How Smart Tech Can Make Philanthropy Smarter

Stop us if you’ve heard this one before: A new technology walks into an organization and says, “I’m here to solve all your problems!” Yup, you have. We get it, the last generation of digital tech, particularly email and social media, created a cacophony of messages and amplified the always-on, toxic work culture. You have every right to be furious at whoever created the “reply all” button.

However, that was the last generation of tech. The next generation of digital tech, what we call “smart tech” in our new book, “The Smart Nonprofit,” includes technologies like Artificial Intelligence (AI) and its subsets and cousins such as machine learning, natural language processes, smart forms, chatbots and robots. These technologies make decisions for and instead of people. They work in the background, automating functions, and have the potential to remake philanthropy.

Many organizations are beginning to use smart tech to screen resumes, automate budget reconciliation and expense reporting, and answer the same questions over and again (“Do you accept proposals?”). In addition, smart tech is in the process of democratizing philanthropy by analyzing enormous amounts of data to provide strategic insights and identify urgent needs. Rhodri Davies, Pears Foundation philanthropy expert, invented the term “philogorithm” to describe the use of algorithms to direct philanthropic giving. According to Davies, philogorithms can identify “where the most pressing needs were at any given time, as well as the most effective ways of addressing those needs through philanthropy.”

In this way, every donor will be able to easily:

Create funding plans that match their finances and personal interests.
Identify the most pressing needs within social impact areas or geographic locations.
Find nonprofits working to address those needs.
Learn more about giving models, tax implications, legal considerations, etc.

Philanthropy Cloud from Salesforce, for example, uses smart tech to match employees with causes that meet their specific giving criteria. Nick Bailey, Salesforce general manager of Philanthropy Cloud, notes, “It [the algorithm] can help employees find and connect with the causes they’re passionate about. It allows us to do personalized philanthropy at scale…. the algorithm serves up the right opportunity to engage them at the right time.”

Deluxe, a 105-year-old company, began using Philanthropy Cloud in 2020. Employees donated $260,000 to eight campaigns, whereas in the past, there would only have been a single campaign. According to Alexandra Goodwin, senior foundation relations partner at Deluxe Foundation, “With over 6,000 employees across the U.S. and Canada, the data generated by the platform allowed us to understand trends and other insights about our employees’ community engagement efforts. Through the system, employees can also share photos and feedback on their experiences that is available to other employees.”

Candid has been using data from IRS tax returns to generate a wealth of insights both at the macro and micro levels. Jake Garcia, Candid’s vice president of products, told us, “Now that we have enough data in the system that has been accurately categorized, nonprofits (and program officers) can do queries such as, ‘What nonprofits are working on clean water projects in Ethiopia?’”

However, the data Candid uses is not without its problems. According to a recent report, the IRS data has a nine- to 12-month lag time between the time the organization files the form and the data is accessible in an open data depository. Also, these data sets can be incomplete and contain inaccurate information. To correct for the time lag, Candid built a news media monitoring platform to provide real-time data on giving. It scrapes about 300,000 news articles on philanthropy per day from the web and categorizes them by subject, population group and locations. The algorithm identifies the most frequently mentioned organizations and geographic areas and the establishment of new giving programs or grants.

“Robo advisors” are also on the rise. These are smart-tech powered websites and apps that provide financial advice to clients. This includes facilitating and tracking donations and preparing tax documents. Robo advisors are greasing the wheels to enable faster giving, particularly for emergencies. It is easy to imagine these apps integrating news about one’s favorite causes, research on issues of interest, and invitations to events to share experiences and meet other donors.

Smart tech requires Library of Congress-sized data sets to identify patterns and make recommendations. Not only do single foundations lack the enormous, clean data sets necessary to power smart tech, they are unlikely to have the technical know-how to create the systems. Philanthropy could take a page from data collaboratives like the GivingTuesday Data Collaborative that analyze data from organizations and events around the world. Sister foundations could create their own open data collaboratives around a geography or issue area.

Smart tech needs to be used carefully and sparingly. In particular, users need to be aware of the probability that systems created by human programmers using large, historic data sets are likely to have racial and gender biases built into them. The good news is that there is a growing body of work about the ethical use of data and AI. NetHope and the AI 4 Good Foundation have been working in this arena for years. In addition, the newly created Global AI Action Alliance, a community and accelerator that organizes the world’s foremost AI developers and users, is creating ethical standards for the use of smart tech.

We strongly recommend that philanthropic organizations considering using smart tech prioritize these three issues:

Staying human-centered. It is a myth that robots are going to take over our jobs. The real challenge is finding the sweet spot where the technology does what it does best and people do the fundamentally human parts of jobs like building relationships, solving problems and storytelling. Some people call this convergence “co-boting.” The responsibility for identifying this sweet spot does not rest with the IT department alone. Organizational leaders need to be interested, knowledgeable and engaged enough to ensure smart tech is used in human-centered ways.
Building knowledge and capacity. Using smart tech well and responsibly is not a technical problem but a leadership challenge. Some foundations are beginning to build their internal capacity to understand smart tech and its applications for strategic philanthropy. In addition to building their own capacity, philanthropy should also invest in capacity-building for its grantees. This includes convening smart tech and data experts along with nonprofit experts. For example, the Rockefeller Foundation hired a chief data officer and is convening working groups on the design and implementation of responsible AI.
Maintaining the highest ethical standards. Philanthropic organizations need to adhere to the highest ethical standards in what systems they use, how they safeguard the privacy of users and how they mitigate biases built into smart tech systems. The McGovern Foundation is leading the charge investing in the ethical use of smart tech.

Smart tech has the potential to help every philanthropist become more strategic and intentional at every giving level. Collectively, we can be more agile and better informed. The first step is to lean into this next generation of tech, learn more about it and to follow our steps above to ensure its safe, careful use.

Allison Fine and Beth Kanter are the authors of “The Smart Nonprofit.”

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