Thursday, December 28, 2006
That is what a wise supporter advised me soon after we started GlobalGiving. He was referring to the hype surrounding the dot-com boom.
Lots of people were talking back then about all sorts of new possibilities in the philanthropy arena. There were meetings and conferences and papers and excited drawings - on whiteboards and napkins - of potential "ecosystems" And a number of experiments were launched.
Five years later, a lot of the hype has died down. Many of the experiments have failed or stalled. Some were all talk and no action. Others failed due to bad concepts, poor execution, or just bad timing.
But many others are succeeding. I was flattered when Monitor Institute called GlobalGiving the "most mature and established of the new philanthropy marketplaces." We have more than doubled in volume of donations each year since we started, and over seven hundred projects have been funded.
But as I said, we are not the only success story (I will highlight others in coming posts). And, together, the success stories now provide a critical mass for the emergence of a fully fledged philanthropy marketplace.
What would such a philanthropy marketplace involve? As my friend Venkat Krishnan, founder of GiveIndia, and I have often discussed, it would include the following components:
* Exchanges - where philanthropy transactions occur
* Investment Bankers - who help larger organizations secure funding
* Investment advisors - who advise large donors
* Investment analysts - who provide independent analysis of organizations and projects
* Private equity funds - managed on behalf of high net worth funders looking for high (social) return social investments
* Mutual Funds - baskets of philanthropic investments that help donors diversify risk and focus on a theme or country
* Venture philanthropists- funders who specialize in high-risk, high-return projects.
* Standards agencies - which develop criteria for effectiveness, transparency, and accountability
* Ratings agencies - organizations that give ratings to philanthropic organizations based on agreed reporting standards
In this emerging marketplace, the lines between for-profit and non-profit organizations will be increasingly blurred, with micro-credit institutions and even regular venture capitalists getting into the act.
Sometimes one organization will perform or enable several of the above functions. For example, at GlobalGiving we provide an exchange for transactions, but a major donor has also used the platform to create a mutual fund focusing on Human Capabilities. We have a mechanism for reporting transparently on project progress, and we have implemented the beginning of a feedback and rating system.
But a full marketplace will have many different organizations and institutions meeting varying demands of both donors and recipient organizations. There is not a single approach or mechanism that can meet all needs. "Different strokes for different folks" is as true in this sector as in other sectors.
The emergence of this full-blown philanthropy marketplace is not a foregone conclusion. It will take lots of hard work, an increase in cooperation and inter-operability among emerging components of the system, and significant financial investment. But unlike five years ago, the vision is now on the horizon.
In its excellent report "Future Matters," The Monitor Institute predicts we are at a tipping point in the emergence of the philanthropy marketplace. Lucy Bernholz predicts that we are about to see "meaningful commercial investments (in scale and scope) in social good, including online philanthropy exchanges." She continues: "2007 might be the breakthrough year I've been predicting."
I plan to write more on this topic - including highlighting some of the more successful emerging players such as DonorsChoose - in the weeks ahead. But in the meantime, I hear the voice of that wise advisor whispering to me: "Don't talk. Do." So I better get back to work.
Thursday, December 21, 2006
Tuesday, December 19, 2006
"You can provide schools, but children will not learn if they are hungry."
- "Foreign Aid," The Economist, April 1, 2006
Two Returned Peace Corps groups have won $5,000 prizes to be donated to their projects on GlobalGiving.
Returned volunteers from Burkina Faso and Morocco walked away with $5,000 each after each group mobilized more than 100 donations for their projects.
Friends of Burkina Faso supported a project called Noon Meal Improves Girls' Learning in Burkina Faso . This project delivers something very simple, school lunches. But this simple thing can dramatically improve educational outcomes and keep girls in school. And keeping girls in school is one of the most cost-effective things that can be done to spur economic and social development. What I like about this project is that $50 will enable a girl student to eat lunch for a whole year! You can't beat that.
Returned volunteers from Morocco supported the High Atlas Foundation’s project Tree nursery to benefit 10,000 Rural Moroccans . As the project description notes:
This nursery will provide a cash crop that will increase the income of 10,000 inhabitants by at least 150% after two years, offer a more diverse diet with fruits, improve soil and water quality, and combat overgrazing and deforestation.A $100 donation to this project plants 400 seedlings and sustainably increases incomes for 4 families. Not bad bang for the buck!
Thanks to the National Peace Corps Association for partnering with us on this initiative. Special thanks go to Kevin Quigley, the President of NPCA for proving the leadership to allow this possible. And hats off to Tony Gambino for coming up with the original idea, designing the whole thing, and getting out the vote. Check out Tony's Blog for more details and discussion!
The prize money was provided by an anonymous donor to see if there is potential in mobilizing networks. The results of round one have been very positive, and we will likely run similar competitions in the coming year. If you have ideas for future competitions, please send them to me.
Sunday, December 17, 2006
"Carefully planned and intelligently directed philanthropy may be the best answer to the claim that aid doesn't work."
In an excellent article in this week's NY Times Magazine, Peter Singer considers the moral case for philanthropy. He discusses whether donors give away money out of a sense of duty or because it makes them feel good.
He concludes that people give away money for both reasons. His punchline is that, in the end, the motivation is not as important as the incredible potential for leveraging philanthropy to solve poverty.
A UN commission has estimated we need to spend an additional $50-75 billion per year to meet the Millennium Development Goals - which would mean the end of most poverty worldwide.
Singer calculates that Americans alone could provide over $800 billion per year in philanthropic funding without substantially reducing their standard of living. This is ten times the amount needed, and it does not even take into account the money available from philanthropy in other countries.
The availability of money is not the problem. The system by which the money flows to high impact projects is the current binding constraint. If we create a system that allows donors all over the world to connect directly with useful projects that resonates with their personal interests and values, we can harness this $800+ billion and substantially wipe out global poverty within a generation.
That would be a legacy worth leaving.
