring down the transaction costs have made it possible for lots of people to support lots of causes and issues that they might not have been able to do before.

Personally, I think this is somewhat overblown. After all, what web sites do is make things faster and more interactive. But the same person who know manages a portfolio of loans on Kiva could have supported a child through CARE's magazine ads back in the day. Sure it is faster, cooler, and feedback is right there, on the desktop that you are staring at 8 hours a day (as opposed to in the magazine you put down in the bathroom, good intentions and all). Yes, the Internet has changed giving, but as important, I think, is that it may be changing receiving.

The changes for the receivers, which are about more than being faster and global, have to do with a re-invigorated faith in individuals, concern about choice and discretion, changes in how we think about institutions, and a general increased 'marketization' of philanthropy.

This includes the trend of giving directly to some ONE rather than to some INSTITUTION. Witness DonorsChoose, which features teachers' postings about giving opportunities; the aforementioned Kiva*, which features individual entrepreneurs; Endeavor and ASHOKA (also about individuals). Each of these organizations is about the people they support - they lead with their images, market their accomplishments, and measure organizational success through their success. The "voices and images" of Kiva and DonorsChoose, in particular, are those of the individuals who benefit from the loan/grant.

Now, in the most direct - to - direct example I've seen, comes DiscoverScholars.org - which matches scholarship donors directly to students (or claims to). The idea is to give donors a chance to support specific kinds of students, not just the universities where those students go to school. In their words:

"DiscoverScholars.org is a public charity that seeks to award scholarships to the types of students who donors wish to support. Unlike colleges, universities, or other educational foundations, we let donors specify student attributes they care about with their donations."

Economist Tyler Cowen took a look at the site - his comments focus on the increased competition that the site can bring to the scholarship market. (Typical of an economist) However, the larger point here is that this kind of 1:1 giving shares attributes with several other trends we've followed on p2173, notably:

• the rise in prize giving (invest in a solution);
  
• rise in social enterprise and social entrepreneurs (invest in people);
• giving the data to the donor;
  
• disintermediation (the buzz word of the Internet in general).

Of coure, a wise giver won't completely fall for this 1:1 hype - all of these sites rely on institutions (many of them newly created) to manage the donations and the selection process. *Kiva works through its microfinance partners, for example, and DiscoverScholars doesn't escape institutional middle-men, it simply created a new one (itself). So, I still don't think philanthropy is particularly democratic, but it sure looks ever more like a market.

Tags: philanthropy, socialcapitalmarkets, philanthropiccapitalmarkets, data