Tuesday, July 31, 2007

Back to virtuality

Here's a story on corporate philanthropy experiments in SecondLife. Philips, the consumer company which specializes in "simplicity"** used the platform to lead a cross company discussion on the production of a "smokeless stove." Philips is using the SecondLife platform to get feedback on their designs, co-create new products, engage potential users in shaping the tools, and provoke discussion on the fine lines between Bottom-of-the-Pyramid market reach and philanthropy. Those of you who inhabit SecondLife can use this SLurl for more on the effort.

The interaction and findings as noted in the story are interesting. This version of social investment is less about giving money and more in line with "Design for the other 90%" exhibit recently at the Cooper Hewitt. Philips excels in building beautiful high end stereos and shaving systems - can they bring this knowledge, aesthetic and practicality to products for the poor.

**John Maeda, MIT Guru of simplicity, advises Philips.

Mashups for change

(photo courtesy of change.org)

By now, everyone knows you can mashup a Google map of just about anything - cafes in Paris, bookstores in Madrid, internet access points in Nairobi. Mapping where to get help - from non governmental organizations - is also possible. The folks at Change.org have partnered with GuideStar to mashup U.S. nonprofits. They also have an arrangement with VolunteerMatch and Idealist to map "citizen actions" - so you can get involved and know where you're going.

These efforts should complement telephone-based help lines such as 311 and 211. The 311 system works in several parts of the U.S. to provide access to non-emergency police services. The 211 number is an initiative led by the United Way to help people everywhere in the country access support services from after school care to rides for the elderly. It is not nationwide either, though efforts are underway to spread it. Here's the map of where services can be found.

Soon, we should be able to see several layers of such information - where the services are, where the needs are, where the money comes from, where it goes. Maybe, one day, we'll also be able to create maps of where the needs were (and no longer are).

Monday, July 30, 2007

The end of the .net

The Omidyar Network is shutting down Omidyar.net (ON). This online, self-managed community launched in 2004 and quickly drew thousands of people who organized themselves into dozens of groups. Here are some stats on the ON community:

There are 19,368 individual users organized into 427 groups. They've created 8,346 discussion topics, posted 190,245 comments and 12,440 workspace pages.

Over the years the Network used the ON Community to inform some funding decisions, to find people with similar interests, and simply as a platform for community building. On July 19, 2007 the Network decided to shut down the ON platform and allow a community board to determine where to go next. There are many unknowns, but one thing is clear: by December 31, 2007, the technology platform that hosts the current ON communities will close to public access. The full timeline for the transition is online here.

Why is it shutting down? Not clear from any public statement. The public statements are all about the positive effects of moving this direction - but there is no reason given for why this or why now. So, those reasons might be cost or a sense that the community is no longer of value to the Network organization. Perhaps its just another "time-limited" philanthropic investment ("three years and out"), in which the funder decides time is up, regardless of whether their partners agree, there are clear opportunities for vested interests to continue their work, or any shared goals have been achieved. Perhaps the Network believes the investment failed, and its time to end it? There are some indications in the comments that staff from Omidyar Network are moving on (are they being let or go leaving by choice? - this is not clear from public information)

I'm not an insider to the goals laid out in the beginning, so I can't say if they were met or not. Given recent media attention to the willingness of a few foundations to acknowledge failure, it seems appropriate to ask why the platform is being turned off and whether or not goals were met? From the Network's point of view (not the community's) was the platform and its groups, conversations, projects a success or a failure, and how does that assessment factor in to the decision to close it down?

What is the community's response? Skimming through pages and pages of user comments, there is clearly a mix of annoyance, respect, gratitude, and disgust. Many people have jumped in to talk about how to make it work - by sub-communities, by issue, by platform. Others decry the time they've wasted, while some comment on how they'd be willing to pay for the service. Some wonder if the content they've created will be secure. Others rue the loss, but wish the community luck.

The public discussion and the interactive, community based planning for transition is impressive. It shows the power of reaching out, engaging, and sharing power. However, the Network's reasons for action are invisible to the public. Why now? Was it a success or a failure? That's what I'd like to know.

Thursday, July 26, 2007

Patent philanthropy (Part three)

The Public Patent Foundation has scored a major victory over Monsanto, regarding ownership of gene transfer processes. I've written about "PubPat" (as the foundation is known) before - primarily because it represents the value of information, knowledge assets and the their role as part of - and in defining - the public domain.

