nuance intelligence

Good friend Rebecca Saltman turned me on to this piece in the Journal of Philanthropy (ironically, a paid subscription site). It looks at how Steve Case leveraged both Parade Magazine and Facebook to build a socially-focused initiative that funds smaller non-profits.

The competitions, financed by the foundation created by Steve Case, founder of AOL, and his wife, Jean, promised $50,000 grand prizes to nonprofit groups with the greatest number of donors to their cause, not the largest amount raised. In all, the Case Foundation handed out $750,000 in awards.

Both contests were held from December 13, 2007 to January 31, 2008. “America’s Giving Challenge” was run with help from Parade magazine and its Web site. It promoted the use of electronic donation links, often called badges, that can be attached to e-mail messages or Web sites. That contest focused on bringing offline readers to online giving, and sought to reach the older adults who read Parade.

Participants in the second competition, “Causes Giving Challenge,” raised money and awareness for their causes through the social-networking Web site Facebook, which serves a younger audience.

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Many of the winners were very small grass-roots organizations that were able to garner more support than bigger, well-established groups.

In related news from 2007, consider the following:

Sean Parker and Joe Green, co-founders of Facebook and Napster have created Facebooks’ Causes application, which lets you add philanthropic messages and fundraising to your profile. Contribute, a media company focusing on next-generation philanthropists recently profiled their work, along with eight peers, including our friend Michael Furdyk, who runs Taking IT Global.

Kiva.org, a peer-to-peer lending platform that lets anyone loan (generally small amounts of) money to people in the developing world, has found all of their loans subscribed, and more donors than people in need. While this may point to the disconnect between need and internet access in the developing world, it’s a testament to the power that the web is having on philanthropy.

What’s the nuance? Not only did Case’s project give away money to small charities, they accomplished other goals:

• Got older users onto the digiwebs for a purpose they support.
• Encouraged non-profits to help their supporters become online activists.
• Prioritized the act of giving over the size of the gift.

In the macro lens, these initiatives demonstrate the growing impact online media is having in the philanthropic field. The decentralized nature of the Internet will disrupt traditional flows of capital, be it social or financial.

Although my initial gut reaction is to say I don’t think the Bill & Melinda Gates Foundation will be adopting a similar platform anytime soon, Facebook members are becoming a more important force in philanthropy.

Will consolidation trends in media, like AOL/TimeWarner and NewsCorp/MySpace be mirrored in philanthropy? The absence of a profit motive makes me doubt a direct parallel, but how soon will the Rockefeller, Hewlett and other traditional philanthropies be courting Kiva’s Matt Flannery, TiG’s Mike Furdyk or Facebooks’ Parker and Green?

Steve Case got a taste of how these mergers work out, but he’s found the power of digital philanthropy, and probably is not the last rider on the bus.