In 1887, four people in Denver imagined a plan for working together in new ways to make Denver a better place. They founded a small organization to benefit 10 area health and welfare agencies while raising $21,700 that first year. That idea became the first United Way and the movement has since raised and distributed billions of dollars across the world.

In an an effort to improve the way the Cleveland Trust Company did business, the company’s president, Frederick H. Goff, established in Ohio in 1914 the world’s first community foundation, The Cleveland Foundation. He combined a number of trusts managed by the bank into a single organization. The foundation would assess the needs of the local community and make grants to community organizations to meet the needs in that region.

Before 1925 each missionary and agency of the Southern Baptist Convention was responsible for raising their own operating support.  While some thrived on this challenge there were many others who suffered.  Overall, the method known as “societal giving” had resulted in severe financial deficits, competition, overlapping pledge campaigns, and frequent emergency appeals. As well, the churches already suffering from their members, mostly Southern farmers, being devastated by the worst crop price crash in the history of the country, were besieged with constant appeals for money from agencies and individual missionaries.

The response to near bankruptcy and chaos was the invention of the Future Program Commission (now the Cooperative Program) to create a unified and centralized way to fund mission agencies and individuals. No longer would they be responsible to raise their own support but money would be sent to the Commission for coordinated collection and disbursement. Hundreds of millions of dollars for missions and the support of agencies has been raised since then and eliminated the need for individual fund-raising.

All these are examples for what Alexis De Tocqueville observed in early America. He called it “the art of association” and described our native tendency to organize and associate.

When you allow them to associate freely in everything, they end up seeing in association the universal and, so to speak, unique means that men can use to attain the various ends that they propose. Each new need immediately awakens the idea of association. The art of association then becomes, as I said above, the mother science; everyone studies it and applies it.

Not only did it allow us to solve problems but the very act of association helped prevent the negative effects of both hyper-individualism and the concentration of power in a small group of oligarchs.

Creative Destruction

Americans of all ages, all conditions, and all minds learned how to guard against such democratic perils as excessive individualism, the tyranny of the majority, and the stifling effects of administrative centralization simply by constantly joining together in groups.

Today that unified approach for meeting needs and solving problems may be fading away. It is a good example of Joseph Schumpeter’s principle of “creative destruction” where institutions are constantly being created and then destroyed when they are deemed obsolete. New options for funding ministries and organizations are everywhere.  Crowdfunding (small donations from thousands of internet donors) can raise thousands to millions in hours or days. Whatever you want to fund there is an app for that. If you want to fund journalists doing local reporting on stories you commission you can donate to Chalkbeat. Web-based aggregators like DonorSee, Give Directly and Global Giving can raise and direct money to individuals in every country around the world   If you want to help underwrite a movie or arts project you can use Kickstarter or Our Crowd.  A new twist is actually selling equity in a television series. Instead of a gift or free popcorn the investors receive a financial share in the project. A pioneer in this is the television series about the life of Christ – “The Chosen” –  produced by a limited partnership under the same name. Dallas Jenkins used “equity crowdfunding” to raise enough money for several episodes of the scripted show, offering one share for each dollar invested. Its record-setting campaign raised over $10 million from 19,000 donors.

Organizations like Praxis and Inspired Individuals bring not only funding to new leaders around the world but mentoring and access to expertise and networks of relationships.  In other words the pendulum is swinging back to “societal/social network giving” and away from large unified approaches.  Whether it is a growing failure of trust in institutions, the desire for both speed and control, the proliferation of small organizations or a host of other factors the changes will affect institutions created to centralize both receiving and giving. What will be the result?  I suspect we’ll see new versions of the Cooperative Program and United Way in fifty years (or less) as we experience another swing of the pendulum and yet another round of creative destruction.

Until then, buckle up.  It’s a great time in the history of giving.

The new book is now available on Amazon: The Edge of the Inside