Platform Philanthropy
A 21st Century approach to scaling impact.
Receiving an email at 4:45am isn’t usually cause for excitement. But for Mrs. Casuga, a high school teacher in Hayward, CA, it was a big deal.
This early-morning notification delivered unexpected and important news: her class project on DonorsChoose.org, a crowdfunding website for high school teachers, was fully funded. Her original goal? To raise $1,420 dollars to cover the field trip costs of a bus, lunch, and tickets to the California Academy of Sciences for her students, made up of mostly special needs students and many who speak English as a second language.
Like many educators, Mrs. Casuga had a dream to share a hands-on learning experience with her students at the California Academy of Sciences. She believed that if she could get her students into the museum, she had a shot at generating a life-long excitement in science. While Mrs. Casuga had a dream, she didn’t have the funds. But in the evening, somewhere around midnight, in one unexpected swoop, a generous donor contributed the final $1,000 to help Mrs. Casuga reach her goal. The trip was on.
Mrs. Casuga and her class were not alone that morning. They were swept up in a philanthropic tidal wave called the #BestSchoolDay wherein over 12,000 classrooms and teachers, across 47 states, had their funding needs met on DonorsChoose.org. The press release called it a “philanthropic flashmob.” But it wasn’t such a far-fetched idea. In many ways, it was an established philanthropic model. Matching grants aren’t anything new. NPR stations and others use the strategy to spur donations all the time. And non-profits and NGOs have always used large chunks of funding to support local and smaller projects. That’s all old hat. Philanthropy 101. But #BestSchoolDay represents something different, in both scale and scope. I’ve been calling it “Platform Philanthropy” — foundations and companies using technology-based platforms to amplify the important work being done by individuals and communities.
Despite the name, the #BestSchoolDay was months — if not years — in the making. Charles Best, the company’s founder, started DonorsChoose.org as a crowdfunding site in 2000. A teacher himself, the site gave educators an easy way to raise money for their classroom projects and needs. It wasn’t a particularly crazy idea. Crowdfunding has become a household term, with websites like Kickstarter being used to launch creative projects and GoFundMe used to cover medical expenses or family emergencies. DonorsChoose.org was born of that ilk, but with a specific focus on filling the gaps for teachers who are continually expected to do more with fewer resources.
It’s working. Over 500,000 teachers have funded projects this way, totaling nearly $1B. Individuals (like you, right now!) can contribute just a few dollars to a classroom in their community or area of interest. While DonorsChoose.org has garnered some high-profile support as one of Stephen Colbert’s preferred philanthropies, the model has never found the runaway momentum that Kickstarter has seen. Sadly, funding classroom projects hasn’t had the allure that films and technology gadgets have, so Charles and the team began looking for other novel ways to fill the funding gaps. One of the most fruitful ideas was convincing more traditional philanthropists — high net worth individuals or celebrities — to step in. The pitch: “there are X number of unfunded classroom projects in your city, you could write a check for Y and all of these classrooms get the resources they need” — simple, straight forward.
The team then gathered dozens of philanthropists and celebrities together and focused their attention on a single day of classroom-funding action — the #BestSchoolDay. They did it the next year, too, with one company, Ripple, funding every project on the platform through a donation of $29M.
It’s platform philanthropy at it’s finest. This is the prototype for a new genre of philanthropy, away from the competition-based, moonshot craze of the past decade, and towards a model that is rooted in community and inspires agency and hope. Others are catching on and the trend is being driven by three main factors: Trust, Small-First, and Tools.
Trust
The way we trust others has changed, and technology is the difference. More accurately: it’s enabling the difference. New tools and platforms are allowing us to trust strangers in completely new and exciting ways. We already have good examples of this outside of philanthropy: sharing our houses with strangers on AirBnB, driving for Uber, or pooling money together from hundreds of backers for a creative project on Kickstarter. The novelty isn’t the financial transaction — room renting, car sharing and art patronage have been around for centuries — the novelty is in the level of trust we’re willing to extend to strangers because the apps and algorithms provide a filter. Rachel Botsman, a leading researcher and author on the subject, gave a TED Talk on the evolution of trust:
“I am not saying we do not need hotels or traditional forms of authority. But what we cannot deny is that the way trust flows through society is changing, and it’s creating this big shift away from the 20th century that was defined by institutional trust towards the 21st century that will be fueled by distributed trust. Trust is no longer top-down. It’s being unbundled and inverted. It’s no longer opaque and linear. A new recipe for trust is emerging that once again is distributed amongst people and is accountability-based.”
