PHILANTHROPY 2173: March 2007

Friday, March 30, 2007

Generational shifts in social expectations

Think back two generations (your grandparents) and forward two generations (your grandchildren). The difference between the providers of health insurance, education, cultural activities, employment, open space, and retirement benefits for our grandparents as compared to our grandkids - that is the sectoral shift we're living through right now.

With all the growth in corporate social responsibility, social investing & finance, revenue-producing nonprofits, hybrid social enterprises, and mission related investing - are we about to see the end of the bifurcated (commercial and not-for-profit) sectors as the last several generations have known them?

We seem to be approaching a new configuration of the private sector - part of which emphasizes returns for the public good and part of which emphasizes returns for private investors, but all organizations in which use - and are expected to use - a dynamic blend of market tools and social purpose.

I think we are at the front edge of a wave that will wash in one of two ways. We may see a two-sided sectoral structure that mergers the commercial and for-benefit structures in the private sector into a single force and leaves the public sector as the other force. Or, we may see the three sectors stay themselves and the dynamics between the sectors rise to the forefront as the force of change - where the dynamics become more cooperative, integrated, and interdependent - so that we expect action from all three on all social challenges.

Such changes would help sharpen our understanding about what works when and where. Market forces, social justice goals with an intent to increase equity, an emphasis on long term community returns instead of quarterly profits, and a degree of independence - all raise interesting possibilities about how change can be brought to bear.

This has huge ramifications. First of all, markets don't solve all problems, they actually create many. Second, new structures and new regulations are needed to guide these shifts well and appropriately. Third, this shift presents whole new opportunities for thinking about what problems to solve rather than being constrained by the limited tools of one sector or another to solve them. And, finally, what do these changes imply and require for the public sector?

Will we have two sectors or three sectors that work together in new ways? What will we expect from a community organization, a local business, and our municipal governments? How are these expectations being shaped now for the generations to come?

PoIP (Philanthropy over Internet Protocol)

I was at the grocery store yesterday. A woman of a certain age was on line in front of me. She finished writing her check, handed it (and her drivers license) to the cashier, and continued her conversation with her friend. The cashier stepped away, talked to the manager, and returned, saying "I'm sorry, we can't take out of state checks." A snotty interaction ensued, in which the customer ripped into the cashier for not telling her "before she wasted her check," (she had not asked), the manager came over, she threatened never to shop there again (big threat, she lives out of state, remember), blah, blah, blah. My six year old son observed the whole thing, wide-eyed. "What happened, Mama?" "Why was the woman so mean to the worker?" "Why wouldn't he take her check?"....(pause)...."Mama? What's a check?"

In the last two weeks I have posted about remittances and charitable giving by ATM, by mobile phone, and, as of today, by VoIP (Voice over Internet Protocol). It should come as no surprise that Skype, a leading VoIP service that is owned by eBay, which also owns PayPal, has launched a new service to allow users to send money while talking by Internet phone. Some would say it is long overdue.

Why am I so interested in how technology changes money flows? Several reasons, but the one most relevant to this blog is this - global finance moves ever faster through an ever expanding set of devices and channels. Meantime, foundations are still cutting checks. According to a survey done by the Grants Managers Network, only about 1/3 of the 200 US foundations surveyed use electronic transfers of funds. These are institutions with billions of dollars in assets, professional staff, general counsels, and really slick application procedures and risk/liability management handbooks. They process thousands, if not hundreds of thousands, of transactions each year. And most of them are still hand-signing checks. Then they probably make a copy of the check, paperclip it to a a copy of the grant agreement and file it (and several copies of all that).

Let's be clear - it is not the checks that bug me. It is the process and mind-set that the checks represent. It is time to rethink the ENTIRE process of foundation giving - from the ground up and the inside out. What do we need to do and what do we do just because we have always done it? Who knows what we need to know and can we beg, borrow or buy it from them? Who already does what we want to do and can we partner with them? Foundations are famous for criticizing nonprofit administration and overhead expenses - the real question is what percentage of those expenses are created by outdated, paper-heavy, redundant foundation requirements?

Oops, gotta go, my phone's ringing. It might be money.

Thursday, March 29, 2007

Skoll Forum - Live from Oxford

The Skoll World Forum on Social Entrepreneurship has video clips of key sessions - get them here. SocialEdge has links to bloggers - including Jim Fruchterman (Benetech), Gillian Caldwell (Witness) and Dennis Whittle (GlobalGiving) and several Oxford student bloggers.

Another nice feature - quick video profiles - find them here.

All this stuff should go on the PSE (Philanthropy and Social Enterprise) Channel at fora.tv

NTC Video Contest

See how video can change the world. Several very cool nonprofit/social change related videos and PSAs can be found on the NTEN website or at dogooder.tv. Register (free) and you can vote for the best. Here is a partial list of what's up there:

Green Day + NRDC: Be Part of the Solution
Free Hugs Campaign
Robert Cray “Twenty” music video
I'm Sorry Darfur
The Bio Da Versity Code
Irene's Story, Heifer International
Urgent Climate Wake Up Call, Avaaz.org
Close Guantanamo Bay! Amnesty International USA
Grassroots Action, Get Loud! Darfurby
Shining a Light on HIV, STOP AIDS Project

The Free Hugs/Peace on Earth campaign won in the "big event," the YouTube awards (most inspirational category) and the Free Geek video makes you want to get up and volunteer.

Of course, for powerful examples of video changing the world, check out WITNESS - an NGO that teaches people to use video to document human rights abuses.

Wednesday, March 28, 2007

Mobile banking - not just for Africa anymore

As of March 27, mobile banking has come to the U.S. At least to cell customers of Cingular/A.T. & T. Now, lets watch those remittance numbers jump.

Citizen Philanthropy

The Huffington Post has joined with AssignmentZero to cover the 2008 Presidential campaign using citizen journalists.

AssignmentZero is trying "pro-am" journalism, matching professional editors with reporters, bloggers, community activists around the country. You get quality editorial selection with an unmatched reporting force in terms of scale, diversity, and access.

