Thanks to the Columbus Foundation and DonorEdge for making possible this podcast.
Sidney Hargo interviews Katya Andresen of Network for Good and me on the future of social media, nonprofits and philanthropy. Enjoy.
Thanks to the Columbus Foundation and DonorEdge for making possible this podcast.
(photo by exfordy, Flickr, Creative Commons)
One of the key noted philanthropy trends of 2008 was the growth of philanthropy prizes.
This year the buzzword is charity challenge. These challenges tend to be some form of matching grant - based fundraising opportunity that uses blogs, twitter, widgets, online video and every other possible web-based communications tool. They allow the public to vote on where the sponsor's dollars go, or at least those recently run by Target, Toms of Maine, and American Express do so.
(photo by psd, Flickr, Creative Commons)
The Idea Index is a great (and beautiful) example of learning from the ecosystem that prize philanthropy creates. The Buckminster Fuller Institute (BFI) has taken all of the entries for its recent challenge and published them in the Idea Index. BFI refers to this as "an open-source database of solutions to the world's most pressing problems."
It is similar to the way Changemakers is running its prize platform. HASTAC also works to connect the many organizations that submit to its Digital Media Challenge. NetSquared's annual conference acts as a way for applicants to get to know one another. These opportunities for networking the people behind the ideas, those selected by competition and those who weren't, is a wonderful contribution to the ecosystem for change.
I think the Social Entrepreneurs API, SocialActions, and AllforGood are great examples of how we can pull data from disparate sources and let people use it for all kinds of purposes. Imagine if we could mashup these "challenge ecosystems" into one massive index of ideas and idea-makers - from health, digital media, social enterprise, poverty alleviation, and so on - and see what they can accomplish when they can find each other....
I was hoping I could come up with a term for "deeper than embedded" before writing this post, but my mind failed me. Since I am on vacation this is probably a good sign. So we'll open this up to you, dear readers - what term would you use to describe business models in which the giving element is so thoroughly integrated into the product and its marketing that it is a fundamental piece of the puzzle - even if the giving itself is not the core revenue driver, purpose of the product, or outcome of the service?
Here are some examples:
Contribune provides donor analytic software that allows an organization to track the news that its potential donors read. Users enter the URL of a news story that they care about, and Contribune facilitates donations to related nonprofits, tracks those donations, and elevates the story to the "front page" depending on the actions taken by readers. This seems similar to the services offered by Good2gether.
The Contribune site and blog include a movie that explains the process, but information on who is behind this site and what the revenue model is is somewhat vague (there are photos of the founder, but no last names listed). I presume that revenue (or predicted revenue) will come from selling data (donor analytics) to fundraisers (political and nonprofit) and from news sources. I suppose there could also be a token fee taken off of donations, but my guess is this won't be significant.
Giving is part of this model - but its really just the action that triggers the ratings that trigger the revenue. Sort of the way Nielsen ratings have been used to set broadcast advertising rates.
Contribune also launched a "charity focused URL shorteners - a technology that Twitter has made requisite. This URL shorteners allow you to clip a URL of any length into a shorter one, saving space in twitter and even allowing for some "built in" advertising. This is particularly true with the Giv.to shortener, as the clip will now look like "http://giv.to/cancerprevention" or "giv.to/savethewhales." These URL shorteners are loved for the brevity and vanity - they also provide great metrics as you can track who clicked through on the URL and what actions they took. Again, great data of potentially great value.
Last year we saw the development of search engines that enabled giving. Now we've got news sites and URL shorteners. What do you think will be the next technology action to integrate charitable giving? And what should we call this kind of embedded giving?
(photo by kjarrett, Flickr, Creative Commons)
I'm looking for examples of social change organizations that are totally native to the digital world. They were created in and around digital tools and they use these tools to manage their work, communication, programs, fund development - everything. The prevalence of these tools shaped the way the organization's founders defined the problem they hope to influence or the solutions they seek to spread. The organizations would not exist if it weren't for mobile or Internet-based tools that are free or cheap to use, readily available and familiar.
Here is what I've tracked so far. Please grow this list by adding those you know in the comments. I also welcome improvements of my working definition of "native to the digital world." Thanks.
(Photo by Tyger_lyllie, Flickr, Creative Commons)
I am remiss as I have just realized that I have not previously tagged leverage as a buzzword. I guess it goes to show that some buzzwords become so embedded that we almost miss them.
We've heard a lot of bad things about leverage lately - sub prime mortgages, bank bailouts, credit default swaps, etc. all have some connection to the idea that you can use a little money to access a lot of money. And much of the economic pain we face now seems to be because too many institutions were over- leveraged.
