Andreas Broeckmann on Tue, 29 Aug 2000 12:03:44 +0200 |
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x-posted from <nettime> from: jpeizer@sorosny.org (Jonathan Peizer) see also: www.mediachannel.org Foundations And The Digital Divide by Jonathan Peizer CIO of Soros Foundations, for MediaChannel.org U.S. foundations have been slow to adopt technology for a number of reasons. In the late '80s and early '90s, other sectors of the economy were pressured by external competition to overhaul their organizational structures and become more efficient. Because their funding is endowment-based, traditional foundations benefited from these changes, and consequent increases in their investment portfolios, without having to change much. Foundations have never been bastions of technical leadership in any case. Like NGOs, they tend to be behind the technology curve, not because they do not have the funds, but because management has not fully understood its implications. That's changing, slowly, with a new group of senior executives heading foundations. Few foundations still have stand-alone technology programs or funding for technology, and most prefer to roll these programs into their current funding sectors. Unfortunately, many of the program directors who head these sectors may be experts in their particular fields, but do not have the expertise to assess technology proposals. Most foundations do not enlist their internal support staff to review or assist with technology proposals for their programs. Traditional foundations operate on a number of principles antithetical to the Internet culture. The proposal review/approval process can take months and multiple board meetings. Unfortunately, Internet proposals have a short shelf life. If they take longer than six months to approve, they may as well be rewritten. Foundations tend to operate on fixed program budgets cast at the beginning of the year, while technology is an ever-changing animal and requires quick venture capital to seize opportunities. An interesting characteristic of traditional foundations is that they do not have a culture of cooperation. Foundation boards tend to analyze different sectors, determine if there are other foundation players and, if there are, look elsewhere for their own unique niche. Traditional foundations have not been able to properly address a new breed of proposals I refer to as ".corgs". These are hybrid Internet projects with a core social component (.org) and a supplemental, revenue-generating potential (.com). They are a direct outgrowth of the Internet revolution which couples low entry costs and huge reach with the unique information and services some entrepreneurial NGOs can provide. Hypothetically these should be a funder's dream; socially responsible projects with enough income- generating potential to make them less likely candidates for continued subsidies. But as it turns out, they do not fit neatly into foundations' sectoral portfolios. The fact that they generate revenue is ironically sometimes what disqualifies them for funding because foundations do not have the appropriate metrics to distinguish them from pure business ventures. Subsequently the Amazon.com equivalents of the social sector are not being funded properly, and many are not meeting their potential. Worse yet, some are being forced to abandon their ".org" core missions entirely and become ".coms" because they cannot find public sector support. Traditional East Coast foundations, many founded by old industrial- revolution money, are being pressured by their grantees to address technology proposals. While NGOs have been slow to adopt this technology, five years into the Internet revolution they realize the importance of being a player in this field. Unfortunately, many proposals are not well developed, and the NGOs do not have the resources to do a better job of developing their on-line presence. Nor do foundations often have the personnel to properly review the proposals or to offer good technology advice to NGOs. Traditional foundations are also being pressured by the new kids on the block--West Coast foundations funded by new information-economy wealth. The new upstarts know how to cooperate and leverage their technical and financial resources. They are also very comfortable with the concept of exploiting unallocated funds or "venture capital" to solve development problems. But these new foundations have their own limitations. They are largely untested in the development field. While they know how to identify a problem and spend money on it, they are just developing the experience and personnel networks of the traditional foundations to work with NGOs in communities and to affect long-term change. Development work is not like selling technology: you cannot simply go in, fix the problem and leave. If it was that easy the market would have already dealt with these problems. Bridging the digital divide requires understanding people's problems before applying technology to solve them. It requires a significant time commitment and lots of training, nurturing and handholding. Many of the new social philanthropists see the world from a specific vantage point based on their own experiences. Their world perspective is primarily shaped by CNN-type news bytes absorbed during 10- to 15-hour stints in front of a computer screen creating the new information economy. To date their funding has tended to mirror their interests and experiences. Many focus on local domestic issues, the environment, pet hobbies or training projects of one sort or another. There is nothing wrong with these focuses, and no doubt there is good being done. However, with two billion people around the world making under $2 per day and another two billion making under $1, developing world issues are far more compelling and require more than the limited focus they currently receive. The Internet is already seen in many places as another aspect of Western imperialism. By not focusing more of the wealth on these intractable issues in the developing world and instead focusing on problems in our own back yard, the new foundations are further fostering the idea that this new information revolution is not for everyone. (To be fair, there are examples of inroads being made in this area; both the Gates and Intel Foundations are making significant contributions in the field of healthcare and teacher training abroad.) The most important thing the old and new foundations can do to bridge the digital divide is to forge better working relations with each other and then combine their resources to work across sectors. The old notion of each foundation focusing on niche sectors is obsolete in the new information economy. Foundations must work together on technology-related issues, not only because that is the nature of the Internet, but because most foundations don't have the requisite expertise to go it alone. Traditional foundations need to change the way they address technology proposals, evaluating them more quickly and setting aside some venture funding to take advantage of opportunities. The newer foundations need to expand their horizons and learn more about working effectively in the developing world. They need to learn from their older peer foundations both inside and outside the United States about leveraging the NGOs that exist around salient social sector issues. Their expertise can be leveraged in new ways using the Internet to deal with development issues. Western foundations, with their close links to founding corporations, present an incredible opportunity for private sector partnership for all foundations. Finally, the foundations must be more innovative in the proposals they review and fund. The hybrid ".corgs" discussed above will only become more prevalent and continue to cut across sectors. In addition, there are also some socially responsible ".coms," such as World2market.com, that work with NGOs supporting artisans in the developing world to bring their products to retail and wholesale outlets. Foundations must be able to work together like venture capitalists do, pooling funds to support the social component of these "best of breed," socially responsible ventures whether they start out as ".orgs" or ".coms". Some of what is being suggested is already happening but too slowly to match the speed of technological change and need. A number of hybrid "social venture" technology projects are making their rounds at the more progressive old and new foundations and are being co-funded. Foundations like Rockefeller, Pew, and OSI have separate venture-capital arms or management structures that allow grants to be reviewed and funded quickly. Foundations like AOL have put the talents and technical resources of the AOL Corporation to work developing important technical resources and tools for the NGO and foundation community at the site www.helping.org. What is a more cohesive strategy and commitment than that? ------- Jonathan Peizer (jpeizer@sorosny.org) is CIO of Soros Foundations (http://www.soros.org), one of the funders of MediaChannel.org. # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: majordomo@bbs.thing.net and "info nettime-l" in the msg body # archive: http://www.nettime.org contact: nettime@bbs.thing.net ----- Syndicate mailinglist -------------------- Syndicate network for media culture and media art Info: majordomo@mikrolisten.de; msg: info syndicate information and archive: http://www.v2.nl/syndicate to unsubscribe, write to <majordomo@mikrolisten.de>, msg: unsubscribe syndicate