Topical Punch: Crowdsourcing Philanthropy

The future of nonprofit funding?

Tuesday mornings, we offer up Topical Punch, a post that examines emerging issues in leadership and nonprofits.  We invite you to share your comments and talkback!

Philanthropy has long been the lifeblood of the nonprofit sector.  However, with the advent of technology, namely the internet, the game has been slowly changing.

Corporations (like Target and Starbucks) have been leveraging social media networks to determine where their corporate giving will go.  It’s a pretty simple concept — champion your favorite nonprofit, and get as many friends to deliver eyeballs and clicks to the site, and you win.

Pepsi has upped the ante in 2010 by diverting their Super Bowl ad money into the Refresh Everything campaign, where they’re giving away grants each month in different “weight classes” (250K for the big kahunas, while li’l community projects can scrap for 5K).

Activities like these have been dubbed as crowdsourcing, “outsourcing a task normally designated to an employee or contractor to a large group of people or community, through an open call.”  On its face, it appears to be the most democractic (lowercase “d”, mind you) of processes, like voting for the President, or which Idol you want to vote off.

Is this the future of philanthropy?  Upsides:

  • Sense of transparency.  We know what choices are available for a group to fund, and we know it’s priority/rank based on the votes it receives.
  • Participation.  Now we have an excuse to crow about our favorite nonprofits, and have a chance to provide support with our “mindshare”, as opposed to our dollars.  (a.k.a. “wallet-share.”)
  • Crossover.  This provides more exposure of nonprofit/public sector work into the mainstream.  Traditionally, nonprofit work has been less understood by the general populace.  Corporations can put their marketing muscle behind their good deeds, and this provides less of a barrier for non-nonprofiters to learn more about the work.

However, here are some possible drawbacks to this trend:

  • The biggest will win out.  “Back in the day” it used to be whoever had the strongest grantwriters/development teams will win the funding battles.  Now the war has moved into the “social media” terrain, and only the strongest nonprofits that can afford to build up their social media arsenal will win.  While one can argue that flip cams are cheap, and editing software can be obtained even cheaper — it takes time and skills to put good product together.  As nonprofits face even more diminished staffing, how can they keep up with the big dogs?
  • What about the “un-sexy” work?  There are tons of  work that needs to be supported, but may be crowded out by the great marketers and “new new ideas.”  Will this new trend decrease support for the crucial “social safekeeping” activities?
  • What happened to the experts?  Quick, name how many American Idols have become multi-million dollar record sellers, or Grammy winners?  (And don’t use wikipedia to go look for them).  Case in point:  that show does not create “commercial” or “critical” artists.   Will the same trend emerge if crowdsourcing becomes the dominant method in nonprofits?

In the past year, Public Allies has engaged in and benefited from social media and crowdsourcing.  We’ve raised thousands of dollars on Facebook Causes, and have also won a 5K technology grant through the Starbucks/HP Challenge.  We’re also working with our local sites on how to use Flip Cams to capture and share Ally Impact stories.

What’s your take on this development?  Crowdsourcing and social networks a boon or danger for the nonprofit sector?

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3 Responses to “Topical Punch: Crowdsourcing Philanthropy”

  1. Diane Bacha Says:

    Great topic! I am so impressed to see the effort and resources corporations like Pepsi and Starbucks are putting behind social-media-driven philanthropy. A small team of us at Public Allies National have been doing some research to learn how we can participate. I’m equally amazed at the efforts some nonprofits invest in “winning” — it drives a lot of inventiveness and, to my mind, demands that we all have well developed networks. Not a bad thing. I’m eager to see comments from people who are (like us) learning about this.

  2. David Says:

    Good points all. One of the things that is a “down-side” of crowdsourcing is that the people who may think a certain social issue or service is important to them or their community may not have the access to the internet or computers the way the people with money do. This may just widen the socio-economic divide and leave funding programs to the “haves” and leave the “have-nots” out in the cold again.

    Is there a way to close this gap or help those with limited access?

    • macarthura Says:

      Thanks for checking in, David!

      Digital divide is very serious. While Twitter is growing, it’s primary user base is still highly educated and affluent. I dig twitter, but I think it gets an inordinate amount of buzz compared to it’s actual “physical” presence. Pop culture comparison: AMC’s Mad Men. I’ve never seen the show, and I’m sure it’s an artistic triumph. It sure gets alot of dead-tree press and ‘net buzz for only averaging less than 2 million viewers a week.

      Perhaps a way to bridge this is to identify tech platforms that all (even the “have-nots”) have access. To this end, I’d offer that cell-phones/texting would be the most likeliest platform. According to wikipedia (http://en.wikipedia.org/wiki/Mobile_phone) — as of ’07, there are 97 mobile phone subscribers per 100 inhabitants in “developed” countries, up from 65 users per/100 in ’02.

      I imagine as cell phones and their networks get “stronger”, they’ll have the ability to have browsers which may narrow the digital divide.


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