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“Beep, Beep”: The Sound of Philanthropy and the Social Economy in 2013

January 07, 2013

(Bradford K. Smith is president of the Foundation Center.)

Wile-E-Coyote"We will change what we do with and without institutions, and we will change how our institutions (funders, nonprofits, and others) work." So predicts self-described philanthropy wonk Lucy Bernholz in Philanthropy and the Social Economy: Blueprint 2013, a must-read roadmap available for the first time as a GrantCraft publication. "Beep, beep." Wile E. Coyote (me, nonprofit executive) has just been left holding a burning stick of dynamite while the Road Runner (Lucy, blogger extraordinaire) races headlong onto her next prediction. That is the true value of Blueprint 2013 for those who are busy running the institutions that make up the "social economy": Lucy has seen the future for us, and now we must struggle to adapt, respond, and innovate. The data- and technology-driven future she envisions is both exhilarating and a bit unsettling, but one thing is clear: the Silicon Valley credo is fast approaching the staid world of philanthropy: "Disrupt yourself or be disrupted."

The vast majority of today's social sector leaders grew up in a world where foundations were the funders and nonprofits were the doers. Blueprint 2013 lays out a vision of a social economy inhabited not only by traditional nonprofits, but also by social businesses, socially responsible corporations, peer networks, and institutional forms not yet invented. Donors in this economy have choices between well-known forms of charitable giving (like creating a foundation), impact investing, and political giving to bring out the change they desire.

Running throughout the social economy is the lifeblood of data. In 2012 alone:

These are but a few of the examples included in Blueprint 2013 to illustrate how "new data-driven insights will become a first step, an input, into the practical work of decision-making." Lucy notes that the "next step in using social economy data is for community organizations and funders to join in this ethos of using, sharing, comparing, and contrasting data and tools."

While fast-developing technology makes it easier by the minute to collect, access, analyze, and visualize data, unresolved issues loom on the horizon. "Nonprofits in the future will be defined by how they use their data for public good while protecting the personal privacy rights of all who contribute that data." Data use, ownership, and access rules will be as definitional for the social economy in the 21st century as the charitable deduction was for nonprofits in the 20th century. Blueprint 2013 urges the social sector to take the lead in setting standards for collecting, using, storing, and sharing individual data in ways that thread the needle between personal control and social good. The Worldwide Initiative for Grantmaker Support (WINGS), a federation of some hundred and forty philanthropy support organizations around the world is doing just that by promoting a global philanthropy data charter much like that already adopted in the field of health.

Not all of Lucy’s predictions are about the shimmering world of data and technology. Something everyone in our sector cares about -- the charitable deduction -- is also on her radar: "They (Congress) will set lower limits for charitable deductions." Others -- "Civic crowdfunding will grow and may exacerbate inequality" -- require serious debate and reflection. But among the rich density of Blueprint 2013, the most interesting thought comes toward the end in a section entitled "Glimpses of the Future": "We still need to think about what purposes we want served and what the right mix is of institutional and financial systems to accomplish those goals." Lucy laments that a narrow focus on maintaining the tax deductibility of charitable gifts will crowd out a much-needed and broader discussion about "the most effective ways to provide incentives for private involvement on behalf of the public benefit."

In this regard, perhaps philanthropy and the broader social sector cannot escape the largest question facing our global community -- what kind of world do we want? Data, technology, institutional forms, and regulation are tools to be used to create a better world. While no one expects a return to the failed welfare states of the 20th century, we still need a destination. Otherwise all of our networking, crowdsourcing, analytics, social entrepreneurship, and innovation will occur in a vacuum where change, though sometimes inspiring, will ultimately be retail. Aspiring to something greater requires the kind of thought and questioning contained in Blueprint 2013: a roadmap filled with tantalizing glimpses of where we might be able to reach. As the fuse grows shorter, defining the destination is our responsibility.

-- Brad Smith

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