So, how about citizen philanthropy?

What if you took the best of grassroots activism - local knowledge, connections, networks, honesty - and hooked it up to thoughtful strategists who could step back and see broad trends, lessons from history, and make connections between areas of expertise? Take the ground-level analysis and due-diligence that Global Greengrants and/or GlobalGiving and/or GiveWell have developed and supported it with foundation-funded research, program analysis, and strategy development. You could:

Find a wider range of social change efforts and monitor them on the ground;
Share strategy, get feedback in real time and adjust;
Influence other people's money, driving more resources to effective actions and solving problems with proven solutions;
Spark a move toward quality and measures of success;
Reap a return on the foundation investments in research and administration across the philanthropic industry;
Aggregate philanthropic funds

Here's another analogy, sparked by conversation with several dozen grants managers today. Its like getting the best of Wikipedia and the Encyclopedia Brittanica - we don't have to choose, citizen philanthropy can have the best of both.

Why video matters

OK, folks, I am still waiting for your ideas on how to develop the "philanthropy and social enterprise channel" for Fora.tv. If you don't send me some thoughts soon, they may revoke my crown as queen of the channel, so help me out.

What am I looking for? Here's the thing. The world is a visual place. Pictures are great - just look at the communities and friendships that have been built using Flickr. But things move. And so video is even better.

Try this analogy: If YouTube is the illegitimate love child of HBO and ComedyCentral mixed in with your neighbors' home slide show and some porn, then Fora.tv is the result of a rendezvous between the BBC and PBS, that took place in the best independent bookstore and was recorded by an an info sciences geek. (Can I get sued for saying these things? Is Viacom or the RIAA coming after me next?)

So, Fora.tv is creating a channel (an organized, curated collection of video clips, linked to blogs, documents, websites, public campaigns and other stuff we can think of) about philanthropy and social investing. I'm the curator of the channel (or, the queen, as I prefer). I want to make this useful and exciting to social entrepreneurs, donors, community activists, foundation professionals, nonprofit leaders, investment advisors, and everyone with a stake in the public good. Some ideas:

We can use the resource to post video clips of really fabulous conference plenaries. Create an online conversation about the topic. Link to clips of authors reading from relevant publications.
Post point/counterpoint videos.
Build a collection of effective, philanthropically-supported public awareness campaigns and have an online discussion of why some work and others don't.
We can have a best party hat contest from foundations' holiday parties (That's a joke - just checking that you are still reading).
But we could have a community-votes contest on best PSA. Contests are big - check out the netsquared proposals or the NTC Video Contest hosted over at dogooder.tv.
We can make the channel the 'go-to' place for philanthropically-supported content about climate change, health, education, the arts, and so on.

What do you want to watch? Let me know. If I have to make this a contest to get ideas, I will (that is intended as a threat).

Tuesday, March 27, 2007

Web 2.0 Grantmaking

This essay on NTEN, "Grantmaking in a Web 2.0 World," is worth reading. It notes the work of GrantsFire, a syndication service aggregating foundation grants data (yippee!). It also references David Bollier's work on networked advocacy, a topic which is examined further by Allison Fine and these folks at network-centric advocacy.

Monday, March 26, 2007

Innovation in philanthropy

Thanks to Sean Stannard-Stockton for reminding me what a valuable resource can be found in NetSquared. Even before this year's event (May 29-30, Cisco Campus), the proposed projects page is a treasure trove of cool things in philanthropy. Check it out.

Skoll World Forum on Social Entrepreneurship

The Forum starts tomorrow. Bloggers are here (RWJ Foundation) and here (socialedge). Video streaming will be here. More blogs coming, no doubt.

Why we're cynical?

Start a foundation, avoid being seen as a greedy pig.

This is the point of Saturday's Dealbook column, which was headlined "How to Show That You're no Gordon Gekko" and opened with this paragraph:

"...the Blackstone Group’s 221-page-thick prospectus [contains] an unusual paragraph: The firm says it plans to start a charitable foundation.

The prospectus says that the partners will contribute as much as $150 million of their equity to the foundation, which “is being established to support charitable organizations in the communities in which we operate and worthy charitable organizations with which our employees are personally involved...
Skeptics, of course, will say that the new foundation is simply about “optics” — or worse, a clever way for its partners to offset their tax gains from the I.P.O.
But it’s hard to criticize people for giving away money. And, frankly, the industry needs all the image-polishing help it can get.”

The irony is that the last paragraph is only referring to the private equity industry and not also the philanthropy industry.

And just to put that $150 mm in perspective CNBC estimates that the Blackstone Group's market value as a whole "...easily exceeds $20 billion, CNBC said. The firm's management company has between six and 12 owners, the Journal said. Chief Executive Steve Schwarzman's stake would be valued at least at $8 billion, CNBC said."

Is it really possible to see the intended foundation as anything but an "optical" rounding error?

Friday, March 23, 2007

Subprime lending and philanthropy

Say what? The title of this post may be a bit confusing to you. What does subprime lending - and the now unfolding mortgage default mess - have to do with philanthropy? Well, in my pattern-riddled brain, a lot.

Here's how, from a social perspective. Today's NYT has a front page story (subscription required) on how homeowners in major suburbs have taken to sprucing up the yards and installing alarms in the now-empty foreclosed houses in their neighborhoods. Their reasoning? Simple. They need to prevent the "snowball effect in which surrounding property values suffer and worried neighbors move away." In other words, we are our neighbors foreclosure. The ripple effect, socially, is profound. Communities will unwind, neighbors and friends leave, crime may increase. And not just poor communities - all communities.

The economic connections are also profound. Some suburbs have been particularly hard hit, including Euclid, Ohio outside of Cleveland; Gwinnet and DeKalb counties outside Atlanta' and several towns south of Chicago, according to the Times. Municipalities are losing tax revenue and some are borrowing money to cover the costs of increased property inspections, rehabilitation and renovation of foreclosed properties to prevent the problem from getting worse. The effects on schools, elderly supports, police protection - all the things property taxes paid for - may be still over the horizon, but we know they're on their way.

