2007 Buzzword #10 - Philanthropy 2.0


After all the hoopla about embedded giving (including this story that ran on the front page of Sunday's Washington Post) I am tempted to hang up on the list of 10 buzzwords. I'm guessing that nothing else will compete with the buzz of that one.

Of course, since the point of this list of buzzwords is to point out some silly ideas, flag some valuable ones, remind myself and you that the jargon and hype grows faster and with more flourish than meaningful change, and, really, just to have a little fun, I figured I'd better finish off the list.

In the spirit of New Year's Eve countdowns, everywhere, here then is the full list of 2007 philanthropy buzzwords.

10. Philanthropy 2.0

This is the newest one to the list so here's an explanation. Philanthropy 2.0 (or giving 2.0, charity 2.0, etc.) is a riff on Web 2.0 and refers to any of the zillion efforts or applications out there that are trying to make philanthropy more interactive and user-generated. Examples include the spread of charity badges and widgets, community giving sites such as change.org or the much hyped causes application for Facebook, Kiva.org, etc. etc.


Being named a buzzword doesn't mean that the ideas matter. It also doesn't mean that an idea is nothing but fluff. This list is deliberately a mix of both fluff and matter.

I believe that some of these ideas matter in profound and meaningful ways - whether or not the actual buzzword is the term that sticks. Notably, the ideas, purposes, and mechanics behind B Corporations, Social Stock Exchanges, Aligned Investing, and Endorsement Philanthropy have the potential to make lasting and significant change in the business of giving. Microfranchising also stands to change how aid and development efforts are organized. The concepts that underpin open philanthropy are critical to a more transparent, accountable, and leveraged set of giving practices - let's hope they take hold.

If I'm right, these buzzwords will go far beyond buzz to actual impact and acceptance. That would make for a good 2008. Regardless, starting January 1, I'll be on the lookout for the next ten buzzwords.


Washington Post on kids and giving

The front page of Sunday's Washington Post featured this story on kids and philanthropy. The reporter looks into embedded giving as well as the enormous change in scale of fundraising by kids these days.

Compare the ten or so dollars per Halloween that my siblings and I used to raise for UNICEF to the tens of thousands of dollars raised by kids today. In addition to those examples in the WaPo story, check out what a few teens in the East Bay have done through FundaField to build soccer fields in Africa.

NYT editorial on embedded giving

The New York Times ran an editorial today (Saturday, December 22) about embedded giving. Here is the link.

I can't run the whole editorial, but here's the closing paragraph, which is in line with comments I've made in this space, in the Times, on NPR and to ABC News.

"Rooting out philanthropic hawkers is going to be tough, especially in the age of Internet retailing. A host of profit-seeking sites have sprung up online, with names like benevolink.com (slogan: I Shop. Therefore I Give.) and charitymall.com, offering to satisfy the giving spirit.

For now, the old-fashioned, direct, tried and true route to charity seems best."


Another interview with me is set to run on NPR's program Day to Day on Tuesday, December 25. The other buzzwords will never live up to this one.

A diversity of measures

(Reposted from Alliance Magazine)

What do public benefit, performance metrics and evolution all have in common? No, it is not just the tendency of some to dismiss them all as ‘merely theories’. It is that they all rely on diversity to thrive. Whether you are looking at the provision of social services in Britain, the arts community in Berlin, or affordable housing in Boston, you will find a mix of non-profit organizations, government agencies and private companies providing the benefits. With regard to performance metrics and measures of impact, we have seen an explosion of indices for corporate social responsibility, social return on investment, and double bottom line accounting. And, of course, evolution is inherently linked to biological diversity, which is itself a lynchpin of a healthy region, ecosystem, and, ultimately, planet.

It is ironic, then, that one of the most consistent challenges to developing meaningful outcome or performance measures in the social sector is the old canard that ‘there are too many definitions of success’. In other words, success is too diverse to be measured by any common standards. Critics of measurement efforts will argue that some of the social sector is focused on school choice programmes, while others are trying to expand public investment in public schools. These entities are working at cross-purposes – how can there be one definition of success?

