In a recent Wall Street Journal essay, “A Hacker’s Guide to Philanthropy,” Sean Parker of Napster and Facebook fame laments the current state of philanthropic giving and urges his fellow giants of technology to “hack” a better solution that will truly make the world a better place and improve the lives of those in need.
Dear Sean Parker (and other Internet barons),
While you have the means to use your distinctive talents to transform the world of giving, it’s not in the way that you’re thinking.
Traditional models of philanthropy are already being upended thanks to you—and we hope you’ll do more!
Crowdfunding and the Power in Numbers
The reality is that the hack is already under way. Quietly, in small increments that multiply into billions of dollars, the combination of crowdfunding, social networks, mobile and search are democratizing philanthropy and solving problems in a way that rich people, nonprofits and governments simply can’t.
In your essay, you nobly explore how the current generation of Internet barons, including yourself, can “hack” a solution to more efficiently deploy your well-earned fortunes to the benefit of those in need.
But I’d like to suggest that you and your peers can have a greater impact elsewhere.
The solution is not finding better ways to spend hacker fortunes philanthropically.
Instead, the truly Earth-changing revolution will arise by deploying those same hacker skills that famously delivered the various technologies now intertwined with the very fabric of our daily lives and directing them in a new trajectory. We refer to it as “compassionate crowdfunding”—or crowdfunding for personal and charitable causes, such as medical needs, funerals, memorial funds, disaster relief and the like. And it is already unleashing a global grassroots philanthropy movement on a scale never before seen in human history.
While your wealth, accumulated with that of others, along with your charitable arms such as the Parker Foundation, is significant and has the means to do tremendous good, it is massively dwarfed by the pockets and mobile devices of the world’s 7 billion people.
The Charity Aid Foundation’s report, “Future World Giving; Unlocking the Potential of Global Philanthropy,” concluded in 2013 that enabling greater philanthropic giving by ordinary citizens could be transformative. Were the world’s middle classes to donate a mere 0.4 percent of their spending to charity, they would contribute $224 billion to charitable causes. That would make that level of philanthropic giving equal to one of the top 50 nations by GDP.
Crowdfunding has just started to unlock that fortune. And therein lies the bigger opportunity.
You are correct that traditional philanthropic institutions are outmoded. Their giving models no longer mesh–and increasingly clash–with the new ways in which people want to give.
The institutions have not–and cannot–pivot. The new digital, mobile generation is already turning to new technology-enabled means of giving that better suit their philanthropic goals as well as their lifestyles.
The power of crowds represents an untapped vastness of wealth that we (I speak of all of us in the technology community) hold the power to tap and unleash. The average compassionate crowdfunding donations of between $50 and $100 are already adding up to billions, and the industry is growing at an extraordinary rate across all geographies. Compassionate crowdfunding is shape-forming the new philanthropic model.
What does compassionate crowdfunding look like?
People are no longer satisfied giving their funds to a monolithic institution and entrusting its collective wisdom to determine who shall receive benefits. As you point out, Mr. Parker, there is no transparency once your donation is pulled into the vast machinery, a point of great importance to younger donors.
Crowdfunding allows people to discover–whether by social network or search on YouCaring, Indiegogo or others–the person or cause they want to donate to. And they know that their donation goes directly to the person in need. And in YouCaring’s case, no portion of that donation is given up to an intermediary–more on that in a second.
Anyone with Internet access can participate in compassionate crowdfunding, whether it’s on a smartphone in the mountains of Nepal, in an Internet cafe in sub-Saharan Africa or on a laptop in the privacy of their New York City apartment. A few swipes and keystrokes, and anyone can donate to a cause they believe in. Or someone in need can create a campaign and begin receiving help.
This model of minimalist infrastructure is not only the antithesis of old-school philanthropic institutions; it enables highly scalable platforms like YouCaring to provide compassionate crowdfunding free of charge. Aside from personally handing a Hamilton directly to a friend in need, that is unprecedented on an institutional scale–but is today made possible because of hackers like yourself and the very technologies you developed.
The mobile revolution continues to spread. In the developed world, people are using multiple mobile devices to spend more time online. For the developing world, huge swaths of the population are just beginning to discover they can access the world and transact through a handheld device–opening new opportunities for better prosperity, mobility and giving.
Think Globally, Act Personally
A cornerstone of compassionate crowdfunding is reach. Giving to a neighbor fighting a serious illness becomes as easy as giving to a family in Nepal rendered homeless by the earthquake. One can help a family member, local group, stranger across the world or global cause–all from the same convenient platform.
For these reasons and more, compassionate crowdfunding is rapidly becoming the new way of giving, and a powerful means for changing the world.
The largest cohort of donors to compassionate crowdfunding is Millennials, who came of age at the dawn of the Internet and discovered, grew alongside of, and are intimately comfortable with the mobile and social networks that are woven into the fabric of their daily life.
Even more interesting, 70 percent of donors are women. They clearly feel empowered by this new means of giving, which is personal, convenient and gives them the ability to micro-target the causes with which they most emphasize.
Giving Never Becomes Outmoded
The challenge for would-be technologists-slash-philanthropists-slash-entrepreneurs (and yes, hackers) is to meld transformative technologies with our best philanthropic instincts.
Let’s seize that growing connectivity from mobile and social technologies–and empower every citizen of the world to fulfill that most basic of humanitarian desires that lives within all of us: to help those in need.
Mr. Parker, you point to frustration at the problem of scaling philanthropy. “How do these individuals, accustomed to unleashing massive social changes that span the globe, make a lasting contribution in their charitable lives and find satisfaction in doing so?”
The good news is that you and many like yourself are precisely the kind of people who can effect massive, global social change, carve out lasting contributions, and yes, find satisfaction in doing so.
Thanks to you and other pioneering technologists–the Zuckerbergs, Jobs, Brins, Pages, Gates, Stones and Dorseys of the Internet world–that revolution has already been sparked.
You urge your peers to spend down their philanthropic assets during their lifetime, and “don’t worry about leaving an institutional legacy.” But it is your collective skills, not wealth, that are your greatest assets.
We hope you will join us in the challenge to expand the technologies you have built and build new infrastructures. Ones that expand compassionate crowdfunding into an unprecedented global community of giving. That may become the greatest legacy in the history of philanthropy.