I'm going to guess that we are at the early stages of what may become the first version of the Savings and Loan debacle of the 21st century. Congress will hold more hearings, fingers will point, lending regulations may change (or existing ones be enforced). But what we need to consider is how we are all bound together in this - by the neighbors we count on, the public resources that will go into fixing the mess, and whatever complex economic ripples will come from interest rate changes, fewer housing starts, fewer jobs, etc. etc.

But wait, where is philanthropy in this? At least two categories of questions come to mind when I see these kinds of economic stories. The first category has to do with the economic ties that bind the wealthy and the poor. Those ties may seem slender but great wealth is often made right alongside great poverty. Is this just further evidence of the income gap in this country, which is partly responsible for the great boom in philanthropy and wholly responsible for the increasing numbers of poor? Will the ripple effect be solely economic - will the only impact on philanthropy be the effect of markets rising/falling on endowment sizes?

The second category has to do with the social mission of philanthropy. how do these kinds of systemic financial quakes effect the work of philanthropists? Do they care? Do they change directions? Increase local giving? Do tremors such as this influence direction and uses of philanthropic wealth in any meaningful way, or just the size of that wealth?

I think this is another area where the sectors that can make a difference in the policy and regulations that shape this kind of financial event are oblivious to the incentives they have - admittedly, long term and abstract - for not letting these kinds of things happen. A collapse of the mortgage industry and orthogonal financial systems, increased regulations, expensive public hearings and investigations, public sector bailouts, etc. etc. are certainly not in the interest of the shareholders, wealthy individuals, and their corporations (who also happen to be the source of the big philanthropy). None of what has happened, and what be may still come, is in the interest of the defaulting mortgage holder. But someones, somewheres made a boatload (household?) by selling subprime mortgages which also drove home building binges which also led to more jobs, more spending, more money, more tax revenue - in the short term.

No one paid attention to the long term costs and the long term incentives. Which, one would hope, might be an interest of foundations endowed in perpetuity.

Thursday, March 22, 2007

Open Educational Resources

The Hewlett Foundation Education Program has been a big supporter of work on Open Educational Resources. They've launched a blog, called OERderves (I hate puns but that's a pretty good one) with great links and resources. The site points to other resources on Open Education, Open Course Ware, K-12 and higher education policy.

Full disclosure: I attended graduate school with members of the Foundation's program staff who were serving either in leadership positions or were my classmates.

Philanthropic success...with a twist

The Economist has a bold claim in its March 17 issue - microfinance has shown it can succeed, philanthropists deserve the credit, they should take it, and move on to the next frontier. This is the kind of claim one would think foundations would love to hear - a major independent media outlet gives them credit for their work. As the magazine puts it, "The pioneering work of donors means there are now some 10,000 microfinance institutions lending an average of $300 to 40m poor borrowers worldwide."

Furthermore, the magazine cites the entry of commercial players into the microfinance market as evidence of the philanthropists success, claiming at least one victory for this route to sustainability.

So, why won't philanthropists love this story? Because the magazine goes on to say:

"...it is a pity that all these lenders are competing to support the same, small group of microfinance institutions that cater to the most creditworthy borrowers. It would be better for the poort if the IFIs (international finance institutions) and donors left the best credit risks to profit-seeking lenders and concentrated instead on those still stuck outside the system." (The Economist, March 17, 2007, p 16)

This is a tough call. Grameen Bank's founder, Muhammed Yunus, has said himself that Grameen's path to sustainability was lengthened because of philanthropic support - it didn't need to find its sustaining strengths as soon as it could have if the donors hadn't been so generous. And some donors are "cutting the apron strings" to those MFIs that can clearly make it on their own. The article puts it this way:

"This trophy lending is harmful....Aid money is better spent where commercial cash fears to tread - such as on the next generation of microfinance institutions."

The article goes on to encourage donors to get involved in mobile banking, or helping MFIs expand to insurance or other financial products. It also calls on these organizations to then pressure their national governments to remove restrictive regulations that further isolate the poor from financial tools.

I agree with the above and I think its problematic. We know from experience that markets will go where there is profit to be made. So hats off to the donors who helped the commercial lenders find these markets. But the very poor - can we really leave their needs to donors? What then is the public sector's responsibility?

Philanthropy, aid agencies, and social investors are few in number, not subject to widespread oversight or election, and usually suffer relatively short attention spans. Its one thing to encourage donors to take on the needs of the poorest. Its quite another to rely on them to do so. The public sector has a role to play here, and it is more than one of restrictive regulator. We must find ways to work with donors and independent agencies to better the conditions of the poor, and we cannot abrogate its responsibility to do so because of a few market and philanthropic successes. All too often we see governments - who must convince taxpayers to fund services - either abandon the poorest because they can't raise the necessary revenue or rewrite rules so that services are targeted to everyone - thereby winning the support of taxpayers but diluting the available revenue.

Yes, markets and donors make key contributions - and microfinance is a success. But public policy, public revenue, and public services are also key - to either ending poverty or further entrenching it.

Wednesday, March 21, 2007

Foundation wins lawsuit against Princeton

Princeton University agreed to return almost $800,000 to the Robertson Foundation. The Foundation had sued the University, arguing that it was using the funds for purposes other than intended.

Philanthropy phone version 2

This time its rebate time - Amnesty phone donates 10% of users bills to Amnesty International.

Patent philanthropy

Companies have so many patents they are giving them away. And, no, this isn't about open source production. This is philanthropy for economic development. And the companies no longer benefit from tax incentives, as Congress pulled the plug on that tax break back in 2004.

An estimated 90 to 95% of all patents sit idle, according to the National Institute for Strategic Technology Acquisition and Commercialization. Business incubators and economic development departments around the country are working hard to match available patents to entrepreneurs who can turn the intellectual property into companies and jobs. The San Francisco Chronicle ran this story on a retired food-manufacturing expert who took advantage of a patent on instant yogurt to build the company Yokit, which will make and market the product to troops overseas and to vending machine companies. The State of Delaware has hundreds of patents from the DuPont Company which it markets to entrepreneurs through a website called the "Patent Portfolio."