As Andrew Leonard, of Salon's How the World Works, notes in his mea culpa-ish blog post on PubPat's court victory, the goals of the foundation are what matters here:

"The patent system is being abused by private actors to the detriment of the mostly unaware public. Our health, our freedom, and our economic prosperity are all under assault from bogus rights meted out to the few with the power and expertise to game a system originally established hundreds of years ago to promote progress within society as a whole. The government, through primarily a captured patent office utterly failing to achieve its mission and skewed policies implemented into patent law by Congress and the courts, is not just failing to defend the public interest from abuse of the patent system, but is complicit in and supportive of such efforts."
PubPat's own press release about the court's judgement - available here - is worth a quick read byall philanthropists. Not that I think all of you deeply interested in genetically modified foods or small farmers (though we all should be thinking about our food supply), but because it is an easy read that raises questions about public and private, ownership, community rights, power, sytems, and change - a set of issues or concerns that most foundations and philanthropists do - explicitly - care about.

Philanthropy in the 21st century has to be engaged with, protective of, and aware of the role knowledge, information, and ownership of these intangible (but highly valuable) assets play in structuring both the good and the bad in our societies. They are part of every problem foundations wish to address, and foundations' actions about issues of intellectual property, ownership and use, may be valuable tools in achieving their missions. If foundations don't understand how IP works and their own relationships to it, its more likely however, that these organizations will be putting financial assets to work on issues with one hand, and defeating their own goals with their intellectual assets policies in the other hand.

Wednesday, July 25, 2007

Wiki 990

Its not easy to make tax forms exciting, but I'll try my best. Every 501 (c) 3 in the U.S. files an annual tax form called the 990. This form provides basic data on finances and functions of these organizations. The data are, to be kind, less than perfect. The form is, to be kind, less than perfect.

This is why the policy folks at the Urban Institute and the National Center for Charitable Statistics (NCCS) are excited that the IRS is finally going through a process to revise the 990 form. As the NCCS folks say, this is a "once in a lifetime" opportunity.

You can find out more about the IRS process and the form here. Better yet, you can get involved directly in improving the form and the process by going to the newly posted "990 Wiki". You can comment on the various form sections, make suggestions, and provide direct input to the process.

Why should you bother? Do you work for a nonprofit organization? Donate to one? Use the services of one? Ever been to a museum, served at a soup kitchen, played at boys and girls club, swam at the YMCA or volunteered to a "friends of park and rec" organization? Then you know the role that nonprofits play in our world. The data on these forms is the primary source of information about nonprofits. These data are used by GuideStar, CharityNavigator, the Better Business Bureau, major foundations, and individual donors. Accurate and useful 990 data are critical to the media. $290 billion in U.S. giving to nonprofits depend on these data, directly or indirectly. So, yes, the forms matter. Help make them better.

Tuesday, July 24, 2007

Expertise Intermediaries

When foundations talk about intermediaries they are referring to organizations that do re-granting for them or that provide technical support to large numbers of direct service nonprofits. Both of these are services - run by middlemen organizations that can serve a lot of nonprofits either by region or topic.

Its time to start thinking about intermediaries that provide products, not services. The MIT Poverty Action Lab is - in my opinion - the gold standard in this regard. The lab conducts third-party research on poverty alleviation initiatives, culls through the data for generalizable findings, and makes them available to others working to end poverty in other places.

In addition to the MIT Poverty Action Lab another Expert Intermediary is in the formative stage. This is a new effort in international development, called 3IE - The International Initiative for Impact Evaluation. 3IE will coordinate work from foundations (Gates, Hewlett, Google, UN), national governments (Mexico, Uganda, Britain, Netherlands, Canada) and multinational NGOs including CARE and the International Rescue Committee.

The tricks to doing this kind of work successfully, are many. Here are three to think about.

First, we need to counter the "not invented here" mentality in philanthropy. Using strategies or data or interventions or tools that others have created is key to ever having a noticeable impact. One way to do this might be to try to celebrate what might be called (at least by Apple fans) the 'Microsoft' approach - don't be first, be bigger. Take proven ideas, repackage them, and move them broadly.

Second, somehow we have to bring credible data to people in a way that they can use them when thinking about philanthropic strategy. Our first step in doing this should be to recognize the complementary roles that passion and pragmatism play in philanthropy - donors do want data, do use data, and do make rational decisions. And they apply these to issues and causes that they care about. Using data to inform passion and direct strategy is what we should be aiming for - not redirecting passions and interest, but driving them forward with good information.

