The tech industry has produced a lot of wealth, and naturally, the nonprofit world has taken a great interest. It would be a mistake, though, to work with them in the same way that our organizations have always worked with people in older and more traditional industries. In this article, Jenn Grasso of Bowdoin College talks about how to approach the hackers of Silicon Valley.
Hacking the Hackers: Prospecting the Silicon Valley Way
By Jenn Grasso
Silicon Valley has challenged every aspect of business and personal life, from reading the top news headlines on Twitter to earning extra income renting out our homes on Airbnb. This new tech wave, led by a sweatshirt and jeans-wearing elite, is representative of today’s changing philanthropic landscape. These new tech barons are disrupting countless industries including retail, music, transportation, publishing, and now even prospect research. How do we, as prospect research professionals, make the shift from researching prospects of a Carnegie-style old-world mindset to the Mark Zuckerbergs of the world?
In a 2015 manifesto in the Wall Street Journal, Napster’s co-founder, Sean Parker, points out that the one thing that all of these Silicon Valley “technologists, engineers and even geeks” have in common is that they are all "hackers." He goes on to state that “the major companies that now dominate our online social lives (Facebook, Twitter, Apple, etc.) were founded by people who had an early association with hacker culture. I still consider myself to be one of them. Once you adopt the mind-set of a hacker, it’s hard to let it go.” So, what is the mind-set of a hacker? According to Parker, hackers share the following values:
Given this set of values, non-profits now need to make a shift in the way that they identify, engage, cultivate, and solicit these hackers. Here are some tools we can use to identify hackers with major giving capacity in our databases:
Once you’ve uncovered these top hackers in your database, it is important to tee-up Major Gift Officers to think like hackers in order to successfully engage, cultivate, and solicit them. We are so accustomed to the "East Coast" or "Wall Street" view of philanthropy where private foundations and "safe" donations given to large institutions rule the land. It is imperative that we start thinking of ways to engage the "West Coast" philanthropists given the vast amounts of wealth being accumulated by these young hackers. The majority of these "data geeks" are not prepared for the enormous amount of wealth and responsibility they have been handed, which is where we, the traditional yet data-driven non-profits, can step in and help guide them as they come into contact with a more traditional model of philanthropy.
Some examples of institutions that are courting hackers with success are Duke University and Babson College. Duke created "DukeOne," a pledge program in which start-up executives promise to donate 1% of their venture’s equity to the institution if it is sold or offers stock through an IPO. Babson’s "Founders Fund" works in a similar fashion as an extension of planned giving, where “donors contribute a percentage of their future equity position in their business (usually 5%) to the College. At the time of the company’s sale, initial public offering, or other liquidity event, the contribution is transferred to Babson. Depending on the size of the contribution, it may be applied to a range of current-use or endowed funds at Babson." Start-up entrepreneurs have a positive income maybe one out of five years, so the traditional mode of giving every year is not really a model that fits with them. This format mimics several pledge platforms, like Pledge 1%, Pledge 1 Boston, Patagonia’s 1% For the Planet, as well as Salesforce’s 1-1-1 model where they promise to “annually earmark 1% of a company’s equity, products, and employee time for charity."
Hackers are innovators who love to disrupt the norm and produce better versions of familiar and existing things. They are problem-solvers who want to be engaged on the front lines, be shown the data, and see how their gifts are making an impact. If institutions learn to speak in terms that these donors understand, we may be able to better solicit gifts in return. The question non-profits need to be asking themselves is not when are hackers going to disrupt our institutions, but how can we best work with them in this new era of innovation?
© 2021 New England Development Research Association