States and nonprofits are not the only game in town. "Patent trolls" is the unsavory term used to describe companies that exist to do nothing but sue others for patent infringement can be the bain of start up companies.

The world of technology transfers - from companies to entrepreneurs, universities to companies, inventors to corporations - is a marketplace for knowledge assets. And, like other markets, there are commercial enterprises and investors, not-for-profits, and public sector players, cooperating and competing with each other.

We've seen some wonderful philanthropic developments within these markets - specifically the creation of the Institute for One World Health which takes pharmaceutical research through the testing and approval process to produce drugs for diseases widespread among the world's poor. Foundations - whose ability to research social challenges and innovations, and document successes - is what best separates them from other charitable options should think seriously about how they could contribute to these markets. If foundations do, in fact, have useful knowledge, there are markets for it.

Tuesday, March 20, 2007

Philanthropy by Phone

Most people are pretty reluctant to give out their cell numbers - email, IM, work number, blog address, and other identifiers usually go first. Most people might want to re-think this - especially most people living in Kenya.

Kenya's largest mobile service provider (Safaricom) announced M-PESA, an SMS feature that lets mobile customers send money to each other with text messages. You can read about it here. The Guardian (U.K.) touts this as a world first. Can you hear me now?

Not only is the transformation of money amazing, but how about a shout-out for Africa leading on innovation?

Yesterday it was charitable ATMs. Today its mobile money, or Philanthropy by Phone.

What happens tomorrow - we blink and transfer funds?

The Philanthropy Channel

I've written about Fora.TV before. This platform - which I think of as "the YouTube of Ideas" - is getting better and better. Look over there --> to the right. That is the embedded Fora.TV player - you can get it for your blog or website by going to fora.tv/tools. I'm delighted to announce a formative partnership with Fora.TV - stay tuned, we'll let you know more as details of the Philanthropy Channel develop.

Imagine what this means for social action. If a picture is worth 1000 words, consider what it means if you can stream video of public policy conversations, important lectures, activist demonstrations, global health discussions, and philanthropic conferences.

For any conference host it means potentially reaching millions of people instead of dozens. For activists it means bringing awareness to millions, not dozens. To foundations, it means hosting conferences or discussions that millions can watch, contribute to, and inform - not just dozens. Every organization's media strategy needs to consider the implications of this. Who do you really want to talk to? Who needs to hear your message? Who cares about your work and doesn't know it yet? What other conversations do you and your partner organizations need to be part of?

Fora.TV partners with YouTube and Revver and any of the other video sites - what gets posted to Fora.TV can then travel across those systems to reach any of their users. Fora.TV is organized around issue-specific channels that are integrated with other media (blogs, web links) and that are curated to make sure the highest quality, global thinking on a subject is brought together in one place. It also provides tools that let you 'click' through a video to a specific chapter or topic, to search the video for certain phrases, and to participate in the think tank on the topic. Go ahead, click on the "open tools" box in the screen to the right. You can now search the talk by "chapter" - you can get the transcript, and you can get the link.

So, help us design the Philanthropy Channel. We'll be designing this in the next several months - send in ideas, tell me what you want to see, what should be covered, and how this tool can help you accomplish your social and philanthropic goals.

Another take on networks and integration

Mari Kurashi of Global Giving provides these insights on the need to break down the conceptual firewall beween giving money and giving time.

Its in line with the power of networks being built over at xigi - which is connecting various kinds of financial tools for social good.

10 ways to save the world...

...Valleywag style. ValleyWag is a silicon valley self referential blog about silicon valley self referential-ness. Or, in its words, a tech gossip rag. Here's a recent post on 10 ways to save the world.

I won't copy the whole post but let me say this, all 10 involve web/Internet sites, the post is introduced by a paragraph that includes the phrase "take a minute and save the world," and the overall tone of the collection and the post is to say, "do good, but don't knock yourself out."

Here are the 10 recommended sites:
10. World Community Grid:
9. The Hunger Site:
8. MoveOn.org:
7. Meetup:
6. Trickle Up:

5. Prosper:
4. Distributed Proofreading:
3. CivicSpace:
2. Your blog: Write an entry about the sites above and encourage others to take action. Or promote world-saving sites through Digg, Twitter, Reddit, Delicious, or a pay-it-forward site called Six Degrees.
1. The Mars Society:

So, here's the thing. I'm all for getting folks involved and making it easy to do so. But the message that you, or I, can just go on doing what we're doing and with the least possible effort make a difference on major world problems, is wrong. Its just not true. So - good for these sites and good for these activists, but enough with the simplistic lies about what it takes to make something happen. C'mon, get up and do something different. That might actually make a difference.

Monday, March 19, 2007

What are you listening to?

Enough about blogs, what about philanthropy podcasts? I love podcasts. They let me listen to NPR on airplanes (admittedly, I'll never get to compete on Wait Wait...Don't Tell Me by doing this), I've listened to lectures from universities around the world, I've heard conference presentations for conferences I skipped, and I laugh till I cry when listening to "Julian Fleisher's Guilty Pleasures: What songs do you most hate to love?"

So what about podcasts on philanthropy? Sean Stannard-Stockton has a series of interviews here. Business Week has a podcast series called Top Givers. The Queensland University of Technology Centre on Philanthropy has a series of podcasts that focuses on research and policy for the sector. Google and Technorati searches pull up a few more - here is one directory and here is another. Not a lot - so send me more if you can find 'em.

The Shock of the Old

David Edgerton is an historian of science at Imperial College, London. His newest book, The Shock of the Old, is a fabulous rewrite of what we know of as technology history. Edgerton argues - sometimes in impenetrable sentences but always with strong evidence and compelling reasoning - that we need to think of the history of technology from the point of view of its use, not its invention.

