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How To Create Social Innovation? Fund It Like Tech Startups

Will bringing a Silicon Valley mindset to how we measure success in social entrepreneurs get more results?

Sal Khan recently visited Google and spoke about his early ambitions. Before Khan Academy had raised its first million or grabbed headlines around the world, Khan had a vision to bring "a free, world-class education for anyone, anywhere." He thought big from the beginning.

Top tech startups and leading social ventures have a lot in common. They take risks, create fundamentally new business models, and match large-scale challenges with big ambition. In many ways, we’re natural partners.

After spending eight years at the Gates Foundation and five years at Google, I’ve seen the benefits and risks of bringing a Valley mindset to backing social entrepreneurs. Tech philanthropy is often willing to make big bets and support emerging solutions. But we have blind spots. Our strengths and weaknesses point to how philanthropy can evolve to better support social innovators.

Tech companies often bring an appetite for risk to philanthropy—essential to challenging the status quo on global problems. The social sector needs risk capital; governments and traditional funders often can’t play this role. At Google, we encourage our grantees to think big and embrace a launch and iterate approach. We funded Khan Academy in its early days, providing $2 million in September 2010 to encourage its founder’s bold thinking before the model was proven. We "fail fast" in the Valley. Whether it’s eradicating disease or transforming education, we need to encourage the same mentality in social entrepreneurs by funding early-stage ideas with great potential.
While embracing risk is important and natural for many tech companies, a sense of pragmatism is also needed. While working at the Gates Foundation, I lived in India to launch a $300 million health initiative, and saw firsthand how technology is transforming the country. I was impressed by the engineers who were pushing boundaries while demonstrating a true understanding of the user. Pratham, for example, has become the largest education NGO in India by using technology wisely, iterating based on data, and partnering closely with governments, educators, and community to address underlying issues and student needs.

Google’s highest standard is to focus on the user, and we need to seek the same in nonprofits. In this respect, tech philanthropy doesn’t always practice what we preach. It’s good to fund innovative new solutions, but we need to resist falling in love with ideas that dazzle on the whiteboard but don’t have impact on the ground. We need leaders with tech savvy and in-country experience. Homegrown solutions like Pratham are often the best poised to succeed. Silicon Valley can learn a great deal from this balance of innovation and awareness of the realities of tough markets.

Like many tech companies, Google is a data-driven company. We strive to measure outcomes without getting bogged down by process. We can bring that flexibility to our evaluation. I see a cutting edge in the nonprofit sector of tracking metrics, where grantees and funders receive information at the same time. Charity: Water, for example, has taken a first step towards this radical transparency with a system of sensors and monitoring technologies that provide real-time status of projects to ensure water is flowing over time. We haven’t figured out how to apply this kind of real-time, open data to every grant—but we’re pushing for it.

For tech philanthropy, we can bring the most to the table when we support emerging innovators with an approach similar to that of our companies: fail fast, know your user, and make data-driven decisions without getting caught up in process. It’s time for Silicon Valley funders to apply our own business ethos to our grantmaking.