Saturday, December 16, 2006
This quote comes from a blog by Antonio Gould, who says that his knowledge of international development is limited. His blog is the perfect example of why even people with limited experience can have a large positive impact if they are empowered to get involved.
Globalgiving seems to me a formalised way to search for these kinds of projects and give directly to them. What I find interesting about this is that it’s another example of how the internet is helping to create a long tail economy - this time in the charity / NGO sector. It exactly parallels the changes going on in other forms of commerce, one great example being the music industry.
Mr. Gould explains how he came to this conclusion:
When in Cambodia I met some incredibly committed people who were raising money in Canada, then physically taking it to Cambodia and spending it on sending children to the doctor, sending them to school, trying to find ways to get them away from living on rubbish tips and all sorts of other direct action. You couldn’t help but be impressed by the directness of what they were doing. After I met these guys I decided I’d much prefer to give my money directly to them than to any of the large NGOs, just because I knew it was going to have a real, direct impact.One thing to make clear is that some large NGOs do outstanding work, and often they are either the precursors or enablers of the types of people Mr. Gould met in Cambodia. But he is absolutely right about two things: first that there are amazing (and usually unheralded) people doing extraordinary things at the grassroots level all around the world. And second, that the old system for finding and supporting these people was incredibly inefficient.
We are working hard to create the "long tail" in international philanthropy and aid. The internet revolutionized shopping via eBay and Amazon; it revolutionized search via Google, and music via iTunes. It is now revolutionizing philanthropy.
There is a long way to go still, but we are on our way.
Tuesday, December 12, 2006
Although there have been mistakes and excesses, overall Rubenstein argues that private equity funds have driven substantial productivity increases, especially in the US.
I worked at the World Bank for over 14 years, and it is hard to imagine many organizations that have a greater abundance of underutilized assets. The Bank has thousands of extraordinary experts in an amazing range of subjects. The Bank has billions of dollars of financial assets and lending power. The Bank has an unparalled global network of access to top policy makers. And yet, and yet...
The Bank as a whole is far less than the sum of its parts. It achieves far less impact than it could, and its influence is declining as it fails to adapt to the new era of globalisation and the rising influence of civil society and the private sector. Despite some significant reforms, especially under Jim Wolfensohn from 1995-2005, the Bank remains constrained by its post-WWII structure and has an exceedingly risk-averse culture and board of directors.
So here is a crazy idea: What if a group of folks got together and launched a leveraged buyout of the World Bank? Though this is likely infeasible politically, in theory it is not only possible but desirable. There is plenty of both philanthropic and private money available to finance the deal, and the amount of expertise that could be brought to bear in running the place better has never been higher. These excellent people come from all sectors - many are from top-notch NGOs, others from private companies, some from government agencies, and many from within the World Bank itself.
I am starting to compile a list of my own dream team of colleagues at such a revitalized institution. If you have suggestions, please send them to me at dennis at globalgiving.com.
Monday, December 11, 2006
If you are like me, you are getting inundated with year-end appeals from charities and non-profits. Many of these requests are compelling, and you want to drop some money in the envelope and send it back.
But here is the sad truth. According to the Chronicle of Philanthropy, if you put $100 in the return envelope, the charity itself may wind up with only $35. Considering list acquisition, printing, production and mailing, costs can be as high as 65%, and most organizations don't have the size and scale to lower that ratio. And to top it off, you usually don't even know exactly how your money is being used, or what impact it ends up having.
That is one of the reasons I co-founded GlobalGiving. GlobalGiving is a far cry from my previous life at the World Bank, where I spent 14 years and oversaw over a billion dollars of large projects. There, too, the waste was significant, and the impact of the projects often not all that clear.
GlobalGiving allows you to direct your donation to any of 400 projects of your choice in over 70 countries around the world. If you want to support women's education in Afghanistan, we have it. If you want solar power in Nepal, we have that too. How about nurses on motorcycles in Zimbabwe (for $10 you can pay for one nurse to deliver healthcare to 90 people for a year)?
When you give to a project, we ensure that 85-90% of the money gets there - within 60 days. Furthermore, we believe that you deserve to know what impact your money has had. So project leaders in the field send in progress reports, in many cases with pictures and color commentary. And you don't have to come looking for them - we'll deliver them to your inbox.
We recently introduced Gift Certificates, which allow "shoppers" to give meaningful gifts, and recipients to choose the projects they want to support. They have been a huge hit. Parents are giving them to their children, friends are giving them to friends, companies are giving them to employees and clients. A friend sent me an email the other day that said "I am so tired of sending my siblings stuff they don't need - this is great."
GlobalGiving gives everyone choice, provides a direct connection with powerful work around the world, and enables people to give the gift of giving. What could be more fulfilling during the holiday season?
See for yourself - GlobalGiving.com.
Monday, December 04, 2006
Mari and I were stunned. We were having a general check-in and strategy lunch with Eli Stefanski, GlobalGiving's Chief Program Officer. We had just started talking about the end of the year campaign and our ambitious plans for next year when she dropped this bombshell on us.
Silence. It took us a while to assimilate this. "And...?
"I have decided to take it. You know I have always wanted to live in Maine, and this is the perfect opportunity, even though I hate the idea of leaving GlobalGiving and the timing is lousy."
Mari and I were floored, but there was only one right answer, and we both said it at the same time: "You have to do it; it is too good to pass up."
But I was devastated.
Eli had been a key part of the DNA of GlobalGiving since she joined, three years ago. She came on board at a critical time, and had become integral to the growth and success of GlobalGiving. In particular, she had built up our Project Sponsor Network from about three organizations to over forty. This meant we had a worldwide partner network with operations in over 100 countries that could vet projects. This network had been critical to our success in getting millions of dollars of funding to over 700 projects. And Eli was integral to nearly all the strategic decisions we had taken in the last three years.
Of course, this is not the end of the world; there are plenty of talented people out there, and some fresh blood will probably help take us in good directions we had not anticipated. In fact, we have already talked to a few candidates, and the gloom has lifted.
