Rhodri Davies, Programme Leader, Giving Thought

Rhodri Davies

Head of Policy

Charities Aid Foundation

The role of giving

TECH SUPPORT: WHY PHILANTHROPIC FUNDERS SHOULD CARE ABOUT DISRUPTIVE TECHNOLOGY AND WHAT TO DO ABOUT IT

17 November 2017

This blog is based on a speech I gave as part of the Plenary session for the Association of Charitable Foundations annual conference recently. I thought I would expand it a bit and turn it into a blog as I had been mulling over writing something along these lines anyway, so it seemed to make sense to repurpose the material!

My brief for the speech was to talk about: “the role of foundations in change and what they might be looking back on in 20 years time with the golden gift of hindsight.”  Given that I only had five minutes, I decided to focus in on the role of technology and the impact it might have on donors and philanthropic organisations. My aim in the speech was not to talk about specific technologies as such, but rather to craft an argument about why I think foundations (and philanthropic organisations more broadly) cannot afford to ignore what is happening at the moment, and to suggest the sorts of questions they might want to turn their attention to.

Here goes then. (For the full effect, imagine this as spoken by a man in a suit who has been awake since 4.30am and already consumed at least 6 cups of coffee):

I think it is worth saying up front that trying to predict the future is largely a mug’s game. And I say that as someone who seems to have ended up spending quite a lot of my time attempting to do precisely that!

As an illustration of how difficult it is, imagine you had been asked to make predictions 20 years ago and were looking at them now. When it comes to technology would you have foreseen any of: Google, Facebook, Twitter, YouTube, Spotify, smartphones or tablets? Not to mention the various technologies that are now emerging, like Artificial Intelligence, cryptocurrency and blockchain, Virtual and Autonomous Reality (VAR), The Internet of Things (IoT), autonomous vehicles etc?

Yet many of these things have now either become the background to our lives, or at the very least part of mainstream discourse. It’s pretty hard to pick up a newspaper or to turn on the TV or radio on these days without hearing something about AI in particular!

There is always a danger of ignoring historical precedent and assuming that the present is somehow unique. However, when it comes to technology it does feel as though we are at a huge moment not just of change, but of acceleration.

With that in mind, I think one thing that foundations and other philanthropic funders looking back in 20 years time will be asking themselves is whether they understood and adapted to this change. And let me suggest three top level reasons that I think it is important that those in the philanthropy world start thinking about this now.

THREE REASONS WHY THOSE IN PHILANTHROPY SHOULD START THINKING ABOUT DISRUPTIVE TECH

1. In order to take advantages of the opportunities new technologies afford

This may be in terms of new ways of addressing social and environmental problems, or in terms of more efficient and effective ways of running your own organisations. Both of which I will come onto in a minute.

2. In order to understand the risks that new technologies pose and play a part in addressing

These might be the risks that technological developments will pose for the operational or business model of philanthropic organisations themselves, or it might be the risks they pose in terms of creating new challenges for those organisations’ beneficiaries or for society as a whole. Either way, foundations and others will struggle to respond effectively if they haven’t got to grips with the issues themselves.

3. Because you think this is all nonsense.

This is some people’s immediate reaction to any discussion of far-reaching technological developments. And I am willing to accept that is a valid point of view; but I would argue that you need to be able to explain why you think it is all nonsense (i.e. you need a strategy about why you don’t need a technology strategy).

I totally acknowledge that it is easy to be sceptical about this stuff: it can sound very far fetched to those outside the tech world, and the situation is not necessarily helped by some of the tech evangelists who make grandiose and definitive statements. However, if you cut through the hyperbole what you will actually find is many people quietly getting on and making these things a reality. That is why I think it is so important that charities and foundations don’t simply write all this stuff off as irrelevant or bury their heads in the sand.

If you buy any of those arguments for why it is important to give some thought to technology; then what do you actually need to be thinking about?

Firstly, I don’t think you necessarily need to get to grips with the fine details of specific technologies or precisely how they are being used. For one thing, you probably don’t know how many of the existing technologies you rely on, like email, actually work (I mean really work, under the hood). And for another thing, there will almost certainly be a weeding out effect over time; so many of the current organisations and platforms will not last the distance. (This something we saw in the dot com boom of the early 2000s, where many prominent companies fell by the wayside and a small number have lasted the distance and won out big).