The answer is simple: the search for measures, indices, metrics and standards need not be monolithic. They will be useful when they are as diverse as the sector(s) that they measure. This is why the Alliance/Keystone survey and analysis of the state of impact measures in civil society is so important – we must know what we already know in order to improve.

And the survey findings are illustrative if not scientifically testable or comprehensive. Donors and civil society organizations agree on the value of collecting data across several domains, from activity level, participant reach and productivity to direct and indirect change. There is widespread agreement that evaluation is under-resourced.

There is, not surprisingly, some difference of opinion – for example, about the utility of various evaluation processes, and the degree to which evaluative processes are under-funded – and there are differences in how each side views the other in terms of follow-up. What does all this tell us about impact evaluation in civil society?

There are several findings that could advance the sector as a whole, if they are applied with an eye towards improvement and not obstruction. First, we have some way to go in developing broadly useful practices and distributing them widely. Second, when we shift our gaze from individual organizations to the sectors as a whole, we find workable test groups, each developing suites or clusters of measures and processes that make sense in certain situations. Third, it is this level of analysis that may hold the most promise for developing comparable, widely applicable measures.

The Keystone/Alliance survey doesn’t answer our question – how do we measure success, but it is an important step forward in categorizing the stakeholders involved, and their perceptions of what works and what doesn’t, and identifying future directions for action. It is true, we may not be able to boil everything down to a single measure that allows for universal comparison of food security programmes in Ghana with cultural preservation efforts in Grenada or immigrant rights programmes in Greenwich. But wait a minute – we don’t have a single standard in any other sector, either.

This kind of diversity of measures also characterizes commercial activity and politics. We pretend that there are standard measures that cut universally across commercial activity or political action, such as market share, stock price or electoral victories. But this is not really the case. Some stock analysts rely on price/earnings ratios, others pay them no mind. Some investors develop super computer-powered formulae. Others, Warren Buffett famously among them, only buy companies that make products that the investor actually understands and uses.

Similarly, while electoral victories are one measure of success in democratic politics, there are many others. Some put more weight on the long-term development of ideological strongholds, others pursue political ends through the court system, and others put their focus on local issues over national politics, based on their beliefs about control and the avenues of change. In both markets and politics there are many measures of success, and many applications thereof. It is likely that such is true in the civil sector as well.

We have confused the need to measure our impact with the need to develop single common metrics. The Alliance/Keystone survey is valuable for several reasons, including its contribution to debunking this myth. The universe of organizations that contribute to public benefit and social good is expanding and morphing and hybridizing. The types and interests and wishes of donors are doing the same. We need to measure how we are doing, but we need to do so in ways that are useful and flexible, not simply available and comparable. I have written at length about the costs of settling for less – for using measures simply because they exist and can be gathered, even when they don’t actually tell us what we want to know – see http://philanthropy.blogspot.com/2007/11/sector-wide-logic-lapse-collapse.html) It is time to move beyond metrics of convenience to those that can help us make better investments, provide better programmes, and make a difference that matters.

This survey gives us hope that we can move towards complex and useful metrics by bringing forward new ways of looking at this age-old problem. We need to look at areas of work, not necessarily organizational structure. We need to look beyond that which is easy to count to that which may be meaningful. And we can get further than we’ve ever been before if we are willing to consider the diversity in the sector – its structures, actions and outcomes – as a potential source for the answer rather than an insurmountable obstacle.

GiveWell...and move fast

Monday night at close to midnight EST the Board of Directors of GiveWell and The Clear Fund wrapped up our second meeting. It was only 9:00 p.m. my time, but we'd been in the meeting since 3 and I was wrecked - it was a long meeting, with some process bumps, good decisions, some missed targets, and several tough calls.

On Tuesday the first grants were made. Today, the founders of the organization are all over the press - in the Times, the WSJ and on CNBC. You can also find the audio of the first Board meeting online, and the record from Monday's meeting will be up soon. We did not get everything done that we had set for ourselves; we've made adjustments in our budgets, our timeline and the criteria we use for the work, and we've set real deadlines for getting done what was left hanging on Monday night.

