Back at the end of September a large meeting of people in the philanthropy world was held sponsored by Union Square Ventures which was recorded on their blog under the title Hacking Philanthropy. They posted the transcript of the meeting but given that there were about 40 people at this all day session, it is mighty long. Even after reformatting it so I could read and reference it a bit better, I haven’t had the time to tackle it.

One of the principals at Union Square Ventures posted his reflections on the meeting last month. One of the interesting things he observed was is that the relationship between individual donors and recipients.

“Historically, philanthropy has been dominated by organizations that gather funds from donors based on mission statement and a prior track record and then distribute those funds to those in need. Once the check was written, the donor’s work was done….

Recently we have seen the emergence of a new type of charity, one that radically changes the relationship between donors and recipients. Nonprofits like DonorsChoose and Kiva behave more like marketplaces than traditional charities. This new model allows people in need to post a request for a gift or a loan to the site, and donors to chose which of those needs they would like to fund….

….But information technology also makes it possible to have a much more immediate relationship with the person in need. The appeals to sponsor a child have always had a deep emotional resonance, but it was not possible to put every child’s picture in an ad in the NY Times magazine. Today, it is possible to host hundreds of thousands of pictures and stories on the web and to provide tools to for donors to quickly find the appeals that speak most directly to them.

Organizations like Kiva and DonorsChoose vet the recipients and certify there is no fraud involved and groups tools to promote their needs. DonorsChoose focuses on helping schools sends disposable cameras to teachers so they can document the good the donations are doing then passes the pictures and handwritten letters from students on to donors.

The next 10 years may see a growth in this model of fundraising. The core of an arts organization’s annual campaign may be focused on maintaining the organizational profile on donation clearinghouses rather than direct (e-) mailings and phone banks. It would be interesting to see if larger foundations farm out fraud monitoring activities to companies like Kiva and DonorsChoose as these latter entities grow their proficiencies in this area.

I hope to post my thoughts on the full transcript of the meeting some time soon. The stout of heart might want to take a look themselves.