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Not so long ago, most major U.S. foundations fit the image of the giant East Coast institution, rooted in fortunes made by titans of the manufacturing and extractive industries. For decades, the Ford, Carnegie, and Rockefeller foundations carried out sweeping programs on a scale that rivaled those of governments. Many public reforms and institutions were buoyed by their efforts, including public broadcasting, public libraries, and the Green Revolution.
But in recent years that primacy has been challenged by a host of new foundations, rooted in the digital communications and technology sector, that are rewriting the rules of American philanthropy. They don’t always march in lockstep or speak with one voice, but they are generating a new philanthropic culture nonetheless.
Here are eight ways in which the new tech philanthropies are making their mark:
1. Their footprint is large and growing. In fact, tech-based donors represent the fastest-growing sector in U.S. philanthropy today. This claim could be based on the Bill & Melinda Gates Foundation alone. Founded in 1994 with an endowment of $94 million in Microsoft stock, it immediately experienced dramatic growth. This was further galvanized by Warren Buffett’s 2006 contribution equivalent to $30 billion, which was to be paid out over a number of years.
The Foundation Center’s list of last available audited statements (as of July 2011 at this writing) places the Gates Foundation’s assets at nearly $34 billion at the end of 2009. This is more than the assets of the three next largest U.S. foundations listed (Ford, J. Paul Getty, and Robert Wood Johnson) combined.
In recent years, Gates has been joined by a number of other donors from the tech community, among them eBay’s Pierre and Pam Omidyar, founders of the Omidyar Network; eBay’s Jeffrey Skoll, founder of the Skoll Foundation; and the Google philanthropic arm known as google.org. Not only are these organizations built on vast new fortunes, their assets are also often neutral or even counter-cyclical compared with traditional foundations’ portfolios.
2. They are generating new organizational cultures. Institutions tend to mirror the dominant administrative cultures of their origins, and foundations are no different. The new tech-based philanthropies, rooted in startup culture, tend to be distrustful of big bureaucracy and admiring of innovation. The Gates Foundation began in Seattle with a bare-bones staff that had to be doubled in 2006 when the Warren Buffett contribution arrived. The Omidyar Network dispensed with traditional titles to indicate its idiosyncratic approach to the funding process. (This decision included the word “foundation.” One of the network’s alternate labels is “philanthropic investment firm.”) Omidyar programs are shaped by individuals whose titles include “principal” and “managing partner.” The network collaborates with “partners” rather than funding grantees. The Omidyar Network is also pioneering the use of social investment, investing in for-profit companies for the sake of social impact, at times acquiring equity in the process.
Many of the new foundations favor a “venture capital” approach to their grants, in which many new projects are seeded with the expectation that a number of them will fail, and the successful models will proceed to the next level of support. This approach often places a heavy emphasis on project monitoring and evaluation as part of the ongoing funding process.
3. They promote a global perspective. The Ford Foundation and the Rockefeller Foundation were deeply involved with the architecture of the Marshall Plan that rescued Europe from the ashes of World War II. Now the Gates Foundation and its counterparts are taking a close look at the developing world, and at Africa and India in particular. The Gates Foundation’s three program areas are global health, global development (with a strong emphasis on Africa and India), and U.S. programs (with a primary focus on education). The Omidyar Network’s portfolio includes a number of projects in India and Africa. Google’s philanthropy has experimented with a number of different approaches, among them pro bono tech projects and public health initiatives in Africa. Some of these global initiatives include surprising new approaches, such as Jeff Skoll’s Participant Media, which finances films to advance public education on critical global issues. Participant’s most recent project is Contagion, a feature film that portrays the world in the grip of a rapid-fire pandemic. The project features a public education website, and its advisors included public health expert Dr. Larry Brilliant, formerly the head of Google’s philanthropy and currently president of the Skoll Global Threats Fund.
4. They’re still in motion. Some of the older technology-based foundations include the David and Lucile Packard Foundation (founded in 1964) and the William and Flora Hewlett Foundation (founded in 1967). These foundations have been around long enough to define their portfolios and institutional approaches, and bear a stronger resemblance to traditional East Coast foundations. But their younger cousins are far from set in their ways. The Case Foundation was founded by former AOL CEO Steve Case and his wife Jean in 1997. Google was only launched as a project in 1996, and google.org wasn’t formed until 2004. Google is still adapting the administrative structures for philanthropy, with an increasing role played by various policy and regional offices.
Google has made a habit of experimentation in philanthropy as it has elsewhere. It has included traditional grant-making, staff volunteer projects, and the creation of online platforms for worthy causes, such as online crisis mapping to help disaster victims locate missing friends and relatives. (Google’s philanthropic projects include the Google Foundation, a subset of google.org.)
