Reader Dan Bassill, who blogs at the Tutor Mentor Connection, recently brought up the importance of the internet in changing the way that philanthropy is practiced. I think he is exactly right.
While the democratization of philanthropy is occurring about 10 years after the democratization of the stock market, philanthropy has the benefit of coming of age during the rise of Web 2.0. Like most new technologies, when the internet first went mainstream it was used mostly to facilitate old forms of business and communication. Most of the great companies of Web 1.0 did things like sell books (Amazon), or “send letters” (Yahoo’s email). Some companies actually used the new technology to create entirely new businesses like person-to-person auction based marketplaces (eBay), but for the most part the internet made old business/social/information systems work more efficiently.
Today we are seeing the rise of Web 2.0 (Web 2.0 is somewhat of a controversial phrase and it means different things to different people. I will use the term to refer to internet applications that leverage the two-way communication aspects of the web rather than facilitating one-way communications). These technologies are extremely important to the rise of the Second Great Wave (or Philanthropy 2.0 if you’re feeling overly cute). Web 2.0 technologies are most useful when a situation needs the input of the community at large. Since philanthropy is by definition about individuals focusing their attention on the community around them, Web 2.0 is a perfect platform for The Second Great Way.
Web 1.0 dropped the operating costs of traditional philanthropy, distributed information about strategies, tactics and needy causes, and facilitated transactions. Essentially, it made the philanthropic “marketplace” more efficient. These are the same types of changes we saw in the financial markets during the 80’s & 90’s. With Web 2.0, we are seeing not just a more optimized version of Philanthropy 1.0, but instead the emergence of a radically new philanthropic marketplace.
Unlike the Rockefellers, Carnegies and other early foundation founders who created entities that mirrored existing institutions, the structured philanthropic vehicles of the 21st century will create a tradition similar to the emerging Web 2.0 companies. Rather than concentrated pools of money which imitate existing institutional structures, the new philanthropists will be smaller, widely distributed agents of change who co-create the social sector that they support.