Pro Bono Brasil

The "Pro Bono Brasil: From Web 2.0 to City 3.0" conference - today in Second Life - launches a year-long discussion exploring charitable giving in virtual worlds and looks at a new economy that values global collaboration and sharing of knowledge.

The event is co-hosted by the University of Southern California Center on Public Diplomacy and the Institute of Advanced Studies of the University of São Paulo, with support from the John D. and Catherine T. MacArthur Foundation.

SLURL: http://slurl.com/secondlife/MLBR%20Mosaico%201/213/236/22/?x=400&y=300&title=Cidade%20do%20Conhecimento

Chicago Tribune on Prizes

Here is a good story on philanthropy and prizes from Sunday's Chicago Tribune.

Note this quote from an 18 year old winner of one the contests sponsored by ASHOKA and Changemakers:

"I found the contest on the Internet and I didn't think it would amount to much, but it turned out really well," said Kyle Freas, 18, of Plano, Texas, president of the Youth Together organization that won April's "That Was Easy" national contest sponsored by Changemakers, which is a project of Ashoka, a non-profit group that supports social entrepreneurs.

Working with a seed grant of $800 from a non-profit organization, Youth Together raised $70,000 by organizing kids to perform community service and raise money for shelters, children's hospitals, animal rescue centers and other causes. Freas' group won a $1,000 grant and a $5,000 shopping spree at Staples."

Turning $800 into $6000 worth of grant money and office supplies and $70,000 for community groups. Pretty good ROI.


When nonprofits provide risk capital

This story in DealBook highlights the role that charitable endowments can play as risk-taking investors.

The Cystic Fibrosis Foundation has invested $22 mm in new drug research led by commercial outfit FoldRx.

The CF Foundation is particularly fond of these approaches, notes the Boston Globe:

"In 2007 alone, the Cystic Fibrosis Foundation -- whose primary mission, through an affiliate called Cystic Fibrosis Foundation Therapeutics, is to keep the drug-development pipeline filled with promising prospects -- has earmarked $48 million for drug investment in pharmaceutical companies."


According to the Globe, The CF Foundation invested more than $138 million in Boston-area biotech firms alone. Puts a new spin on the term "aligned investing."



Prize winners...and more prizes


Here's some more news from the prize front. First, the winners:

The Robert Wood Johnson Foundation announced the finalists for the 2007 Games for Health Competition. The winners are:

The finalists in the 2007 Games for Health Competition (Open Competition):

"Open Prototype: Neuromatrix, submitted by Morphonix of Sausalito, Calif.—$20,000
Neuromatrix is a game designed to teach adolescents ages 11-14 about the brain and sustain their interest over time. The game takes players through a series of short movies and games where they participate in a brain exam and make decisions very much like a neurologist would encounter in a real-life setting.

Open Storyboard: Food Finder, Erin Hoffman, Albany, N.Y.—$5,000
Food Finder is an action-packed game envisioned for the Nintendo DS system. It shows children ages 8-14 how to make healthy eating choices through an interactive quest to find nutritious food groups.. As players work through the game, the healthier food choices become harder to find."

In the Student Storyboard (U.S. College Students) competition, the winner is:

"Bizarro Olympics, Team Fun, Indiana University—$5,000
Bizarro Olympics is an interactive video game concept designed for the Nintendo Wii™. This exergame, or video game requiring physical activity for game play, blends the traditional surreal gaming environment with an exercise theme."

For those interested in results of previous mentioned prizes you can check winners below:

The RWJF Games for Health competition is run in partnership with Changemakers - which seems to be going into the philanthropy/prize/competition business. In addition to the Games for Health Competition, Changemakers is in varying stages with the following three additional prize events:


Upcoming Enter Prepare to Vote Vote Winners Announced


And some more philanthropic prizes of note:

The Skoll Awards for Social Entrepreneurship. The review process for 2008 begins on August 27 - All applications are due in by September 24, 2007.

The judging for the PBS/NOW Social Enterprise award is underway. Three finalists will be picked by the judging panel (of which I am a member) and then the public can vote for the best of those three.

