Three Ways Technology Will Fix What's Broken in Philanthropy
Charities stand to benefit from evolving fintech and artificial intelligence that will make charitable giving more efficient, transparent, relevant, collaborative and impact-focused.
I’m among the first to advocate that giving to charity is one of the best ways to improve your life. Some studies even show there is a link between generosity and happiness. But it’s no secret that the philanthropy sector is facing serious shortcomings that are preventing people from being more generous.
According to research from Independent Sector, public trust in nonprofits among Americans is dropping despite the fact that most charities have a positive impact on the world. The reasons cited by respondents are no surprise: high overhead, political agendas, corruption, scams, mismanagement, and small demonstrable results. Even for donors active in charitable giving, it can be hard to stay inspired without transparency and visibility into their donation’s impact.
To encourage more people to give and remain engaged, the charitable sector needs new systems to make the giving journey better: more efficient, transparent, relevant, collaborative and impact-focused. The good news is technology will provide the means to allay many of the sector’s headwinds, opening up more potential for those who don’t give to give and those who do give to give more.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here are three ways technology will fix what’s broken in philanthropy over the next decade:
1. Financial technology will bring more scale and capabilities, rapidly lowering costs and hassle.
It may surprise you, but still today only a small percentage of total charitable dollars actually transact online. This is because the flexibility and perceived costs of offline methods like paper checks and wire transfers still have advantages for many donors and charities.
Online giving platforms will advance in capabilities and achieve greater scale, lowering transaction costs and giving donors and charities increasingly centralized places to transact or receive charitable dollars (even complex donations).
When giving moves online, it will bring greater efficiency and transparency as well, fostering clearer emphasis on the impact and relationship-building involved in giving, not the administrative steps and costs.
2. Technology will usher in an unprecedented era of coordination and connection among donors.
It’s valuable for a donor to know what causes, organizations and projects people they trust are supporting. It provides opportunities for personal connection and likely exposes them to new values-aligned opportunities. Today, this is hard. Giving is quite private.
Technology will increasingly facilitate ways for donors to collaborate, such as establishing social giving funds among communities and friends, where charitable resources can be pooled together seamlessly and anonymity maintained when it’s needed.
The first generation of these capabilities is already starting to emerge among modern donor-advised fund sponsors.
3. Data, machine learning and ai will enable leaner, higher-trust giving decisions.
Analytics and artificial intelligence will likely touch every sector of the economy, and giving will not be an exception. An ever-increasing pool of rich data between donors and nonprofits will enable machine learning and AI to help donors discover organizations that are much more likely to inspire them, lowering the fundraising costs for nonprofits in the process.
Second, as more impact data flows, there will be greater ability to offer donors a prediction of the type of impact their gift is likely to create.
Finally, as better predictability of matching between donor and charity emerges, these two parties can better invest their relational time and capital between each other, increasing the speed and depth of partnerships that develop in the space.
So, while charitable giving has had its fair share of setbacks, over the next decade we can expect technology to usher in more collaboration, transparency and relevancy for philanthropy — and as a society we’ll be better off for it.
In the meantime, as individuals we can take action by opting for the applications and organizations that make it easier to give. Charityvest is just one example, but other like-minded organizations, including Every.org, The Giving Block, and PayPal Grants, like these are the ones that will move the industry forward.
Stephen Kump is CEO of Charityvest, a modern donor-advised fund (DAF) technology company making purposeful generosity more accessible and frictionless for all. Prior to Charityvest, Stephen worked for over 10 years as a consultant to nonprofit organizations, philanthropists, corporate leaders and private equity investors, most recently with Bain & Company. He is a former U.S. Army cavalry officer and holds an MBA from the Yale School of Management.
-
Strategies to Optimize Your Social Security Benefits
To maximize what you can collect, it’s crucial to know when you can file, how delaying filing affects your checks and the income limit if you’re still working.
By Jason “JB” Beckett Published
-
Don’t Forget to Update Beneficiaries After a Gray Divorce
Some states automatically revoke a former spouse as a beneficiary on some accounts. Waivers can be used, too. Best not to leave it up to your state, though.
By Andrew Hatherley, CDFA®, CRPC® Published
-
Strategies to Optimize Your Social Security Benefits
To maximize what you can collect, it’s crucial to know when you can file, how delaying filing affects your checks and the income limit if you’re still working.
By Jason “JB” Beckett Published
-
Don’t Forget to Update Beneficiaries After a Gray Divorce
Some states automatically revoke a former spouse as a beneficiary on some accounts. Waivers can be used, too. Best not to leave it up to your state, though.
By Andrew Hatherley, CDFA®, CRPC® Published
-
What’s the Difference Between a CPA and a Tax Planner?
CPAs do the important number crunching for tax preparation and filing, but tax planners look at the big picture and come up with tax-saving strategies.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
Charitable Remainder Trust: The Stretch IRA Alternative
The SECURE Act killed the stretch IRA, but a properly constructed charitable remainder trust can deliver similar benefits, with some caveats.
By Brandon Mather, CFP®, CEPA, ChFEBC® Published
-
Three Ways to Take Control of Your Money During Financial Literacy Month
Budgeting, building an emergency fund and taking advantage of a multitude of workplace benefits can get you on track and keep you there.
By Craig Rubino Published
-
How Did O.J. Simpson Avoid Paying the Brown and Goldman Families?
And now that he’s died, will the families of Nicole Brown Simpson and Ron Goldman be able to collect on the 1997 civil judgment?
By John M. Goralka Published
-
What Not to Do if an Employee or Loved One Is Kidnapped
Businesses need to have a crisis plan in place so that everyone knows what to do and how to do it. Sometimes, calling the authorities isn’t recommended.
By H. Dennis Beaver, Esq. Published
-
Why You Shouldn’t Let High Interest Rates Seduce You
While increased interest rates are improving the returns on high-yield savings accounts, that may not be an effective place to park your money for the long term.
By Kelly LaVigne, J.D. Published