Typically, histories of technology focus on when things were invented - leading to a global history that focuses only on certain places, times, and people. Focusing instead on how and when and which technologies are actually used presents a much more inclusive, expansive and real story of how people make and use technology.

Edgerton also offers an alternative hypothesis about why certain tools take hold and others don't. In typical tech-glorious discussions of innovations the end-results is to make the object in question - from gas engines to nuclear power to The Pill to personal computers - seem special for helping people do things they could never do before.

By looking instead at what technologies are used, when, and by whom, Edgerton shows that technologies that succeed may not be unique, they may simply be better than the available alternatives. For example, the recent interest in reducing the use of fossil fuels has led to a growth in electric engines for transportation. Hybrids, electric cars, and alternative energy is all the buzz (and its where all the VC money is going). In fact, electric cars and electric buses dominated certain transportation systems in the first few decades of the twentieth century.

Why does this matter? The conditions that make one technology better at one point in time may not hold for all time or in all places. This is true of technologies like those we usually envision - machines, energy sources, gadgets, tools - and social technologies, such as immigration laws, welfare policies, and tax structures. Philanthropists need to be able to look beyond a "tech-glorious" focus on innovation and understand what systems of support really take hold in certain communities - these are the technologies to build on.

Sunday, March 18, 2007

Connectors, mavens, and salesmen.

"And I'd like to thank the Academy and , of course, Malcolm Gladwell, without whom the concepts of social networks would never have reached a, ahem, tipping point."

What am I talking about? xigiviz - The latest cool visualization and social network mapping tool launched at xigi. Check this out.

Good luck to these folks as they take this show on the road. They are making the case that connections and networks across and among the entities involved in social investment, social finance, philanthropy, and microenterprise can strengthen the sector, strengthen the tools, and help improve the world. The cool thing - as a platform xigi both shows the networks and makes them happen which then makes them stronger which then makes them grow, etc. etc. - ah, networks.

Charitable ATMS

You can forget the old cliche about charitable checkbooks. Wells Fargo has made giving a step easier - Charitable ATMs. More than 350 ATMs in the San Francisco Bay Area have been equipped to allow direct donations to Glide Memorial Church, the Boys and Girls Club of the Peninsula, Self Help for the Elderly, and the Headlands Institute.

ATMs have long been equipped to help remittance senders - Citibank ATMs in the Bay Area open with a screen that says, "Send money home now. Right here, from this ATM." Now they're in the local giving business also.

The entry of banks into the remittance business helped to bring the immigrant practice of sending money home into the awareness of the general public. How? By making the size of the remittance flow visible - $100s of Billions flow across country lines every year (and have since the first person migrated to a new country). Sending money home isn't news - but tracking it digitally through banking systems and reporting out those numbers is - and its big news when the numbers are as large as these. How will this same reporting effect play out on domestic giving? Wait and see.

Friday, March 16, 2007

Counter intuitive counter-incentives

Why don't governments and philanthropists support programs that work?

This is the underlying question in a January New Yorker profile on Amory Lovins and a paragraph in the March issue of The Atlantic on the study, "The Economic Lives of the Poor." The study on poverty was produced by economists at MIT's Poverty Action Lab. An article extract of the study by one of its authors, Abhijit Vinayak Banarjee, notes:

"Empirical research on best practice in development has grown apace in the last decade or so, and we now have evidence on a number of programs that work. These are programs that do something very specific -- such as giving deworming drugs to schoolchildren and providing a particular kind of supplemental teaching in primary schools -- that have been subjected to one or several randomized evaluations and have been shown to work. ... We could clearly spend all that and more without ever funding a program that does not have a demonstrated record of success, especially given that evidence on new programs is pouring in."

The MIT lab is focused on using randomized trials - an evaluation technique usually deemed too expensive for social interventions - to find what programs work. How do they make it affordable? They've centralized the research work and use it across extant programs - rather than having programs attempt to build this kind of research into their own budgets.

On the other hand, Amory Lovins, CEO of the Rocky Mountain Institute, is known for his optimistic approach to energy-related solutions. Since 1976 he has been promoting, prompting, and pushing to get corporations, the US government and others to implement the tools that he says will enable the U.S. to:

"...eliminate its use of oil by 2050, even while reducing its coal and natural-gas consumption, enjoying economic prosperity, and preserving the Arctic National Wildlife Refuge."

Lovins has crunched the numbers, found the strategies that reduce energy use, and identified the myriad perverse incentives that keep people from implementing them. For example, Lovins has proven blueprints for refurbishing buildings so that the energy consumption drops dramatically and savings skyrocket. The incentive problem? Building owners would have to pay for the renovations while tenants pay for utilities - so the landlords can't be bothered. The mere fact of savings isn't enough; Lovins has to find ways to make those savings return to the right people.

What do we do with the "evidence coming in" on anti-poverty programs that work? We need folks like those at MIT to work on the incentives issue - find out what the perverse incentive structures are that keep governments and philanthropists acting like landlords. In other words, mere evidence of what works isn't enough, we need to find the counter-incentives to really change how we fund.

Thursday, March 15, 2007

Assignment Zero - reinventing journalism

NewAssignment.net is a great example of those who want to "stop whining and start doing." Instead of continuing to bemoan the way new media are changing old media, these folks are promoting a "pro-am" middle ground. Take the best of editorial professionalism, add the reach, diversity, and tenaciousness of dedicated amateur writers (bloggers) and sic em both on interesting stories - that is the idea behind NewAssignment's project, AssignmentZero. It takes the best possibilities of sites like Digg and NewsTrust and moves it from the back end (readers) to the front end (writers). I can't wait to see what happens.

For philanthropy, its this "pro-am" mix that has such potential. Philanthropic professionals - fundraisers, program officers, evaluators - produce a lot of good stuff. But they don't have anywhere near the reach nor the ground-level perspective of the nonprofit professionals, dedicated individual donors, or activists - lets bring them together and see what we can do for philanthropic giving.