But in philanthropy the idea of leverage is usually less about debt* and more about using dollars from Pot A to access dollars from Pot B. If a donor puts in $1 and, in so doing, attracts another $1 to the issue or organization, that is a good thing. Leverage is at the root of matching grants, NPR pledge drives, giving circles, pooled grant making funds, social venture philanthropy, affinity groups, and lots of other things that are now normative on the philanthropy landscape. (Did I just write that? Oy. Let me try this instead - "Leverage is a common concept for both donors and foundations.")
If it is so common, why is it a buzzword? Partly because there is a good amount of discussion and innovation about how leverage is achieved. We increasingly hear foundations talking about the need to "leverage other funders" (both private and public) as part of their strategy development - especially now where stimulus funds are concerned. A lot of the discussion about "exit strategies" or "sustainability" is about leveraging other revenue sources beyond a foundation's initial support. Buzzword #2009.2 - sidecar funds - are all about leveraging someone else's infrastructure investment and their knowledge.
It also achieves buzzword status at this point in time because the public sector - in discussions of everything from stimulus funding to health care, to the Office of Social Innovation and State Department's public/private initiative - is talking leverage, leverage, leverage.
At their root, these developments represent a realization by foundations and donors that they cannot achieve their (often hyperbolic) mission statements by themselves, that they operate within funding streams that may or may not work well but are out there, and that the more each of us understands where we fit in these revenue systems the better chance we have of making them more effective and efficient. The rise of leverage as buzzword may also be a sign that systems thinking is really beginning to take hold in philanthropy. Or it may just be a buzzword.
*For discussions of debt and the nonprofit capital markets, and the ways that leverage works in that realm, I defer to the experts at the Nonprofit Finance Fund. To paraphrase Click and Clack, don't mistake the trends discussed on this blog as consulting, financial or legal advice.
(Photo by Maurice King, Flickr, Creative Commons)
Buzzword 2009.2 Sidecar Funds
The Gates Foundation got a fair bit of attention last week for the $10million in unsolicited funds that it raised in 2008. This is not just news for the Gates Foundation but for all of philanthropy - private foundations are going into the business of managing "sidecar funds." In the angel investing or venture capital worlds sidecar funds are those that "ride along side" major investments. The idea is to leverage (another buzzword) the due diligence, investment and monitoring that has gone into a primary investment.
In the philanthropy world, the 2006 Buffett gift to Gates is the biggest example of this - one donor riding alongside the infrastructure and due diligence of another. The many smaller gifts that make up that $10 million given to Gates represent the appeal of this approach - ride along on the investments Gates made in staff, research, strategy, process, monitoring, and learning. And not just ride, but free ride - giving gifts to Gates comes at no cost - there are no management fees, percentages taken on assets under management, or service charges levied to these donors by Gates.
Gates is not the only large foundation that serves individual outside donors. The Ford Foundation features information for donors off of its website. Several small foundations partner with others - meaning take grants from the others - to regrant in their region or issue-area of specialty.
This makes the sidecar fund phenomenon relevant to philanthropy writ large. After all, if the roles that foundation staff play in the philanthropic revenue system are those of analysts and strategists, and the CFOs of these organizations are already being paid to invest the endowment, then riding alongside these systems is the cheapest, highest quality service donors are going to be able to get - more research than from a national donor advised fund, more specialized expertise than a community foundation, and cheaper "fees" than either. It is certainly cheaper than starting your own foundation.* For donors these options might be very enticing - high quality expertise on both the investment and grantmaking side at lower cost than other vendors in the market. For the foundations, this offers one way to "leverage other people's money" directly - manage it and give it away.
Buzzword 2009.3 Pipeline
There are two pipelines drawing buzz these days - one is seemingly void of people and the other is seemingly void of funding. The pipeline for new leaders and the pipeline of new funding opportunities are both the topic of great discussion.
There is a lot of justified concern among nonprofits about leadership, including the need to fill more than 20,000 job in the sector in 2009. This leads to discussions of leadership development and the "pipeline" of leaders. Who is coming up next? How will they prepare for management roles, how will the sector replace those who are retiring, how will we find the leaders we need? Sometimes hidden, sometimes overtly the discussion of leadership and "pipeline" is also a discussion of diversity and demographic change. In the just announced Community Leadership Project in the San Francisco Bay Area a notable amount of attention is being paid to developing leaders. About a month ago, New Profit Inc held a one-day training session for potential social enterprise leaders of color.
As for funding pipelines, well, anyone who has tried to raise money for anything lately knows about these.