Third, large funders are important investors in these efforts, and they need to think about the downstream funders of the work they intend to improve. Individuals are a significant part of the revenue streams for civic sector work in poverty and on other issues. Bringing this kind of information to individual donors in the form, depth, and frequency that they can use, is a strategy that could strengthen, align, and improve the effectiveness of billions of dollars in philanthropic support and remittances.

Friday, July 20, 2007

The buck stops...where?

The blurring/blending/merging/shifting of public, private and commercial sectors is one of the main themes of this blog (and of my work in general). But I admit, the following "adventure in blending" boggled even my mind.

Dramatis Personae/Companae:
Paul Tudor Jones II, commodity trader.

Senator Charles Grassley, Republican Senator from Iowa.

Tudor Investment Corporation, (TIC) investment company founded by Mr. Tudor Jones. Tudor Ventures is part of TIC.

Robin Hood Foundation, (RHF) a New York City-based, nonprofit poverty-fighting foundation.

GreenDimes - private commercial do-good organization that charges customers ten cents a day to cut down their junk mail (saving paper, trees and the environment) and plant trees. I wrote about GreenDimes here.

July 15, 2007: Senator Charles Grassley, ranking Republican on the Senate Finance Committee calls for investigation of the Robin Hood Foundation's $144 million emergency fund, much of which is invested in hedge funds managed by foundation board members, including Paul Tudor Jones. Foundation tax records from 2005 show:

"... a stake in Tudor BVI Global Fund Ltd. grew to $10.07 million at the end of 2005 from $8.78 million a year earlier; an investment in the Tudor Futures Fund grew to $5.76 million from $5.03 million.

... Saltzman said Jones [and others] were compensated for managing the charity's money because their funds don't allow for charging some investors and not others."

Jul 19 2007 Green Dimes announces raising $20 million in Series A investment round led by Tudor Investment Corporation. Deal is noted under VC deals in PE Week.

July 19 2007, Robin Hood Foundation sends letter to its donors announcing it will stop the practice of investing its money in funds managed by board members.

Now --- follow the money:
  1. A dollar given to RHF (nonprofit) goes to emergency fund.
  2. Emergency fund is invested through TIC (commercial).
  3. TIC invests in GreenDimes (commercial do-good company).
From the dollar's point of view, there really are no sector differences. The original Robin Hood, as we all know, took from the rich to give to the poor. Modern day Robin Hood takes from the rich, gives to the poor, invests and grows the funds for the poor, then reinvests and makes the rich richer. Now that's an adventure.

Tuesday, July 17, 2007


Here's a great tool for philanthropy - GeoCommons. Upload a data set - grants made, proposals received, demographic data, public revenue - and see it on a map. Check out this samples of individual political contributions or this one on rural population projections to see what is possible.

Friday, July 13, 2007

Maimonides needs a new ladder

Maimonides was a 12th century Spanish Rabbi who developed, among other things, the concept of the "a ladder of giving" which discussed 8 steps of giving, from the first rung of "begrudging giving, only when asked" to the highest step of "giving without attribution, whenever needed, and such that the recipient becomes self-reliant."

Two technology trends seem to take this ladder and streeeeeetch it into something else. The first trend involves social networks and giving. Ever since Facebook opened up its code to developers the techy philanthropists have not been sitting around idle. Care2 has created a Facebook application that lets Facebook users add cause-related petitions to their pages. They are not alone, FirstGiving has a soon to be public Facebook application that will let people use their pages for fundraising. These join several Facebook applications that let users give virtual gifts to each other.

The second trend is the use of search engines to donate cash to causes. I've written about these, including EveryClick, GoodSearch and GoodTree. Now there is (at least one) company that will create custom search engines for specific causes. These engines intend to donate portions of ad revenue to the designated cause. There are two such sites, CatchTomorrow, that donates to public schools and Charteroo, which funds charter schools.

Taken together, these two trends reveal an odd paradox of philanthropy - the first group, those related to Facebook, are all about individual identity, social networks, and giving. Its "ego-connected philanthropy gone high tech." The second cluster - the search engines - are all about "giving without giving" - they make it easy to drive money to causes you care about, but not your own money. These approaches take embedded giving to a new (low) level - they make the act of giving almost invisible, and the financial impact of giving non-existent - in other words, its easier than ever to give away somebody else's money.

I'm not sure what kind of ladder these would fit on.

Wednesday, July 11, 2007

Books, blog, twitter...endowment

My publisher insists that books still matter. In the changing landscape of written media, its easy to see why he may need to convince himself (I actually agree with him, I just like to listen to how he shapes his arguments).

