The Rise of PhilanthroSourcing (Part 1 of 3)

Picture 2.png For the next three days, PhilanthroMedia is proud to present an article (in three parts) that seeks to define a new trend that we see growing in the culture of web communication. Today, an introduction to the term PhilanthroSourcing.

Part One

Corporations that find themselves in need of fresh ideas, products and content need no longer depend on what can be developed in-house. Fueled by Web 2.0, the world and seemingly all of its inhabitants have become pearl-producing oysters from which they can spin profit.

Jeff Howe was among the first to identify this phenomenon and coin the term now used to describe it in his Wired Magazine article, The Rise of Crowdsourcing in June, 2006. (His new book, Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business, has just been released.)

According to Howe, “Hobbyists, part-timers and dabblers suddenly have a market for their efforts,” says Howe, “as smart companies in industries as disparate as pharmaceuticals and television discover ways to tap the latent talent of the crowd. The labor isn’t always free, but it costs a lot less than paying traditional employees. It’s not outsourcing; it’s crowdsourcing.” One marketplace for such solutions is InnoCentive which enables corporations to tap 180,000 members of the marketplace to challenges like: "A formulation for enhanced binding of biocides to surfaces exposed to an aqueous environment is desired." The winner of this solution won't get a full-time R & D job with the corporation that needs it, but they will get $20,000. Like mercenary soldiers, these minds for pay, piece together a living from solving multiple challenges.

From the very beginning, philanthropic entities such as the Rockefeller Foundation, the Case Foundation and Ashoka, began exploring ways crowdsourcing could be used to harness breakthrough ideas for social change.

For the past year, PhilanthroMedia has been tracking this trend we call: philanthrosourcing. Like crowdsourcing, philanthrosourcing taps the wisdom of the crowd but its focus is on solving social challenges that have been resistant to traditional approaches. Like traditional grantmaking, an entity that applies the tactic of philanthrourcing states a given challenge, and invites solutions. Unlike traditional grantmaking, those who propose solutions aren't necessarily entities who can or even want to execute the solutions they propose.

Like the lone geek chemist working in the basement to solve a pharmaceutical challenge listed on InnoCentive, for instance, what's pursued by philanthrosourcing is pure insight that individuals may be more readily access because they are not working within the confines of a given organization's culture or resources. PhilanthroSourcing seeks to harvest smarts from a much larger pool of talent. In addition to nonprofits, corporations, public entities and individuals are all invited to participate. Through the process, savvy entities gain access to an incredibly wide range of ideas that can inform their chosen approach and they can support any entity they want to execute winning ideas.

One of the things that is most promising about philanthrosourcing, for our field, is that it recognizes that the most innovative ideas don't necessarily come from those with the highest capacity to execute those ideas. Often, innovation comes from "close to the ground" in organizations that have little resources but which know what could work if they had resources, infrastructure and necessary know-how. While foundations have often recognized this fact, the most common responses have either been to invest the best ideas and hope for the best or to fund capacity-building efforts intended to meld innovative ideas with high-quality execution. One might expect neither of these approaches to be particularly successful. In philanthrosourcing, however, the "idea generator" gets credit for the idea and may even be rewarded monetarily, but understands that the idea may be offered up to others best able to execute that idea.

Like crowdsourcing, it’s on the rise, with immense potential for the future of philanthropy.

Susan Herr

Posted at 10:19 AM, Aug 27, 2008 in Philanthropic Strategy | Permalink | Comment

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