Other prize competitions - noted here - are still underway, as is MacArthur Foundation's Digital Media and Learning Competition.

Live and (not) in person...


I am moderating a panel of funders* at the third annual Second Life Community Convention, which starts on Saturday in Chicago. On Saturday, however, I will be home eating Dim Sum in San Francisco, having finished a week long trip to New York, Boston, and San Antonio.

Odd.

You can participate in the panel and the conference from where ever you happen to be. On the web, the panel discussion is (already) unfolding here. (spotlight.macfound.org)

You check in on the rest of the conference (on the web) here and get the unfolding panel discussion here and here. And, of course, you can participate in Second Life.

Media can change your life. Not only am I moderating a panel that I'm not attending, on September 16th we'll be launching the Giving Channel on fora.tv - of which I will be Executive Producer. Who knew? Stay tuned for more on that news. Where ever you are.

*Funder panelists include Benjamin Stokes (MacArthur Foundation), Chinwe Onyekere (Robert Wood Johnson Foundation), Allyson Knox (Microsoft Corporation), and Brad Lewis (Learn and Serve America). The "live" moderator will be Barry Joseph, Online Leadership Director, Global Kids who notes that:

"All five presentations will be introduced by Craig Wacker, MacArthur Foundation Program Officer. Two papers will be produced from the SLCC proceedings, one on the Non-profit and Philanthropy Thread and one on the Education Track. Before, during and after the SLCC, two related dialogues will be held on the MacArthur Foundation’s Spotlight Blog (spotlight.macfound.org). "


Inside community foundations


My opinion piece in Sunday's San Francisco Chronicle stirred a few pots. I've heard from philanthropists and foundation leaders from around the world. Lots of people emailed me directly. Some folks posted comments on the newspaper's website, such as this one from Nebraska:

"Community Foundation Ideas from Nebraska: The Omaha Community Foundation is helping to develop a city wide community design plan called Omaha by Design that values the unique character of each neighborhood. ... I think the HomeTown Competitiveness model (Youth, Entrepreneurship, Leadership, Charitable giving toward community development) can be applied at the neighborhood level in large urban settings if the neighborhood has a good mix of business and residential."

However, I hadn't heard much from the community foundations in my own back yard (San Francisco Bay Area). Today, finally, my phone rang.

"What about the regional work we do in the arts? And the Bay Area Livable Communities Initiative? And the partnerships we've run on immigration or with private foundations to spur support for individual artists?"

These are fair comments. Local community foundations do work together - and the examples above are real, important, and - in some cases - serve as models for this state and other regions.

I take full credit and responsibility for the piece I wrote. And I knew about these initiatives and deliberately didn't sing their praises.

The point of the article was to inform the readers of the paper - hundreds of thousands of individuals across northern California - of the resources, skills, talents, and opportunities that community foundations represent. I liken these readers to "my cabbie"- the archetypal informant I ask whenever I travel to a new city, "Do you know about your local community foundation?" Sometimes they do. Usually they don't. I've interrogated cab drivers for years. It amuses me that Jim Collins uses "cab drivers who say "we're really proud of our orchestra"" as an indicator of "distinctive impact."* I want cab drivers to sing the praises of community foundations. Or at least know they exist.

My phone caller's concerns were legitimate. But I wasn't writing a critique of community foundations, I was writing a "call to community." If the piece were successful, it wasn't going to make my phone ring, it would ring the phones of community foundations.

All of this led me to think about two things - first, how we measure success in our own work (the 'we' in this case is me, my company, and all foundations). In this case, my measure of success would be the public's outreach to community foundations. So, if you work for a community foundation, let me know if your phones are ringing.

My second thought was about how we all need to put ourselves in the shoes of our public/customers/constituents. Usually I write in the trade press - about philanthropy, for philanthropy, by philanthropy. This piece was written for the public - the same public that community foundations serve - not the community foundations themselves. It wasn't an "inside baseball" discussion of all that these organizations can do, it was intended more as "what I would tell my mother" about community foundations.

