New "Digital Paths" for Philanthropy - White Paper

Donors can offer “digital donations” — gifts in electronic form — for leveraging policy reforms and “land grant” endowments that benefit grassroots groups in troubled areas, according to a US white paper that distils the findings from an 11-month research project on global trends in digital philanthropy.

Entitled “New Catalysts for Sustainability: A Global Opportunity for Digital Philanthropy,” the white paper describes a new ‘challenge grant’ approach for philanthropies to encourage communities around the world to launch self-funding systems that expand grassroots access to learning, health care, and job opportunities.

The research effort was conducted by Mark Frazier under the sponsorships of the Massachusetts-based Sabre Foundation and Brussels-based Sabre Europe with funding from the Whitehead Foundation and private donors. It proposes that current forms of digital donations such as free software and online reference materials be extended to include ‘micro-scholarships’ for eLearning and ‘micro-vouchers’ for health care resources.

White paper author Mark Frazier says these new forms of giving can spread grassroots access to valued education and health information resources around the world, much as micro-finance innovations have brought private capital within reach of tens of millions of small and new entrepreneurs.

The President of Openworld Inc., a Not for Profit Washington-based group that specialises in design of self-funding information technology ventures in emerging markets says that given the rapid plunge in telecommunications costs and the rise of new online payment systems, the white paper notes that it is now possible for philanthropies to extend their reach by offering digital donations on a basis that can catalyse self-funding NFP initiatives even in remote areas of the world.

The white paper notes that expanding bandwidth enables philanthropies to bypass cumbersome and corrupt bureaucracies, and to target resources in ways that reach local Not for Profits directly. By combining digital technologies with such traditional devices as scholarships, land grants, and challenge grants, local NFP’s can seize opportunities to break out of dependency upon current external subsidies and charitable giving.

The report charts detailed practical steps that can be taken by philanthropies and their NFP clients. It notes that philanthropists can offer bundled digital donations to reward communities that agree to make local groups beneficiaries of land grants, and that commit to new liberalising policies raising the value of these stake holdings.

Key factors in choosing areas to receive digital donations can include local agreements to:

– remove outmoded telecommunications regulatory constraints;

– introduce transparent eGovernment systems that simplify start-up and operating procedures for business and social entrepreneurs; and

– adopt land registry reforms that can substantially raise property values and attract inflows of diaspora and other private sector investment.

Frazier says that normally, advocates of these changes have had limited leverage, because tangible gains from adopting reforms often take time to reach the public.

He says digital donations offer a means for community residents to experience a wide range of benefits with little or no delay.

Moreover, the white paper notes that vesting highly-regarded NFP groups with ownership interests in “greenfield” land grants can establish a growing asset base for local self-help initiatives, expanding the services they provide to communities as liberalising reforms take hold.

In addition to laying out the framework for catalytic digital donation strategies, the white paper provides “toolkit” resources in its appendices that can be put to immediate use by philanthropies and local NFP groups interested in launching replicable and scalable sustainability initiatives.

Frazier notes that moves to offer digital donations on a challenge grant basis may help to open a new era in philanthropy, in which donors promote the long-term sustainability of recipient organisations around the world rather than continuing dependence upon external subsidy.

The focus is on promoting people-to-people, grassroots community development initiatives that can move forward with or without the macro-approaches associated with governmental foreign aid programs.

A copy of the final Sabre Foundation-sponsored white paper is available for downloading at http://www.openworld.com (an 80-page report in PDF).