Monday, December 17, 2007

Distributed funding - a new model for philanthropy

An article in the Washington Post today underscores one of the key recent trends in philanthropy -- distributed funding.

While foundation-based and major-donor funding are certainly as important as they've ever been, social networking has introduced the idea of generating small dollar amounts from a very large base of supporters as an alternative to more standard practices.

The company featured in the Post article is called Razoo, but there are many others vying for space in this emerging market - including Steve Case's foundation on Facebook (which i talked about in an earlier post),,, Network for Good, SixDegrees, Changing the Present, and many, many others.

Razoo represents an offshoot of the basic concept because it focuses attention on how technology and philanthropy are intersecting with the start-up, for-profit culture of the Internet.

Razoo is a company that has built a Web site to connect people with one another, much like social networking giants MySpace and Facebook, but in support of humanitarian objectives such as preventing homelessness in the United States and helping families who live in a Nicaragua trash dump. Users and causes each have their own pages.

"YouTube is transforming TV. Google has transformed advertising," said Razoo founder J. Sebastian Traeger. "The Web will do the same thing for philanthropy."

The point here is that non-profits have tended to spend a great deal of time cultivating larger donors, and have tended to invest less time cultivating the smaller ones. Given the changing technology landscape, organizations will need to rethink that strategy very, very soon. Tapping in to the deep ocean of donors on the internet is likely to spell financial success for those organizations who reach them sooner, rather than later.

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