We're still working on how to measure ourselves - what metrics matter for this new entity - quality of the research? dollars leveraged? users of the research? change in other funders? change in public discussion? And how we will track and report on these indicators?

Giving away money well is not easy. But The Clear Fund and GiveWell show that a lot of what stands for "business as usual" need not be - the work can be done quickly, informed decisions made and acted on, and information shared publicly. We need to hold ourselves to the same standards for cost effectiveness, impact, and transparency that we deign to ask for from those we fund. These are important elements of grant making, and many established funders are making real efforts to move in these directions.

Some of this is much easier to do when you've started fresh and have no institutional weight to carry. Some some of the problems and challenges that this a startup needs to deal with won't burden more established organizations. Listening and informing and debating across the bounds of "old" and "new" may be the best conversation we can all have.

Remittance data


Here is something for the data wonk in all of us - the Migration Policy Institute - a resource we all need to know about, has new maps that show the 280 Billion USD that flow globally each year (that 280 bb is the 2006 number).

Play with the maps, download the data analyses by country, and ask yourself - why can't we see this same kind of information for foundation grants, public sector investments, multilateral organizations, or other revenue sources?

I apologize if I am repeating myself. I have a feeling a post something very similar to this every year when I find myself checking out MPI's work. On the other hand, no apologies. Why do we go year to year to year without this kind of information on philanthropy?

Embedded giving on ABC News

Embedded giving is the buzzword with the most buzz. After reports on NPR and in the NY Times, here is last night's story from ABC World News with Charles Gibson (video and more). Today, Senator Robert Menendez of New Jersey is set to introduce legislation on the issue - let's hope the proposed regulation isn't worse than the buzzword itself.

Making change happen

This is from an earlier post, which had the uninspired title of On philanthropy and environmental change. I also want to highlight the comments to the points from The Green Skeptic.

My belief, as has been stated on this blog repeatedly, is that we can only solve social challenges through the combined contributions and creativity of all sectors. There is no reason we should expect any single sector to ever solve our social/environmental problems - simply because these problems are a result of the dynamic failures of all of the sectors. In other words, business, government and independent action created our social ills, they will all have a role to play in solving them.

That said, vision and creativity are clearly important elements of philanthropy/social enterprise making an impact - and being part of tri-sector solutions.

Here's an interesting provocation about how this all might play out - the Futurist Magazine (published by World Futures Society) has this idea in its Outlook 2008 section (Nov/Dec 07 issue):

"Socially responsible investing may get a boost from venture capitalists. Investment in green or clean technologies such as such as alternative fuel development is gaining momentum. This new interest by venture capitalists follows a trends led by individual investors and mutual funds to weigh social values alongside financial reports."
Here's a link to free abstract - full article is available for purchase.

So - back to some of this blog's favorite themes:
  • Solutions will require that each sector make its best contributions in relationship with those of the other sectors;
  • Aligned investing is on the rise;
  • Advocacy as a tool is better understood by more and more funders and nonprofits;
  • Alternatives and new methods are evolving from established approaches - learning from the past and deploying new mechanisms will move us forward
It is insufficient to say that philanthropy hasn't ended hunger, fixed public education, slowed global warming, or eradicated poverty, and therefore we need a new philanthropy. It is incumbent on us to look to the contributions to our problems from all sectors, and then consider how each sector independently - and in concert - can instead work to solve them. We should think across sectors and not be limited by archaic expectations of roles. We should be strategic about issues in which one sector might be promoting one set of options, while others work at cross-purposes. And, most important, we should not throw logic out the window nor assume any single strategy is the path to solution.

