SocialMarkets.Org is a very cool idea that will probably upset a lot of veterans in the nonprofit sector.

Before I tell you how cool it is, I should provide two disclaimers:

1)  I'm serving as a consultant to the project, which means that I'm a paid lackey.

2)  Allan Benamer and Jeff Tuller, the founders of SocialMarkets.Org, are (along with yours truly) also co-founders of LOLnptech.org.

So I'm not exactly an unbiased commentator.

But think about it...what if you could participate in the philanthropic equivalent of Prosper, going online to compete for the opportunity to support initiatives that you think are most likely to yield the best outcomes?  What if outcomes measurement were built into every funding opportunity at the most granular level?  What if you could collaborate online with members of your team to score the highest social return on investment?

Jeff and Allan are serious* about bringing transparency, accountability, quantifiability, and cool web tools to the nonprofit sector.  This is going to be very scary at first; as nonprofit professionals, we like to focus on processes and relationships rather than quantitative standards of success.  Outcomes measurement is expensive, time-consuming, and tedious - it also tends to reveal our failures.

What Allan and Jeff are proposiing is not a model that will work for every philanthropic agenda. Moreover, it's scary to tie outcomes so closely to funding, and to enable funders to go online to track programmatic outcomes, in the same way that stockmarket investors can track the value of their shares.

However, it's a whole new funding environment out there.  I'd like to tip my hat to the wonderful George McCully, CEO of the Catalogue of Philanthropy, who pointed this out at the recent Boston Nonprofit Technology Conference.  Funders - whether they are individuals, families, corporations, or traditional foundations - are less interested the discourse of "giving away" and more interested in opportunities to "invest in social change" and "make a difference."

"Invest" is a key word here, signaling a major cultural shift.  I'm far from the first person to predict that the prevailing image of the philanthropist will no longer be the grand patron who performs a social duty to the needy.  I think it's very likely that the philanthropic future belongs to online investors.  As we've seen from the brilliant success of Modest Needs, the internet now makes it possible to give small gifts at great distances that yield life-changing impact.  And "impact"will definitely be another key word.

"Investing for impact."  That sounds pretty good to me.  I know that SocialMarkets.Org will help us get there.


* Notwithstanding that they are both extremely funny guys.