By Sean Stannard-Stockton
April 23, 2009 | Link to Chronicle of Philanthropy article
Two years ago, Carla Dearing, then chief executive of Community Foundations of America, wrote an opinion essay in Worth magazine titled, "The Schwabification of Philanthropy."
She argued that philanthropy was going through a transformation as the Internet not only reduced the cost of making philanthropic gifts to both donors and nonprofit organizations but also made it easier for donors to do their own research on potential beneficiaries rather than seek help from community foundations, the United Way, and other long-established institutions.
Just as Charles Schwab & Company had disrupted the business of investment management in the 1970s by lowering transaction costs and unbundling financial advice from transactions, so, too, would that change happen in philanthropy, Ms. Dearing predicted
That trend has proved to have staying power, and the Schwabification of philanthropy became a reality. Online donations, commercial donor-advised funds, and Web sites like Kiva.org and DonorsChoose are all direct results.
Now a new trend has taken hold: the Googlization of philanthropy.
If Schwabification focused on automating and reducing the costs of transactions, Googlization focuses on enabling collaboration and participation by unbundling the process of creating information from its distribution. Since philanthropy is improved exponentially as more information is shared about which social-benefit efforts work — and which ones fail — this is a big moment for philanthropy.
Philanthropy is unlike industries in which the Internet has destroyed business models that relied on the information producer’s maintaining control of distribution. The very technology that is killing newspapers and record companies will revolutionize philanthropy for the better.
According to Google, the company’s mission is to organize the world’s information and make it universally accessible and useful. While it does not produce much information itself, Google is the first place many people turn when they want to find information.
Without needing the cooperation of people who produce articles and other content, Google has organized valuable information so well that seekers of information turn to Google rather than go directly to content producers. What this means for philanthropy is that as philanthropic knowledge is captured and put online, third-party groups can organize this information and make it accessible and useful.
Today both PubHub, a project of the Foundation Center, and IssueLab aggregate publicly available research about organizations that serve the social good. PubHub focuses on foundation-financed research, while IssueLab focuses on research conducted by other types of nonprofit groups
Recently, Tony Wang, an employee at Blueprint Research & Design, a philanthropy consulting firm, spent a few hours of his spare time playing with Google’s Custom Search service and created a tool called PhilanthropySearch.org. It scans the Web sites of the 100 largest foundations, philanthropy consulting firms, university research centers, and other sites about philanthropy. If a foundation or other philanthropically oriented organization posts information on its Web site, the search tool will index it.
What is interesting about PhilanthropySearch.org is, first, how little time and money it took to create, and second, that it was created by an information seeker rather than an organization. The power of using online information tools in philanthropy is that they can organize the knowledge accumulated by nonprofit organizations and make it universally accessible.
But just as Schwabification was not an argument for one entity to dominate philanthropic transactions, the Googlization of philanthropy does not suggest that Google should come to dominate philanthropic knowledge aggregation.
The newly redesigned GuideStar Web site and the efforts of Charity Navigator toincorporate data about charities’ results in its evaluations expand on efforts to aggregate philanthropic information. But for those efforts to be successful, valuable information must be available in a digitized form.
Both groups are trying to find ways to encourage nonprofit groups to submit information that is not readily accessible. But all charities, foundations, and other organizations that serve the social good need to recognize the importance of knowledge sharing and to post as much information as possible, so that third parties can find ways to make it accessible and useful.
One group already capitalizing on the explosion of digitized philanthropic information is SocialActions.com. Its Web site aggregates more than 50 sources of online social activity, including Change.org, GlobalGiving, Razoo, andVolunteerMatch. Over time, people interested in giving money, volunteering, or taking some sort of action online may find SocialActions.com their first destination.
The Schwabification of philanthropy was about lowering the cost of administering philanthropy and thereby giving charitable financial tools to more individuals.
The Googlization of philanthropy is about organizing knowledge to allow for smarter giving by more people. Most important, the Googlization of philanthropy means that organizing the information will not be done by the information creators, but by third parties and — excitingly — the people who want to consume that information.
Sean Stannard-Stockton, a regular columnist for The Chronicle of Philanthropy, is a principal and director of tactical philanthropy at Ensemble Capital Management and author of the blog Tactical Philanthropy.