*There are tax issues to be aware of if making a donation to a private foundation. Talk to an attorney.
I am not necessarily promoting these practices or organizations just pointing out the trends and buzzwords.
If you liked this blog post on "What's Next?" you should also read Mario Morino's latest two columns on the VPP site. They are here: The Innovation Imperative and Nurturing the National Reef.
These are two great thought pieces, drawing from worked experience, on what is possible if we dedicate ourselves - as both public actors (voters, citizens, activists, legislators) and private actors (donors, entrepreneurs) - to recognizing the enormous opportunities that new information ecosystems provide to us. These are the lessons of experience - from VPP and others (REDF, SVPI, NewProfit, Inc) who fundamentally transformed the discussion of how capital works in the social sector.
Nonprofit leaders have known about, decried, and innovated around capital challenges for decades. I believe it took the shifting conversation that VPP and others have been part of for over a decade now (Letts et al published Virtuous Capital in HBR in 1997) to make social enterprise, social investing, funding networks and hybrid organizations as familiar a part of our current landscape as they are. This is a living and lasting legacy of the theory, practice, successes and failures of venture philanthropy - it changed (and is changing) how we think about financing social good. That is significant.
Those who entered the social sector in the last five or even eight years may think concepts such as social finance or for-profit philanthropy are "givens." In fact, they reflect essential changes in how we think about the social sector, markets and policy (a key intersection in Morino's writings), and are innovations in their own times. The next round - the "what's next?" that I write about and the ecosystem of innovation that Morino calls for - build from these evolutionary phases.
I know there are folks out there working on real recommendation engines for philanthropy. These kinds of engines are examples of both what is driving innovation in the information ecosystem and what will be possible as that ecosystem changes. But, in the interest of "retaining the personal touch" take it from me - read what Mario writes.
Last week I pointed out that the entire ecosystem of information on nonprofits in the USA is changing. Just as the 1990s was a decade of innovation in philanthropic financial products, the 00s have been, so far, a decade of innovation around information. You can read the full post either here or on SSIR.
Here's one more sign of these changes - the Foundation Center, which has a database of more than 1.6 million grants from funders going back some 40+ years, is now offering up widgets. You can load the Foundation Finder widget or the 990 Finder widget onto your website and let donors or nonprofits find the info they're looking for. The data come from the Foundation Center. Your website is the place that helped the user find what the information she needed.
This represents many of the key trends I've been writing about - including the seven I discussed last week at the DonorEdge Conference. The slides from that presentation are here. Here's an abbreviated list of the seven trends that matter in philanthropy today, remembering that it is all about the data:
- Demographics matter
- Groups matter
- Ownership matters
- Mobility matters
- Forms matter
- Markets matter
- Alignment matters
[Cross posted from SSIR]
"Green Shoots" for New Philanthropic Forms
I’ve been writing about information as the currency of change for a long time. Everything I have seen in philanthropic innovation in the last two decades is predicated on this simple observation—there are two kinds of philanthropy products: financial products and information products. They used to be bundled together, in the form of foundation staff, personal advisors, or community foundation program officers. In these forms a donor got both services—a place to manage the financial assets that fueled their philanthropy and professional advice on strategy, grants, and outcomes.
In the early 1990s the advent of national donor advised funds showed that a huge market existed for unbundled products—donors would eagerly purchase the financial product by itself. Several billions of dollars in charitable assets were soon being managed through Fidelity, Schwab, Vanguard and others who provide best-in-class financial accountability, responsiveness, and transaction processing, with no promises of strategic advice, support or other types of information products. The market worked—we’ve had two decades of new innovations, new customers, and new financial products for donors.
Nowadays, some of the same technological advances that led to scalable efficiencies in transaction processing are beginning to shape the landscape for information products and service providers. First, the broad and deep adoption of broadband access and a decade plus of online banking, travel booking, emailing and searching have changed our collective expectations about where information lives, how to get it, and whom to trust. Second, the massive storage and searching capacities that underlie systems like GuideStar now make it a commonplace assumption that basic information on nonprofit organizations should be only a “click away.”
From these “expectational starting points” new behaviors begin to sprout, leading to the possibility of new products. If financial information is a click away, why not more nuanced information? This leads to systems like DonorEdge or Blackbaud’s Nonprofit Central. If there is “professional vetted information available,” why not the insights of customers or volunteers, leading to innovations such as GreatNonprofits or Keystone’s constituent response work. And if I can get information on one nonprofit, why can’t I find lots of options for action in one place (SocialActions.org) or compare the work of multiple efforts (New Philanthropy Capital’s reports or Acumen’s Pulse system)?
