The Wall Street Journal recently did a piece on how Web 2.0 giving sites are breaking through the stodgy giving models of the past, offering young people the ability to organize their circles of friends around causes and engage in peer-to-peer lending for rapid fundraising and mobilizing around causes.
Clearly the trend is moving away from traditional methods of giving through Foundations and charity events, etc. That doesn’t mean that foundations will disappear anytime soon however. In fact, a parrallel trend is for foundations (i.e., Gates) to get bigger and wield even greater power, in some cases, than national economies. But even the foundation behomeths that are shielded by large endowments from single or a handful of donors will be keeping an eye on peer to peer giving and whether or not money starts shifing further in that direction. Methinks it will.
Of course, peer to peer lending is nothing new. Heck, churches and other institutions have been practicing it forever. But the ability to connect worldwide online, and interact directly with donees and the larger giving community around them is something new and something the foundation world had better pay attention to. Just look at www.change.org, www.kiva.org, and www.donorschoose.org to view the tip of the iceberg. And don’t just look at the philanthropic world. Look at www.prosper.com and www.lendingclub.com where private, peer-to-peer loans are slowly seeping into the mainstream. Once people are more comfortable with the idea of peer-to-peer financial transactions, sponstaneous giving group formations, and demands for instant accountability through rapid engangement channels will likely be the result. I predict It’s gonna be a whole new ballgame for traditional funders. Lesson: You’d better adapt, come up with other meaningful models, or get the heck out of the way!