But still. Eli is one of a kind and cannot be replaced as a person or colleague.
Last Thursday was Eli's last day, and on Wednesday night we had a big party for her where we told stories, showed pictures, and had a good time. On Thursday, she packed her boxes, and left the office. We all said goodbye as if she were headed off on vacation.
Eli called yesterday. She said that as she drove into Portland with her husband Scott and Lab George, it was starting to snow. She was starting a new life, far from the hustle and bustle of Washington. She sounded very good, excited, but relaxed - and at home.
Monday, November 27, 2006
But both of us have been involved in non-traditional official aid projects that made a real difference, and we both know people who have done great work in the World Bank, USAID, DFID, and elsewhere.
The key is to find the innovative people and approaches that are working and to get more resources to them.
Someone who fits this mold well is Scott Guggenheim, a World Bank anthropologist who led an extraordinary team of Indonesians and expats who devised the "KDP Program" in Indonesia. Just like the Development Marketplace and GlobalGiving, which I had the privilege to help launch, the KDP program turns the old model upside down by just asking villages what their priorities are, and then gets them the money to do it - directly, without going through ten layers of government bureaucracy.
Rather than try to explain KDP, I will just reproduce the first page of a paper Scott wrote about it below.
It was a brilliantly clear morning in
Central Sulawesiwhen the villagers first spied the large pile of lumber. One of the delivery truck drivers stood lazily by the wood, smoking a cigarette that he blew over his steaming coffee. He’d come from Palu, the provincial capital. The golden lettering embroidered on his hat told the villagers that he and the silent man in the neatly pressed green safari suit also sipping his coffee worked for the Public Works Department there.
The villagers were curious. Just last year they had gotten funds from the Kecamatan Development Project to build a stone road from their rice fields to the market route, and now here were the materials to repair a bridge. Had the government finally noticed their plight?
“Friend, what is this wood for?
“It’s to build a bridge”
“How much wood is there? What did it cost?”
“That’s none of your business. Just be thankful that the government will be building you a bridge.”
“But we want to know. This is our new rule here. You have to come to the balai desa and tell us about the project. Then you have to post a signboard so that all of us know how much this bridge costs. If KDP does it, we want you to do it too.”
“You are mistaken. KDP is KDP and it has KDP rules. This is a government project and we follow our rules. Just be thankful that you are getting a bridge”.
The villagers were troubled. That night the village elders met. Some people said they should just accept the wood because the village needed the bridge. But many more villagers were angry. This was now the era of reformasi and people had a right to know about projects.
Early the next morning, even before the first rays of sunlight pierced the dark clouds, the villagers had heaved the wood back onto a large truck owned by the son of the village council head. Two truckloads of villagers and scores of motorcycles joined the procession to the district parliament.
When the first parliamentarians arrived for work that morning, they were met by a quiet delegation of villagers standing atop a large pile of wood wrapped in an enormous white cloth.
“What is this? They asked”
“This is the cloth we use to wrap our dead,” the village head replied, “and dead is what this project is. We would rather have no bridge and no wood than go back to the corrupt ways of the New Order. From now on we only want projects that involve us in decisions. If KDP can do it, other projects can do it too.”
And with those words, the villagers got back on their trucks and went home.
 Story collected by Enurlaela Hasanah.
The full paper can be found here.
It was K, the seven-year-old kid from down the block, shouting up to my balcony from the alley below. By my count, this was going to be the eighth flat tire I had fixed for K in the last year.
I don't recall getting eight flat tires in my entire childhood - how could he get so many so often?
But I love fixing K's tires. He often brings his friends along, and I raise and lower seats, tighten wheels, and calibrate brakes for them, too. They watch me work, ask to help, tell me about school, and tease each other about girlfriends and boyfriends.
K and his friends are basically good kids. You can tell that their mothers or grandmothers have been a big influence on them. They don't need a lot of prodding to say please and thank you.
K's father is currently serving a little jail time for small-time drug dealing. I broke up a fight he was in on the street one day after another kid started taunting K: "Where's your daddy? Huh? Where's your daddy?" K is constantly in trouble at school, and has to go to special behavior classes.
But in fact, many of these kids these lack fathers at home.
A former professor of mine writes books about the arguments among religious figures in the middle ages over whether they could do the most good through the church as an institution or through personal acts and compassion. A modern version of this dilemma is often played out among graduate students I meet today: "Should I join the government or an official agency where I can influence policy that will affect millions of people? Or should I join a non-profit where I can roll up my sleeves and get something concrete done even if it is on a smaller scale?"
Over the past twenty years, I have worked this question from all angles, it seems. I did lots of policy work while at the World Bank, and I know some of it has improved lives. I have also made some hundred-million dollar infrastructure loans that should help increase economic growth rates and lift people out of povery. Now, at GlobalGiving, I am trying to provide a platform that enables a large number of small donors and small non-profits to come together to make a big difference in the world.
But I have to admit that, when K and his friends call up from the alley and ask me to come fix their bikes, I want to drop everything and go down there to help them out and talk about how things are going. Mari recently made up shirts for them with their own names and favorite numbers on the back. I told them that we would go play some ball in the park as soon as I had time. I need to make that time soon.
Monday, November 20, 2006
This was the response I got at the Hertz rental counter at a New Hampshire airport about six months ago when I returned my rental car only to find I was subjected to a whopping fee that I had never been charged before. I was shocked not only by the fee but by the response of the desk staff.
Peter Lynch, the legendary investor who ran the hugely profitable Fidelity Magellan Fund, believed that you can tell a lot about a company's prospects just by walking in the door and using their products and services. In his book One Up on Wall Street: How to Use What You Already Know to Make Money in the Markets , Lynch argues that you should invest in companies that: (a) you understand, and (b) produce things you like using. Warren Buffett has a similar philosophy.