Disrupting philanthropy

The California HealthCare Foundation and Health Affairs, a major public health policy journal, hosted an interesting interview with Clayton Christensen - the innovation guru - on disruptive technologies and healthcare. The online article is here.

The interview covers territory stemming from the simplest examples of a disruptive technology - such as LASIK surgery - to more complicated policy and financing issues, such as Health Savings Accounts, where the disruptive technology is not a routinized procedure but a new form of financing. Christensen, a diabetic, also talks about the role that self-monitoring technologies play in allowing him to track his own health, making it so he "[has] no need ever to see a physician."

The interview is interesting partially because both Christensen and his interviewer, Dr Mark Smith, CEO of the California Healthcare Foundation, are clear that routinized technologies can only go so far in addressing the high-cost issues endemic in health care. They also acknowledge that health care is not a single industry, but several (ten or twelve in their estimate).

These two observations are also true of philanthropy. Simple technological solutions - online grants and financial management, for example - disrupt at the "easy" end - compliance, monitoring, tracking, processing. The harder stuff - social benefit, progress toward goals, strategy selection - is not likely to be disrupted by a technology as we normally think of technology, but by an innovation in the 'technologies" of economics, politics, or social structures. This is why social enterprise is interesting, as it disrupts the old boundaries between the private and independent sectors.

Wednesday, March 14, 2007

Third buzzword of 2007

And, for those who have been waiting, we have found our third buzzword of the year (here are numbers one and two). Drumroll, please......and the word is....Microfranchising.

Some use the term to describe the practice of nonprofit organizations opening up and running a franchise of a commercial entity. Examples include nonprofits that run Ben and Jerry's outlets through the PartnerShop Program.

Others are using the term to describe the creation of small franchise enterprises that themselves have a social purpose. Examples include LivingGoods, which I've previously discussed here. More information is on a new blog called Microfranchising, which features stories on eyeglass franchises focused on the poor and the hippo water roller franchise.

My prediction? By January 2008 microfranchising will be a big part of the discussions among philanthropists and social entrepreneurs. Just remember, you heard it here.

New resource for donors interested in Asia

It is simply called In Asia, a new blog by the Asia Foundation. Check it out.

Reminds me of the need to listen to people in the places and of the communities that donors want to assist. Other blogs that help outsiders "listen in" include Global Voices and BlogAfrica, each of which can help you find blogs from specific countries around the world. Global Voices maintains a wiki of BridgeBlogs that is also useful.

Linking to bloggers in the countries they serve is a great service that portals such as GlobalGiving, Give2Asia, NetworkForGood should provide.

Create the future - for The Economist

The Economist is seeking fortune tellers. So begins the intriguing brief posted on Project Red Stripe's blog. What is Project Red Stripe? That's what I asked when I received an email from a name I didn't recognize, with just enough typos for me to check to see if it came from Nigeria. The email states:

"I work at The Economist on an internet innovation unit, and we've got six months to come up with an innovative web product. At the moment we're in consultation and are asking people to submit ideas of what we could do.

To that end I thought it would be really interesting to find out more on how the web makes good possible. If you, or your readers, have any great ideas we'd love to hear them. One of the key parts of our brief is to make a difference, so you might know just what we should do."

So, the wisdom of crowds comes to mainstream media. There is a point at which this "crowdsourcing of innovation" feels more and more like Tom Sawyer gets Jim, Ben, Billy, and others to paint the fence for him.

If you've got an idea, and want to give it away (maybe The Economist should connect with Jonathan Lethem and The Promiscuous Materials Project), then send it to The Economist, via their blog.

Think fast - ideas are due by March 25.

Tuesday, March 13, 2007

Open access and the irony of normal behavior

Once upon a time you had to go to conferences. First you registered, then you bought a plane ticket, booked a hotel, packed a bag and went. And then you came back.

Now, you can not go to a conference. You stay at home/work and check a conference site or search engine such as upcoming or eventful. You login, read the program online, find the sessions you care about, logon for streaming audio/video if available, attend in SecondLife, and/or submit questions via email/skype/IM to the speakers on stage/bloggers in audience, and then you read the live blog coverage. Then you go get lunch and go back to whatever else you were doing.

Alternatively, you can stay home, wait a day, listen to podcasts, download text of speeches, watch the presentations on YouTube or Fora.TV, read all the blogs, comment and discuss, check your RSS feed of del.icio.us tags to make sure you didn't miss anything. Then go get lunch and go back to whatever else you were doing. What do you lose? Frequent flier miles.

And, in the ironic twist that is business in the networked age, the conference business is booming. The easier it becomes not to go to a conference, the more people want to go. There are lots of reasons for this, but, since this is all just a metaphor, I'll leave you to think of them.

What is the metaphor? In an age of easy access to information and networks, the more open an information source is, the more valuable it is. Opening the virtual doors to conferences doesn't keep conference goers at home, it invites more in. Opening the virtual doors to other information sources - file cabinets, source code, board meetings, think tank discussions, writing projects - should do the same thing. Obviously, not everyone agrees with this. The open access movement, open source, and creative commons folks will agree. I think its fair to say that the Recording Industry Association of America probably won't.

Regardless of the RIAA, artists and writers are getting into the open access movement anyway. Jonathem Lethem, author of one of my favorite books, Motherless Brooklyn,* announced yesterday that he was making the movie rights to his newest book available for free. He will give the rights to a filmmaker who agrees to two conditions -- 2% of the budget be paid to Lethem once a film has a distribution deal and the filmmaker must release ancillary rights to the film 5 years after it premieres. Lethem is also giving away song lyrics and selling story ideas for $1 apiece at The Promiscuous Materials Project site.

So, in my endless quest to convince foundations that they should share their research, strategy papers, evaluations, and other information that could be useful to other grantmakers, I've found a new frame for an old point: The more you give away the more its worth. We'll see if this one convinces anyone.

