5 things that set tech donors apart from other philanthropists

On a recent call with philanthropists, a nonprofit outlined the many supporters it already had before then proceeding to ask for the support of the donors on the phone. “It completely backfired,” said Jessica Robinson Love, a managing director at the San Francisco office of philanthropic consulting group Arabella Advisors who took part in the meeting. The philanthropists on the call identify as “effective altruists,” meaning they seek evidence on how their giving can most benefit others. Many of these donors select causes to support based on data-driven criteria including importance, tractability, and neglectedness. So once the philanthropists understood how many donors were already supporting this nonprofit, they became less interested in backing it themselves. The pitch was “painful to watch,” Love said. But the anecdote is important for nonprofits that want to enlist the support of a growing number of tech donors. “Everyone likes to jump on a successful bandwagon, but these donors maybe less so,” she said. Eight of the world’s 10 richest people come from the tech industry. Many of them come from Silicon Valley, and they approach their philanthropy with the same entrepreneurial mindset that helped them generate so much wealth. Love, who works closely with this growing class of tech donors, spoke with Devex about what sets them apart from their philanthropic peers — and how nonprofits can engage with them more effectively: 1. They are often interested in leveraging similar technologies in their social impact work. Donors who generate their wealth from a tech-related field are frequently looking to deploy their money by using the same tech for good, Love said. For example, executives from Google are thinking about how artificial intelligence and machine learning can be used to identify human rights violations or advance conservation goals. Tech donors are increasingly interested in maximizing the benefits and minimizing the risks of the technologies they used to build their businesses, from social media platforms to emerging tech such as blockchain, robotics, or biometrics, Love said. “I really appreciate donors who are both using the tech or the infrastructure that they’ve built for a philanthropic purpose or really grappling with the potential negative consequences of that,” she said. 2. Many identify with the effective altruism approach to philanthropy. Tech donors’ mindsets often have a natural overlap with effective altruism principles. Dustin Moskovitz and Cari Tuna, the billionaire couple behind Open Philanthropy, are perhaps the highest-profile examples. Many organizations in the effective altruism community have a strong commitment to transparency, with one example being GiveWell, a charity assessment and grant-making organization that publishes comprehensive details of its evaluation process and other operations. “The ability for one philanthropist to build on and learn from the work of another philanthropist is something that has been dramatically lacking in our field,” Love said. 3. They can be in a unique position to tap into the three T’s of philanthropy. A concept that often comes up in the philanthropy space is the three T’s: time, talent, and treasure. “When working with clients, it’s not just where can you give your money, but what else do you have to give? Your knowledge, network, relationships,” Love said. This is not unique to tech donors, but they are often in a position to support nonprofits on issues related to data and technology. For example, tech donors can help organizations develop new ways to measure, test, and communicate results of their work. “When it is successful, it is powerful,” Love said. “When it is not successful is when you see a tech donor say, ‘I made an app that made billions of dollars, so therefore I know how to hack philanthropy.’” Love said she spends a lot of time educating her tech donor clients on the complexities of the social sector. She tells them that philanthropy is a learning journey and that their first portfolio of grants should have both impact metrics and learning metrics. When tech donors want to launch something new, she often works with them to scope out whether similar efforts are already underway and explore the potential for collaboration. 4. They seek other strategies to complement their grant-making. Many tech donors see the value of approaches that extend beyond — and can amplify — grant-making. “When I talk about this, I talk about three legs of the stool,” Love said. In addition to philanthropy, these include advocacy and “impact investing” — an approach that aims to generate societal benefits in addition to financial returns — which can help donors access the value of government funding and private markets. “When you look at philanthropy, it is a tiny piece of the puzzle ,” she said. “But advocacy and impact investing are equally important. We encourage our donors to think about all of those approaches.” 5. Realizing problems are too big to solve alone, many are turning to philanthropic collaboratives. A number of tech donors prefer to set up lean operations for their giving, rather than establishing the kinds of foundations created by their predecessors in philanthropy. But as they seek to move more money with fewer staffers, these individual donors are looking for ways to connect with the domain expertise available to staffed foundations, Love said. Tech donors are drawn to forums to connect with their peers or established foundations, and the growing number of philanthropic collaboratives are tapping into this trend. Collectives such as the Science Philanthropy Alliance are built around specific issue areas. Others take a broader approach, as is the case with Co-Impact, which focuses on systems change. “Everyone likes to jump on a successful bandwagon, but these donors maybe less so.” --— Jessica Robinson Love, managing director, Arabella Advisors What these trends mean for nonprofits Before nonprofits approach tech donors, they should be prepared to articulate how data and technology play into their impact, Love said. If the donors identify as effective altruists, nonprofits should understand why their work might fit that mindset. Love also advised nonprofits to invest in evaluation and be prepared to share successes as well as failures with a high degree of transparency. “It’s encouraging for donors to understand that nonprofits have learned from what they’re measuring and are pivoting when they see that they're not working effectively,” she said. “I have seen stories of failure be much more persuasive than stories of success.” Finally, nonprofits should consider how to build and cultivate relationships with the philanthropic advisers and other networks that tech donors rely on. “Many of these folks you can’t get a phone call with. Don’t even try,” Love said, adding that the giving operations for most of these tech donors don’t have a website, much less a staff. Nonprofits can also think of their existing donor base as a network, asking who among their peers in philanthropy might be interested in supporting their work.