Philanthropy’s Trifecta: Information, Wisdom & Relationships

My most recent column for the Chronicle of Philanthropy, appearing in this week’s issue. You can find an archive of past columns here.

Data Don’t Tell the Whole Story of Charities’ Impact
July 2, 2009 | Link to Chronicle of Philanthropy

A week’s worth of The New York Times includes more information than the average American living in the 18th century would have encountered in his or her lifetime, according to the book Information Anxiety 2 by Richard Wurman.

As grant makers demand more data on which to base their philanthropic decisions, let’s remember that information by itself is not useful unless it is filtered using wisdom and relationships.

Philanthropy has entered an age in which information, especially quantitative data, is prized by foundations and other donors.

Many people believe that data can help us identify great nonprofit groups and effective programs.

Just as the global economy is operating in an Information Age, "knowledge workers" who seek to make available new types of information for the public good now populate philanthropy. However, information is a necessary but not sufficient condition for robust philanthropy.

That’s why it’s great that philanthropy leaders are starting to show their thought processes in regular Internet postings available for everyone to see. For example, Paul Brest, of the Hewlett Foundation, uses his blog for a rolling conversation about what makes for good philanthropy. So does Carla Javits of REDF, a group that uses innovative approaches to train needy people for jobs.

Adding to the store of knowledge through online postings are people such as Ken Berger, head of the Charity Navigator watchdog group, and Bob Ottenhoff of GuideStar, the repository of information from nonprofit tax forms.

As the amount of available information explodes, the wisdom to process it and put it in context becomes exponentially more valuable. In this environment, information becomes a resource that is valuable only when we place it in context. Access to information is no longer a competitive advantage. It is the ability to filter and process the flood of information that sets effective people apart. That is why the decision by a prominent foundation leader like Paul Brest to start a blog is so important.

No matter how wise someone like Mr. Brest is, each person has a limited capacity to understand the world around him or her.

That is why relationships are the third core element of a philanthropic trifecta — information, wisdom, relationships. Relationships, especially those with other wise people, allow grant makers to filter the information they receive through a network of expertise and place the information in context.

Wisdom allows an individual to place new information in the appropriate context and use it to make better decisions. But when wise people connect their ideas together, a communal understanding of philanthropy will sprout, and individuals can benefit from experience far beyond their own.

While these relationships are rooted in human connections, online tools like blogs and Twitter are allowing those networks to flourish without regard to geography.

Philanthropic leaders have long gathered to communicate among themselves, but the power of relationship-based networks is now being supercharged by the inclusion of people from all walks of life and geographic locations.

When I wrote recently in The Chronicle about the "Googlization" of philanthropy (Opinion, April 23), I argued that it would enable "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."

But Pat Nichols, a management consultant to nonprofit groups, worried about the implications of my suggestion, and in a comment on my blog, he wrote, "It struck me that the capacity to Googlize philanthropy doesn’t improve philanthropy by itself. There are at least two sets of interwoven criteria at work — the criteria by which information is deemed important and, thus, selected or organized, and the criteria by which the reorganized information is applied in making giving decisions."

Mr. Nichols is exactly right and his comment gets to the core of the issue. Information is the raw material of effective philanthropy, but without the skilled processing of wise individuals and their extended relationship networks, information isn’t worth very much at all.

Gathering, filtering, and processing information is essential to great philanthropy. But this is a human-powered activity.

Computers can slice and dice the raw material of information. The Internet can provide access to the information to more people in new ways. But it is only through the skilled application of the uniquely human aspects of wisdom and relationships that we can use the information to make philanthropy more effective.

One Comment

  1. Jeff Mowatt says:

    Sean, The information accessibility argument was also used to support the case for a people-centered economy. Though it was written some years before Google existed. It was also reiterated in more recent times by CK Prahalad when talking about Creative Capitalism with Bill Gates, in saying poor people remained poor because they lacked access to information.

    “In order for economic development to take place in any given location, the very first thing required, before anything else can possibly happen, is information. This information includes first and foremost where to look for the necessary resources to do anything. If new businesses are needed, knowing they are needed and finding funding for them are two very different things. The first step is to locate possible capital resources in order to move forward, and this step is no more and no less than information. Once resources are located, the next step is what terms and conditions are involved in obtaining those resources — more information. Once this is known, paperwork must be completed, business plans made, market research and due diligence conducted, and all of this compiled and forwarded to the appropriate parties. Again, nothing more than information. In fact, most of the work involved between identifying a need and solving the problem is information acquisition and management: getting and developing information.

    “As Alvin Toffler predicted in Power Shift, where once violence and then wealth were dominant forms of power, information is now becoming the dominant power. Those nations with the greatest freedom of information and means of transmitting it have now become the most powerful and influential, and the strongest economically. Toffler also predicted the collapse of the Soviet Union would come about due primarily to its authoritarian control and limiting of information. Unfortunately for Russian citizens, this old habit has continued for them beyond the collapse of the former Soviet Union and will at the least make an interesting case study on the survivability of a once strong nation which still remains committed to limiting and controlling information.”