Opinion: How ‘Fantasy Philanthropy’ Can Reward the Best Charities

An author has an unusual approach for dealing with the challenge of how best to steer money to charities that have the best results: borrow an idea from the fantasy-sports world.

Writing in the online magazine Slate, Douglas K. Smith notes that fantasy sports is now “a billion-dollar market in which players operate leagues whose entrants win or lose based on agreed-upon metrics.”

In philanthropy, he says, donors would pool money to deal with a topic such as improving prenatal care. They would then give a certain number of groups the same amount of money to carry out their programs. At the end of a set period, the groups would be judged on whether they met agreed-upon goals and those that did the best would get more money for a second round.

“With a committed flow of capital, the winning nonprofits could bet on the strategies for growth that are tried and true in the private sector — like building distribution channels, advertising, and branding,” writes Mr. Smith, author of On Value and Values: Thinking Differently About We … in an Age of Me. “And philanthropists enamored of venture and strategic approaches would reap the satisfaction of transforming inefficient cottage industries into endeavors with much broader and deeper impact.”

The article is part of a special series on philanthropy appearing on the magazine’s site today.