The power of ‘lean philanthropy’
If you’ve been in Silicon Valley, you’re familiar with the phrase “lean startup.”
It’s the idea of producing less waste and focusing more on innovation to meet a customer’s needs. The end game: Get the product out the door and into customers hands better, faster, cheaper.
What if we adopted the same when it came to philanthropic giving?
That’s exactly what MacKenzie Scott and Square CEO Jack Dorsey have embarked on.
In the last two years, the two of them alone have uprooted the traditional idea of philanthropy.
While the coronavirus crisis was causing policy leaders and scientists to rethink how fast we could produce a vaccine, each of Scott and Dorsey were rethinking how they could drive “radical generosity” with the billions they’ve been fortunate to secure — Scott through her divorce from Amazon founder and executive chairman Jeff Bezos and Dorsey as a tech titan with Twitter and Square.
Independently, but each driven by a desire to more directly impact the lives of those in need, they’ve created a new model of giving. They did away with bureaucracy and detailed applications. Interviews — only in the case with Dorsey — were limited to 30 minutes generally.
Funds were received almost instantaneously. They did this with little staff. And no networking required.
Juxtapose this with Scott’s ex-husband, Jeff Bezos — the world’s richest man — who received a major “booing” for announcing a $500,000 donation at a recent charity dinner. Soon after, he gave $100 million to the Obama Foundation facilitated in large part through Jay Carney, who worked with the Obamas as their press secretary, an insider’s insider.
Traditionally, big dollar giving requires deep personal relationships and favors long-established organizations. Otherwise, it involves a long application and review process that can take years, with an uncertain outcome. This approach can sideline new and innovative ways to impact our communities.
The moves by Scott and Dorsey are truly admirable — and have the power to create a profound longterm shift in philanthropy.
For one, broader access to philanthropic capital would allow more organizations to thrive.
Similar to raising capital as an entrepreneur (which I’ve done in Silicon Valley as CEO of Women’s Financial Network), raising money for a nonprofit is equally difficult, unless you have a network. Donors or decision makers are looking for credibility or validation from others. They’re looking at your team. Even if you offer up reams of data and are doing truly life-changing work, they’re often guided by others they know or respect.
Rare is the foundation that takes a leap of faith and provides some capital to get you going.
Second, this “lean philanthropy” approach could drive peer giving effects.
Even if only a few of the 50 wealthiest families — who’ve seen a 30 percent increase in their assets to $1.2 trillion — were to follow the lead of Dorsey and Scott and support radical generosity, the impact would be profound.
Just as everyone wants to invest in the new hottest startup, philanthropists should jump on the Dorsey-Scott lean philanthropy wave. Seek out the organizations that have the right mission, but need capital to scale their impact. Find those who are driving real change in their communities no matter the size of their fundraising departments. And lead the way in supporting innovative solutions to today’s problems.
It’s a call to lead that aligns with their personal investing philosophies.
Finally, the metric for success should be real societal impact. ROI is not only return on investment, but also “return on impact.”
How can funds be used efficiently to have the greatest impact?
As one example, Alyssa is a 19-year-old young woman who was homeless for a year, living in a car. After learning about a free business training program, she attended online classes and created a business plan for “Poetic Healing.” “This is the first time I felt some sense of hope,” she said at her graduation. Since then, Alyssa’s been working with a mentor — a former CEO — who’s guided her and today, she’s landed a job.
The best part? The cost for her training, renewed confidence, mentor and job landing was under $1,000 — one-tenth the cost of what a recent government official told me they pay.
Like most things, it takes a crisis or major disruption in the traditional way of operating to create new and better methods. Dorsey and Scott are doing just that — paving the way for radical generosity. Hopefully, many others will follow their lead and creating lasting impact in the areas of greatest need.