That said, if we look to the dynamic interactions between public/commercial/independent action that resulted in our environmental challenges, our human rights failings, our educational failures, our health care challenges, etc. than we can craft potential investments and solutions to these challenges by:
  • Using resources from each sector in new ways;
  • Jointly designing solutions with input from each sector;
  • Considering the limitations of each sector, mapping how these interact with those of the other sectors, and investing knowledge and resources in ways that directly counter those aggregated failures;
  • Considering "the grey area" - sometimes called the fourth sector - as a new blend of the first three, not a silver bullet replacement;
  • Using new tools to understand complex problems - tools such as social network analysis or the kinds of complex problem solving highlighted here
Here are some comments from the Green Skeptic that build on these points. Change matters - what else do you think we need to make it happen?

Buzzword 9 - B Corporation

B Corporations are more than a buzzword - they may be a game changer. New organizational structures, new corporate code, and new ways to organize social good - B corporations are the real deal. This is one buzzword that is more than just buzz. Not only will this idea stick into 2008 and beyond, it may very well prove me wrong in my prediction that there will be no meaningful regulatory/legal changes in 2008. Let us hope so.

Not enough buzz for a buzzword

We're getting down to the wire on the top ten philanthropic buzzwords of 2007. Here's one that won't make the list - charitable gift cards. You can read about them here.

Why don't they qualify? Partly because there is no buzz to the buzz - gift cards are old news, gift cards for charity are just a riff on an old idea. But more important, they are not a buzzword because they were SO predictable. If you didn't see these coming down the proverbial pike, well, I guess you just weren't looking.

They may work fine, some of the key questions behind them (what happens if the gift recipient doesn't redeem them? Who gets the tax benefit, the buyer or the receiver?) may have been answered by now, and they may even raise some money for charity, but they just strike me as much ado about nothing.

Let me ask you this, if you don't care enough to pick out an actual gift for someone and you don't care enough about them them to find out what causes they care about and make a gift in their name and you don't care enough to make a gift to something you care about in their name, why are you giving them a gift in the first place?

Embedded giving and the law

The New York Times reported an increased interest on behalf of lawmakers regarding embedded giving - the story is here.

Buzzwords everywhere - and here is Buzzword # 8 Endorsement Philanthropy

Embedded Giving is Philanthropy buzzword # 6 for the year 2007.

Here is this week's Marketplace story on embedded giving

Here is today's New York Times story on the topic

And today I'm pleased to announce Buzzword #8 - endorsement philanthropy, which gets a big boost today from The Case Foundation. Here's one story on it. In this latest challenge, the Case Foundation, Parade Magazine, Facebook and others are helping individual donors endorse the causes they support - lending their trust and credibility to the organizations that they care about.

What is endorsement philanthropy? As I introduced this concept in my book in 2004, endorsement philanthropy is when institutions, such as foundations, make a deliberate effort to promote and stand behind the organizations that they have selected to fund. They do this - wisely - for several reasons:

  1. The foundations have done the research and due diligence, by sharing their recommendations they can drive more support to organizations they believe in;
  2. Its one way for foundations to influence "other people's money" - a good thing since no foundation has enough to solve the problems they seek to solve
  3. It saves time for the little giver - who wants to trust where they give, but can't afford the time or resources to do the due diligence themselves
Endorsement philanthropy isn't new - think of all those names on the wall of the museum, the lists of donors in the playbill, and the back pages of almost every nonprofit annual report. But it is taking on some new forms - as in the 21/64 Slingshot Fund, the Case Foundation Challenge and its Guide for Good Giving, New Progressive Coalition's Mutual Funds, Calvert Giving Folios, or GlobalGiving, which presents a donor with several organizations that have all been vetted by the trusted GG brand.

This is a way for donors - big and small - to share the nuances, details, and credibility of quality due diligence. Regular readers know how I feel about the application of free, abundant, easy and USELESS measures such as administrative ratios to guide decision making about charitable choice.

Endorsement philanthropy, wherein a trusted entity shares both its process for decision making and its own decisions, gets some real information to those who can use it. This is an area of great excitement - new developments, such as FasterCures Philanthropy Advisory Service, the Nonprofit Reporter demonstration project, the Hewlett Foundation's focus on sharing information - this is all good. After all, philanthropic financial resources are finite - but real philanthropic knowledge, about what works and how to make a difference - is only valuable if it is used. And the more it is used, the more we will be able to determine what is real knowledge and information, and what is...not.