So, I was shocked when the staff at the rental counter told me to "Talk to the new owners." Hertz has been a shining beacon of superb service at reasonable prices for years, and they really seemed to understand the concept of a customer "experience." If you were a member of their frequent renter program, your name was up on a board when you arrived, and you didn't even have to check in - you just got in your car and drove away. And when you returned to the airport, they had mobile checkout people who often arrived at your car even before you came to a full stop. The average time to checkout was about one minute.
In short, air travel was a real drag, but you could count on Hertz to make the car rental experience efficient and pleasant.
No longer, apparently. Since that rude encounter in New Hampshire six months ago, things have continued a slow slide downhill. Prices have edged up, counter staff are getting more surly and a lot more demanding, and service is slower. My car has not always been there when I arrive either.
This experience all came on the heels of the purchase of Hertz from Ford by a private equity group. Those investors announced plans this month to take Hertz public - at a very hefty profit.
Last week when I was returning my car to the airport in San Francisco, there was not even a mobile check-in person to great me. A bunch of us had to wait in a long line at a booth. After a confusing interval, a couple of check in people came slinking out of the shadows, went up to the cars, and started shouting "OK, WHO'S CAR IS THIS? WHO'S CAR IS THIS?" I went back to my car, and was rudely checked in, with nary a thank you.
A year ago, I would have followed Peter Lynch's advice and bought some stock in Hertz. After this, I am going to follow Peter Lynch's advice and not buy any Hertz stock. The investors taking Hertz public may make a short term profit, but unless the company turns its service around, the "Lynch Law" would predict a slow decline thereafter.
Wednesday, November 15, 2006
A million dollars is really an awkward number. If you said, "What would you do with a billion dollars?" we could talk about setting up new research institutes or huge change-the-world undertakings. If you said, "What would you do with a thousand dollars?" I could name a specific charity worth getting a little more help. But a million dollars is in the gray zone - too much to feel good about blowing on just any old charity, too little to allow you really to change the world.
I'm tempted to say that I'd use the money to buy as many acres of forest land as possible in Malaysia, Indonesia, Brazil, the Congo, or elsewhere, because in the short run I fear that such ownership is the main way to keep the forests from being cut down. But I realize that on its own, that would probably yield parcels too small to make a difference. So, on reflection, I would probably divide the money between two organizations that have pioneered brilliant ways of matching entrepreneurship with good works of the environmental, medical, poverty-reducing, and democratizing variety, and that have delivered a lot of value per dollar spent. They are Ashoka and GlobalGiving. Each represents an inventive new model of deciding which projects to support, and each appears to work. I'd probably hold back
$100,000 or so and give it to Medecins sans Frontieres.
Wednesday, November 08, 2006
Anyone who has observed the nonprofit and philanthropic sector over the last decade cannot help but be struck by its growth, evolution, and emerging sophistication. For anyone here who has wished growth upon this sector, you have certainly been granted your three wishes by the Growth Genie. There are more nonprofits and philanthropies, and more large nonprofits and philanthropies than ever before. While it is true that some 60% of all nonprofits have $100,000 or less in annual revenue, the number of nonprofits with revenues of $10 million or more has increased by 73% in the last ten years. The sector is growing both at the bottom of the pyramid and at the top. (From Three Wishes for the Growth Genie: Our Sector Confronts Expansion.)
No one is a more astute observer of trends in philanthropy than Susan Raymond, who writes for OnPhilanthropy.com. Whether you are a newcomer or an old hand in the field, I highly recommend Susan's columns. She often sees trends well before others, and she is an expert at teasing out interesting insights from boring reports you might see elsewhere. The article above talks about the dramatic growth of the philanthropy sector, and how it brings about increased scrutiny, a greater need for transparency, and ultimately better leadership.
The third company I met last week is OneTrueMedia. If you thought you needed a degree in graphic design and film making to create high quality photomontages and even movies with accompanying music, you were wrong. This service dramatically simplifies the whole process. You supply the photos and raw video footage, and it provides easy-to-use editing tools. You can then view the thing on the web, burn a dvd, or even download it to watch on your iPod.
Simple, simple, simple.
India beat out Pakistan to win the first GlobalGiving Olympics by raising the most money for projects listed on GlobalGiving over a 3-week period in October. Projects from India won both the Gold and Silver Medals. Congratulations to "Educate 100 slum Children of Sex Workers in India," led by Ray Umashankar, which raised over $43,000 to take first place. Ray did an extraordinary job mobilizing donors for this project.
Tuesday, November 07, 2006
My mom told me this right after she got a new computer at her home. She was used to a fax machine, where the messages "came out" and then you read them.
My mom now sort of knows how to use email, but to be honest she doesn't like it - the computer may hang and need rebooting, or the wireless network may need to be reset. So she often waits for her brother to come by for a visit and gets his help. Sometimes she even makes him READ the emails to her. (She doesn't have a printer.)
As I said in my last post, technology is still too complex, and I am always looking for things such as Pinger to make life easier.
Here is another service I really like - it is called, appropriately for my mom - "Presto." Presto is kind of like a fax machine. Your mom just plugs it into the phone line, and when you send her an email (even one with a photo of your new puppy), it automatically prints out on the device and is there waiting when your mom gets home. One of the best things about it is that it uses a "white list" approach. It will only receive emails from addresses in its addressbook. So it cuts out the spam that scandalizes your mom and just delivers messages from her kids.
PS: It does not take huge imagination to realize that Presto could be used for business purposes as well.
Monday, November 06, 2006
So I am always on the lookout for products and services that are very easy to use.
Today I draw your attention to Pinger. This service enables you to leave voice messages for others without having their phone ring - perfect for when they are in a meeting or when it is the middle of the night their time. What's even better is the ease with which they can pick up those messages. In most cases, they get a text message (SMS) on their cell phones telling them who has left a message, and how long the message is. All they have to do is hit one button, and they go straight to the message - without all the usual extraneous action (password) and information ("You..... have....two.... new....messages.......... First..... mes....sage. .....From .......phone...... num...ber.... 1 2... 3 - 4... 5... 6... - 7... 8... 9....... Sent...... Nov.... em .... ber.... 3, two..... thou....sand.... and... six... at... two..... thirty....seven... p...m").
