What's the 'Next Big Thing' in the World of Philanthropy?

No longer do funders see their primary role to be writing big checks. Spurred by the entrepreneurial drive of a new generation, new philanthropists are developing their own blueprints for change.
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Whenever the world's most innovative philanthropists and social entrepreneurs gather for the annual Global Philanthropy Forum (GPF), there is a palpable sense of anticipation in the air. It's an excitement that something quite powerful may coalesce; something that might constitute a consensus of thinking around a breakthrough idea; something that has the potential to transform the way we approach solutions to the world's most intractable problems. Executives representing the world's most powerful foundations including the Bill and Melinda Gates Foundation, the Rockefeller Brothers Fund, the Omidyar Network, Google.org, Salesforce.com, the World Bank and many others, small and large, are all there to listen, to learn and perhaps to fund a major new initiative.

For some of the 500 plus attendees, GPF is like a big mixer. It provides an opportunity for nonprofits to showcase their programs in the hope of attracting new or additional funding. For the foundations and philanthropists, it's a smorgasbord where they can get a taste of new opportunities to deploy their capital in more impactful ways. But for others because of its size and stature, this event hold out greater hopes -- hopes of being present at the creation of something big that disrupts the "systems" of philanthropy.

Taking place just a few miles from the heart of Silicon Valley, it's a conference where tech billionaires mingle casually with African innovators and inner city nonprofits. GPF tends to attract a new generation of philanthropists, who are disruptors by nature ... those who founded companies like Cisco, Google, eBay and others.

Initially formed out of a living room conversation in 2001 at the home of Cisco co-founder, John Morgridge, the Global Philanthropy Forum has become one of the year's most productive and prestigious events in the world of philanthropy. The original premise of the Forum was centered around a concern that a new generation of entrepreneurs was emerging without a full understanding of the ways that philanthropy can change the world. Says Jane Wales, GPF's Founder and CEO, "They were creative, natural problems solvers with resources to apply to positive social change. But they needed evidence that philanthropy actually works so as to know its true potential."

That was 2001, which was also a time of a lot of soul-searching not only in the world in philanthropy, but also in the tech world as many dreams were dashed by the Internet bubble burst. In this climate of self-examination, suddenly many young entrepreneurs had more time to think more expansively about how they might impact the world, perhaps through philanthropy instead of business enterprises. In the year and a half following that living room meeting, over 500 family foundations were formed. Clearly there was an important trend at work, and Jane Wales saw the need for an annual convening and donor-to-donor match-making to help create community and advance peer learning among these newly minted givers.

Previous conferences have proved to be fertile grounds for creative discussion around ideas that were gaining force: impact investing, venture philanthropy, new metrics and big data strategic philanthropy. Several have since congealed into foundational concepts of modern philanthropy -- veritable buzzwords like:

• Venture philanthropy: Venture philanthropy transfers the tools and techniques of venture capital into the world of philanthropy. Venture philanthropy emphasizes innovation, active involvement of donors and the use of benchmarks to progressively evaluate program success.

• Strategic philanthropy: Is a directive approach to giving, often relying on big data to drive decision-making according to various strategic objective and core competencies.

• Social Capital: Social capital is a recognition that there is a critical ingredient missing from the way financial markets measure value -- the intangible value found in environmental protection, community building and social contributions.

• Impact Investing: These are investments that link the importance of measurable social and environmental impact with a financial return. It's a first cousin to both social capital and socially responsible investing, but also considers the negative impact of investments on the environment or social landscape.

So what will be the breakthrough idea of this year's conference? Will it be something that can connect the dots between ideas offered in different contexts? This years conference, entitled, "Outrage, Opportunity and Choice in the Digital Age suggests that there's a powerful trend underlying the dissemination of information and knowledge in the world of philanthropy. According to Wales, "New digital tools are empowering people all over the world. Not just in the United States."

What might come of this? According to Wales, "As wealth is created and capacity is built, indigenous philanthropists are emerging, dedicated to promoting inclusive development in their countries and on their continents. The digital revolution allows them, and us, to target philanthropic interventions with greater precision. Together we can tap that great reserve of human ingenuity that exists in every community, family and person."

In other words, she hopes this year's conference, combined with greater access to digital tools and technology, will open up our eyes to the potential contributions flowing out of emerging economies in the "South." Says Wales, "The next wave of philanthropic innovation is as likely to come from Sao Paulo, Lagos, Mumbai, Johannesburg, or Nairobi as it is from Silicon Valley, London, New York or Austin. This year's conference will have been a success if philanthropists help enable and benefit from the South-South transfer of knowledge that results. It's a real moment of opportunity." Is the a global democratization of knowledge in the philanthropic world, the next big thing? Wales thinks so and in recognition of this trend, GPF is announcing the formation of the African Philanthropy Forum at this year's conference.

It's an opportunity that Wales believes will be fueled not only by technology but also by outrage -- outrage over the fact that today joblessness, hunger, disease and even slavery persist. Says Wales, "These deficits are both a cause and a consequence of poverty and insecurity, creating the conditions that allow more than 860 million to go hungry, and over 20 million fellow human beings to be trafficked and sold into slavery."

Despite appearances to the contrary, the world of philanthropy is changing is dramatic ways. No longer do funders see their primary role to be writing big checks. Spurred by the entrepreneurial drive of a new generation, new philanthropists are developing their own blueprints for change and using their capital in very specific and directed ways to implement those plans ... much like they did in the world of technology or business.

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