The Secret to Funding Massive Change at Scale

But first, a short epigraph from The West Wing:

Frank Hollis: I want to find a single problem that I can attack, something that might have some sort of substantive effect. Maybe I should be fighting AIDS in Africa, or maybe it’s malaria. It could be clean air or election reform…I don’t know. My sense is that you would have a unique perspective on what that could be, and how to make it happen.

CJ Cregg: A single problem? Highways. Highways is what you’re looking for. It’s not sexy. No one will ever raise money for it. But 9 of out 10 African aid projects fail because the medicine or the personnel can’t get to the person in need.

Frank Hollis: Infrastructure is a problem.

CJ Cregg: Blanket the continent with highways, and then maybe get started on plumbing.

The West Wing, Season 7

Funding for social impact initiatives has seen a recent sea change, largely thanks to the Internet. Until the end of the 20th century, we were accustomed to foundations giving large grants as part of direct-action programs. Now crowdfunding is a $5.1-billion-dollar-a-year industry with 450 different platform options. At the same time, the rise of social entrepreneurship has linked revenue and products with social impact.

These changes are excellent. They offer avenues to sustainability, provide a check on the strictly profit-driven enterprises, and open up charitable giving to wider participation.

But what, in the midst of all this change, is the role of the large philanthropic foundation in the 21st century? How can larger-gift organizations leverage their depth of knowledge, financial might, and wide networks?

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Here we tap the wisdom of The West Wing. Funders, even in the age of online crowdfunding, there’s a crucial and potentially world-altering contribution you can make:

To enact massive, scalable, and lasting change, invest in infrastructure. Revamp the building blocks of our world that have either degraded or are no longer suited for the digital age.

Innovations such as global Internet access, distribution of electricity, expansion of plumbing and sewage, and mobile financial services—these are the infrastructure changes that can create lasting change in people’s lives. To tackle these problems, we must step back from individual programs, projects, and products and recognize the importance of foundational, fundamental work on systems.

Infrastructure + Technology = A More Effective Nonprofit Ecosystem

For most of us with access to well-functioning infrastructure, its role is invisible: our lights turn on, our web pages load, we wait at timed stoplights, we withdraw funds from the local ATM.

Generally speaking, technological advances are uniquely suited to overhaul old systems: the right technology can eliminate redundancies, reduce bloated costs, and increase access by many orders of magnitude. 18F, for example, is a federal agency making government more effective through technology: they smooth out everything from FOIA requests to immigration applications.

If we deliberately apply technology to infrastructure, the impact is exponential. WattTime makes your electric grid efficient by prioritizing clean energy. Cell towers in rural areas enable local residents to receive health information over their phones. The Stellar network expands financial access to the developing world by connecting siloed financial systems like SWIFT and ACH.

Technology isn’t always the cure-all, individual programs are still important, and the human side of any social problem is vital. But fixing infrastructure—electricity, highways, financial access—will allow direct service programs to function more effectively.

Challenges of Fundraising for Infrastructure

Traditional nonprofits produce emotional artifacts, pictures, and stories of how people’s lives have changed dramatically. Telling the story of infrastructure, on the other hand, isn’t easy—the concepts are often technical, high-level, and somewhat abstract. Few documentaries address bridges, mesh networks, or plumbing (though we believe that more should!). Instead, infrastructure offers more traditional business-to-business metrics: adoption, activity, and local feedback.

Technical organizations also have different needs than traditional nonprofits: we have high front-loaded costs to build engineering teams and several radically different audiences to address. Progressive foundations, such as Mulago and Open Road Alliance, are sensitive to these needs. These foundations structure their programs to attract scalable solutions. They offer budgets that cover overheads, quick turnaround times, and minimal-friction reporting. They also fund with vision in mind, supporting early-stage work that might not tie directly to a user service goal.

Another trend we’ve observed in the tech-for-good space is “hacking” the fundraising timeline. Watsi, for example, successfully funded their program in rounds. Sean Parker effectively issued a call to technologists as philanthropists, urging donors to give early, focus on effectiveness, and look for measurable solutions.

Why the Nonprofit Still Matters in the 21st Century

If infrastructure is the best way to make an impact, and technology is uniquely suited to close that gap, why do nonprofits continue to exist? Perhaps Google and Facebook should solve all of our infrastructure shortcomings.

But imagine if the US highway system had been built by a for-profit organization. How much would a commute cost between towns? Would anyone get to see the Grand Canyon?

And how about if the Internet were owned by one company? Would Wikipedia or Craigslist even exist?

Certain infrastructure that is critical to the health and safety of the world must remain a public good. At Stellar, we like to say that the open financial network we’re building is “owned by everyone and no one.” It should be as accessible as air.

Funders, try an experiment: next time you hear a pitch from an organization, imagine a blank canvas. Which system, rebuilt from scratch, would improve the whole development goal of that organization? Then find out who is tackling that problem.

As CJ Cregg, who is usually right, said: Highways. Highways is what you’re looking for.

Vanessa Gennarelli
Vanessa Gennarelli is the Educator at Stellar.org, a nonprofit committed to full economic participation for all human beings. She holds a Master's in Education from Harvard University, and is a former research intern at the MIT Media Lab. Find her at @mozzadrella on Twitter.