This service dramatically reduces the time required to listen to your messages, and it allows you to listen to the messages in any order you want.
Joe Sipher, one of Pinger's co-founders, told me that cell phone companies claimed it was impossible to improve on the existing voice mail interfaces,which had been honed over the last twenty years. Luckily, Joe and his co-founder ignored them.
Try Pinger - I bet you will like it.
Friday, November 03, 2006
Now our friends at CharityFocus have launched something called KarmaTube. CharityFocus is a very special organization, and I would not be surprised if they are onto something with KarmaTube. Check them both out.
Monday, October 30, 2006
GlobalGiving has recently launched a partnership with the National Peace Corps Association that empowers former Peace Corps volunteers to band together to support high impact projects in the countries where they lived and worked. The Friends of Burkina Faso, the Friends of Thailand, and the High Atlas Foundation are helping launch this initiative.
Much of the credit for leading this belongs to Tony Gambino, a former volunteer in Congo. His blog is here - check it out.
Saturday, October 21, 2006
But, Tim says, another way to look at this is that Americans are "98 percent selfish." Worse, he says that much giving is motivated by personal concerns for status or vanity.
Tim refers to an ongoing debate on Tyler Cowen's blog about whether it makes the most sense to give all one's money to a single cause or project, or whether it is better to spread the money around. He concludes that if people were really altruistic that they would give all their money to the single thing they think would have the highest impact. Since people don't act this way, they are therefore acting on other motives, he says.
Tim's conclusion on this front demonstrates just how far economics has not come in the last 20 years since I was in grad school. Back then, we were required to apply standard approaches to what economists call "utility" to come up with exam answers that plainly contradicted the way the world worked.
Despite many years of research costing many millions of dollars, no one has been able to figure out how to rank the impact of better education versus better health versus better roads versus better jobs. Which of these has higher value? The answer is, it depends. It depends on the place, it depends on the time, it depends on the circumstances, and it depends on the preferences of the individual people involved. The best outcome is one in which those preferences can be clearly described and efficiently pursued by both the beneficiaries and the funders.
Nonetheless, Tim's article does raise a much deeper philosophical debate. Why do - and should - people give away money? My view is that a very small number of people give money for purely altruistic reasons in a manner that makes them feel bad. It is true that some people give money out of guilt or because they are told to do it, against their will, by some higher authority.
But most people give because it makes them feel good on some level. I personally give money to good projects because it feels good to contribute something to a project that uses my money effectively to help other people. If that is "selfish," then so be it - I am proud of being selfish in this sense.
So altruism and selfishness are not mutually exclusive. And the two together, when practiced on a large scale by a large number of people, can power major social, economic, and environmental benefits.
Barry Gaberman gave a talk a couple of years back where he argued that all of the small givers in the US, when aggregated, undoubtedly have a greater impact than the large foundations everyone talks about. This was a pretty strong statement coming from the #2 at one of the largest of those institutions (the Ford Foundation).
This is why GlobalGiving exists - to provide a transparent, efficient way for donors of all sizes to choose the projects they think will have the highest impact in a variety of different ways.
[Update 10/28/06: To be fair, both Tim and Tyler are excellent economists and all around smart guys whose writings and opinionsi I respect highly and are worth listening to. The purpose of this post was only to demonstrate how (a) newspaper columns can require people to condense arguments to such a degree that they involve major leaps of faith (or at least logic) on the part of the readers, and (b) the degree to which economists and those from other disciplines will strain to make reality fit their standard models, rather than revising their models to fit reality, which is naturally much harder.]
Thursday, October 19, 2006
When I lived in Madagascar, people would open the tombs of their dead relatives each winter, pull out the cloth-wrapped corpses of their loved ones and dance with them held aloft.
That is the first sentence of Katya Andresen's new blog. It is called Getting to the Point about the art of marketing for non-profits. She is by far one of the best voices out there on this topic. The blog has just started, but if her past writing, including Robin Hood Marketing, is any indication, it will be worth adding to your RSS feeds.
Tuesday, October 17, 2006
A typical response to us from people on the West Coast is "You are underselling the game-changing potential of GlobalGiving. This thing could change philanthropy the way eBay changed shopping, Google changed search, iTunes changed music, and MeetUp and MoveOn have changed politics. We need to think much bigger about this."
By contrast, a very successful financier on the East Coast recently said "Send me all the numbers and let me look at it. I'll see if it makes sense to invest a little, or whether the whole operation needs to be cut down to size."
You can imagine what would have happened if an entrepreneur had pitched eBay, Google, Hotmail, Amazon, YouTube, or something similar in New York. They would have been "cut down to size" pretty quickly.
On the other hand, successful startups need finance from New York - to go public and sustain themselves in the big equity and debt markets. So to be fair, Silicon Valley and New York City are the Yin and Yang of the extraordinary innovation that emanates from the US.
Thursday, October 12, 2006
The GlobalGiving Olympics is a competition for $75,000 in prize funding — $50,000 for the project receiving the most money from donations, and $25,000 to be shared by the country team generating the most donation volume. The competition launched on October 9 and will run through October 31.
FYI, here is what we told the current project leaders in a recent communication:
How to win
- MOBILIZE your supporters to help your project or country win by making donations and telling their friends and colleagues to do the same.
- COMMUNICATE to let everyone know exactly how they can put your project in first place. Use newsletters, websites, blogs, and email to spread the word about the Olympics and how people can participate.
- ENCOURAGE existing donors to make a contribution to your project on GlobalGiving, and send them your project link so they know exactly how to give.
Monday, October 09, 2006
So have I been overly impressed? Am I a starry-eyed Clintonista, blind to the dark realities? I don’t live in the middle of philanthropy issues in my daily life, but I am not aware of a get-things-done conference like this, and especially of this magnitude, occurring before.
