"Don't talk - Do."
That is what a wise supporter advised me soon after we started GlobalGiving. He was referring to the hype surrounding the dot-com boom.
Lots of people were talking back then about all sorts of new possibilities in the philanthropy arena. There were meetings and conferences and papers and excited drawings - on whiteboards and napkins - of potential "ecosystems" And a number of experiments were launched.
Five years later, a lot of the hype has died down. Many of the experiments have failed or stalled. Some were all talk and no action. Others failed due to bad concepts, poor execution, or just bad timing.
But many others are succeeding. I was flattered when Monitor Institute called GlobalGiving the "most mature and established of the new philanthropy marketplaces." We have more than doubled in volume of donations each year since we started, and over seven hundred projects have been funded.
But as I said, we are not the only success story (I will highlight others in coming posts). And, together, the success stories now provide a critical mass for the emergence of a fully fledged philanthropy marketplace.
What would such a philanthropy marketplace involve? As my friend Venkat Krishnan, founder of GiveIndia, and I have often discussed, it would include the following components:
* Exchanges - where philanthropy transactions occur
* Investment Bankers - who help larger organizations secure funding
* Investment advisors - who advise large donors
* Investment analysts - who provide independent analysis of organizations and projects
* Private equity funds - managed on behalf of high net worth funders looking for high (social) return social investments
* Mutual Funds - baskets of philanthropic investments that help donors diversify risk and focus on a theme or country
* Venture philanthropists- funders who specialize in high-risk, high-return projects.
* Standards agencies - which develop criteria for effectiveness, transparency, and accountability
* Ratings agencies - organizations that give ratings to philanthropic organizations based on agreed reporting standards
In this emerging marketplace, the lines between for-profit and non-profit organizations will be increasingly blurred, with micro-credit institutions and even regular venture capitalists getting into the act.
Sometimes one organization will perform or enable several of the above functions. For example, at GlobalGiving we provide an exchange for transactions, but a major donor has also used the platform to create a mutual fund focusing on Human Capabilities. We have a mechanism for reporting transparently on project progress, and we have implemented the beginning of a feedback and rating system.
But a full marketplace will have many different organizations and institutions meeting varying demands of both donors and recipient organizations. There is not a single approach or mechanism that can meet all needs. "Different strokes for different folks" is as true in this sector as in other sectors.
The emergence of this full-blown philanthropy marketplace is not a foregone conclusion. It will take lots of hard work, an increase in cooperation and inter-operability among emerging components of the system, and significant financial investment. But unlike five years ago, the vision is now on the horizon.
In its excellent report "Future Matters," The Monitor Institute predicts we are at a tipping point in the emergence of the philanthropy marketplace. Lucy Bernholz predicts that we are about to see "meaningful commercial investments (in scale and scope) in social good, including online philanthropy exchanges." She continues: "2007 might be the breakthrough year I've been predicting."
I plan to write more on this topic - including highlighting some of the more successful emerging players such as DonorsChoose - in the weeks ahead. But in the meantime, I hear the voice of that wise advisor whispering to me: "Don't talk. Do." So I better get back to work.