Public Policy Analysis

Nonprofits and new age philanthropy…Dawn of an era

The nonprofit sector in the US is very fragmented. GuideStar estimates as of July 2015, more than 1.5 million nonprofits were registered with the IRS as tax-exempt, not including 6000 nonprofits not registered with IRS which are included in GuideStar database. Since most of the nonprofits work on their own mission with little overlap between other nonprofits and in wafer-thin budgets, the social impact over the years of the nonprofits has not been very prominent. Only in the recent years, with the rise of new age focused philanthropists like Bill Gates, Pierre Omidyar, Thomas Siebel, Sergey Brin and Mark Zuckerberg to name a few more accountability has come into the nonprofit sector. One of the major structural change brought by new age philanthropists is an increase in capital resources, innovation and technical know how.

Focus on critical sectors including defining a measurable mission for example eradication of malaria by a certain date brought a renewed focus on addressing critical issues facing the society. Bountiful budget helped in designing creative solutions as well as attracting the best talent in the industry. A formative change in philanthropy started through a rigorous scientific method for identifying and evaluating critical solutions using statistics and other data-driven models. Furthermore, new age philanthropists are usually successful tech entrepreneurs, well-educated with tangible skill sets who can leverage their personal contacts to motivate and collaborate with other entrepreneurs, government officials for sustainable social missions. This gave an impetus in bringing about a mindset change around the world with the rise of for-profit social enterprises, think tanks, micro-lending organizations, and foundations to work towards measurable social change. To be continued…