*Motherless Brooklyn is about a trio of bumbling orphans, one with autistic spectrum disorder. It, along with The Curious Incident of the Dog in the Night Time, The Speed of Dark, Daniel isn't Talking, and A Wild Ride Up the Cupboards, are among my favorite collection of fiction featuring autistic protagonists. Daniel Tammet's memoir, Born on a Blue Day, is an incredible autobiography by a man with autism. What does autism have to do with philanthropy? Stories about autism inevitably ask "what is normal?" What is normal? is a question that forces you to ask, "Who decides?" "Who decides?" is a fundamental part of my lifelong interest in understanding "What is public and what is private?" The question, "What is public and what is private and who decides?" is - in my mind - the fundamental question about philanthropy.

Monday, March 12, 2007

Big Problems? Try small problem solving.

An important post from Denise Caruso over at Hybrid Vigor this morning - citing an article called the "Myth of Carbon Offsets" on alter.net. Caruso, author of Intervention and NYT columnist (subscription required) notes that the bigger the problem (climate change, food safety, etc) the more likely that real solutions - those that are equitable, sustainable, and transformative (my definition of real) - must involve local, community stakeholders.

Here are my two sound bites on this nugget:

"The more global the problem the more local the problem solving."

Or, if you prefer,

"The bigger the problem, the smaller the problem solving needs to be."

Philanthropists, development experts, social investors and entrepreneurs give local stakeholders rhetorical due, but the focus on replication and scale pretty quickly quashes their real support for local expertise. Finding ways to foster global connectivity and let small, local solutions take hold is the real challenge. This is the same challenge I wrote about in my essay on Open Philanthropy in The World We Want - from which I still owe blog readers the last three of my seven building blocks for open philanthropy. The full list of seven:

1. Facilitate adaptation, don’t hinder it
2. Design for interoperability, local specificity will follow
3. Build for the poorest
4. Assume upward adaptability
5. Creativity and control will happen locally
6. Diversity is essential
7. Complex problems require hybrid solutions

And the earlier posts describing numbers one and two and three and four.

Friday, March 09, 2007

Aligned investing by any other name

The March Issue of the Harvard Business Review has an article on "Competitive Advantage on a Warming Planet." It makes the case for why businesses - regardless of industry - need to be able to "...beat competitors in two areas: reducing exposure to climate-related risks and finding business opportunities within those risks." It features side-bars on "potential revenue drivers" and "cost drivers" from climate change. It has the requisite business magazine 2x2 chart for "plotting your climate competitiveness."

It is an argument to management that is precisely in line with this one:

"There are sets of qualitative management measures that look at how a company will succeed given the limits of our environmental resources – what economists euphemistically call a “carbon constrained economy” and what the rest of us ... call global warming. These measures have actually served as “searchlights” in finding companies that are leading the way on alternative fuels, clean technology, and sustainable business practices. The result – investors who use these screens have invested in Toyota, which has returned 10:1 on the dollar over the last decade, while Ford has remained flat, and GM is not doing so well. The result – a better bottom-line for the companies, a better return for investors."

That paragraph is from my comments on a panel about social investing. Qualitative management screens help investors find companies that manage their resources in line with economic and environmental realities. Warren Buffett, a better source of investment advice than I am, has said, "I never made a good investment with bad management." According to HBR, managing companies to be "climate competitive" is critical to corporate success going forward. As any ten year old could tell you, "like, duh."

A wealth of wealth builders

Microfinance has gotten a lot of (mostly-deserved) attention lately. But it isn't the only strategy that philanthropists (and others) support to address the breakdowns in financial systems that keep the poor poor. Issue Number One 2007 of Ford Reports called "Saving's Grace: Building Financial Assets" is a good, quick read on a subset of the many ways to address these systemic shortcomings. The report discusses:

Microfinance
Credit unions
Matched savings
Homeownership
Credit and credit scores for the "unbanked"
Individual Development Accounts
Mortgage choices for the less affluent
Federal policy proposals for building assets among the poor

This isn't groundbreaking stuff. Most of it will be familiar to those already involved in community finance. But the report is a solid introduction to how the different tools fit together. The report also lists additional resources, including:

Is this the whole universe of options? No, of course not. It doesn't include, for example, LivingGoods, which aims to make social franchising the next great development in social finance. Are all of the above organizations Ford grantees? No doubt. Is there a problem with that? Sure, if you don't agree with the Foundation's mission or its strategies. If you do agree with them, a report like this, which lays out an overall picture of a problem, gives quick cases of specific organizations working on the issues, and breaks down the various approaches and tools that are available is very helpful.

Predictions on the future of fundraising

From Gayle Robert's Blog.

She posts 10 predictions; I'll whet your appetite with these three:

Donor-driven calls for increased efficiency will reduce the number of nonprofits.
Corporate giving will disappear, to be replaced by various forms of cause marketing.
The number of operating foundations rise.

Live your values

This is the motto of actics - a morphed wordination of action and ethics. The idea: companies, organizations, individuals can state their values, crunch them into widget form, post the widget on their blog or website, and get feedback from customers, sponsors, friends (and anyone else) on how well they are "living their values." The actics blog lets you communicate with the folks behind this tool, which they see as part of next generation corporate social responsibility, otherwise known as...wait for it...csr 2.0. And of course, actics is more than a widget its a social network.

Transparency is good. Aligning what you do with what you believe is good. Getting feedback is good. But if you ain't already doin' it, a widget ain't gonna do it for you.

Thursday, March 08, 2007

Its beginning to feel a bit like...some folks get it

This post on xigi is really inspiring:

Danish pension funds want to invest in Africa. Leads to creation of capital funds, such as C-4.
The announcement of myc4.com, another mapping tool that will help investors, capital, and social enterprises find each other (like xigi does).
The linkage of these capital activities to the Millennium Development Goals - finally, aligning action with rhetoric with capital.
The continued growth of xigi - as a mapping tool, information source, pattern analyzer - its helps you sort what you know, array it so new patterns emerge, and display it so others can find it. The minute they find it and add to it, the picture changes, and off you go.

