Within philanthropy circles, one of the major subtexts of the earthquake in Haiti was the phenomenal success of text-message fundraising appeals. Nonprofits are abuzz about it. The Red Cross alone raised more than $30 million via text donations by the middle of February, more than 10% of the total funds raised.
This form of communication indeed will dramatically change the industry — but not in terms of fundraising.
Text-messaging’s revolutionary impact is best illustrated by Ushahidi. It’s an online platform for sharing crisis information in real time. It was founded in Kenya in 2008, the result of post-election uprisings. Anyone with a cell phone can send a text into the system. In the days after the earthquake in Haiti, Ushahidi provided millions of people worldwide with a front-line look at what was happening on the ground. The information the system provided was used to help coordinate the crisis response. Ushahidi was up and running, gathering and reporting information within an hour of the Chilean quake, too.
Ushahidi’s use of text-messaging to gather data in the moment is the real change being wrought by text messaging and other forms of cheap, instantaneous communication. It’s the harbinger of a person-to-person (P2P) revolution that will change philanthropy much the way it has changed other industries like music and media.
As human beings we are wired for personal connections. We love to feel like we’re making a difference in a specific person’s life. That’s why various campaigns such as child sponsorship and alternative gifts (give a goat, for instance) play up one-to-one connections. The P2P illusion is compelling in this way but it must be genuine. When the illusion is exposed as not creating that link, donors tend to get quite angry. Take for instance the case of Kiva. When it became clear last fall that the P2P connection between lenders and borrowers that Kiva touted was actually much more tenuous and theoretical, Kiva faced a firestorm of criticism. Part of the reason that people were upset is that the connections implied are now plausible. The communications infrastructure around the world has reached a point where beneficiaries of any program could conceivably be text-messaging regular updates on their lives.
Kiva’s misstep is an important sign of things to come for the entire nonprofit industry. The expectation and reality of true P2P connections threatens to dismantle much of philanthropy’s standard operating model:
Defining needs. Donors have typically depended on aid agencies to report on community needs. No longer; those in need will be able to tell donors exactly what the situation is. The data will be available in real time, to anyone.
Accountability. Soon, child sponsorship donors (who by some estimates account for 50% of private U.S. international giving) will no longer be content with an annual letter from a sponsored child — they’re going to want the child’s cell phone number. (And given that 75% of the world’s cell phones are in developing countries, this won’t be such an outlandish request). GlobalGiving, an aggregator of international giving opportunities has already allowed beneficiaries to report on a project by text message and found that the head of the local effort was abusing his power. GlobalGiving took action to remedy the situation. How many nonprofits are prepared for that kind of on-the-ground accountability?
Value-add. Many nonprofits, in the name of fundraising expediency, have positioned themselves as low-cost intermediaries for donated funds (92% of every dollar goes straight to the children!). P2P means you no longer need the middle man. So how will nonprofits start truly communicating the value they bring to the table?
The P2P revolution will affect foundations as well, in many of the same ways. For years foundations have been struggling to find ways to gather and incorporate feedback from the nonprofits they fund. Now that feedback will come to them directly from beneficiaries. How will program officers at Ford, Rockefeller, and Gates respond to tens of thousands of text messages from the field? Will they develop the needed listening skills to incorporate feedback that can lead to rapid learning? Or will they be slow off the mark, further eroding public trust in the role they play?
Rapid information sharing and P2P connections have already turned several major industries upside down. Philanthropy is next.
Timothy Ogden is an executive partner at Sona Partners, and the editor in chief of Philanthropy Action, an online journal for high net worth donors.
