By Peter Mastrantuono
The technological disruption that has upended the business landscape, most notably in retail and hospitality, has been largely absent in the world of charitable giving. Not for much longer, though. Technology is finally beginning to change how Americans support their favorite causes, transform how charities are run and democratize the charitable paradigm itself.
The impact of technology on charitable organizations will be massive and mostly for the better, including more efficient project management, the use of artificial intelligence and big data to make smarter decisions, more effective communication and greater transparency.
Perhaps one of the more interesting developments is how technology is democratizing the charitable giving process. One manifestation of this is “giving circles.” Similar to crowdfunding, in which projects or ventures are funded by raising small amounts of money from many individuals, crowd granting has emerged as a new and compelling way for individuals to effect positive change, most notably through “giving circles”.
Emily Rasmussen, Co-founder and CEO of the leading crowd granting platform, grapevine.org, explains the growing appeal of giving circles. “There is a huge interest and desire,” Ms. Rasmussen observes, “for individuals to feel connected to their giving and have a sense of engagement that traditional charitable models are not built to provide for everyone.”
This new model of giving is made much more accessible with today’s enabling technology. Though the technology is especially helpful in bringing people with similar passions and goals together, its impact reaches far beyond its networking benefits. A crowd granting platform, such as grapevine.org, also provides the infrastructure that makes it easier to collect charitable donations, hold them, poll community members on grant making, generate reports, facilitate community growth and serve as a resource to assist individuals in identifying giving circles that match their interests.
While this model has been a boon for new, smaller and more local organizations, these digitally-based initiatives can become large in their own right. An example of this is Giving Tuesday, a philanthropic initiative that seeks to remind Americans of the needs of the less fortunate just before the start of the holiday shopping season. According to Giving Tuesday, donations rose from just over $10 million in 2012 to over $500 million in 2019.
The number of causes and communities that technology can empower is nearly limitless. Women are just one of many donor segments that may have been overlooked by traditional philanthropy, and have been a significant source of the giving circles’ growth. Ms. Rasmussen posits that “women have been underserved by the traditional model; the collaborative and personal engagement provided by giving circles are an especially good fit for how women prefer to give.”
For individuals considering starting a giving circle or contributing to one they may want to have a conversation with their financial advisor. Many advisors can help grow a giving circle since they can be a good a source for identifying and connecting like-minded individuals. They may even serve an integral role in helping multi-generation families utilize the giving circle as the vehicle by which to fund and administer a family legacy and teach newer generations the value of social involvement.
Peter Mastrantuono is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Peter worked for over 30 years in the wealth management industry, focusing on retirement planning, investing, asset allocation and financial planning.
