A Giving Thought discussion paper Networking Opportunities: Rediscovering Decentralisation in Philanthropy and Civil Society? December 2016 December 2019 1 Background to This Paper This paper was presented at the 48th annual ARNOVA conference in San Diego in November 2019. As such, it is slightly more academic in tone than standard CAF Giving Thought output, and goes into theoretical issues in somewhat more detail. It is, however, intended to remain accessible and of interest to non-academics. It will be followed in due course by a shorter discussion paper that will summarise the key points and put them in a more directly practice- based context. The abstract of this paper, as presented, is as follows: Abstract Decentralised, non-hierarchical models in the non-profit world have historically taken a back seat to centralisation and hierarchy. However, new technological capabilities have brought a renewed focus on the potential for decentralisation in many spheres of activity. What might this mean for philanthropy and civil society? This paper explores how technology-driven decentralisation narratives may apply to the context of philanthropy and civil society. The analysis is placed against the wider theoretical and historical background of the notion of decentralisation, to highlight known strengths and weaknesses of decentralised approaches. Using historical evidence, the paper argues that in the context of philanthropy and civil society the failings of decentralised approaches have driven a long-term trend towards centralisation. The paper then outlines some of the key affordances of current technologies (both established, such as the internet; and nascent, such as artificial intelligence and blockchain) which are claimed to enable greater decentralisation. It assesses whether these genuinely address the known limitations of decentralised approaches or will eventually encounter many of the same problems as previous attempts to operate in a decentralised manner. The hope is that this analysis provides a framework for a more balanced discussion about the relative strengths and weaknesses of centralised and decentralised approaches in philanthropy and civil society, which can inform considerations of the potential impact of technology. Registered Charity number 268369 2 Contents 1) Introduction .................................................................................................................................. 4 2) Theorising Decentralisation ....................................................................................................... 7 3) What Drives Decentralisation?................................................................................................. 15 I. Lack of trust in existing institutions ....................................................................................... 15 II. Overcoming Power Asymmetries ........................................................................................... 16 III. Anti-fragility and resistance to attack ................................................................................... 16 IV. Improving Efficiency .............................................................................................................. 17 4) The Limits of Decentralisation ................................................................................................. 21 I. Transactional Inefficiency ..................................................................................................... 21 II. Recentralisation: The Iron Law of Oligarchy and the Tyranny of Structurelessness ............. 21 III. More talk, less action ............................................................................................................. 23 IV. Decision making and accountability ..................................................................................... 24 V. Communication within a decentralised group ...................................................................... 25 VI. External Communication by a Decentralised Group ............................................................. 26 VII. Exclusion and Participation ................................................................................................... 27 5) Centralisation in Philanthropy & Civil Society ....................................................................... 29 I. Centralisation of Philanthropic Transactions ........................................................................ 30 II. Centralisation of Philanthropic Systems ................................................................................ 34 III. Centralisation of Organisational Governance ....................................................................... 38 6) The Promise of Decentralisation through Technology ......................................................... 47 I. Information ........................................................................................................................... 47 II. Communication ..................................................................................................................... 48 III. Peer-to-peer (P2P) Transactions ............................................................................................ 48 IV. Trust ....................................................................................................................................... 49 V. Transparency ......................................................................................................................... 50 VI. Organisational Governance ................................................................................................... 51 VII. Process Automation ............................................................................................................... 51 7) Platforms & Networked Social Movements: Decentralisation through Technology in Philanthropy & Civil Society ............................................................................................................. 53 I. Decentralising Transactions .................................................................................................. 53 II. Decentralising Systems .......................................................................................................... 56 III. Decentralising Organisational Governance ........................................................................... 58 Registered Charity number 268369 3 8) New Models, Old Problems: Does Technology Overcome Known Challenges of Decentralisation? ............................................................................................................................... 60 I. Power ..................................................................................................................................... 60 II. Trust ....................................................................................................................................... 61 III. Offline Connections & Experience ......................................................................................... 61 IV. Information & the Attention Economy .................................................................................. 62 V. Leadership & Authenticity ..................................................................................................... 63 VI. Altering the Nature of Philanthropic Decision-Making .......................................................... 63 9) Conclusion ................................................................................................................................... 65 Registered Charity number 268369 4 1) Introduction Technological development is having a profound effect on all aspects of society. Over the last 30 years, the internet has reshaped the ways in which we communicate, interact, learn and work; and now the emergence of new technologies such as Artificial Intelligence (AI), blockchain and Virtual and Augmented Reality (VAR) has accelerated the pace of change, (Schwab, 2017). The focus so far when it comes to analysis of the potential impact of this Fourth Industrial Revolution on philanthropy and civil society has been primarily on the ways in which technology is enabling us to tackle social and environmental issues ─ around which an entire Bughin et al, 2019) ─ and on the ways in which technology can make non-profit operations more efficient and effective through the provision of new tools for fundraising or improvements in the transactional infrastructure for philanthropy. In addition, as awareness of the potential negative impacts and unintended consequences of technology grows, we are also seeing more philanthropic funders and civil society organisations (CSOs) begin to ask what new challenges technological development may bring for the people and communities they exist to serve and what role funders should play in addressing them. (Davies, 2017a). One area that has received less attention so far is how technology will alter philanthropic and civil society governance models. This is despite the fact that the radical transformation of models of governance is an important element within many broader discussions of the impact of technological development. In particular, a strong narrative has emerged around centralis made high-profile and bold predictions about the impact that new capabilities to coordinate in networks, without hierarchy, will have on society in coming years. (e.g. Benkler, 2006; Shirky, 2008; McAfee