Philanthropy runs on trust. NGOs strive for effectiveness and transparency, vying for ratings on sites like Charity Navigator and GiveWell. For obvious reasons, a foundation or organization is only going to give a grant to an entity they believe in.
The impact of scaling trust with technology has a number of implications for philanthropy. It solves non-obvious bottlenecks for both grant makers and receivers. The traditional process goes something like this: a grant writer at a non-profit submits their lengthy proposal to a program officer or review committee at a foundation, which then goes through numerous approvals for relevance, merit and legality. Small non-profits commonly expresses frustration with the significant amount of time it takes to write grant proposals, and because of this, many teams have full-time or part-time staff devoted exclusively to it. The infrastructure required to both apply for and administer a grant is not insignificant, and it takes away from the actual non-profit work being proposed.
But that traditional process is changing dramatically with something new — augmented trust. Here’s how DonorsChoose does it: teachers pick out the materials they need and write 3–4 paragraphs on what they need and why. Teacher volunteers working with DonorsChoose screen each project to ensure it makes sense and the essay accurately describes the items they requested. With teacher profiles and links to past projects and comments, there is community-level vetting of the viability of the project. When the project reaches full funding, DonorsChoose then orders the project supplies through Amazon and other channels, and sends them to the teacher. With this precise combination of steps — each one relatively easy for the teacher — the risk of fraud is reduced dramatically, if not eliminated entirely. DonorsChoose.org is a crowdfunding site, certainly, but it’s also a trust factory.
Small-First
With DonorsChoose as a platform, individual teachers essentially become their own non-profit entities. They don’t need a grant writer, administrator, or 501c(3) status. They just create their page on the site, and adhere to the guidelines and requirements. There are hundreds of thousands of Mrs. Casugas. DonorsChoose has a staff of just eighty. That’s powerful leverage.
Traditional grant-making faces a tricky threshold problem. Each proposal, no matter the size, has to go through the same legal review, which can cost thousands of dollars. This has the unfortunate effect of making smaller grant amounts unreasonable, simply because of the administrative fees. Theoretically, smaller amounts would mean that a foundation or company could spread the grants over a wider number of projects. Augmented trust enables this by dramatically reducing the overhead costs. Less overhead means that grant amounts can get a lot smaller. With teachers serving as their own advocates, and foundations avoiding the costly process of reviewing the merit and legality of each grant-receiving entity, even small amounts of money can go directly to the important work, as opposed to indirect fees like grant writing and administration. For the right people or teams, small amounts of money can go a long way. Mrs. Casuga only needed $1,420 for a life-changing experience for her kids.
At some point, the ability to go small completely rearranges the strategy. As philanthropy enters this new territory, it’s possible to take cues from adjacent sectors. Startup investing, for example, has undergone a dramatic shift towards the small-first strategy. Over the past decade, there’s been an explosion in “startup accelerators” that offer founders and companies relatively small amounts of investment money (as compared to traditional larger venture amounts), combined that with a community of support, and a program of introductions and education. This trend was started by the success of Y Combinator, a program that has now funded almost a thousand early-stage companies with a cumulative valuation of over $60 billion dollars. The original hypothesis was simple: the cost of starting and launching a company was dramatically reduced thanks to platform technologies like Amazon Cloud Services and the iPhone, and it no longer required huge infrastructure investments. Instead of making a few big bets, Y-Combinator’s investors spread themselves very thin, making hundreds of smaller bets knowing that it was very difficult to predict which would prove to have the biggest return. Small-first allows for the businesses, even the crazy ideas, to prove themselves worthy of ongoing investment. As we continue this societal trust shift, there are hopeful signs that philanthropy will evolve, too.
Tools & Platforms
These experiments, like #BestSchoolDay, need two things: tools and a platform.
Having affordable tools and materials isn’t necessarily obvious, but DonorsChoose.org wouldn’t work if they had to buy the buses, manufacture the notebooks or build the museums. They need affordability. More importantly, they need it to be accessible. By using Amazon and other partners, they have access to almost any tool or service that a teacher could possibly need, along with the shipping and logistics infrastructure to get it to the classroom.