Hence what is more important is understanding the bigger-picture trends these technologies epitomise. Here I am thinking of things like disintermediation, radical transparency, access rather than ownership, automation, data-driven decision making etc. (For an accessible overview of these sorts of trends, try Kevin Kelly’s The Inevitable). And then what we need to do is to ask a series of relevant questions about what impact these trends might have on the world of philanthropy. Below are some suggestions of the sorts of questions we should be asking:

1 COULD THEY CREATE NEW WAYS OF ADDRESSING SOCIAL AND ENVIRONMENTAL PROBLEMS?

There are already many fascinating examples of emergent technologies being put to work for social good. One look at any of the various events and organisations dedicated to “Tech for Good” will give a sense of this. If you take pretty much any existing disruptive technology, there is almost certainly a charity somewhere trying to find a way of using it to address its mission (e.g. Arthritis Research UK’s use of AI to provide advice services, Royal Trinity Hospice’s use of VR for end-of-life care, or the Lindbergh Foundation’s use of drones and AI to beat poaching in Africa).

But we should also be clear that there are still only a small number of charity applications of any of these technologies at present, so there is a huge amount more scope to explore their potential.

2 WILL THEY LEAD TO NEW ORGANISATIONS EMERGING TO COMPETE WITH TRADITIONAL CHARITIES?

A lot of the action in the “tech for good” space is often being driven by socially-motivated start-ups rather than existing charities. That is not necessarily a problem in and of itself- I don’t believe that charities have a monopoly on social purpose (and are certainly unlikely to in the future), and the disruptive mind-set of many tech start-ups could spur welcome (if not always comfortable!) challenge and innovation. However, I do worry that if the philanthropy world is not engaged then we will potentially lose the benefit of individuals and organisations with vast stocks of accumulated knowledge and insight about what the most pressing real-world problems are and how to address them. As a result, we could end up with a lot of tech-led solutions in search of problems, and a lot of wasted effort and resources.

3 COULD THESE TRENDS CREATE NEW PROBLEMS THAT CHARITIES WILL HAVE TO ADDRESS?

As well as the potential for disruptive technology to bring benefits for society and the environment, it could also create new challenges. I explored this idea in Future Imperfect, but to give a sense of what I mean:

  • We are increasingly aware of the capacity of AI algorithms to entrench historical bias and thus disadvantage already marginalised individuals and communities.
  • Increased use of Virtual and Augmented reality could have implications in terms of creating dissociation and weakening real-life social relationships.
  • The “mining” processes currently used to maintain Bitcoin and other cryptocurrencies are wasteful by design and some are beginning to worry about their environmental impact if the technology becomes more widely adopted.
  • Existing social media technology is creating “filter bubbles” that lead to greater division and to more extreme views becoming normalised. The addition of new technologies like VAR or conversational AI could exacerbate these problems further.
  • At a macro level, new technologies such as AI could lead to vastly increased inequality within society as many jobs are automated and those that own and control the technology gain ever more power and wealth.

Although it is good not to be too blithely utopian about technology, we should also not retreat into dystopian scepticism. The reality is that new technologies are tools, and like any tools they can be used in good ways and bad ways. And sometimes even their seemingly positive uses will bring unintended negative consequences. It is important that charities and philanthropic funders understand these, as they will almost certainly have to play a role in addressing them.

4 WILL IT OFFER NEW WAYS FOR EXISTING ORGANISATIONS TO RUN MORE EFFECTIVELY OR EFFICIENTLY?

As well as providing new ways of addressing their core mission, disruptive technologies may also present opportunities for charitable organisations to run more effectively and efficiently. A lot has been said recently about Robotic Process Automation and the impact that AI could have on the future of the workplace, and charities will benefit (or suffer, depending on your point of view) just like other types of organisations. Chatbots, for instance, could replace many instances of human-delivered advice services or call centre working. Likewise, AI could be applied to streamline data-heavy processes like grant application consideration. The introduction of blockchain-based infrastructure for financial transactions could also allow real-time financial reporting and remove the necessity for a separate audit procedure.

Of course, this assumes that charities will not be usurped by other types of organisations (see point 2 above) or find their own governance structures radically changed (see point 5 below).