These are exciting developments. And they are built around data—data that can be found, compared, searched, mashed up, re-purposed, questioned, and applied. The data are the currency of change.
And rest assured, today’s data systems and information products are just the beginning. How we use these products, build off these services, interact with them as individual donors or change makers, or iterate entire new organizational forms on top of them is what the future holds. The information products for better giving are not as good as they will be, we have not yet seen all of the forms they will take, nor are they widely deployed or integrated into other financial management tools. Yet.
But we’re getting there. In which case the landscape for philanthropic giving—the structures and tools that donors use to organize, aggregate, learn, give, and bank (literally) their philanthropic financial resources will change yet again. This might explain why we’ve seen a notable rise in independent philanthropic advisory firms (SeaChange Capital Partners, Rockefeller Philanthropy Advisors) in the last five years, why online giving markets (such as GlobalGiving and Kiva) have taken off, or why the never-ending stream of new social media tools are all quickly unleashed for giving-related purposes (Facebook Causes, Twitter fundraising, and blog/badge challenges). And it might be inciting new forms from familiar ones—new roles for community foundations or new services from donor advised fund vendors.
We should also plan on this changing landscape of information being full of the seeds of new forms. If you imagine that any donor, anywhere, has quick, easy access to meaningful, comparable, useful data on organizations they could support and issues they care about, what kind of philanthropic entity, service provider, financial tool, public/private partnership, broker, deal platform or relationship builder would you build? That is the question we all need to ask, no matter where we work in philanthropy now, because that is the well-seeded field on which all existing philanthropic enterprises are now playing. And that is the question that some innovator, somewhere, is working on, right now, in the proverbial garage.
(Creative Commons Photo By: Ambuj Saxena)
...Imagine a future in which high quality, informed, diverse, and meaningful data on nonprofits and change organizations, the work they do, and the impact they have is widely available, free or low cost, and comparable.
What kind of community philanthropy organizations, or philanthropic organizations, or donor services, or giving circles, or prize competitions, or public problem solving strategies, tools and activities would you create on top of those data sources?
Data are commodities. Huge investments in cleaning them, making them accurate, gathering 360 degree feedback, and making them comparable are beginning to pay off. As this happens with useful real-time data about nonprofits and social change the above question now faces all existing philanthropic organizations - community foundations, private foundations, national donor advised funds, public grantmaking charities, etc. The data are there. What will you do with them? What do you have to add?
I have been writing this blog since 2002. There are 000s of posts here. I'm looking for the right editor and publisher to work with me to turn some of this content into serialized pamphlets - separate book chapters if you will. I envision a series of short pieces* - each no longer than 20-25 pages - that would focus on and refine each of the themes I've been writing about: innovation in philanthropy, the role of information and data, new structures for giving, technology and philanthropy, indicators and measures of change, and meaningful trends in public problem solving.
The site, Beyond Good Intentions, is the moving picture equivalent of what I have in mind. It hosts a series of short films, each one a standalone piece on some type of international aid. Taken together, they are "film chapters" of a "film book" that offers insights on microfinance, social enterprise, disaster relief, research and other related topics. Check it out. BeyondGoodIntentions shows a great understanding of social media as tools for conversation - you can watch the videos on the site, leave comments about them, link to Facebook, MySpace, or YouTube, link to the episodes, meet the filmmaker in a nationwide tour - in other words engage in a number of ways, when and where you want.
These are precisely the characteristics of Internet based social media that make them so valuable - multiple formats, give the user control over time and space, allow people to add their own ideas, share when and what they want.
Of course, there are still some "old fashioned" kinds of social media sharing - such as conversations. Allison Fine has a great post on the value of unthinkable ideas, those thoughts and visions that push on "sacred cows." These are as likely to arise in good old fashioned face to face conversations as they are in the potential anonymity of chat rooms and comment boards. I'd argue that the conversations that push on "sacred cows" and that might actually turn into joint action need the kind of trust, relationships, and time that can be facilitated by online tools but still need some sort of personal connections.
It is my belief that the conversations we find most challenging need to be had both online and off, with those we know well and to whom we have joint obligations and responsibilities (think of your fellow board member, for example), as well as those we know best by their twitter picture. This is why I'm planning the pamphlet series - to provide hard copy, engaging, short and provocative pieces that board members can share with each other, staff colleagues might pass around, donors would bring to their advisers and vice-versa when they are ready to slow down, think about, talk about, and (I hope) act on new philanthropic structures, trends in giving, social innovation, and measures that matter.