Wednesday, September 30, 2009

Social innovation- Catalytic Philanthropy

Before taking this class, my definition of innovation was only limited to technical innovation, such as ipods and laptops. I never thought an innovation could be a process, idea, or public policy which changes our routine or beliefs to reach a social need or a shared vision ( Westly and Antadze, 2009). Numerous nonprofit or for-profit organizations and governments have put forth some innovative policies or measures, which are called social innovations, in order to tackle current social problems. Nonprofits face some problems, including the lack of funding, and the ineffective policy implementation. Mark R. Kramer, thinks that donors should actively engage in solving the problem, not just write down a check to support nonprofits as in conventional philanthropy. He proposes a new approach “Catalytic Philanthropy.” If philanthropists really care about a problem and are able to analyze it in detail, they would have more knowledge to know how to make the society better. Kramer’s article “Catalytic Philanthropy” in Stanford Social Innovation Review mentioned an example of Tom Siebel, founder of a software company and a philanthropist. He tackles mesh abuse among teenagers in Montana by mobilizing experts and advertising agencies to film ads to inform teenagers how terrible meth abuse is and how it is related to the crime. The result turned out well. The rate of mesh abuse decreased 45 % among teens and 72 among adults from 2005 to 2007. Below are links to the websites about the article “Catalytic Philanthropy” and also about social innovation.

The article “Catalytic Philanthropy”
Social innovation

I like this idea of Catalytic philanthropy and also agree with his point that donors should make sure their money is used effectively. However, I think that people donate their money to organizations, because they expect the organizations to have experts who can put the donated money to use effectively, very similar to people hiring an investment manager to manage their wealth, because they believe he/she can earn a better return on the invested money.


  1. I agree, Brenda. While I think that so-called Catalytic Philanthropy could be used in combination with donation to existing nonprofits, I have some problems with the article's assumptions. While he hits on some legitimate concerns, many of his concerns seem generalized and unsupported by relevant evidence. For example, he sites our ranking among OECD countries as evidence that nonprofits in the U.S. are not effective- a highly suspect correlation given the complexity of the issues and data involved in that ranking. He also makes some broad statements about the entire nonpofit industry- which is like me saying that because we have been in a financial crisis, that is proof that businesses in the U.S. are poorly run. The issue is both more complex and more specific.

    Additionally, some doubt has been cast on the effectiveness of the ad campaign in Montana. This article says that the ad campaign may not have been as effective as originally thought, and may actually have increased the acceptability of meth use in the area:

  2. I agree that organizations should be equipped to make sure money is put to effective use. There are donors who want to get involved in making sure this happens - jackpot for the organization. But if a donor wants to give money to an organization that shows it can be trusted (by being transparent about CEO salaries, fundraising expenses, how much of donations actually goes to program services), then the donor has made a respectably informed decision.