5 COULD THIS TECHNOLOGY DISRUPT EXISTING GOVERNANCE STRUCTURES?

I have written at some length on this blog and elsewhere about the possibility that in the future the model of doing social good will itself become decentralised. The use of blockchain (or other distributed ledger tech) to create Distributed Autonomous (DAOs) is already showing that it is possible to find ways of enabling groups of individuals to coordinate and act at scale without the need for centralisation. If this approach takes off when it comes to addressing social and environmental issues, it may mean that there is no longer a need for charitable organisations in their current form. 

But even if things do not go to this extreme; the role of charities and the people who work in them is likely to change as a result of the trend towards decentralisation. If it is possible to do many of the things that charities currently do, but without centralised structures, then it raises the question: what value there is still to be had in centralisation? I suspect the answer will be that there is still value of various kinds, but we need to more to highlight precisely what it is rather than simply taking it as a given.

6 COULD IT GIVE RISE TO NEW KINDS OF DONATIONS?

Given that philanthropy is, at a transactional level, about getting assets from those who have them to those who need them in order to increase public good, the role of technology in creating new markets for assets, or even entirely new types of assets is something we should be aware of. The continuing (albeit volatile) rise of cryptocurrencies like Bitcoin, Ether, Ripple etc. has demonstrated that there may be a market for entirely new forms of monetary assets. Likewise, blockchain technology may provide a means for recording and transacting using all kinds of digital and intangible assets in a way that has never proved possible before (e.g. Intellectual Property, social value etc.) Once again, could these be harnessed as new forms of donation?

The automation of transactions using smart contracts also raises the possibility of making micro and nano-payments feasible. Whilst each individual payment would be tiny, the volume could be enormously high and hence add up to significant sums of money. One intriguing feature of this scenario is that it would seem impossible to have human oversight of each transaction, so if we were trying to divert a percentage to charity, we would have to automate the process of selecting causes itself using AI.

The evolution of the internet of things is likely to herald a shift in the nature of our relationship with many objects and machines too: away from a norm of owning things outright and towards a norm of having access to shared goods. What might this mean for philanthropic giving? Would it decline, as people no longer had assets of their own to give to good causes, or would people find new ways of donating all or part of their right to access shared objects?

7 COULD IT GIVE RISE TO ENTIRELY NEW CLASSES OF DONORS?

As well as giving rise to new types of assets for donation, could disruptive technologies also create entirely new classes of donor? For example, the enormous increase in the value of Bitcoin and other cryptocurrencies has created a new breed of unexpected millionaires among those who were early adopters. On the assumption that there might be an “easy come, easy go” mentality among some of these individuals, they would seem ripe to be tapped up for philanthropy. However, it has been well documented (eg in The Politics of Bitcoin) that the roots of Bitcoin are deeply entwined with a crypto-libertarian philosophy that takes a radical (and pretty dim) view of institutions like governments and central banks. So what will these potential crypto-donors think about organised philanthropy, both in terms of its role and how it should be done? So far, we don’t really know.

Another likelihood is that more and more philanthropic decisions will be data-driven. This might be because human donors become reliant on AI-powered philanthropic advice (as I explored in detail in Robotic Alms), or because there is boom in entirely automated philanthropy as a result of the growth in machine-to-machine (M2M) transactions.

8 WILL THE TECH MAKE IT EASIER OR HARDER TO IDENTIFY POTENTIAL DONORS?

Even if the types of donors and the nature of the assets at their disposal changes radically, one of the traditional jobs of the fundraiser will remain: namely identifying who those donors are in the first place. Technology has long been used to aid this process by making it easier to do prospect research, and charities have begun to use techniques honed in the world of social media to micro-target potential donors more effectively. It seems likely that these techniques will become even more refined over time (although there is also a question over whether new legislation and regulation like GDPR will stifle some of these efforts).

Yet there is also the possibility that the very model of online identity will be radically shaken up; and that we will shift from the current paradigm in which personal information about us is held by multiple different public, private and charitable sector agencies and organisations, to a paradigm of “self-sovereign identity” in which we each take ownership of our own data and have the choice about which elements of it we share in any given context. This would even allow for the possibility that we could, in the future, monetise our personal data by selling it to companies who use it to refine their own products and services (rather than simply giving it all away for free, which is what we do now).

9 WILL THE TECHNOLOGY OFFER NEW WAYS OF ENGAGING DONORS AND SUPPORTERS?

Assuming that you can find donors in the future; will you also have new ways of engaging them? For example, Virtual and Augmented Reality can enable new forms of immersive storytelling that could create powerful emotional and empathetic bonds with potential supporters (and   a number of charities are already using these technologies for fundraising and awareness-raising).