Perhaps this quote from Socrates might help... (Courtesy of Thomas West, Thinking Like Einstein and Marc Andreesen's blog):
"Long ago, Socrates described some second thoughts he had about the new and questionable technology called a "book". He thought it had several weaknesses. A book could not adjust what it was saying, as a living person would, to what would be appropriate for certain listeners or specific times or places. In addition, a book could not be interactive, as in a conversation or dialogue between persons. And finally, according to Socrates, in a book the written words "seem to talk to you as if they were intelligent, but if you ask them anything about what they say, from a desire to be instructed, they go on telling you just the same thing forever."
Why bring this up? Its where the web led me as I followed an argument about how blogs are so yesterday - today its all about building your own social network, mashing up your "tweets" with your 30boxes account, and on and on.

It came to mind because of the changing nature of blogs (google.org's doesn't allow comments - making it more like Socrates book than like a blog), their role as info sources (how many do you read each day?), and an unsubscribe message I received regarding this blog, citing "too many updates" as the reason for leaving. Do I blog too much? Did she leave or did she just shift to reading the blog in a reader and not via email? Will she come back?

For those of us that do blog (and can't keep up with our Facebook or twitter accounts), all of the above might seem a bit disheartening - behind the tech curve, one more time. But does it matter? Note that the blog post about Socrates drew the quote from a book. Admittedly, I read the passage using an online book preview function and didn't have to head to the library or bookstore to find it. Which allowed me to write this at 4 am after being up all night with sick child (not sure if that is good or bad).

Finally, so what for philanthropy? In the changing landscape of giving options, one distinguishing value of endowed foundations - more than ever before - may be their permanence. That is not the same as saying everything should be endowed or that everything endowed is valuable - just to say that permanence is a choice, it is a distinguishing factor to some types of giving options, and one should consider its value in making choices about how to deploy philanthropic resources.

Endowing a foundation is by no means the only option for donors - so choose carefully. What could permanence accomplish? What limitations does it bring along with it? Do endowed foundations accomplish social goals that advised funds, community foundation support, giving circles, or direct gifts to nonprofits don't or can't? If so, how must endowed foundations be structured and supported and used to realize these values? These are the questions donors face today - how to compare the various giving options and get maximum value (for themselves and for the public good) from their suite of choices.

Remember - TV didn't kill the radio, twitter won't kill blogs, blogging can't beat a book, and endowed foundations are only one option for giving.

Tuesday, July 10, 2007

Talk amongst yourselves...about power

Back in March, the Council on Foundations hosted and recorded two conversations at the Seattle Public Television Station, KCTS. One of them, The Philanthropic Fault Line: Exploring the Sometimes Shaky Ground between Foundations and Nonprofits, used a paper I wrote, Rewriting Myths, as its backgrounder. The paper was commissioned by the Annie E. Casey Foundation and is available here. The video of the conversation is here (scroll down to second headline).

Two teasers about the paper - its about power and it identifies ways that that might actually change.

Here's the blurb from the Council web site ->

The Philanthropic Fault Line: Exploring the Sometimes Shaky Ground between Foundations and Nonprofits

This town hall-style conversation in the studios of KCTS-TV explores the various relationships between foundations and nonprofit organizations. The panelists discuss finding common ground in the sometimes thorny and contentious landscape of power, control, collaboration, finding authentic voice, and funding in a results-based environment. A number of COF conferees joined the greater Seattle philanthropic and nonprofit communities in this lively discussion.

Moderator: Diana Aviv, Independent Sector
Panelists: Edward Skloot – the Surdna Foundation

Carole Thompson Cole – Venture Philanthropy Partners

Clara Miller – Nonprofit Finance Fund

Putnam Barber – The Executive Alliance & Idealist.org

Pramila Jayapal – Hate Free Zone

Thanks to the Venture Philanthropy Partners July Newsletter for bringing the video site to my attention.

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Monday, July 09, 2007

"Does that hurt? No? How 'bout that?"

Sally Beatty has an intriguing article, "Giving till it Hurts," (subscription req'd) in the WSJ on stretch giving - a phenomenon (?) of making donations that seem to reach beyond a donor's financial capacity.

There are plenty of examples in the story - including the old favorite of Oseola McCarty, an elderly washerwoman who funded scholarships for financially needy African Americans at the University of Southern Mississippi.

