Is information most valuable when you possess it or when you release it? It depends on whether you being able to act on the information is what makes it important or whether other people being able to act on it is important.
As an investment advisor, I know that in the stock market it is the possession of information that is important. If I have valuable information about the market, I want to act on that information before anyone else does to maximize the value of the information. In philanthropy, the opposite is true. As Lucy Bernholz points out today:
No one philanthropic entity has the money to solve the problems the entity claims to care about – Hunger. Education. Sustainable growth. Better foster care. AIDS. No foundation can achieve their own chosen goals by themselves. Those who set out to solve social problems and those who set up funds to support these efforts want to succeed. They are not satisfied with "feeling good," they want to do good. As they struggle to achieve their lofty, oft-hyperbolic, but well-intentioned goals, they are recognizing what those who have been doing this work for centuries also know – they need others, they need to work together. Doing so requires sharing ideas, tactics, resources and strategies.
There is no first mover advantage in philanthropy. If a foundation discovered a new ultra effective way to reduce poverty, acting on this information before anyone else did would not maximize value. Instead, value is maximized by the most people possible acting on the information as quickly as possible. So why don’t most foundations attempt to maximize value by releasing valuable information as quickly as possible?
I think part of the reason is how we as a society tend to “rank” foundations. Have you ever heard of the Bill and Melinda Gates Foundation or Google.org? Both are innovative foundations, but they are well known because they are the largest private and the largest corporate foundations, as measured by assets in their endowment. What if instead of ranking by assets or grant size, we applauded foundations for the most innovative projects or the highest impact programs or being the most transparent? People tend to behave in the way that society expects them to behave.
Just 10 years ago, the idea of celebrating the biggest philanthropist was outside of the mainstream. The important ranking for wealthy Americans was the Forbes 400. Then Slate launched the Slate 60:
The Slate 60 attempts to fuse two essential but conflicting aspects of the American character: generosity and competitiveness. So, it’s not surprising that the inspiration for the list came from a man rich in both qualities, Ted Turner. In 1996, Slate editor Michael Kinsley was struck by remarks Turner made in an interview with Maureen Dowd: The CNN founder bemoaned the influence of the Forbes 400 list of richest Americans, saying it discouraged the wealthy from giving away their money for fear of slipping down the rankings. Turner suggested that a list of charitable contributions could inspire rich Americans to compete in a more beneficial way.
Most people have never heard of the Slate 60. But the concept that we should admire people because of how much they give has gone mainstream in a big way. The Robin Hood benefit is a case in point, as the NY Times noted earlier this month:
The event raised $71 million, up 32 percent from a year ago, in what was a display of gilded age excess.
“It was overwhelming,” said Glenn Dubin, co-founder of Highbridge Capital and a founding board member of Robin Hood. “There was a feeling of social responsibility and philanthropy in the room that was palpable.” In an era where 25 money managers can accumulate $14 billion in one year and private jets fail to inspire awe, Wednesday night’s results aptly conjured up a bit of amazement.
In an era where private jets fail to inspire awe, the raising of $71 million for charity was what got people’s attention.
So how does all of this relate to blogging as the title of this post promised? Bloggers are judged on the speed, accuracy and relevance of the information they release, not the information they posses. When we talk about a “scoop”, the ultimate achievement in journalism, we’re talking about the release of highly important information before anyone else was able to release it. This is the frame though which philanthropy must be judged. How quickly can philanthropic entities obtain relevant information about how to further their cause, how quickly can they release it and how effective can they be at catalyzing other resources to act on the new information.
It doesn’t matter how much you have, it’s what you do with it that counts.