Philanthropy 3.0

I just met with Alexandre Mars, founder and CEO of the Epic Foundation. This is a Philanthropy 3.0 concept, beyond the long-term investor and activist investor model of Philanthropy 1.0 and 2.0. Epic is a technology company that facilitates direct connection between donors and charities. In his own words, he seeks to “disrupt the philanthropy industry with game-changing technology and partnerships.”

According to Mars, the biggest barrier to donation is donor confusion: “There are 160 organizations fighting breast cancer in New York City alone. How will I know that a charity is using my donation well? There needs to be transparency on use of funds to the extent of identifying the direct recipient, the young girl who is going to school because of your money.”

Mars is a builder of apps. He is very clever in his design. He has one called the Payroll Giving App, which rounds your paycheck down to the nearest dollar amount and the pennies are donated to the charity of your choice. Similarly, he has developed an app for retailers that allows a customer to round up a bill to the nearest dollar amount, with the balance going to charity.

He is also determined to make the decisions on charities receiving money as open as possible. There have been 1,900 organizations applying for funds and 10 have been selected, including a Uganda-based group that builds homes for women caring for AIDS orphans and the Ali Forney Center in New York City, which manages houses for homeless LGBT youth. Mars has 45 data points that determine the selection of charities.

But the most compelling part of the story is that Epic is a pass-through organization. The donors, whether corporations such as L’Oreal or family businesses or individuals, are matched with the charities directly. Whatever money is raised goes direct to the NGO. The funds to bankroll the 15-person operation, about $2 million per year, come out of Mars’ pocket, because he made money selling a start-up to Publicis and another to BlackBerry.

The NGO sector is now in a virtual tie with business for the most trusted institution in global governance. This is a stunning change over the past decade, from NGOs as the selfless heroes resisting corporate greed to NGOs as spending too much on overhead or failing in turning around challenges such as Zika. In fact, trust in NGO representatives as spokespeople is hardly higher than that accorded CEOs or government officials. The Epic model has the potential for changing that equation, allowing agile and young NGOs to get more visibility for their demonstrated effectiveness in problem solving.

Richard Edelman is president and CEO.

Epic Foundation