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Technology Megatrends That Will Change Philanthropy

Over the next decade, the integration of technological innovation will radically change how nonprofits engage with their constituents and supporters.

Building a Comprehensive Donor Development Strategy:  This article is part of a series launched by Westfall Gold to help nonprofit development leaders create an effective and comprehensive long-term fundraising strategy.  An introduction to this series can be found here and an index to the articles here.

Megatrends in Technology

In the past, machines sifted through massive quantities of data to report valuable information. Today, they are creating new and meaningful insights on their own. Artificial intelligence is enabling computers to identify problems, test hypotheses, and create solutions.

A milestone achievement in artificial intelligence was reached by IBM’s Project Debater in February 2019. After years of research and development, Project Debater engaged in a live back-and-forth debate with world champion debater Harish Natarajan. While the human clearly won the contest, IBM’s system held its own by crafting and articulating persuasive arguments. A machine’s ability to participate in complex conversations with a person unlocks significant opportunities in automating customer interactions. (Here is a great exploration of AI-powered customer service by Maruti Techlabs.)

Artificial intelligence will lead the convergence of technological innovation that delivers a more personalized and meaningful experience.  This “combinatorial technology explosion” – as referenced by McKinsey & Company – will integrate trends in innovations such as:

  • Cloud/Edge Optimization – access to almost limitless computing power and storage available to all devices
  • Bandwidth – the next generation of wireless infrastructure provides exponentially greater bandwidth
  • Connectivity – 500 billion devices connected to the Internet (vs 20 billion today) will work together to improve learning, decision making, and user experience
  • Big Data – the exponential growth of connected devices and increasing online engagement will grow the global datasphere from 33 zettabytes in 2018 to 175 zettabytes in 2025
  • Robotics – automation of commercial and personal tasks through machines becomes ubiquitous
  • 3D Printing – on demand creation of goods brings us closer to realizing Star Trek’s replicator
  • Mobile – 3 out of 4 people engage the world through a mobile device

“Digital transformation will continue to blur the lines between the digital world and ‘real life.’ The power of the cloud, big data and advances in digital technology are going to transform how entire organizations, industries and sectors work and what they can do, the impact they can have on the world. And this means that consumers are going to have radically different expectations on how organizations engage with them, and how people engage with each other,” forecasts Steve MacLaughlin, Vice President of Data and Analytics for Blackbaud.

Impact on Philanthropy

Not only will technological innovation radically change how people engage with one another and how business engage with their customers, but it will also greatly impact how nonprofits engage with their constituents and supporters. Here’s our perspective on the top three impacts technology will have on fundraising:

1. Improved machine learning and broad integration of donor data will create deeper insights into giving capacity and propensity.

The donor analytics industry is making substantial advances in creating predictive models to improve the accuracy of estimated giving capacity and the likelihood of giving.

“Fundraising analytics not only summarizes specific, accurate, and useful fundraising data,” notes Sarah Tedesco, Executive Vice President of DonorSearch, “but it also discerns and predicts patterns and trends, allowing nonprofits to decide the most effective way to move forward with future fundraising strategies.”

The power of donor analytics allows nonprofits to better identify prospective supporters who are more likely to align with the organization’s mission.

“We have entered an increasingly post-list world,” comments Dave Raley, Executive Vice President of Masterworks. “Instead of buying mailing lists, more and more nonprofits are building new audiences informed by a rich mosaic of data from the physical and online worlds.”

 

2. Nonprofits will engage artificial intelligence systems to create and manage unique interactions with general donors that deepen the bond with the organization.

Even now, firms are developing complex systems that analyze donor history, individual behavior, social media interactions, and other data to help nonprofits improve engagement with donors.

“Artificial intelligence is on the cusp of being able to deliver the right message, at the right time, to the right person, through the right channel. Powerful and informed systems will trigger specifically crafted experiences designed to advance the nonprofit’s relationship with each individual donor,” predicts Raley.

Within the next decade, a sophisticated AI system – designed with a great deal of human ingenuity, of course – will canvas vast amounts of data about a prospective donor, identify the most compelling giving opportunities, construct a captivating appeal, and deliver it at the best time through email, direct mail, and/or social media.

 

3. Major donor cultivation will be even more reliant on in-person relationship building, despite face-to-face meetings becoming harder to secure.

In-person cultivation has always been critical in major donor fundraising. While technology will give us better information about donors, it cannot replace the need for personal connection.

In fact, life in an always-connected world with the proliferation of human-to-machine interactions will drive a hunger for real (i.e. non-virtual) experiences.

“Offline experiences have become key to personal fulfillment,” reports the World Economic Forum pointing to research by Professors Thomas Gilovich and Amit Kumar of Cornell University which shows “experiences create more lasting happiness because they are more open to positive reinterpretation; they tend to become more meaningful parts of one’s identity; and they do more to foster social relationships.”

This is especially true for high-net-worth philanthropists.

“Creating memorable experiences is critical to advancing major donor relationships,” offers Lisa Wolf, Vice President of Consulting at Westfall Gold. “Our major donor experiences are successful because they deepen relationships of trust and building a new community of support for the nonprofit. In the future, it will be even more important for nonprofits to deliver live experiences that bond donors to the mission.”

About Robert Yi

Robert Yi | President and Chief Operating Officer

Robert leads strategic initiatives and day-to-day operations through the talented members of Westfall Gold. Previously, Robert was the Chief Operating Officer and General Counsel of ECCU, a $3.5 billion financial institution serving churches and nonprofit organizations. He also taught operations and strategy courses as an adjunct professor at Biola’s Crowell School of Business. Robert holds degrees from UC Berkeley, Loyola Law School, and the Wharton School. Currently, Robert serves on the boards/advisory boards of International Sanctuary, Town and Country Manor, Biola’s Startup Competition and FUSION Leaders.

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