Five years ago, tech entrepreneur and venture capitalist Marc Andreessen famously wrote, “Software is eating the world.” It’s hard to think of more prophetic words coming out of Silicon Valley, and new players that have software at their core continue to reinvent entire industries. Uber disrupting the taxi industry and Airbnb the hospitality industry are just two examples.
Unfortunately, the software revolution has not benefited all members of society equally. The reason for this is simple: The vast majority of software is developed to maximize profit, not to deliver social good. The Silicon Valley business model is laser-focused on products projected to be hugely profitable in big markets. Certain commercial products, such as the mobile phone, have a wider positive social impact on the majority of humanity, but financial constraints limit the best intentions of many for-profit entrepreneurs. As a result, Silicon Valley has failed to fill the massive unmet needs of the social sector on issues ranging from poverty and education to human rights and the environment.
Silicon Valley is well aware of the gap between delivering profits to shareholders and providing social good to the world. It’s that awareness that led to robust corporate social responsibility (CSR) programs, steep nonprofit discounts on otherwise expensive software, Salesforce’s 1/1/1 model and many software billionaires committing their fortunes to social efforts through the Giving Pledge. These efforts have been a boon to the social sector.
Even with these efforts, the great irony is that the social sector has not fully benefitted from what Silicon Valley does best: Using software to achieve scale and using the data inherent in software solutions to continuously improve services, identify new opportunities and demonstrate impact. That is the big unmet need, and the reality is that the social sector must learn from Silicon Valley’s software prowess if it ever wants to achieve the incredible lasting scale and penetration that the world’s most successful software companies have achieved. Software must eat the social-good world too — but with a focus on maximizing social impact, not profit.
The social sector is long overdue for a software and data revolution characterized by delivering greater social impact to more members of society. The need is especially acute given that so much of what the social sector does is push information around.
Take, for example, the social service referral field, which seeks to connect people in need to the health, human and social services that can help them most. Social service data is largely siloed, out of date and incomplete. As a result, vulnerable members of society who need social services most — such as the half-million Americans who are homeless — can’t always find the support they need. A software and data revolution for the social sector would break down these barriers so individuals in need are seamlessly and quickly connected to the 1,200 referral providers in North America and the 100,000-plus organizations providing the social and human services they need.
There are a handful of steps we must take now to usher in this software and data-driven revolution across the social sector:
- Silicon Valley and the social sector must open up lines of communication. The former is a treasure trove of proven innovation and best practices. The latter holds valuable insights into the communities they serve and can help shape the actual software innovation. It’s straightforward to predict what innovations will probably be adopted in the near future, given that the social sector is five to 15 years behind the for-profit industry in tech applications. For example, nonprofits are just starting to use chat-based communications (such as SMS, WhatsApp or web chat) to improve client satisfaction and to save money just as for-profit companies have for years.
- Nonprofits must increase social sector data literacy for running organizations more efficiently and measuring impact. Every organization must have the desire to know what data it needs, how to collect it, how to analyze it and how to make better data-driven decisions.
- Social entrepreneurs must double down on catalyzing the use of software and data across the social sector. We need to shift our philanthropic mentality away from funding one-off projects to a model that drives systematic change across entire fields. Investing in the capacity of the social sector by putting data and software to work today will unlock benefits across the social sector tomorrow.
My prediction is that the majority of revolutionary nonprofits started in the next decade will have software and data at their core shaped by the voices of the people they serve. The impact of a $10 million investment in software to help solve a major social issue such as homelessness will not solely be measured by fewer people on the streets, but also by its ability to deliver $100 million in savings across the sector. Or, we might invent a completely new way to meet a social need that enables us to serve 10 times more people for the same amount or even less money. Software will eat the social good world.
Silicon Valley wants to play a role in addressing unmet social needs. Philanthropy and corporate social responsibility have just scratched the surface so far. Now is the time to unleash what Silicon Valley does best: Software and data. To borrow from Andreessen: “That’s the big opportunity. I know where I’m putting my money.”
Jim Fruchterman is the founder and CEO of Benetech, a Silicon Valley nonprofit that empowers communities in need by creating scalable software solutions. Benetech's work has transformed how more than 500,000 people with disabilities read, made it safer for human rights defenders in more than 50 countries to document human rights violations, and equipped environmental conservationists to protect ecosystems and species all over the world. Fruchterman is a MacArthur Fellow, a recipient of the Skoll Award for Social Entrepreneurship and a distinguished alumnus of Caltech. Reach him @JimFruchterman.
This article originally appeared on Recode.net.