Sunday, October 01, 2006
Pierre has launched the Omidyar Network and Jeff the Skoll Foundation to support innovative initiatives that catalyze good in the world. If you hear of a really interesting new idea (or movie - Jeff Skoll has also been producing movies), there is a good chance that either Pierre or Jeff is behind it.
So I was especially pleased when Bill Clinton began adopting the same metaphor for his own Clinton Global Initiative (CGI). The CGI is remarkable for the fact that people who attend have to commit to actually DOING something - they can't just talk. Here is a nice clip from Clinton on the Daily Show, where he notes the power of the internet to allow basically anyone in the world to DO something - and the extent to which a lot of small $10, $20, or $100 donations can have a major impact. He observes that after the tsunami, 30% of Americans contributed $1.2 billion (50% of which was online) to the tsunami recovery.
Saturday, September 30, 2006
At this year's event, held last week, even more impressive commitments were made. Richard Branson, founder of Virgin Airlines, pledged to invest a huge sum in fighting Global Warming. Vinod Khosla and others pledged a massive campaign to develop biofuels to reduce oil dependency. And those were only two of the notable commitments made.
But one announcement was really dear to my heart.
Tens of millions of dollars were pledged for "Playpump" projects throughout Africa. I love this idea. Millions of women in Africa walk hours each day to get fresh water, and in many places they are often attacked or otherwise abused along the way. A South African guy named Trevor Field came up with the idea to connect water pumps to old-fashioned merry-go-rounds. Kids play on the merry-go-rounds, and by doing so they pump fresh water to the service. Everyone wins - the kids have a toy to play with and the mothers can come together, share news, socialize, and get clean water without walking for hours.
I especially like this project because the concept got seed funding at the first-ever Development Marketplace that we did at the World Bank before leaving to create GlobalGiving. That was in 2000, and some people wondered whether "cute" little ideas like this could ever get to scale. Well, the announcement at the Clinton Initiative was the first step in a commitment by the Case Foundation to gets tens of millions of dollars channeled to this initiative so that throusands of the Playpumps could be installed all over Africa.
But you don't have to be Clinton, Case, or the US Agency for International Development to help fund a Playpump. $6 will provide clean water for one person for a whole year, and $6o will do the same for ten people. If you want to get ambitious, get some friends together and raise $14,000 to fund an entire pump and provide water for thousands!
PlayPumps: Bringing Water to the Poor in Africa
We will bring clean drinking water to the poor in Mozambique via a next-generation water pump, the Playpump™ water system: a merry-go-round water pump powered by play with a decade of maintenance.
Theme: Health |
Location: Mozambique | Need: $140,000
Friday, September 29, 2006
Even when he is not running for office, Bill Clinton sure does know how to campaign. And over the last couple of years, he has been campaigning hard to mobilize people behind the cause of improving the social, economic, and environmental wellbeing of people in developing countries.
Last year, Clinton invited several hundred people - businessmen, movie stars, government leaders, economists, non-profit leaders to a hotel in New York City to take action. He demanded that people make commitments to take real action, and not just talk. The inaugural "Clinton Global Initiative" in 2005 was quite the jamboree of celebrities from all walks of life, and what was striking is that people were actually talking about the issues and not just posing for the cameras.
During one "break-out session," I sat at a table with Brad Pitt, who asked his table mates to explain this thing he had been hearing about called "capacity building." And he was seriously interested.
At the next table, Oprah was deep in conversation about similar topics with another group.
People really had their sleeves rolled up.
In my next post, I will describe some of the things that happened at this year's Clinton initiative.
Thursday, September 28, 2006
Very briefly, Jeff Sachs points out that we already have the ideas and technologies to dramatically improve - at relatively low cost - the health and economic well being of hundreds of millions of people in developing countries. He is right about this. There is much reason for hope, and a few dollars can have an absolutely enormous impact on communities in developing countries.
But Bill Easterly argues that the way in which these ideas and technologies are surfaced and disseminated makes a huge difference in whether they have the intended impact. Over the past 50 years, official aid agencies have spent about $2 trillion (in today's dollars), and few would argue the results have been commensurate with the money spent. The problem is that current aid agencies operate in a manner very similar to central planners. This approach does not work in the aid business any better than it worked in the old Soviet Union. We need more market-based mechanisms for aid, where "searchers" can find solutions appropriate in specific places and times.
Some research I commissioned last year estimates that market-based economies allocate resources 2-3 times more efficiently than centrally planned economies. I believe the same will hold true in the aid business. It certainly is proving to be the case on GlobalGiving - projects posted on GlobalGiving can have an impact at 1/5th the price of an official top-down aid project.
Monday, September 18, 2006
I am thrilled to announce the launch of Pandora & GlobalGiving's partnership to promote Philanthropy for Music Education. Their investors have even agreed to match the first $7,500 donated to any of the three projects featured.
If you don't know Pandora you should check it out right now. It is a web-based radio-type service where you act as your own DJ. You give it examples of music you like (artists, songs) and it constructs a customized station for you. It has spread like wildfire, and even within our office we compete over who gets to play "their" stations during the day.
But Pandora also distinguishes itself by its values. While they are a hard core company, their DNA is to help good music and musicians get discovered and heard around the world. They have a special fondness for the undiscovered gems out there. What I call the underdogs.
I am going to quote from Pandora's founder, Tim Westergren, who says it best:
"One of the most important founding principles of Pandora is a respect for music and for those who create it. It has long been our desire to support the music community and to be actively involved in music-related causes. Music has a long history as both an effective agent of social change, as well as a powerfully transformative art for individuals.
We're very pleased to begin this mission through our partnership with GlobalGiving. We hope you will join us in supporting these worthy causes. We have carefully chosen organizations with a broad reach, and a proven history of effective action."
Thank you, Tim, and thank you, Pandora. We are honored to be partners.
