Is Your Organization Ready for the Third Wave of Philanthropy?

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Hi ,

Early in my career, I wanted to double a major donor's ask from the previous year's gift. I'd done the research and knew they could give significantly more.

But before I was allowed to do that, a mentor asked me a simple question:

Why should we ask this donor for more?

I started explaining that they had just sold a company, were flush with cash, and could easily afford the larger gift. Not to mention, this would help us get closer to our fundraising goal.

Nope.

He wasn't asking why we needed the money. He was asking what would change because this donor chose to invest more.

That was a much harder question to answer.

Looking back, it was one of the most important fundraising lessons of my career. I learned that making a bigger ask starts with making a bigger case.

I've been thinking about that conversation ever since I read Nan Ransohoff's Substack on the Third Wave of Philanthropy.

If you haven't read it, here's the (very) short version:

AI is creating extraordinary wealth. OpenAI has made a commitment to direct a significant portion of that wealth toward philanthropy, and if similar commitments follow, Nan estimates there could eventually be between $37 billion and $100 billion in new philanthropic dollars flowing into the social sector each year.

Nan's (again, extremely simplified) position is that when this money comes:

1. The nonprofit sector won’t be able to absorb it.

2. Current nonprofits aren’t compelling enough to woo the tech sector anyway.

Her solution? A new generation of "philanthropic startups" founded by entrepreneurs and technologists who can tackle society's biggest challenges with the same speed and innovation that built today's technology companies. (You know, think fast and break things.)

My vision for how to manage an influx of philanthropic dollars is a little (okay, a lot) different. And I say bring it on.

While I'm certainly not the first person to weigh in on this conversation (read more here, here, and here), here’s what I’m hoping we can take away:

A sector with much more to offer

I'm willing to bet that you, dear reader, already know something many people in the tech sector don't: the power of nonprofits.

Personally, I don't believe there's a shortage of organizations capable of solving big problems, and if you're reading this newsletter, I'm guessing you don't either.

Is there room for innovation? Yes, I hope so. But I don't think we should confuse chronic under-resourcing with a lack of capability.

We already have extraordinary nonprofits tackling our communities' most pressing challenges every single day. (I know because I have the privilege of working with several.)

They've spent years earning trust, building partnerships, learning what works, adapting when circumstances change, and staying committed when funding, attention, or the political climate go awry.

But if someone from inside the tech world like Nan, an executive at Stripe, is explicitly telling us that nonprofits in their current state are not compelling enough to invest in, I think that’s worth listening to.

A solution in the making

You’ve probably surmised that I don’t think the solution is a new set of tech-run, AI-powered nonprofits.

No, I believe a much more reasonable and effective solution is for legacy nonprofits to become much more compelling, relevant, and interesting, not just to newly minted tech billionaires but to everyone who can invest in your mission.

Long before funders make an investment, they have to know your organization even exists. (It's time to retire the phrase "best kept secret.")

Then they have to understand why your approach works, appreciate the capabilities and vision of your leadership, and believe you're uniquely positioned to create the change they want to see.

The good news is legacy nonprofits already have something new organizations can't replicate overnight: trust, relationships, community knowledge, and years of learning what works.

My hope is that this conversation encourages more organizations to tell a bigger story about the future they're building and to make a stronger case for why they're worth backing.

If this new wave of philanthropy materializes, I'd love to see established nonprofits equipped with the resources to deepen their impact, pursue bolder ideas, and solve problems at a scale they couldn't before.

Organizations already making transformational change can't assume potential funders will recognize their value on their own. They have to show they're the right solution for the funder's goals.

Like I learned all those years ago, making a bigger ask still starts with making a bigger case.

To your success,

Angela