Nonprofit Literature Blog

Philanthropy and the Social Economy: Blueprint 2014

Released last week, Philanthropy and the Social Economy: Blueprint 2014 is the latest annual forecast of the philanthropy industry. Philanthropy wonk Lucy Bernholz (@p2173), writes on a wide range of topics, including European vs. American philanthropy, digital civil society, key buzzwords of 2013, and predictions for next year. 

Europe vs. America

In "Expanding My Horizons" Bernholz examines the social economy of Europe and what distinguishes it from the U.S. One thing she points out is that the European social economy puts more of an "emphasis on values and governance practices, not on sectors." She also tells us that the category of social welfare organizations ("political nonprofits", or 501(c)(4s)) most clearly differentiate the two economies, and she even boldly predicts in her 2014 Wildcards that these will be split out of the 501(c) tax code and be subject solely to Federal Elections Commission regulation.

How Will the Social Economy Evolve to Meet the Needs of the Digital Civil Society?

Bernholz argues that the frame of the social economy more effectively "captures the full set of options for both donors and doers (entrepreneurs and organization execs)" than our traditional lens of nonprofits and philanthropy. A key part of this economy is the adoption of digital practices that "has the potential to change its root structures." 

She points out some independent efforts of digital evolution within the sector, including the Foundation Center's own new Foundation Directory Online Free search tool which provides full-text searching of IRS Form 990-PFs for nearly 90,000 foundations, as well as its partnership with Guidestar.  In the end, though, she tells us that we are all involved: "each time [we] take civil action with digital tools — texting donations, sharing videos, snapping and sharing photos of protests or movements — we invent digital civil society."

"Privacy" is This Year's Top Social Economy Buzzword

Privacy. Bernholz tell us that "Edward Snowden put it on the front pages...and our pervasive reliance on digital communications makes us all vulnerable." Other top buzzwords of 2013 include "Peer-to-Peer Services", another word for the sharing economy, "Makers" or the newfound interest in old-fashioned handmade goods, and "Bitcoin" the virtual currency popular with financial speculators and some nonprofits.

Could a Major Crowdfunding Scandal in 2014 Make Us Rethink Online Fundraising Platforms?

What will next year bring? Here are some of her predictions and wildcards for 2014:

• At least one major nonprofit/foundation infrastructure organization will close up.
• We will experience a major scandal in the crowdfunding marketplace.
• One winner of the Gates Foundation's Data Interoperability Grand Challenge will launch a widely used new product or service for social sector data by December 2014.
• New mobile money tools will make informal networks of people even more visible, viable, and important.
• Github will become a widely used, meaningful sharing platform for nonprofits.
• Americans and Europeans will make greater use of "personal privacy" protection services on the Internet, allowing them to control/own their own data.
• U.S. foundations will launch several new initiatives rooted in concerns about the polarized and paralyzed state of American democracy.

Wildcards (or, "Predictable Unpredictables")

• The American system will split social welfare organizations out of the nonprofit, 501(c) tax code.
• Proposals for moving oversight of American nonprofits out of the IRS and creating a new charities regulatory authority will come to pass.
• Benefit corporations and nonprofits will be on opposite sides of policy battles about tax privileges.
• A major natural disaster will set new fundraising records, begging the question "as these disasters become more predictable, will philanthropic responses change?"

Bernholz also examines her previous forecasts, acknowledging some that were right (the mainstreaming of crowdfunding) and some wrong (that the Affordable Care Act will lead to new community solutions). Finally, in "Glimpses of the Future" she examines the growth of "civic tech" movement where citizen techies are volunteering to improve city functions, and the "emerging ethics of data" that includes hypothetical scenarios which force us to think of the implications of data used for good that could possibly hurt or compromise the privacy of the very individuals it helps.

You may also want to read Bernholz's own highlight reel of Blueprint 2014 that was recently published in the Stanford Social Innovation Review.

--Rob Bruno
Foundation Center
New York, NY

"Off the Shelf" Book Reviews

The newly redesigned Philanthropy News Digest (PND) is a compendium, in digest form, of philanthropy-related articles and features culled from print and electronic media outlets nationwide. In PND's Off the Shelf feature, you'll find reviews of books on a variety of topics ranging from fundraising to nonprofit management.

Here are excerpts from two recent book reviews, both of which are available at Foundation Center libraries.

Cause for Change: The Why and How of Nonprofit Millennial Engagement
Derrick Feldmann, Kari Dunn Saratovsky (San Francisco, CA: Jossey-Bass, 2013)

"According to Saratovsky and Feldmann, the "why" of millennial engagement is simple: nonprofits can't afford not to engage millennials on millennials' own terms if their organizations are to thrive. In part, that's because millennials boast $62.7 billion in discretionary spending power and, perhaps more importantly, are in line to inherit some $41 trillion in wealth from their parents and grandparents. What's more, Saratovsky and Feldmann argue, millennials insist on being actively engaged, as opposed to simply solicited, and are driven by personal relationships based on trust.

The "how" is more complicated. Saratovsky and Feldmann propose a "Millennial Engagement Platform" comprised of four "operational and cultural components" "leadership inviting" (i.e., inviting and empowering millennials to connect with the organization's decision makers); transparency; social connectivity; and a solution-inspired environment." Read more...

The Cycle: A Practical Approach to Managing Arts Organizations
Brett E. Egan, Michael M. Kaiser (Waltham, MA: Brandeis University Press, 2013)

"Kaiser is big on proactivity. He thinks of institutional marketing "as a proactive tool for healthy organizations as much as...a remedial approach for troubled ones." Moreover, no organization, no matter how successful, can afford to become complacent at any stage of the cycle. The cycle is not self-perpetuating; each element fuels the element that follows, for better or worse. If an organization neglects to maintain the engine, the engine will stall.

It's an approach that's evident not only in the book's emphasis on long-term planning, but also in its focus on the critical role of the board and donor stewardship. Raising an organization's profile through effective institutional marketing is critical to recruiting effective board members, Kaiser writes, but at the same time board members must be actively managed and engaged — for example, by being asked to "adopt" specific projects. Arts managers also should audit the board periodically to evaluate board members' productivity and replace those who no longer meet the organizations' evolving needs. Although it may surprise some readers, Kaiser tells us that, when working to save Alvin Ailey [American Dance Theater], he asked eighteen of the dance company's thirty-six board members to relinquish their seats — and that 'seventeen did so happily and remained actively engaged with the organization.'" Read more...