Blockchain technology, on the other hand, brings the promise of radical transparency when it comes to donations. Donors in the future could be able to trace their individual gift all the way through a charity and out the other side - which could bring benefits in terms of strengthening trust, but might also raise new challenges in terms of educating donors about the necessity of spending on core costs and other perceived “overheads”.

10 COULD THE DEVELOPMENT OF THIS TECHNOLOGY ITSELF BE SEEN AS A CHARITABLE CAUSE?

As well as helping to address existing causes and potential creating new ones through unintended negative consequences, could new technologies come to be seen as a focus for philanthropy in their own right? We have already seen these in the form of the Open Source software movement (most of which is run on a non-profit basis) or websites like Wikipedia which rely on donations to keep going. There are also a growing number of examples of Silicon Valley philanthropists who view their long-term investments in things like space exploration or life extension as at least quasi-philanthropic.

Historical interlude...

I can’t resist taking a brief detour here to make a point I have made many times before; which is that like so many “new” phenomena in the philanthropy world, the idea of technology as a speculative focus is not actually new at all. Take for instance, the example of the seminal role the Rockefeller Foundation played in the development of Artificial intelligence. In 1932, the Foundation hired Warren Weaver as Director for the Natural Sciences (although he would rather wonderfully go on to refer to himself as “Chief Philanthropoid” instead). Weaver was a noted mathematician in his own right (for any fans of computer science, he co-authored the seminal book The Mathematical Theory of Communication with Claude Shannon). However, in his role at Rockefeller he arguably had even greater influence on the future of computing by using some of his grant money to support ground-breaking academic research in the early days of computing.

Most notably, in 1956, the Foundation gave a grant to support the Dartmouth Conference, a five-week long gathering of some of the leading computing researchers of the time. This is generally seen as the birthplace of the modern notion of “artificial intelligence” (in fact, the first known use of the term is to be found in the grant application for the conference), and the real starting point for all subsequent research in the field.

It is worth noting two other points in this quick historical interlude that may be relevant: the first is that whilst Rockefeller was highly forward-looking in supporting this work, they kept a tight leash on the amount of grant money that was being used. The conference organisers originally requested $13.5K, but in offering them only $7.5K in response, the Foundation Director responsible for the grant explained that, “I hope you won't feel we are being overcautious but the general feeling here is that this new field of mathematical models for thought, though very challenging for the long run, is still difficult to grasp very clearly. This suggests a modest gamble for exploring a new approach, but there is a great deal of hesitancy about risking any very substantial amount at this stage.” The second thing to note is that following the Dartmouth conference, the involvement of the Rockefeller Foundation in the field of Artificial Intelligence diminished as military and commercial interests moved in and took over responsibility for funding. So the foundation could be said to have played a vital catalytic role. (More on the fascinating history of the Rockefeller Foundation and computer science can be found at their own archive).

...end of historical interlude

Back to the present day, and the idea of technology as a focus of philanthropy has once again come to the fore. This might present new opportunities for philanthropist and foundations to play a catalytic role. It might also pose challenges, if donors or funders start to turn their attention away from mainstream philanthropic causes towards supporting technological developments which have debatable societal benefits. This is something we are currently seeing in the blockchain world, where some of the current crop of Initial Coin Offerings (ICOs) are being funded through philanthropic mechanisms rather than commercial ones something that is beginning to cause a great deal of controversy.

This list of questions is not exhaustive, but hopefully it gives a sense of the various dimensions in which we can think about the relevance of technology for philanthropy. And if we start to think through these kinds of questions, hopefully we can develop a vision for the role that foundations and philanthropists could play in responding to the opportunities and challenges presented by potentially transformative technological developments.

I would argue that foundations might be uniquely well-placed to play a role here. One of the favourite bits of received wisdom in the tech world, known as Amara’s Law, states that: “We tend to overestimate the effect of a technology in the short run, but underestimate it in the long run.” At the same time, we are often told that one of the strengths of philanthropy -particularly the endowed foundation model - is that it is able to take a long-term view of issues. Hence, it could perform a potentially invaluable role by cutting through some of the immediate noise around technology; thinking through what some of the longer-term implications might be and what we need to do now to start addressing them.

That way we can make sure that in 20 years time we aren’t having this discussion again and ruing the fact that we didn’t act on all of this sooner.