5. They believe in “social entrepreneurship.” Digital media celebrates a culture of grassroots participation, so it’s no surprise that many of their foundation portfolios feature projects in micro-finance, anti-censorship, and public participation in good governance. The Case Foundation has experimented with the Make It Your Own Awards, in which individuals are invited to suggest “citizen centered” solutions to their community problems and compete for $25,000 grants to implement them — chosen by a public online voting process. The John S. and James L. Knight Foundation is based in Miami with origins in the newspaper industry, but it has moved decisively into the spheres of digital media and tech-based philanthropy. Knight has not only pioneered its News Challenge as an online public competition for digital media grants; it has also forged new approaches to collaboration among philanthropies with shared goals.
6. Their funding interests often reflect their core businesses. It’s only natural that foundations that arose from the digital revolution would take a strong interest in innovators in the field. The Omidyar Network and Google have recently made major grants to the Wikimedia Foundation, the non-profit organization that supports Wikipedia, as well as to Global Voices, an international blogging community, and its academic birthplace, the Berkman Center at Harvard. Tech-based philanthropy also displays a strong affinity for other areas of science and technology, especially medical science and public health. The Gates Foundation has undertaken massive public health campaigns involving vaccinations, malaria eradication and nutrition in the developing world; the Omidyar Network and google.org have also made important contributions.
7. Individual and institutional philanthropy are both significant, and are sometimes carried out simultaneously. Pierre Omidyar’s wife Pam was a co-founder of the Omidyar Network, and also founded two other philanthropic enterprises, Humanity United and HopeLabs. A large community of individual philanthropists is taking shape in the tech sector, and their influence is certain to be felt in coming years. Nor will they all be American. Skype, which was founded by Scandinavians and is based in Luxembourg, has been exploring new philanthropic avenues, including technological support on behalf of social good. A new generation of Indian philanthropists has emerged in recent years, such as Dr. Abraham George, a technology entrepreneur who created the George Foundation to promote projects in health, education, and poverty alleviation.
8. They’re West Coast-oriented. This point is less obvious than it may seem. For decades, much U.S. foundation activity was concentrated in the Northeast Corridor, running from Washington through New York to Boston. This route involved heavy traffic with the federal government, New York media and cultural institutions, and northeastern universities. The new corridor involves Los Angeles, San Francisco and Seattle. (It is noteworthy that while the Case foundation is based in Washington, D.C., and the Gates Foundation has a Washington office, none of the organizations mentioned in this article maintain a foundation office in New York.)
Many Americans can describe themselves as “bi-coastal,” but important cultural distinctions still exist. The West Coast elite have a different relationship to the news media than their East Coast counterparts. To start with, they read different newspapers — and may not look for their news in newspapers at all. They naturally have more ties to Stanford and Berkeley and fewer to Harvard and Yale. They will be more attentive to Asian and Latin American culture and less concerned with Europe than their East Coast counterparts. Most importantly, theirs is a technology-driven environment that still carries the expectation that innovation can fuel growth.
This is not to say that East Coast foundations have disappeared from the media scene. The Open Society Foundations, based on the fortune of financier George Soros, have major offices in New York and London. It provides some $50 million a year to media projects, many of them devoted to freedom of expression and grassroots digital democracy efforts around the world. The Ford Foundation also plays a major role in supporting freedom of expression and international media development. The MacArthur Foundation funds an innovative array of programs in which media, human rights, and international development converge.
But other traditional players of the past have receded from the field. The New York Times Foundation has closed its doors and the Tribune Foundation has retrenched, while the Freedom Forum has dedicated much of its recent funding activity to the Newseum in Washington, D.C.
These trends have increased the relative influence of the West Coast donor community, but there have also been signs of increased consultation and collaboration among the various donors. Ideally, the surge of the tech-based donor activity can usher in a new age of American philanthropy, combining the energy of the new institutions with the experience of traditional foundations, to offer the world a much-needed array of innovative solutions.
This article is adapted from forthcoming issue of Anthony Knerr & Associates’ publication, Strategy Matters
Anne Nelson is an educator, consultant and author in the field of international media strategy. She created and teaches New Media and Development Communications at Columbia’s School of International and Public Affairs (SIPA). She consults on media, education and philanthropy for Anthony Knerr & Associates. Her most recent book is Red Orchestra. She tweets as @anelsona, was a 2005 Guggenheim Fellow, and is a member of the Council on Foreign Relations.
Business content on MediaShift is sponsored by the CUNY Graduate School of Journalism, which offers an intensive, cutting edge, three semester Master of Arts in Journalism; a unique one semester Advanced Certificate in Entrepreneurial Journalism; and the CUNY J-Camp series of Continuing Professional Development workshops focused on emerging trends and skill sets in the industry.
