How Big Data Will Change the Face of Philanthropy

By Lucy Bernholz

“It is more difficult to give money away intelligently than to earn it in the first place,” observed one of the great philanthropists of the 20th century, Andrew Carnegie.

Today, with almost two million nonprofits in the U.S., the challenge of knowing which to support and which to avoid is more challenging than ever. How can individuals and foundations put their money where it’s most needed, and in ways that will be most effective? And how can charities themselves spend the dollars they receive in ways that best fulfill their missions?

Big data may hold some answers.

Just as the ability to access and analyze mountains of new information is transforming corporations, the era of big data has the potential to revolutionize the world of philanthropy—for both donors and charities. More, better and faster information can help donors channel dollars to the organizations that are most effective. It can help nonprofits identify the strategies that work best at fulfilling their missions. And it can guide philanthropies to the fundraising tactics that are most successful.

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Source: The Wall Street Journal