Thanks to my friend Greg Kats at CapitalE, for sending me this excellent related article from the Stanford SocialInnovation Review.
In it, Les Silverman and Lyn Taliento argue that being a non-profit leader is much harder and more complex than running a business. An excerpt follows:
Business leaders play vital roles in the nonprofit sector -- as board members, donors, partners, and even executives. Yet all too often they underestimate the unique challenges of managing nonprofit organizations. In this article, 11 executives who have played leadership roles in both for-profits and nonprofits reveal the critical differences between the two, and suggest ways that business and nonprofit leaders can use this information to create a more effective social sector.
By Les Silverman & Lynn Taliento Summer 2006
Ask William Novelli, the CEO of AARP, if business executives underestimate the complexities of running a nonprofit organization, and his head starts nodding. The former Unilever marketer built Porter Novelli into a public relations powerhouse before embarking on his current career. Twelve years deep into the nonprofit sector, Novelli can attest that navigating Washington, D.C.’s land mines while running his sprawling $800 million operation is hardly the laid-back retirement farm that many businesspeople imagine.
Too many business CEOs just don’t get it, says Novelli. “It goes beyond underappreciated. CEOs are often disdainful of not-for-profit management. They think it’s undisciplined, nonquantified." But in fact, “it’s harder to succeed in the nonprofit world. For starters, nonprofits’ goals are both more complex and more intangible. “It may be hard to compete in the field of consumer packaged goods or electronics or high finance," he says, “but it’s harder to achieve goals in the nonprofit world because these goals tend to be behavioral. If you set out to do something about breast cancer in this country, or about Social Security solvency, it’s a hell of a lot harder to pull that off." And “it’s also harder to measure," he adds.
Thursday, September 14, 2006
Check out the GlobalGiving homepage, which features a video of Little Kids Rock, a great group that helps grade school kids learn to play music. The effect on educational attainment is significant as these kids gain confidence and skill. So it is a serious development approach. But most of all, it is a delight. Check it out.
Wednesday, September 13, 2006
Yesterday Apple announced iTV, a device that will do just that.
What does this have to do with giving? Well, the question is when we will have an iPod for giving.
As BBC notes:
The new iTV device is due out early next year
The company has unveiled a device which will stream music and video wirelessly between televisions and computers.
Wednesday, September 06, 2006
Soon after we started GlobalGiving, I met Charles Best, who had just started a site called DonorsChoose. While GlobalGiving enables donors to give directly to causes overseas, DonorsChooses enables donors to give directly to projects designed by school teachers in the US.
GlobalGiving and DonorsChoose share a similar philosophy, approach, and values. This has made it possible for us to collaborate more and more. Sometimes we swap ideas about technology, marketing, or back-office processing. Other times we work together on stories that appear in print, radio, or TV.
I like Charles and I like DonorsChoose.
As DonorsChoose says, the first few weeks of school can make all the difference for at-risk kids. And so they have launched something called The Back to School Challenge. They are trying to raise $1.2 million before the end of September. I funded a project to promote reading in the science classrooms in North Carolina. What are you going to fund?
Tuesday, September 05, 2006
This is potentially a game changing company. Given how well it works and the modest cost, it is hard to rationalize buying a new car in the city. If this leads fewer people to buy cars, it not only saves money but also reduces congestion and pollution.
The article contrasts Zipcar, a socially oriented for-profit company, with an organization in San Francisco called City CarShare. CarShare claims that it is better than Zipcar because "it is a non-profit." This is a non-sequitur. What matters is how many people the service reaches.
At last count, CarShare was only in San Francisco. ZipCar is in about ten cities and expanding fast. Spurred on by competition with FlexCar, another socially oriented for-profit company, Zipcar has been focusing like crazy on cost, scaleability, convenience, and style.
Friday, September 01, 2006
Thanks to Tyler Cowen for pointing me to a great book by Philip Tetlock called "Expert Political Judgement: How Good Is It? How Can We Know?"
The answer is that experts' predictions are no better than those made by regular people. In fact, many experts have a worse track record than would be achieved by a toss of the dice. (The worst performing experts are "hedgehogs: thinkers who 'know one big thing.'" By contrast, "foxes: thinkers who 'know many small things'" tend to do somewhat better.)
Louis Menand's review in the New Yorker notes that this phenomemon holds across a variety of disciplines and over one hundred studies. College counsellors who were provided detailed information about students and even allowed to interview them did worse in predicting their freshman grades than a simple mathematical algorithm. Psychologists were unable to outperform their secretaries in a test to diagnose brain damage.
As a former "expert" at the World Bank for fourteen years, I can say that this resonates with me. I cannot speak highly enough of the technical expertise of my colleagues, and I have many friends still there. Yet, it was a highly sealed and self-referential environment that admitted little input from other experts, much less from the average guy on the street in Jakarta or Nairobi.
Although I became a reasonably senior executive and was successful by most measures, the truth was that I found the place intimidating. So many decisions and predictions had to be made about so many complex things, and I often found myself wondering how people could walk around the halls looking so self-assured.
This all changed when Mari and I did the Development Marketplace, which opened the front doors of the Bank to anyone in the world with a good idea. Over one thousand groups --many of them grassroots -- applied to the first marketplace. The result was extraordinary - the quality of the ideas, the energy, the commitment, and the resources that "regular" people brought to the Marketplace were in aggregate far superior to what most Bank experts like me could think up.
The amazing potential unleashed at that Marketplace was enough to give me the courage (some say temerity) to leave the World Bank and help launch GlobalGiving. I have never looked back.
Wednesday, August 30, 2006
"Hi, I am writing to tell you that I am leaving my organization. I feel I'm spinning my wheels here. There are so many things we could be doing, but nothing ever seems to happen, and there is no willingness or even interest in changing the way things are done."
I see this all the time. The writer is late 20s, smart as heck, creative, and very motivated. But the organization - a well respected and longstanding pillar of the community - cannot make use of the energy or new ideas.
