Marketplace "magic"?

Jonathan Alter claims to have seen the future of American philanthropy, and DonorsChoose is it. In his article for Slate, Alter ruminates on the possibilities of creating similar web-based marketplaces for all kinds of social goods - malarial bed nets, vaccines, art purchases for museums, and cancer research trials.

I think he's a tad...hyperbolic. DonorsChoose is very cool and works really well. Alter makes an important observation that 93% of the donors who use the site voluntarily add 15% to their gifts to cover the operating costs. This is important not only because it proved several HBS consultants wrong, but because it may show the value of transparency. The willingness of donors to 'opt in' to pay operational costs may be worth watching. Other sites also provide this functionality - making transparent and optional the operating costs - Network for Good does it online and the Vermont Community Foundation is trying it in the offline realm. Tell people what it costs to provide the service you provide - you may be surprised at how willing they are to pay it.

But beyond the observation about operating costs, I think Alter is wrong. In addition to the disagreements about the role of the market in providing social goods that has been bandied about here and elsewhere, Alter is overlooking a basic fact about the users who choose DonorsChoose. They went to school. They remember what it was like. There is some amount of empathy for the plight of the teachers and the opportunities for the kids. This influences their willingness to give. And would also influence the transferability of the platform to funding other - more remote, less personal - social goods.

I don't know anything about DonorsChoose's donors but am confident in my 'guess' about their educational histories. I'd also posit that there is a good chance many of them have or have had school-age children. And an equally good chance that very few of the site's users have ever had malaria, lived a subsistence life in Sub-Saharan Africa, or bought art of museum quality.* Technology and transparency are good additions to the practice of philanthropy. But they don't replace basic human values and behaviors, like empathy and motivation. What would be interesting to know is what other causes - besides education - does the DC model serve? And where does it not fit.

A final note on funding teachers' classrooms needs. Today's SF Chronicle's gossip columnist, Leah Garchik, ran this little item in her Public Eavesdropping sidebar:

"A private school you have to pay for, a public school you have to fund-raise for.''

Alison Zilversmit, 10, to her 6-year-old brother Jacob Zilversmit, overheard by car pool-driving Marc Zilversmit.

Its rare that a gossip column speaks such truth. Of course, you can always count on 6 year olds to speak truth to power. The comment above speaks volumes about what we value as a society, what we have chosen to provide as a public good, and the endless blurring of public and private in American daily life.

(*By the way, I'd be happy to be proven wrong here, if DonorsChoose wants to share its users' data. New tools are, no doubt, changing how donors act on their motivations. But whether it changes their actual motivations remains to be seen.)


3 comments:

kevin jones said...

Imagining markets and their future in a virtual world is a funny thing; the concept can be so compelling you can see it as the tool for any problem. I listened to a development podcast yesterday about a radio marketplace set up in India for farmers to check prices and make offers and list demands for goats or whatever. The first time they did it, farmers brought their goats to the radio station. They did not understand an intermediary based on information. I'm going tonight to a collective intelligence event down at Pepperdine brining together rocket scientists, MIT folks, and prediction market leaders. I think technology offers some new things that we were not able to do before as far as marshalling the wisdom of crowds. But as you point out, basic human motivations are what these tools have to take into account. Seachange was a great and failed example of this thinking. Setting up a $2m Kellog funded charitable marketplace. The software would have worked if people were different; if giving were a rational, logical process rather than, as Paul Schervish says, something that follows the logic of identifying with a cause, validating it with like minded people and seeing an impact.

kevin jones said...

Imagining markets and their future in a virtual world is a funny thing; the concept can be so compelling you can see it as the tool for any problem. I listened to a development podcast yesterday about a radio marketplace set up in India for farmers to check prices and make offers and list demands for goats or whatever. The first time they did it, farmers brought their goats to the radio station. They did not understand an intermediary based on information. I'm going tonight to a collective intelligence event down at Pepperdine brining together rocket scientists, MIT folks, and prediction market leaders. I think technology offers some new things that we were not able to do before as far as marshalling the wisdom of crowds. But as you point out, basic human motivations are what these tools have to take into account. Seachange was a great and failed example of this thinking. Setting up a $2m Kellog funded charitable marketplace. The software would have worked if people were different; if giving were a rational, logical process rather than, as Paul Schervish says, something that follows the logic of identifying with a cause, validating it with like minded people and seeing an impact.

Mike Everett-Lane said...

Mike Everett-Lane from DonorsChoose here. To your question, we do have some survey data on our donor base. 53% of our donors do not have children. Of those with children, 73% attend or attended public schools. When asked "What about the DonorsChoose mission most inspired you to give?" only 25% cited education ("supporting teachers" or "supporting students") while 67% cited our giving platform ("Directing my dollars to exactly where I want to help," "Level of choice DC offers," "Level of accountability DC offers," and "Ease of giving via the internet.") The remaining 8% said "Other".