The rise of ’platform philanthropy’ driven by digital represents a sea change for charitable giving - but is the sector prepared for the risks that this disruptive tech entails?
This article was written by Rhodri Davies, who leads Giving Thought, CAF’s in-house think tank focussing on current and future issues affecting philanthropy and civil society. Rhodri has spent nearly a decade specialising in public policy around philanthropy and the work of charities, and has researched, written and presented on a wide range of topics. He has a first-class degree in Mathematics and Philosophy from the University of Oxford.
Recent years have seen the emergence of a “platform economy.” Traditional owner-operators are being replaced by platform-curators, who put those in search of assets or services directly in touch with those that can provide them. As a result, many of the largest companies in the world no longer own many assets (e.g. Uber doesn’t own any cars, whilst Airbnb doesn’t own any property). Instead, what these companies have is customers and data. The charity sector has also seen the emergence of platforms. Some aim to make it easier for people to find and give to existing organisations or projects on a national or global scale (e.g. CAF, GlobalGiving), while others are focused on enabling giving in local areas (e.g. Local Giving). There are also platforms that go beyond the traditional charitable model: perhaps by enabling people to make direct cash donations to individuals or community groups in the developing world (e.g. GiveDirectly) or by facilitating peer-to-peer loans to entrepreneurs or micro-businesses (e.g. Kiva). A major benefit of these models of “platform philanthropy” is that by providing information and streamlining the process of giving, they can enable people to support smaller or less well-known organisations ─ thus counterbalancing existing biases towards large, brand-name organisations with hefty fundraising budgets.
Platform models may also be more effective at tapping into the underlying psychological drivers that motivate giving. Disintermediating the relationship between donors and recipients could strengthen human connections, which are a key factor in getting people to donate in the first place. Maintaining these connections and making it easier for recipients to report back on the impact of gifts could also deliver the “warm glow” for donors that will keep them giving. However, it is increasingly clear that there are risks as well as opportunities associated with a shift towards platform philanthropy. We have already seen a fierce debate over whether social media companies need to accept a more responsibility for what happens on their platforms when it comes to things like hate speech and misinformation. Now similar questions are starting to be asked of charity platforms: can they continue to see themselves as neutral intermediaries or do they need to take a stronger role ─ for instance by determining which causes are “acceptable”? Global Giving has recently grasped the nettle on this issue and launched an inquiry into the “neutrality paradox” ─ it will be fascinating to see what it finds. A further question in future may be: who owns the platform? Many of the existing examples are operated by non-profit organisations, but there are signs of a trend for commercial platforms to integrate charitable giving into their offering. Social media platforms (e.g. Facebook, Instagram) have introduced ways for users to fundraise or donate, and digital wallet providers (e.g. ApplePay, GooglePay) now allow users to make donations.
In China, meanwhile WeChat Pay and AliPay have led a huge growth in giving via digital platforms. While these companies may have some social purpose in facilitating charitable giving, they are fundamentally driven by commercial pressures. Platforms are constantly adding new functionality (browsing, payments etc.) as a way to retain users ─ so from their point of view charitable giving may be just one more sweetener to keep people on the platform. The danger is that the market becomes highly centralised into a few key platforms (as has happened in areas such as social media or internet search already). These platforms then become de facto gatekeepers for a large percentage of charitable giving. At that point the question of whether their motivations and values are aligned with those of charities or their donors becomes hugely important. But the biggest risks associated with platform philanthropy may not even come from tech companies ─ they may come from us.
The ability of technology to disintermediate and decentralise may bring us full circle back to very old models of giving, based on direct person-to-person interaction. One upshot is that responsibility for selecting the recipients of donations will put it back in the hands of individual donors. Whilst this might be empowering (and thus potentially drive more giving), it may also create a host of problems. Many unconscious biases help to shape charitable giving; and without the intermediation of organisations to counter them, donations could become heavily skewed towards certain groups or causes. Conscious bias may also be an issue if, in a desire to ensure money is “well spent”, donors start to distinguish between “deserving” and “undeserving” recipients based on ideology or morality. (This would not really be that surprising, given that distinctions of this kind have been part of the history of philanthropy for hundreds of years). The need to appeal to individual donors might also benefit those with less acute needs over those with more acute ones simply because they happen to have better-developed existing networks or better skills in using social media to make appeals. (There is already evidence that this is happening with the rise of individual crowdfunding for medical treatment). Even when donations do make their way to the most deserving individuals, the power imbalance in the relationship (and the implied requirement for gratitude on the part of the recipient) may still give cause for concern. So where do we go from here? The shift towards platforms looks set to continue as more and more commercial providers add giving functionality to their offering. The important thing for charities at this point is simply to be aware of the possible unintended consequences ─ so that they can avoid them in their own operations and highlight the risks to tech companies as they develop new products. That way we might be able to ensure that the opportunities of platform philanthropy for charities, fundraisers and individuals outweigh the risks.