21st August 2014
He founded the world’s first school of philanthropy. He’s been watching trends in giving for the past quarter of a century. And this month, The NonProfit Times named him among the sector’s 50 most influential leaders. So what are the biggest shifts Gene Tempel sees in the world of philanthropy?
For one, he notes a growing overlap between the activities of the non-profit and private sectors. With a growing recognition that donor dollars alone cannot fix the world’s problems, today’s philanthropists are turning to everything from social enterprise to impact investing to advance their missions.
Part of the reason lies in the source of modern-day wealth. Since in 1987, when Tempel founded what’s now the Lilly Family School of Philanthropy (then the Center on Philanthropy) at Indiana University, he’s watched an unprecedented growth in personal wealth – much of it generated by successful technology entrepreneurs.
With this, says Tempel, has come the rise of the private foundation, with the creators of companies such as AOL, Microsoft, Facebook, eBay and others establishing grantmaking organizations with extremely large sums of money at their disposal. But while the private foundation is a traditional philanthropic vehicle, these entrepreneurs are embracing new approaches to philanthropy that tap into the power of the private sector.
“You might set up a private corporation for social good or at least want to see a non-profit have an arm attached to it that develops income as part of its operations,” says Tempel. “It’s very much a blurring of the lines.”
He also points to new types of organisations such as the Omidyar Network, established by Pierre Omidyar, founder of eBay. The organization seeks, in its own words, “a world of positive returns”. Yet, as Tempel points out, “it’s not a private foundation – and he’ll fund anything in any of the three sectors that has the promise of delivering social good.”
The tech sector has done more than provide a new source of wealthy donors. Social media and the web have transformed philanthropy by facilitating new levels of transparency and providing low-cost channels through which to manage even small donations.
This, he says, is important, given the increased desire by donors to track what happens to their funds. “Technology has enabled that,” he says. “It enables you to demonstrate the flow of money inside organisations and track performance more easily.”
Technology also allows non-profits to develop better relationships with donors by providing them with feedback in the form of video and e-mails on how their donations are being used.
Of course, this creates its own challenges. “A lot of organisations are driving people to their website with electronic requests – and that continues to grow with people sending gifts via social media,” he says. “But the question is what does the organisation do with that?”
In other words, while it’s relatively easy for non-profits to establish relationships with donors they know by name in their work, it’s harder to do that with a community of millions on the web. “Can the organisations that process those gifts begin to adopt systems that engage these people more personally? That’s a big question,” says Tempel.
Meanwhile, he believes the philanthropic sector has been slow to embrace technologies that enhance customer relationship management – something long ago harnessed by the private sector.
“Intermediaries exist because non-profits have not adapted,” he says. ‘We use Constant Contact or ExactTarget because we know those customer relations systems can personalise things for us as we go out to our constituents.”
He does see growing interest from non-profits in using technology to enhance fundraising. At the same time, however, he acknowledges that the nature of philanthropy means organisations need to behave a little differently from Amazon and other online marketplaces. “We’re not just pushing products,” he says.
And while he believes impact investing and social media will change much in the way philanthropy is conducted, he’s reluctant to predict seismic shifts in the sector. “It’s not ever going to be a complete revolution,” he says. “It’s an evolution.”
THE GOOD STUFF
Here, I invite my interviewees to name a favourite charity and – in the spirit of Mixing It Up – a favourite cocktail.
Charities: The Lilly Family School of Philanthropy at Indiana University, the Indiana Repertory Theater and The Sisters of Saint Benedict of Ferdinand, Indiana
Cocktail: Scotch or a Gin Martini with an olive