Endorsement philanthropy, buzzword #8 for 2007.

Where does the money go?

Today's Wall Street Journal asks this question, in this article by Sally Beatty (subscription required). I sit on the advisory board of the Nonprofit Reporter, one of the organizations interviewed and mentioned in the story.

Today Marketplace, NPR's daily business program, begins a week long series on philanthropy. The opening segment looks at embedded giving, and Kai Ryssdal and I ask the eternal question, "where does the money go?" Find out when the show airs in your area here, or listen from the Internet later today here.


Stay tuned, there is more to come in 2007

My previous post was so badly written as to confuse many of you. It was not my last blog post for 2007, just my last post to SSIR for the year. Still to come between now and December 31, 2007....

  • Buzzwords number 8, 9, and, (drumroll, please) of course, 10
  • The recap on my 2006 predictions about 2007 - how did I do?
  • Links to my interview with Kai Ryssdal of Marketplace, which will kick off the show's special week-long feature on philanthropy. It is set to air on December 10. Also links to other stories to which I contributed that are expected to run in major papers between now and end-of-year.
  • And continuing thoughts here and on HuffingtonPost and on xchangexchange.
C'mon now, it is only December 6th. You didn't really expect me to be done with the year so soon, did you?


What matters and some bold predictions

(This is cross-posted from SSIR.)

This is my last SSIR post of 2007 - so it is time to ask some big questions – two of them, actually (though each has many subsections).

First, what really matters for philanthropy? I’ll list six big issues for the sector – opportunities, trends, and challenges that we’ll face in the next year. My hope is that this will spark discussion (and perhaps even leadership) to move the whole sector forward.

Second, what will happen in 2008? Here are five predictions about philanthropy in the next 12 months, and hope you call me back this time next year to see how I did.


What matters to philanthropy in 2008?

1.The economy matters.

Almost all economic predictions for 2008 point to much slower growth, and even recession, in the US economy, which would matter domestically and globally. How do recessions, or even periods of slowed growth, matter to philanthropy? Lets start with the big money – recessions matter to endowment growth and investment practices. There is a budding movement to foster greater use of foundation endowments for program or mission related investments, will this be stopped before it starts if the economy tanks? Or will larger investment losses actually catalyze more creative applications of foundation financial resources? Second, what about philanthropic spending rates? Warren Buffet recently took the stand calling for greater payout by large endowments – certainly funders interested in fair housing, lending practices, poverty alleviation, job creation, economic development should be getting ready now for the effects of a slowing (or receding) economy.

2. Health care finance will start down the same slope as sub prime mortgages

Hospitals that serve lots of uninsured patients have discovered how they can use the capital markets to collect their fees. The hospitals package up outstanding debt and sell it off to financial service firms. The good news – these hospitals get paid. The bad news? The finance companies impose double-digit interest rates and hire very aggressive collection firms to chase the poor people who couldn’t afford to pay for insurance, let alone usurious charges on top of the hospital bill. If this sounds familiar, it is because it’s the health care equivalent of mortgage-backed securities. Only when these loans fail, I guess the banks will have to take back the kidney that was transplanted or stop your diabetes treatment. Health focused philanthropy could make a major contribution to the well being of our entire nation of it began to deploy some of the “market organizing” savvy that Clinton and Gates and others have tested in developing countries to the dismal state of health access in the U.S.

3. Metrics matter – and the sector will finally make some real progress in developing them.

Check out the December issue of Alliance Magazine to see where we are now, and where we’re going. Institutional philanthropy – foundations, multi-family offices, donor advised fund purveyors – need to lead and inform, and – perhaps, set realistic boundaries around - these developments.

4. Markets matter

The lines between social entrepreneurship, double-bottom line businesses, nonprofits, and privatized public service providers are going to become ever more blended. Some of the many emergent social capital market mechanisms (social stock exchanges, equity products, indices) will take hold, and the discussion about revenue for public benefit work, and the awareness, acceptance and applications of organizational structures such as B Corporations and L3Cs, will expand significantly.