There are lots of great stories about the good work that community foundations do - about their partnerships, opportunities, and successes. There is even a new benchmarking resource to collect and organize these stories. But we have to make sure that our communities know these foundations are there, doing this work, if any of it is going to matter.

Let me continue the 'inside baseball' metaphor. To my mind, it doesn't matter if the local major league team has the greatest strategy in the world for a "bottom of the ninth, down by one, two out, man on" situation, if the fans have become so disenchanted by steroid and payroll scandals that they're no longer watching. I do believe its important that foundations do their work well, thoughtfully, creatively, and effectively. And, I think its as important that the public know about it.

* See Jim Collins, Good to Great and the Social Sectors, 2005, p. 6.

Tech and grantmaking

This article on the website of Grantmakers for Effective Organizations (GEO) presents several practical examples of foundations use of social media tools to advance their missions.

I'm proud to say that the author, Amy Luckey, is a colleague of mine at Blueprint Research & Design. The article is a public resource extracted from a client project we completed - just another example of how we seek to provide public resources from our client engagements. Thanks to GEO for helping us make the resource broadly available.

Emerging philanthropic capital markets 2.0


Three years ago I published Creating Philanthropic Capital Markets: The Deliberate Evolution. Among other things, the book points out the role that knowledge sharing, efficient exchange mechanisms, and external awareness play in high-functioning markets. Specifically, the book outlines nine key industry elements, a set greatly informed by Michael Porter's work on strategy. I provided examples of philanthropy's industry elements that existed in 2004 and identified key gaps. (Bernholz, p. 49)

The elements are:

  • Firms
  • Research organizations, data sources
  • Industry associations, government relations
  • Regulatory bodies
  • Media/press
  • Professional training and standards
  • Credentialing or monitoring of practices
  • Independent analysts and information brokers
  • Rating organizations/metrics
Needless to say, there has been an explosion of activity since 2004 and major funders like the Hewlett Foundation, Gates, Robert Wood Johnson, and Milken Institute have begun to take notice.
  • As for dedicated media, several magazines focused on philanthropy launched since 2004, including GOOD, Benefit, and Contribute. We also have more than our share of blogs and online newsletters on philanthropy.
  • Although professional standards for grantmaking don't exist, the fund raising side has credentials and ethics standards and financial planners can now get certified to guide philanthropy decision-making. There are registers of philanthropy consultants, self-organized consultant associations, and a planning effort underway in the UK to consider registering charity advisers.
  • There are other forms of information in development also - the University of Pennsylvania's new Center on High Impact Philanthropy is developing a metric for philanthropy called "cost of benefit." FasterCures, an initiative of the Center for Accelerating Medical Solutions, is rolling out a philanthropy advisory service to get top quality research to individual donors interested in disease research. The goal - align philanthropy dollars behind "best in class" options.
Philanthropy as a whole has changed dramatically since 2004. Of particular note is the confluence with social enterprise, social investing, and new financial vehicles. Tools such as xigi show this happening in real time, and the creation of the B Corporation is a shot right at the sweet spot of a whole new way of thinking about the market.

There are still important gaps. I'm working on filling some of them with a new venture, so I won't say anymore here (yet). Needless to say, at the very least it seems to be time for a new book.

Digital media Competition


The John D. and Catherine T. MacArthur Foundation has announced a new competition focused on digital media and learning. Information is here.

Look carefully at this foundation-funded competition - its open to individuals, nonprofits, and corporations - because innovation comes from everywhere.


Luis Ubinas named President of Ford Foundation


Ubinas is a west coast based director of McKinsey & Co., who has worked with media, technology and telecommunications companies. He founded McKinsey's Latino networking and mentoring organization that helps the consulting firm recruit and benefit from a diverse work force. Here is a video clip from Newpolitics. His work on media and technology certainly put him in the thick of key social issues such as the blurring of public and private sector roles, property ownership, access, knowledge, equity, economic development, and community control.

He grew up in New York and attended Harvard College and Harvard Business School. He is married to Deborah L. Tolman, Professor of Human Sexuality Studies at San Francisco State University and founding Director of the Center for Research on Gender and Sexuality.