We are entering a new age where organizations that are unable to harness the potential of their people will be unable to survive. I feel bad for the writer's late employer, because it may well fade into irrelevance after making a major contribution to the field in the last twenty years.
Wednesday, August 23, 2006
It is true that short and simple often require more work than long and convoluted.
The same holds true for features on a web site.
Earlier, I blogged on the value of simplicity. As an example, I reflected on how difficult it is to watch TV these days. There are often three or four remote controls to contend with - all with different sequences of buttons, etc. Compare that to how it used to be: You went up to the TV, pushed one switch to turn it on, and turned a dial to change the channel.
I wondered if Apple would ever take up the challenge to simplify the TV situation.
Steven Johnson recently wrote about this topic in Slate. He is far more eloquent than I:
One of the ironies of the last decade of technological change is that things that used to be difficult for ordinary folks to master—setting up an e-mail account, getting an Internet connection—have grown far simpler. Meanwhile, lots of things that used to be easy—say, changing channels while watching TV—have gotten more perplexing. You know the drill: You try to change the channel using the TV remote when you actually need to use the cable box remote (or the TiVo remote), and suddenly the screen goes blank because it's on Channel 4 instead of Channel 3. I know many people who have printed instructions near their media system that explain how to turn it on or how to turn up the volume.
GlobalGiving is growing steadily, and people generally report that they like our web site. While I am happy to hear that, I know it can be much better and much simpler.
Maybe we will never become the iPod for giving. But that does not mean we should not try.
Wednesday, August 16, 2006
Here is an excerpt from a recent blog of hers and my own thoughts on the art of focusing:
I am convinced each of the Echoing Green organizations is needed, because the fellows have followed a verison of the hedgehog concept. They focus like a laser beam on the intersection between three key areas: what they are best at, what makes them different from all others working on their issue, and what their stakeholders care about. BBMG says that intersection is your brand sweet spot -- Collins says it's your raison d'etre. I agree with both ideas and encourage you to find your intersection and stick to it. If we all restricted ourselves to that intersection -- even when board members or funders tempted us to set out in other directions -- we'd all be more effective. If we stray too far, we may wake up one day to find ourselves saying, "We save the manatees. Oh, and we have a program for the elderly... And have I told you about our North Korean initiative?" (Credit to Lara Galinsky on that question!) If it's the manatees, stick to the manatees. And if someone else is saving the manatees, make sure what you're doing is different, needed and supported.
And here are some comments I made on her blog:
I could not agree more on Echoing Green. Most of the fellows I have met or know are absolutely outstanding.
I am wary about the usefulness of advice from business writers, gurus, and business school professors. Most of them study success stories and try to infer lessons from them. These lessons are often not tested in any rigorous way, and though they sound good, in practice they are descriptive rather than helpful to others. Often, they observe that successful people did A and B, but it is far from clear that A and B were the primary factors behind the success. Sometimes A and B may be necessary but not sufficient. So people go out and do A and B and wonder why they don't succeed! And sometimes A and B are irrelevant.
While Collins is by far one of the most rigorous and thoughtful - and hence most useful - writers, readers need to think carefully for themselves about what he is saying. How many times have we heard the bromide "To succeed, you must focus"? The question is what to focus on.
I have been reading a number of business books lately, and one of the better ones ("Pour Your Heart Into It") was by Howard Schultz, co-founder and CEO of Starbucks. He describes how his idea of what Starbucks was good at evolved over time. The original founders were furious at Schultz for putting tables in the stores and allowing customers to sit down! And Schultz himself absolutely hated the idea of introducing low-fat lattes, which he thought was a travesty. Similar story about frappucinnos. In each case, the founders were trying to remain true to their visions. And in each case, being flexible, and adapting those visions to the market was key to growth and success.
Gradually, Schultz realized that Starbucks' focus should not be on the perfect cup of non-adulterated espresso. Rather it should be on the creation of a customer experience which he began referring to as the creation of a "third place" in society for people to escape to. The refinement of the third place concept has really been the key to Starbucks remarkable growth.
As we build organizations and businesses, we all face a similar set of issues. How flexible should we be? Is it the COFFEE we are passionate about or is it the EXPERIENCE of DRINKING coffee in a comfortable "third place" away from both the home and office that we are passionate about?
For us at GlobalGiving, we constantly ask ourselves questions such as "Is it PROJECT-SPECIFIC giving that we are passionate about - and good at - or is our passion and expertise really around giving directly to INTERNATIONAL projects?" There are ususally no easy answers, only answers that evolve with experience over time.
This is not to negate or rebuff the good advice to focus. But it is to reinforce the importance of understanding - and refining - what to focus on is as important as the act of focusing itself.
That is the hard part.
Monday, August 14, 2006
This past weekend, I finished reading an excellent history of a relatively young company we all know. It was written by one of the founders. The author details the trials and tribulations of the early days, with the usual multitudes of naysayers. (In fact, some time ago, I met with a major venture capitalist who said that he had declined to fund the company because he thought the whole concept was stupid.)
I especially appreciated the author's mea culpas regarding product introductions that he thought were off-mission - but which in the end turned out to fuel the company's growth.
But one thing that really bothered me was the prevalent use of the first person "I." The book is all about how "I" created the company, and how "My" vision was critical to its success, and how proud "I" am of what "I" created.
To be fair, he does cite his senior management team members many times in the story. But in the end, it is all about "I."
Now, if there is one thing I have learned over my 20+ year career, it is that few enduring great initiatives, companies, or organizations are based on "I". Instead, they are based on "We."
Things that are based on "I" can burn bright for a short period, but then usually burn out. Things based on "We" endure.
We have a great team here at GlobalGiving, and by that I mean not only those of us on staff, but also the community of project leaders and donors. I am proud to have been one of the founders, and I am lucky to work with a great bunch of people. But our success - hopefully an enduring one - is built on the "We" of the GlobalGiving community, and not just on "me."