Wednesday, January 05, 2011

Using Buzz to Understand History

(Reposted from The Chronicle of Philanthropy)

Buzzwords are fleeting things. They come in and go out, are first hot and then not. However, looked at over time, buzzwords also provide a useful rear-view roadmap of how we got here.

Taken together, the 10 phrases I have chosen to show the long steady rise in market-based solutions for social problem solving, technology’s infiltration of all things fund raising, and a shift in attention from local to global.

Following are the 10 philanthropy buzzwords that define the decade gone by. This story originally appeared in The Chronicle of Philanthropy.

Number 10: Donate-now buttons

Remember writing checks, stamping envelopes, and mailing off your donations? Way back in the 1990s that’s how we gave money. Filling in credit card numbers on a direct-mail appeal reply card was high-tech, just a notch above throwing your coins into the swinging red kettle.

Donate-now buttons on Web sites got their start in 1999 and really took off in 2001 when AOL, Cisco, and Yahoo started Network for Good.

Number 9: Prize philanthropy

It used to be the biggest philanthropic honors were those you couldn’t apply for - like the Nobel Prize or the MacArthur “genius” award. That all changed in 2004 when SpaceShipOne, a privately built and piloted craft, completed its second orbit of the earth and won the $10-million X Prize. Since then foundations and corporations have fallen over themselves offering cash prizes for social change. There are challenges for wireless news tools, clean-water carriers, digital learning games, and much more. Philanthropists love prizes because they don’t pay out until you solve the problem.

Number 8: Celebvocates

Nonprofits have always loved celebrity backers. Nowadays, star status requires that every movie actor, utility infielder, and aspiring politician find a charitable cause to love. Ceaseless, blatant self- promotion in the name of hungry children, sad diseases, and cute animals is ceaseless, blatant self-promotion we can all stand behind.

In fact, here-let me wear your T-shirt, carry your tote bag, and tweet a gift to your organization so you can take credit for my generosity.

Number 7: Microvolunteering

Mom used to bake cookies for the PTA and serve on committees for the church. Now she edits marketing copy for the local animal shelter while waiting for the bus and helps NASA identify craters on the moon during boring department meetings. Microvolunteering, the art of donating time in 20-minute increments, comes to us via our smart phones-which we also rely on to organize protests and tweet our bikeathon fund-raising totals.

Number 6: Philanthrocapitalism

Nonprofits should be more like businesses. Giving should be more like investing. And capitalism should be more creative just so long as it continues to let some people get crazy wealthy so they can give some of it back to others.

Philanthrocapitalism, a term coined by Mathew Bishop and Michael Green and used as the name of their 2008 book, celebrates the coming together of business skills and structures with a focus on solving the world’s shared social problems.

Number 5: B Corporation

For entrepreneurs trying to run businesses with a social purpose, corporate structure has been one of the persistent challenges.

Organize as a nonprofit and you’ll be forever capital constrained, organize as a commercial enterprise and you risk losing your mission to investors. Since 2006, a group called B Lab has enabled B corporations (the B stands for benefit) to gain traction around the country and lead a revolution in corporate operations. Corporate code may not be sexy, but these new efforts stand to attract billions of dollars in new investments in social businesses.

Number 4: Impact investing

Impact investing is the active form of socially responsible investing- seeking out commercial investments that return social good and profits. First named in 2008, this marketplace is estimated to grow to $1-trillion in opportunities by 2020. In the midst of global financial collapse the impact-investing realm did more than keep its head above water; it grew in both name recognition and assets.

Number 3: Embedded giving

A pejorative term for cause-related marketing, a term of art coined in 1983 to promote a campaign to repair the Statue of Liberty, embedded giving describes this decade’s approach to adding charitable donations to sales transactions. Choose one iPod over another to give to AIDS?

That’s embedded giving. During the holiday season that just wrapped up, there was no escaping the pressure to add a dollar to your checkout total or buy Aunt Martha the sweater that will help save the seals. Embedded giving is great for retailers, even if the jury’s still out on how well it serves good causes. And the seals? Well, they don’t care what sweater you wear as long as you stop eating all their fish.

Number 2: Microfinance

Thirty years ago, Muhammad Yunus, a Bangladeshi banker, started lending money to groups of women with no collateral. In 2006 he won the Nobel Peace Prize for his work, helping to make microfinance a household world.

Today's field of microfinance is marked by hundreds of millions of dollars in investment, several IPOS by microfinance companies, and some scandal. Once the realm of nonprofits with large philanthropic supporters, microfinance is now a mix of commercial bankers and small donors. Sites like Kiva make it possible for anyone with a credit card to be a global lender.

Despite its enormous growth and cachet, we still don’t know how well microfinance helps the poor.

Number 1: Social entrepreneurs

In 2000 few people had ever heard of social entrepreneurs. Many would have defined a social entrepreneur as a very friendly business leader.

A decade later, Kiva’s founders are on Oprah, PBS, and NPR, universities offer degrees in social entrepreneurship, and U.S. presidents both present and past laud social entrepreneurs.

The universal reach of the term results from the legitimate accomplishments of leaders like Jacqueline Novogratz (founder of the Acumen Fund) and Muhammad Yunus and massive investments from philanthropists like Jeff Skoll and Pierre Omidyar. And it all builds from the work of Bill Drayton, founder of Ashoka, who introduced the term to the world back in 1980.

Forget the fact that no one can agree on a common definition, social entrepreneurs are still the hottest game in town and the buzzword of the decade.

What does the decade ahead hold? Look for the nonprofit world to become the “impact economy,” for the Securities and Exchange Commission to get involved in regulating investments in social enterprises, and for interactive data visualization to become the standout feature of effective nonprofit fund-raising pitches. More of my predictions for the decade ahead are here.

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