Flattery will get you ... a post


I refuse to be suckered into posting every pitch that crosses through my email inbox, but this one was irresistible for two reasons - first, the writer clearly knew my interests and second, I thought it might be of interest to you.

So, here, in her own words, is the pitch for the community level Neighbor.com "for benefit" campaign for My New Red Shoes:

"I wanted to tell you about a local Bay Area “for benefit” initiative, and ask if you might comment on how it’s an easy way for someone to make a contribution to a local kids’ charity as well as help local businesses while simply doing what people do best – giving an opinion. (It’s also a great use of funds for a start up.)

Palo Alto company, Neighbor, has partnered with Bay Area nonprofit, My New Red Shoes, which provides new clothes and shoes to homeless local kids for school. Through August 25th, for every opinion of a local business or institution that’s written at Neighbor.com using the code SHOES, Neighbor will donate $1 to My New Red Shoes – up to $10,000. This is 10% of the charity’s operating budget and represents a few hundred disadvantaged children going to school in new clothes – and a smile."

Frequent readers will recognize immediately the post's examples of 'sector blur' - the start up company using some of its angel funding to make charitable gifts to a non-profit so kids can go to public school looking good. Kids get shoes, charity gets money, startup gets email addresses, users, and data for their database.

Its a whole new world out there. I just wonder about the pitch made to VC's for startup capital - give us the money so we can use it to entice do-gooders to 1) populate our database (e.g. crowdsource our work) and 2) we will give it to charity. On the one hand, thats a lot of hands for a mere $10,000 to pass through before getting shoes on kids. On the other hand, if the same money builds a useful company and puts shoes on kids, that's a good thing.

The economists call it fungibility. I call it embedded giving.



Giving and new media (Tech Roundup 08.07)


You asked for it (or not), and here it is - a stock exchange for nonprofits, Altruistiq.

If you were about to ask for your own social network, try JustMeans - a linkedin for the public benefit sector.

If you'd like a web portal (remember those?) for blogs, videos, podcasts, news, and research on social change just click over to Change Fan.

Finally, if you'd like an online philanthropy channel, head on over to Philanthropy.TV.


The value and potential of community foundations

My opinion piece on community foundations, titled Toward a better Bay Area appeared Sunday, August 12, in the San Francisco Chronicle (page C-2, Insight Section).

You can read it online here.


Capital Market Development

I've written about B corporations here and here. This is a new effort to register "public benefit companies" and help solve the commercial/nonprofit hybrid dilemma. And to do much more. This is from B Corporation's web site on how it plans to support new B corporations.

  • Capital Markets (access and development)

    The Capital Markets Council will be comprised of 6-12 entrepreneurs, thought leaders, and practitioners in the fields of social finance and socially responsible investing, capital markets and financial services, and corporate social responsibility.

    The Capital Markets Council will provide guidance to B Lab's Board of Directors in two primary areas: first, recruiting and developing a critical mass of B Corporations in the financial services sector; second, facilitating development of a capital marketplace that ensures B Corporations access to mission-aligned capital throughout their lifecycle.

    Members of the Capital Markets Advisory Council will:

    • Work closely with the Standards Advisory Council to develop appropriate standards for financial services B Corporations consistent with their unique regulatory environment;
    • Work closely with the Branding Advisory Council to recruit financial services businesses to become B Corporations;
    • Identify capital markets needs of B Corporations and develop recommendations to serve these needs (i.e. equity/debt intermediaries, exchanges, etc);
    • Facilitate ties to and leverage mainstream financial markets by educating investors in using B Corporation standards to:
      • screen investments
      • advocate for preferential procurement
    • Engage the philanthropic community around mission-related investing in B Corporations;
B Corp is a brilliant contribution to improving social capital markets. It is what I call a "code level" strategy - it provides an alternative option at a core systemic level. That the founders have thought through the system, the alternative, and the supports for the alternative is all the more important.

There is a lot going on in the philanthropic capital world - a new book's worth, in fact. I'll profile some of it here, and hope to get book number two out soon.

