Second Curve Philanthropy

At the Institute for the Future (IFTF), we use what we call a “two-curve framework” to think about the transformations our economy and society are likely to undergo in the next 10 years and beyond.

The “first curve” is the one on which most of our productive activities and resources flow through formal institutions—banks, large companies, centralized governments, and formal educational and philanthropic institutions. It is the curve we’ve built up over the last 250 years, along with accompanying laws, regulations, tools, and practices. We are familiar and comfortable with this curve—we’ve lived like this for a long time. However, the highly distributed technology infrastructure that’s emerged over the past 40 years—infrastructure that today operates like a nervous system of our society and is comprised of the Internet, mobile devices, tiny sensors, miniature cameras, and so on—has disrupted this way of doing things and is giving rise to the “second curve”—a new, highly distributed mode of value creation.

On the second curve, one or a few individuals can create change on a scale that was previously inconceivable or only a large organization could achieve. On the second curve, a platform like Wikipedia, with fewer than 200 employees, can create a global resource to which millions of people contribute and which even greater numbers use on a daily basis. On this new curve, thousands of protesters in Hong Kong can amass virtually overnight and demand changes in government policy without coordination by a formal central organization.

In the past year, we’ve been applying the two-curve framework to think about the future of philanthropy. We identified at set of forces that will likely re-shape the field, and then synthesized these into a map that we hope will serve both as a guide and a provocation to think about how philanthropy can not only prepare for the second curve but also shape it for the better. After all, we believe that the purpose of futures thinking is not to predict the future, but to help us make better decisions and shape a more desirable future.

In doing the research, we conducted several workshops with representatives of philanthropic organizations and with social innovators who, in our estimate, firmly operate on the second curve, using distributed tools and resources to achieve impact. To our dismay, we found a large gap between the world of organized philanthropy and today’s world of social action. Far too often we heard from social innovators that they view transaction costs involved in working with foundations and larger philanthropic institutions daunting, and thus avoid them altogether. Indeed, while the goals of the two sets of actors are similar—social impact—how they think about impact and the tools they use to achieve it are vastly different.

While philanthropic organizations focus on milestones and measurements, many social innovators err on the side of “ad-hocracy”—activating engagement without a carefully crafted “business plan,” with roles and tasks emerging as the needs evolve. Instead of pursuing scale—investing in projects and initiatives that others can replicate and scale to multiple communities and populations (something of great concern to philanthropic institutions)—many social innovators take whatever limited resources they have to achieve impact where they perceive the highest need. Scale may result from networks of such individuals synchronizing actions, but it is often not their ultimate goal. And what many social innovators lack in money and resources, they often compensate with by using the power of social media and effective engagement of large masses of people. They may have limited financial resources, but they often operate with an abundance mindset using digital platforms to gain access to many things, including people, equipment, physical spaces, and needed skills.

It is our hope that this map will serve as a call to action to bring the two sides closer together. Many social innovators can benefit from the wisdom, resources, and tools that organized philanthropy has developed over decades. They often need access to such resources and help in scaling their efforts. “It’s amazing what we can do without staff, money, or management,” said one of the social innovators during our workshop. “Imagine what we can do just with a little money, staff, and management?” Larger philanthropic organizations, on the other hand, have to understand the practices and challenges of the second-curve social innovators. One foundation executive commented in an interview with us, “Yes, we can exist in perpetuity, but will we be relevant?” Philanthropic institutions are facing a critical task today: They need to make themselves relevant in the second curve world. Because the question isn’t just when to make the leap from the first to the second, but how to make the transition in a way that creates the greatest social benefit for all.

Read more stories by Marina Gorbis.