I just spent 4 hours on a plane writing some about the current manifestations of philanthropic trends that first emerged about a decade ago. At that time, as I was writing about these things, the big changes for philanthropy had to do with the emergence of new financial vehicles and vendors, the potential for knowledge sharing brought about by the Internet, and the need to consider policy and regulations as part of philanthropic strategies. Specifically:

Innovations once on the edges of philanthropic activity are starting to draw out the center (PRIs, community investing).
The once elusive markets for financial tools (xigi, et al) are definitely coming together. Philanthropists who understand the relationship of broad regulations on their ability to be successful are standing up and saying that policy matters (see announcement on Omidyar Network today).
Even the next stage of online giving morphing into knowledge brokers seems possible, as consolidation becomes real (Convio/GetActive, BlackBaud/Target announcements) and management gets shaken up (Gruber out at Kintera).

As I was writing I had this sense that many of the highly optimistic, big scale changes we expected from the "new philanthropy" boom of the late 1990s might actually be coming now. An analog to Internet boom 1.0 and 2.0 - we might actually be seeing the real, sticky changes in the philanthropic industry that many thought were going to arrive in 1999.

Self Interest and Social Capital Markets

Bob Ottenhoff of Guidestar offered this proposal for social investing in his President's letter of March 2007:

"Foundations manage hundreds of billions of dollars, but most hold very stringently to using no more than 5 percent of their investment returns for philanthropic purposes. Current practice is to build a high wall between a foundation's investment arm and its program activities. More than one program officer has been told that he or she doesn't have a prayer of influencing a foundation's investment practices. But does that have to be the case?
What would happen if every foundation took a tiny percentage of its assets—let's say one-quarter of 1 percent—and invested—not granted—it in nonprofit organizations and required a modest return, one roughly equivalent to investments in other low-yielding investments, such as government bonds? What if foundations invested this money in such activities as Program Related Investments (PRIs), or created something new like "nonprofit investment bonds," or started a lending program for nonprofit organizations with scalable economic models of sustainability?
Many nonprofit organizations have the capability of expanding their scope and impact but are hindered by the systematic lack of investment capital. Foundations have the potential to do more to advance philanthropy and meet the needs of communities today. Small changes in foundation investment practices can unleash new resources that could strengthen nonprofits and provide a return on investment for foundations' investment managers.
It would be a small step, but a step that could have a dramatic impact on—with lasting consequences for—the nonprofit sector."

So, here's what I'm wondering about the "small step" above, and others like it:

The critics of social investing rely on their claim that "a foundation's decision to invest/not invest in certain ways would have no effect on the capital markets because endowments are bit players." But to what extent are the financial firms that might lose some small percentage of these dollars to PRIs or community investing just looking at their own bottom lines when they criticize strategies such as Ottenhof proposes?

As (a paraphrase of) the old adage goes, "One-quarter of 1 percent here, one-quarter of 1 percent there, and pretty soon you're talking about real money." Endowment funds may not be more than a blip in the overall capital markets, but pull them out of an investment manager's portfolio and see if they notice.

New Congressional Caucus on Nonprofits

This story came from the Chronicle of Philanthropy, via the Examiner. The announcement from the House of Representatives came following the Council on Foundations annual "Foundations on the Hill" event, in which almost 400 foundation professionals visited with their Congressional representatives and staff.

Wednesday, March 07, 2007

10 reasons the discussion is always about nonprofit redundancy...

Notice how no one ever talks about "too many foundations?"

Time ran an article on "Rethinking Nonprofits." Remarkably, nothing new was said. However, the Agitator's comments on it are priceless. My favorites are number 8 + 6:

"8. I recently learned from my favorite sources (MySpace, The Daily Show, my text buddies) that people are still starving, the planet's still getting warmer, cancer hasn't been cured, Brittany can't find a decent rehab center -- what the **** have all these existing nonprofits been doing all this time?! +
6. I signed an online petition once to stop world hunger ... and nothing happened."

Of course, nowadays THE thing to do is start a 'social enterprise' of one's own. But, you get the idea.

My xigi map

Check it out here.

Social Media and NPOs

Confused by all the hype? Well, here is more info on social media and nonprofits than anyone person could possibly generate. Which is why it is being captured on two linked wikis and several blogs. Check out the wikicarnival on social media and nonprofits at SocialMedia.Wikispaces.Com
and web 2.0 for nonprofits and Designing for Social Change .

Ford Foundation eLibrary

The Ford Foundation has put hundreds of its reports - internal and external - on its website for free. Check out FordFound.org/eLibrary.

The search function lets you read online or download a pdf of the reports. Each entry has a brief notation that explains what the document is and for what purpose it was produced.

I've had several conversations with foundation executives over the years about the opportunity present in 'opening up their file cabinets' to the rest of the world. My argument for doing so generally runs as follows:

You've paid for this research; let others use it - you'll leverage more dollars for your investment.
The organizations and causes you are researching need to know what you are learning about them and others.
If the research is any good, others will use it. If its not any good, it will be ignored. Don't you want to know if the research you're paying for is any good, and be in a position to improve it?
Foundation-funded research is a much a part of the 'public good' as are their grants. Information on it (and the research itself) should be as public as grants lists. (My tongue-in-cheek calls for the Freedom of Foundation Information Act almost always made the executive sit down and catch his/her breath).

My favorite response - which I heard repeatedly from a senior executive at Ford - was "Yes, we have a lot of stuff in the files. What makes you think any of it is any good?" He was never convinced by point #3 above.

So, my hat is off to Ford. Other foundations that have opened their file cabinets in useful ways include the Robert Wood Johnson Foundation , Charles Stewart Mott, and W.K. Kellogg Foundation. I'm sure there are lots of smaller foundations that have useful information to share - and it may very well be packaged more appropriately for other foundations and individual donors. If you know of other such resources, please send me the link.

There is a long way to go to make this kind of information really useful - like synthesis of it, short excerpts, critical reviews, user rankings, better searches - and so on and son on - but at least the cabinet is finally open. If I knew how to 'mash up' the resource, I'd link it to a 'user recommendation, comment page, wiki, who's reading what structure' and let the world at it.