If this type of philanthropy is to succeed outside of the public school system, it’s going to be contingent on the availability of affordable tools. If it’s going to work in the areas of science and conservation, which has been my goal and mission, the tools needed to be a lot cheaper. That’s happening. And we’ve helped there. Five years ago, my friend Eric Stackpole and I were building a prototype of an underwater robot in his garage. Our idealistic goal was to democratize ocean exploration and science by creating a low-cost underwater robot. We called it OpenROV. Two Kickstarter projects and several revisions later, the company (now Sofar Ocean) is now responsible for creating a whole new industry and market around affordable remotely operated vehicles (ROVs). Our latest is the Trident Underwater Drone. We’re not alone. There are a number of other groups and individuals who are now designing and building low-cost tools for science and exploration: FieldKit for deploying low-cost sensors into wilderness areas, AudioMoth for affordable acoustic monitoring, or ConservationXLabs’ DNA Barcode Scanner. The list is long and more are coming.
The platforms for collaboration and community vetting are already in place, too. We built and used one of them, so I can attest to the efficacy. Taking a cue from DonorsChoose.org, we created Open Explorer as a digital field journal that allowed anyone with a question or mission to share their expedition online. The goal was to shift from what we were building together at OpenROV to what we were exploring and studying together. Ultimately, the platform was acquired by National Geographic. It’s now called Field Notes.
Last year, using the platform, we organized and ran the Science, Exploration, and Education (S.E.E.) Initiative to inspire the next generation of ocean scientists and explorers. With the support from a handful of foundations — Rolex, Gordon & Betty Moore Foundation, Avatar Alliance Foundation, Dalio Foundation, Schmidt Marine Technology Partners, and others — we donated more than 500 of our Trident Underwater Drones to researchers, citizen scientists, and educators all over the world. The list of recipients is long and diverse: a pioneering study of African manatees in Senegal, monitoring of sea horse habitat restoration off the coast of Portugal, the study of the ongoing purple urchin infestation along the west coast of North America, and on and on. A comprehensive list of most of those stories are documented on National Geographic’s Field Notes website. Many of them helming important and interesting projects overlooked by traditional funding sources. The broad reach of the initiative only possible because of platform-enabled leverage.
We’re planning to expand the program. Moreover, we hope this model of platform philanthropy takes hold. This type of process innovation has happened before, and with good results.
In 1996, Peter Diamandis, an entrepreneur in the space industry, created the first XPRIZE for suborbital spaceflight. Not content with the state of the industry or the pace of innovation, Diamandis staged a competition with a $10 million prize for any company or group who could build and fly a vehicle 100 kilometers into space twice within a two week time frame.
He was actually dusting off an old playbook. He got the inspiration for the idea from a similar effort in the 1919 by French hotelier Raymond Orteig, who offered up a $25,000 prize for the first nonstop flight between New York City and Paris. The competition was won almost a decade later, in 1927, when Charles Lindbergh completed the journey with the Spirit of St. Louis.
Diamandis stunt fared similarly well. In 2004, the inaugural XPRIZE was won by Mojave Aerospace Ventures with their spacecraft SpaceShipOne. And like the Orteig Prize before it, the competition was extraordinarily successful at leveraging investment capital. In the end, the Orteig prize spurred the collective investment of over $400,000 by nine different teams, an order of magnitude increase on the originally promised prize. XPRIZE, too, resulted in over $100 million in invested capital towards the goal from the field of competitors. That kind of straightforward, leveraged impact turned out to be a huge selling point for XPRIZE as it began courting billionaires and companies to sponsor a whole host of new challenges, everything from ocean acidification measurements to landing a vehicle on the moon.
The success of XPRIZE and Diamandis’ campaigning for the idea sent the world into a competition craze. Companies, philanthropists, and even the federal government began using competitions as a way to leverage impact and crowd source solutions. It’s been a great tool. For some problems, the competition model just works. But it’s not a cure-all.
The MacArthur Foundation has been running 100&Change, a “competition for a $100 million grant to fund a single proposal that will make measurable progress toward solving a significant problem.”
The foundation doesn’t specify what problem they want competitors to solve, just that it be a critical issue. They have purposely left room for interpretation. It’s the grand finale of prize competitions — the ultimate test for a philanthropic philosophy that has nowhere left to go.
I suspect this may be the high-water mark for moonshot philanthropy. I hope the pendulum swings back to experimenting with ideas that motivate and inspire entire generations — not just a few teams — to get involved and (quickly) get to work on important issues. AirBnB and Uber have laid out the blueprints, showing how augmented trust can put millions of people to work, quickly. We can use the same tools and ideas to put a generation to work on our most vexing problems.
In ten years, we might look back at #BestSchoolDay as we do the initial Ansari XPRIZE — ushering in an entirely new genre of philanthropy. We’ll have a new 100&Change competition, not to write one big check, but to embolden 100,000 more Mrs. Casugas with $1,000. Ultimately, using her own words, “expanding the size and scope of the futures they imagine.”