5. Bill Gates goes full time.

Given all that he has done as a part-timer, this ought to be very interesting. It is also somewhat unprecedented – to my knowledge, no other founder of a major foundation (Bertelsmann, Rockefeller, Carnegie, Ford, Kellogg, Packard, Hewlett, Sage, etc. ) ever devoted themselves exclusively – or even primarily – to their philanthropy.

6. Race and age matter

If Tom Friedman is right and the world is flat, than geography matters but in very different ways than it used to. Given the 24/7 nature of communications access, PDAs, Slingbox and Tivo and YouTube, we know that time matters in new ways. What we have not figured out yet (and probably won’t in 2008, but they still matter) is how the diversity of experience, culture, and age that mark our society can and will shape our institutions, expectations, and leadership roles. Next year will bring us some new, important lessons on this front, if only because we get one year closer to major institutions being created and led by anyone other than a white baby boomer.

What will happen in 2008? Five predictions about philanthropy for the next year

(I am not going to bother with easy ones, like a big scandal in the nonprofit sector or the jaw-dropping endowment that will be established for somebody’s dog).

1. One of the many philanthropic prizes launched in 2007 will succeed in motivating the solution it seeks. My bet – it will be one of the Gates Foundation– funded Global Health Challenges.

2. At least one-third, and maybe as many as one-half of the world’s top ten largest gifts in 2008 will be made by non-Americans to non-American institutions.

3. The lines between giving, giving, and giving will continue to blur.
We will give gifts to family and friends that are charitable gifts in their names. We will make political contributions with a laser-like focus on supporting those in politics who care about the same social issues we support with our philanthropy. We will give more “embedded gifts,” and may even experience donor fatigue as the percentage of our basic financial transactions that include a “little bit extra” for charity become pervasive.

4. Half of the glossy magazines dedicated to giving that launched in 2006 or 2007 will fold in 2008.

5. Nothing significant will happen to the regulatory structure that shapes philanthropy in 2008 – there will be no new governance requirements, no new reporting requirements, no changes in tax deductions or exemptions. Even in the face of the big scandal that will occur, probably involving fraudulent use of online giving technologies or identity theft.

There you have it. Please be sure to let me know what you think matters, and feel free to add your predictions to the list. Just be ready to come back and defend your choices in December 2008.


Solving complex problems


(Photo: www.mit.edu. Design by Suzana Lisanti)

Solving complex problems is what some foundations claim to be doing. Many more wish they had the guts to stake this claim, but are perhaps more realistic about what they can do.

I've written a lot about crowd sourcing as a possible strategy for philanthropic ideas and insights - now we can all benefit from the brainiacs at MIT (I'm an alumni child so I am allowed to make jokes about pocket protectors) who take courses in "Solving Complex Problems" as freshman. They are then required to share their work live and online (December 4th, 7 pm EST). Check it out here.

In this class the Techies are working on "The Future of Fish."

If I were philanthropy queen I'd find a way to take advantage of these applications of methodology and creativity from smart people that are going on all the time all over the place. I'd bring in thinkers (students and faculty) from the social and natural sciences, arts, design, humanities, business, policy, and religion to co-craft possible solutions to poverty, hunger, sickness, cultural isolation, etc - as part of their own work. Then I'd develop critiques and review processes that were led by those living the conditions so that only applicable, reality-based strategies would survive the process.

Why is this valuable? The group work, methodological approach, intense presentation, and charrette style discussions are bound to produce better and more ideas than any single program officer or committee. Its not necessarily the answer - but it sure brings to bear a lot of intellectual horsepower that's already out there. Add in a good mix of lived experience from the community and then dedicate people to coordinating networks of thinkers and actors, finding implementation partners, and keeping feedback loops robust between funded work, thinkers, and critics. The whole process would be public so that those we hadn't yet found who had something to contribute could find it, use it, improve it - and it would feed a marketplace of ideas for the public good.

That's how I'd do it - and I'd call it open source charrette philanthropy. How would you do it?