Fractal Philanthropy: Indroduction

Philanthropy has come a long way since its origins in ancient Greece. It has evolved from the simple act of giving to the poor, to a complex and multifaceted field that encompasses a wide range of activities, including charitable giving, social investment, and impact investing.

However, we see more and more philanthropic endeavours fail to meet the needs of a highly interconnected and complex world. Old paradigms and approaches stop working, while old non-profit rigid structures are unable to meet the criterias of impact, philanthropists are expecting from their investment. As a matter of fact Philanthropy became so complex, that no amount of money can change the complex systems. 

Straightforward solutions and qualitative impact interventions still embedded in the reductionist paradigm are ineffective and usually harmful. Organisational structures used in a non-profit sector to date are unable to evolve to the level of complexity the world is operating.  As the result we see that despite new trends and deeper understanding, the philanthropic market is shrinking year by year.  Trust in “heroic solutions” has plummeted and we see philanthropists are discouraged to invest as hope of  implementing visible changes, despite their best efforts and money, has been lost. 

The questions

The questions that we’re trying to answer with fractal philanthropy are:

How can we ensure money is invested in long-term sustainable qualitative solutions, without long-term investments  and increasing management fees? 

Why despite our best efforts and available funds, most philanthropic goals fail or never go beyond tax and media frameworks ?

What is being called for us ? 

Questions like that have led me to the deep explorations of systems and understanding of old structures and paradigms. It became evident that as the world has become complex and interconnected, philanthropy as a main engine of change, has also had to adapt and evolve, matching the complexity of the world’s problems. 

New complex challenges call us for new complex solutions.

Fractal organisation

While fractal organization is a basic organizational pattern in nature, it is rarely used in the organizational field. With some knowledge and patterns are appearing it is relatively new field in organizational design. However, what is evident, is that the structuring using fractal principles and properties is way more effective in tackling new highly complex organizational tasks. In a manufacturing for example, Patrick Hoverdstadt the author of the book “The fractal organization” provides a case, how same job, organised in cells decreasing complexity by a staggering 30 millions times. But that’s not the only application, it can applied in any field of organizational activity, from coordination and  monitoring to, to facilitating change and governance. Simply put - by applying the right structures, organizations can potentially handle much bigger complexity with less resources and capabilities.

There is strong evidence and practical use-cases that demonstrate how a fractal approach applied to social and environmental challenges can potentially reduce the complexity of management structures, costs, and increase the effectiveness of all kinds of efforts by multiple factors.

Beyond the capability building

Capability building principle nowadays is at the crux of any philanthropic endeavours. It almost became a buzzword for social and impact investors, while reality is usually far from that. As the structures of underlying systems haven’t changed, the capability building is very limited to the organization itself and rather a “shiny slogan”, that pushes the non-profit sector to a profit-making model. We can easily identify this trend by analysing the income streams of a regular non-profit, where we see more than 50% of income comes from profit-making activities and usually experienced businessmen in the positions of presidents and C-suit receiving six-figure salaries. That is to say, at least 500k of philanthropic money a year going to running the organisation itself, rather than directing to the impact or beneficiaries. What we're seeing is that up 90% of all the money is consumed one way or another by the organisation itself. I would argue that this phenomenon is embedded in the structure. It doesn’t meanthat there’s no impact, there’s, but it is fair to say that it highly limited if measured at all.

The fact is, that the existing structure of the whole nonprofit sector just cannot sustain itself, not to mention making a significant change in the society. You might confront me with many examples, that might demonstrate some successes, however the structure asks me the following:

If a nonprofit organization cannot sustain itself, how can it produce the organizations that can ?

It’s a rhetorical question. I am confident that capability building is usually on-paper, limited in reach and rarely goes beyond a catchword in presentation breaking through investors doubts.

In contrast, the Fractal organization principles and its unique capabilities begin with the mother organization that is creating or facilitating new organizations in the same fashion as itself. 

As many practical cases demonstrate, Fractal organizations, implemented in social projects don’t require a C-suit, while capable of growing faster and without complex chain of management and control all the way down.

That’s a main paradigm shift and cornerstone of fractal philanthropy.

A fractal approach to philanthropy

In recent years, I’ve been developing and applying fractal principles in organizational design and social projects. In nature, the fractal principle governs the way complex systems organize themselves, and we can see the same principle at work in a new emerging organizational pattern called “Teal organization”, that is a fertile ground for our  fractal approach to social investments.

By following natural ways of adapting to the complexity, we have found the extraordinary capabilities of these structures to grow and expand, matching and exceeding the variability of the world, evolving the world itself. 

The essence of fractal design is levels of abstractions, built though acts of emergence. Actors of the system challenged by the complex task begin building connections and relationships. As they grow, so grows the  complexity of  the management of connections. However, instead of continue growing in size, forming new layers of management, they form a foundational level, providing new levels with resources and services, offering freedom of expressing common mission. Common mission is the link between all levels, while management of tasks and decision-making is made exclusively by the members of one level.

By following the fractal principle of abstraction as well as other fractal properties, we can build more scaled solutions that address deep root causes of the problem and overcome the complexities of the world.

By adopting principles of  fractal organisation to philanthropy, we've created a new approach of handling social projects and overcome the complexity - The  Fractal Philanthropy

By applying fractal principles in philanthropy, we are confident that we can significantly enhance the impact and  expanding the range of opportunities available to investors seeking meaningful change. We will be able to observe tangible, measurable improvements in the communities that we invest in and have the assurance that funds are being used in a sustainable way. 

Fractal philanthropy

Fractal philanthropy is an organisational structure, governance models and set of principles, that uses fractal principles and properties to build self-repeated inherited organisational matrices that scale up to match the complexity of a challenge.

• It involves breaking down complex problems into smaller and more manageable parts, and addressing them at different levels of scale using self-organization principle. This approach allows for solutions to be tailored to the specific needs and perspectives of the communities they serve, rather than imposing a one-size-fits-all “global” or “billion dollar” solution. At the same time this structure maintains independence and self-governance of these communities, allowing them to be self-sustained, self-accountable and provide well-being by empowering every community member from ground-up.

• This design not only allows these organisations to act in self-organising manner and grow in size organically, but also gives inner capability to grow in complexity levels matching every scale, address multiple problems and meet multi-stakeholders demands, without overhead and rising collaboration transactional costs and shifting the burden (making your philanthropic act an infinite liability).

Fractal philanthropy can be applied in various fields of philanthropy such as microfinance, impact investing, and community development, by providing tailored solutions for each specific problem at different levels, and creating a ripple effect on the overall system of any size.

Summary

Fractal philanthropy is a holistic, adaptive and tailored approach to philanthropy, modelled after the fractal organisation found in nature, that enables philanthropists to address the root causes of problems at a fraction of cost and management overhead. 

Needless to say it’s a new method and it needs more research and applications of its principles to build a more scientifically proven and repeatable framework, but it’s a promising field that can revitalise the philanthropic market and improve our efforts to solve most urgent world’s problems.

As we move forward, we will continue to conduct research and analysis to further refine and improve the approach, and we continue to actively seek out partnerships and collaborations with other organizations and experts in the field.  By following our main principle “Complexity fights complexity”, we continue our efforts to design and discover how fractal methods meet the needs of philanthropy and build more evidence and case studies.

I appreciate your reading and attention to philanthropy and supporting the well-being of the world. We invite you to explore this new approach with us and see how it can help you make a real difference in the world. If you are interested in learning more about our innovative methods or wish to try them out to address your own challenges or run a pilot programme, please feel free to contact me at [email protected]