Silicon Valley’s depressing vision for the social sector

Technology is supposed to be taking over the world and eating everyone’s lunch. Every industry, from medicine to law to retail has experienced impressive gains (or joblessness) at the hands of nimble, innovative technology companies upending every sector.

As the technology revolution has moved from industry to industry, Silicon Valley has even set its eyes on the social sector, with VC’s pumping money into a handful of startups aimed our way.

And oh man, does Silicon Valley ever have a depressing vision for the nonprofit sector.

With few exceptions, venture funded startup technology companies have focused on fundraising or building hallow online followings for non-profit causes.

But wait, don’t nonprofits need more money and more support? Well, two answers:

  1. I’m not sure. If we have the right interventions, then sure. But if we’re using these tools to litter the African continent with more Tom’s Shoes, then no.
  2. It’s well documented that charitable giving is a function of GDP. More accurately, giving is consistently 2% of GDP. Online giving platforms are not growing the pie, they are simply redirecting giving to online channels.

Don’t get me wrong, there are technology initiatives moving the social sector forward. But they aren’t venture backed Silicon Valley startups.

Companies like Social Solutions have tackled the less sexy, but essential problem of helping nonprofits track and report their outcomes. Outside of the case management market, the real social sector technology innovations are coming from the nonprofit sector itself, with Ushahidi pioneering crisis mapping and Volunteer Match long serving as the leader in connecting volunteers to nonprofits, despite ample for-profit competition.

The social sector’s challenges are vast and well documented. It’s a shame that by and large the technology sector has focused on the least of these issues, catering to a caricatured vision of the social sector content to earn five dollar donations for their do-gooder pass times.

The social sector has greater ambitions and faces starker realities. Indeed, even in so far as the income side of the equation is worth tackling for nonprofits (which it is), more than online fundraisers, nonprofits need to move toward serious financial planning.

There is no doubt that the technology revolution has touched much of the world. But Silicon Valley to date has been a modest presence in the nonprofit sector.

Perhaps there isn’t much of a role for Silicon Valley to play. As Phil Buchanan, CEO of the Center for Effective Philanthropy has argued time and again, the social sector exists to correct market inefficiencies. Technology’s genius has been in making already effective market functions work better, faster.

By contrast, the social sector is not as clearly monetizable, nor are we awash in effective solutions waiting for automation. Instead, there is a lot of ambiguity around what works, and we exist in a market that is largely underserved by for-profit ventures for good reason.

Therefore, technology companies are left to focus on the least compelling, yet monetizable, problems the social sector faces – shifting donations online and winning likes and retweets for your cause.

Hardly earth shattering stuff.