(Full disclosure: I just registered my company, Blueprint Research & Design, Inc. as a founding B Corp)

Imminent financial collapse? Here? Now? or not?


Check out the run on banks in SecondLife and these posts on whats happening to the virtual economy. Apparently a 2L bank, Ginko Financial, promised accounts with 100% interest. When it couldn't come through (which, if it had, would have had an interesting inflationary impact), customers...er, avatars, lined up at ATMs to get their money out. All this happened around the same time a ban on in-world gambling went into effect and then there was a stock exchange robbery. (I am not making this up)

Wow. Real world financial collapse in virtual worlds. What does this mean for philanthropy in virtual worlds? The build up to this and its potential implications are discussed in this great article from Technology Review.

This will be fascinating to watch. I've commented (frequently) on the way private ventures flourished in SecondLife, well before either a public sector or an independent sector took hold
(hence one of the challenges/opportunities of trying to launch philanthropy in-world).

Will the response to all this be a call for regulating financial institutions (a public sector)? Will the avatars collectively organize to monitor and control financial institutions (independent sector)?

Its not just space we're playing with either - its time. Planning now for future historical study, the good folks at the Library of Congress are including virtual worlds in their digital preservation efforts. This means that events like this one now occurring in SecondLife,will be saved for the future, so historians in the real world can help us to look back and understand what happened. Or something like that.

Stay tuned...


A new kind of foundation list

Hedge fund managers are notoriously competitive, even with (especially with?) their foundations.

HedgeCo lists the top 25 foundations created by hedge fund managers - by asset size and rate of growth. In case you care, here are the data:

  • The top 25 hedge fund foundations now have $3.52 billion in assets. That is an increase of 76.8% over the $1.99 billion in assets the previous year.
  • Gifts to these foundations in same time period totaled $865 million, a 190% increase over previous year
  • Biggest hedge fund foundations are (top 3, hit the link for more):
  1. George Soros, Open Society Institute
  2. Julian Robertson, Robertson Foundation
  3. Jim Simons, Simons Foundation


Here's a tip to purveyors of industry data (Foundation Center, Independent Sector, Giving USA, etc.) - its not enough to track philanthropy by region, issue or type of foundation - you need to start collecting data by "employment of endower" - e.g. software, hardware, hedge fund, steel magnate, banking, telecommunications, etc. etc.

Oy.

All media, all the time, on demand

CreateSpace, the new name of Amazon On Demand, lets you publish and sell books, movies, cds, videos, and dvds (no 8 track tapes, sorry). There are other on demand, do it yourself publishers, such as iUniverse, Xlibris and Lulu.

In related news, Google now allows people in the news to comment on the actual coverage of them.

So if you've got something to say, sing, or show - do it. And if you don't like what others say about it, say something back.

So what for philanthropy? Implications fall into several categories:

  • Information access and credibility
    • Where do you get your information?
    • How do you know whether its trustworthy?

  • Knowledge Sharing
    • What do you do with your information?
    • If you share it, in what medium? Who does that medium reach? Who does it miss?
  • Ownership
    • What information do you own?
    • What information do your grantees and partners own?
    • What does these ownership arrangements mean in terms of use, value, and impact?
  • Professional structures
    • What skills do you need to have to do your job - reading, writing, and Photoshop? Video editing or DVD encoding?
    • How will you interview or meet with people? On YouTube or in SecondLife?
    • If you don't do these things, are you missing something or some groups?
  • Impact
    • Are these do-it-yourself technologies useful to your grantees/partners?
    • What happens to the cost of outreach or publicity? Can dollars be redirected?
  • Meaning
    • Does any of this matter to me or my philanthropy?

Three key questions for donors

1. What do I care about enough to dedicate my time and money to?
2. Who can help me do it?
3. How do I know if they are doing a good job?

Simple. But not easy.



