Ongoing disruption is the new normal for industries, but when it comes to charities there is a unique complexity not present in many other sectors -- mostly in diversity of causes, operating models, stakeholders and the disconnect between people who pay for services and beneficiaries of services.
Charities have been disrupted mostly in the area of online fundraising through the rise of crowd-funding and digitally-driven ways to donate, but I believe we'll see lot more disruption in the years to come. This will be driven not only by technology, but by millennials with their distinctly different preferences when it comes to engaging with causes. Because of this, methods, expectations and vocabulary connected with the charitable world will be different.
There are a few broad digitally-enabled trends that have been affecting all industries across the board:
• Life in a consumer-centric, platform-agnostic universe. We are seeing a convergence of user content, community, and commerce at a rate never seen before in history. It's truly shaping how we're accessing information and sharing knowledge.
• The peer-to-peer phenomenon. Overall influence has shifted from "institution to consumer". It is wholeheartedly embraced by millennials. Peer-to-peer systems are creating a different world and a whole new set of values. The dominant voice is not necessarily the one at the top of the hierarchy chain.
• The enablement of the so-called long-tail. It is now possible to mass niche and mass customize -- all through efficiencies made possible by technology (Netflix is the original long-tail service model). As coding languages become more accessible and more affordable, I believe that long-tail will become easier and easier to service.
• The removal of the middle man. With technology, it is possible to go directly to consumers, and to communicate with them one-on-one. Everything can be direct; this introduces a whole new demand for know-how and opportunities for disrupting the entrenched industries.
• The rise of the API economy. This trend is ushering in a new era of co-specialization and is redefining the nature of competition -- at least for now in the for-profit space. In the future, there will not be as many companies delivering one-stop shops -- we will have platforms with vertical eco-systems of integrated infrastructure or services.
• Big data -- everywhere. Different types of data, proliferation of data mining tools and predictive models, machine learning, and analytics platforms are all trying to uncover new patterns, which now allow us to know with certainty what is happening, and to uncover new stories and insights instead of assuming or making educated guesses.
What are the implications of these trends for charities? Charities have been definitely impacted and will continue to be -- it is inevitable. Charities must now use multi-channel strategies to engage new donors in an incredibly fragmented media universe. We have seen democratization and access to tools and technologies. Peer influence will increasingly be the new currency in the charitable sector, requiring some deep adjustments. There will also be more opportunities to be efficient and do things differently through the exciting application of new technologies, like we've seen in Project Daniel or PEEK Vision.
With the strong growth of the multi-billion dollar global crowd funding industry, and the blurring of lines between non and for-profit via the rise of social entrepreneurship and B corps, the questions are profound: what is charity and what is charitable? Who gets to 'do' charity and who can do it better? We are seeing corporations wanting to take up an issue and work to solve the problem themselves -- engaging directly versus supporting a charity, or at least being an equal player. With this, there is a rise of 'solutionism' -- a term put forth by The New Yorker magazine to explain the somewhat naïve approach of many new social entrepreneurs to solving complex societal issues. It's important to guard against "solutionism" as it has the potential for tremendous waste.
If I were to guess where serious disruption in the charitable space will come from, I'd say that it would be through the increasing volume, visibility, accessibility and affordability of data. Data will fuel more and different information, and more accountability; data can change donor preferences and accountability; data can help build an accurate picture about what is going on in the charitable sector and its impact -- something we don't fully have right now. Data can also help us move simply from 'after-the-fact work,' to more preventative, proactive work. Therefore data has the potential to create new scalable, problem-solving ideas and tools in the global charitable/social profit space.
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