Towards a New Social?Contract

Reimagining Modern Philanthropy

Our current social contract is broken. Across society, people of all backgrounds and demographics recognize this unjust reality.

Meanwhile, humanity is confronted by numerous urgent and complex challenges, but we lack the organized will and data infrastructure to execute on viable solutions.

Despite how intractable the world’s problems may seem, there is cause for hope: we can meaningfully address humanity’s problems at scale. But, to achieve this, we must innovate. We need to take a pragmatic and data-driven approach to solving the world’s most pressing problems.

In 2020, it is clear we cannot rely on outmoded approaches to problem-solving any longer. Humanity needs to band together and take practical, organized action. This means building an infrastructure to support modern, data-driven models for philanthropic work.

It is time to harness technology for the collective good. A more virtuous, prosperous, and equitable world is surprisingly attainable. It is time to restore the social contract and build a society that works better for all people.

Background: Social Contract Theory

The concept of a Social Contract, in its most essential form, is the idea that individual members of society agree to cooperate for mutual benefit. We all play a part in a reciprocal exchange. Our collective participation in these shared agreements is the common thread that holds the social fabric of society together.

The dream of a virtuous, successful society, and how to achieve one, is a subject that has been explored by philosophers throughout the ages. The foundation of our Western socio-political system is deeply informed by the philosophical study of the social contract, spanning from Plato, to Hobbes, Locke, Rousseau, and Emerson and beyond.

According to Social Contract theory, things get dicey when the Contract is not being honored by leaders or citizens: When the government fails to secure people’s natural rights (Locke) or satisfy the best interests of society’s “general will” (Rousseau), citizens can withdraw their obligation to participate as well. If the agreement is not being honored for most people, the people are obliged to change course through elections or whatever means available.

If we take an honest look at our social contract in the modern world, we see what everyone knows: it does not currently serve the common good. Rather than refusing to participate in a broken system, we need to take practical steps to establish a new social contract that works for everyone.

Philanthropy’s Sordid Past

The mainstream philanthropic system as we know it was formed during the era of the 19th century American industrialists. These wealthy individuals focused on solutions for the most obvious and immediate needs of their day: education and medicine, for example. They received generous tax offsets to encourage giving, in the hope that wealth would provide support to the less fortunate. An entire industry emerged alongside both the public and private sector: the charity sector.

As industrial society evolved, the nonprofit sector evolved with it. Some nonprofits were very altruistic and effective in solving problems affecting people, but others were so inefficient that they did not always produce meaningful outcomes for the communities they purportedly served.

Oftentimes, nonprofits experienced “mission creep”, as the donors upon whom they relied for survival, dictated the terms and scope of the work they could do. Despite these donors’ best intentions, they were often blinded by various biases, and were prone to projecting their own values. Unwittingly, they were reinforcing the very systems of inequity they sought to alleviate.

The Modern Philanthropic Landscape

Americans give approximately $450 billion per year (as of 2019), which accounts for roughly half of all global giving. With all that money, all that good will, one would think we’d be so much better at solving the problems we face.

Unfortunately, the infrastructure for philanthropy has remained largely unchanged since the time of the Rockefellers and the Carnegies. The Charitable Industrial Complex continues to be an inefficient and inherently unequal machine, which does not dare solve for structural problems. Too often, philanthropy can serve as a means of donor guilt-washing or self-aggrandized tax minimization.

As any nonprofit worker will tell you, the NGO landscape is extremely difficult. Doing good work in and of itself is not good enough. NGOs have to sell. They have to advertise. The ones with the biggest brand cache, largest marketing budgets, and sophisticated fundraising capacity, get most of the funds. A majority of donations go to the biggest players most able to sell their story to funders. It is a vicious, self-perpetuating cycle: the status quo is reinforced, while crowding out new entrants and nonprofits run by people from less-privileged backgrounds.

All nonprofits struggle not only with restricted funds contingent on donor desires, but also the lack of a streamlined process for reporting. As a result, nonprofits become trapped in the torturous purgatory of “accountability”, attempting to meet multiple conflicting donor KPIs (key performance indicators).

Grassroots organizations are often the best knowledge bases on their specific community. They know how it functions, what its needs are, and they have key local relationships. This empowers them to effectively implement solutions to address real problems. However, they are forced to spend a disproportionate amount of time and resources fundraising, instead of focusing on urgent programmatic needs.

Paved with Good Intentions

In these times of great change, people desperately want to help, but the process of charitable giving is fraught with friction and difficulty. It just isn’t easy to identify the most-impactful, direct-response nonprofits. People struggle to determine what a “good” nonprofit is, and often, their good will gets channeled to prominent or trending nonprofits, while the smaller NGOs serving underprivileged communities are left under-resourced.

Crowdfunding has been hailed as a major innovation in philanthropy, but the current operational model is by definition reactive and piecemeal. While sites like GoFundme have indeed helped a lot of people, they focus on one-time financial alleviation and not on systems level change.

So, despite some innovation in technology, the charity landscape has not really evolved meaningfully for any of its stakeholders. Philanthropists, nonprofits, and individuals still operate on an outmoded way of giving and receiving funds.

We need to develop new ways to effectively and efficiently solve humanitarian issues at scale. It is time to channel our good will into transparent systems producing real outcomes.

Doing good better

People’s patience for good intentions that reap little benefit is wearing thin: we must accelerate the rate of change. We can do it. A new social contract is ridiculously attainable. To achieve it, we must transcend old tired tropes and limited paradigms of what is possible. Civilians, nonprofits, governments, and the private sector must come together to serve the common good. We must fully commit as a society to invest in communities– or risk existential peril.

Necessity is the mother of invention. The complexity of our global situation today requires us to build sophisticated tools. We can build a social good ecosystem that thrives alongside our economy. It is time we utilize our know-how, wealth, and technology to meaningfully address the systems of inequity that negatively affect us all. It is time we do better at doing good.

To learn more, visit www.humanitas.ai and www.dandi.io