Omidyar and Patents


I've written here, here, here, and here about patent philanthropy. Now, courtesy of Gifthub, I have learned that the Omidyar Network, which is about to shut down its online community, omidyar.net, has filed for a patent for the point system it used on the site. So here is just a list of the thoughts that come to mind:

  • Noting the comments on GiftHub, I never liked the point system on o.net, it was too complicated for its purpose, so who cares;
  • I'm sure this will make all those disgruntled souls over on o.net really happy to have invested their time in building community - when actually they were just unwitting beta testers;
  • NOW do you believe me that the sectors have blurred beyond meaning - a commercial enterprise launches a free online community for nonprofit do-gooders who turn out to be beta testing a system that will be patented so as to collect royalties on its future use?
  • Wait a minute, if the sectors have blurred this much, maybe the system is being patented, so it can be protected, royalties collected and then donated to a public trust that will fund the advancement of the Creative Commons and Open Source coding (OK, OK, stop laughing...)
  • The value of something is in the eyes of the beholder. Different beholders see different value(s) - to community members at o.net it was in the community. To the owners of the network, it seems the value was in the code.
  • NOW do you believe me that philanthropists should be thinking about IP?
  • I'm glad some philanthropists agree with me that IP matters.

More money for your mission

Most discussions about socially responsible investments focus on whether or not the returns can equal those of value-neutral portfolios. But these comparisons miss the boat when it comes to philanthropic foundations.

Endowed foundations exist to support selected social goals. Their missions range across the spectrum. But regardless of their values, most philanthropists agree on this: more money going to their chosen missions beats less. In fact, those who argue for value-neutral investing do so claiming greater returns lead to more money for grants.

Here’s the irony. Putting the most money toward mission actually results from aligning a foundation’s investment policies with its social goals. It’s not magic-- just simple math.

Two philanthropy basics. First, private foundations must spend at least 5% of their endowed value on their missions each year. That’s the law. Second, foundations care about protecting their principal and are not known for aggressive investment policies. Most tend to seek returns of 9-10% per year.

Imagine a foundation that invests just for greatest returns and achieves 15% growth. A $100 million endowment would grow to $115 million, pay $5 million in grants and start the next year with a value of $110 million.

But suppose the foundation invests 10% of its endowment toward its mission instead. This can mean they invest directly in community-based ventures, vote proxy shares, or make low interest loans to mission-related ventures. If it earns back its money on these investments and makes 15% on the remaining portfolio, it will have directed $15 million toward its mission ($10 million investments and $5 million in grants) and have an endowment of $108.5 million. The foundation will have realized a 200% increase in money toward mission at an (unrealized) loss of just 1.5% in total value.

When the goal is putting more money toward mission, aligning investments with a foundation’s values simply adds up.

Hitchhiked

The Hitchhiker's Guide to the Blogosphere found me - this is a nice writeup of the blog (even though they are a year further into the future than I am). Thanks, folks.

Bernholz in Business Week on Aligned Investing

My opinions on social investing for endowments are well known to readers of this blog. Business Week picked up on them, and had me redirect my thinking to be relevant to individual donors and investors. You can find the article here.

I'll be debating this some more come September 18 at the Council on Foundations Community Foundations conference, with specific recommendations and opportunities for community foundations. Thanks to Brian Byrnes of the Vermont Community Foundation for the invitiation. You can find the joint Blueprint/Monitor white paper on the subject of aligned investing for community foundations here.

Others, such as Goldman Sachs, have lots to say on aligned investing. Goldman has a new report out that finds that companies that lead on environmental, social and governance (ESG) policies lead their peers in stock performance - by 25%.

Read the abstract here and download full report here: http://www.unglobalcompact.org/docs/summit2007/gs_esg_embargoed_until030707pdf.pdf

Goldman Sachs is also offering a new list of companies that meet its ESG policies, called GS SUSTAIN. I note this because some critics of screens for ESG decry the quality of the researchers and the standards used. I suppose they'll quibble with Goldman's team also - after all the company only hit record profits in 2006 setting a Wall Street record of $37.7 billion in revenue and $9.5 billion in profit. Can't imagine they know what they're doing.

Corporate acronym of the day quiz: What is a CRO?
Answer: Corporate Responsibility Officer


Thanks to Lisa Richter, GPS Capital Partners, for bringing the Goldman Sachs report to my attention.