Several points to ponder from this story:
  • The article makes the point that changes in tax law from the Pension Protection Act of 2006 are one factor behind the increase in these gifts, specifically the ability to donate from retirement accounts;
  • While retirement account giving explains some of the growth in gifts, the article also notes that many of these donors are still working professionals, so its not just retirement giving;
  • Lots of advisers are mentioned - financial planners, the bankers who helped Ms. McCarty manage her savings, lawyers, development professionals.
  • Most of the people profiled sought advice from family members about their giving - though not all got support for their generosity;
  • "I don't need any more stuff," a quote from one of the donors, seems to resonate with all of those profiled.
While the headline implies pain, the people profiled in the article appear to have made their choices because of the benefits of doing so.

The article is one of those lovely pieces of journalism that tells several stories, winds them together around a theme, pokes at possible explanations, but leaves this reader with a completely different conclusion than that implied by the title (may be simply a function of how headlines get written).

It isn't a sacrifice for these folks to give. On the contrary, it might hurt them more to use the funds in other ways - such as for mere consumption or accumulation. Of course, that's not much of an attention-grabber...or is it?

Sunday, July 08, 2007

RWJF Prediction market on Avian Flu

(photo: http://www.lifesized.net/images/ithinkuare.jpg)

My earlier post on prediction markets stirred a bit of interest and sent me off looking a bit more deeply. One commentator noted a network of universities, nonprofits and foundations in Southern California developing prediction market. Robert Wood Johnson Foundation funded such a tool focused on avian flu - the Iowa Health Prediction Market. Another post mentions "one very big West Coast foundation" and the Rand Corp using prediction markets.

Here's some info on a prediction market (also known as collective intelligence) conference held earlier this year.

More, anyone?

Friday, July 06, 2007

Predicting success

I received an email the other day from an expert in prediction markets. I've read about these - they are a forecasting tool that aggregates the opinions of large numbers of people to predict everything from the winner of the National Spelling Bee to box office hits to Oscar winners to election outcomes. This week's New Yorker (I skipped over my 3 month pile and jumped to current events) features a "Financial Page" column on prediction markets. The columnist, James Surowieki, can be credited with popularizing the term "wisdom of crowds." He writes about a deal between Simon & Schuster and MediaPredict to see if the book publisher could improve its (industry-standard) poor record for identifying potentially successful book proposals.

Deep into the column Surowieki notes that these markets aren't perfect, but they are better than other forecasting tools. He then makes this key distinction:

"The catch is that to get good answers from consumers you need to ask the right kinds of questions; asking the market to predict how many copies a book will sell, which requires predicting how a wide readership will behave, is better than asking the market to predict which manuscript will get a book deal, which requires predicting the decisions of a small number of editors. (The Simon & Schuster experiment with MediaPredict, unfortunately, focuses more on the latter.) And you need a critical mass of people to participate."
Keeping this in mind, what role might such forecasting tools play in philanthropy? To some extent, the Long Now Foundation uses its Long Bets site for this purpose - its a public forum where anyone can place a bet on future social issues, with philanthropic money at stake. You can make a prediction, note your argument, others can vote for/against it, and anyone can place a bet against your prediction.

Could communities be asked to predict what kind of grant making strategies would achieve certain goals? What about predicting the likelihood of certain public policy futures, and using those to inform philanthropic decision making? Or simply look for future social trends that would influence philanthropy, such as one Long Bets prediction that, "By 2100 racism will no longer be significant phenomenon in most countries of the world."

Given the money (and social issues) at stake, forecast tools that work would be of great benefit to philanthropy. Who knows, maybe one day philanthropically-subsidized social issue prediction markets will be as familiar to us as stock indices and the weather report? Of course, such forecasts may have to be printed in philanthropically-subsidized community newspapers. Independent, credible information - critical in value, and seemingly scarcer every day. It could very well be the philanthropic currency of the future.

Thursday, July 05, 2007

Multimedia philanthropic resources

The Annenberg Foundation is supporting the EXPLORE program - an online, multimedia project showcasing nonprofit activity in India, Bali, China, New Orleans, Costa Rica and elsewhere.

The site includes film, photography, and slideshows, organized by place, that highlight many of the things one might see on a foundation-led site visit to a nonprofit.

This is cool - if more foundations joined this effort and pooled these resources it would be even cooler. Yet another example of information collected by philanthropic organizations that could have multiple uses. I'll have to contact these folks with regard to the philanthropy channel on fora.tv (which we aim to launch end of July).

Monday, July 02, 2007

What kind(s) of IMPACT?

A friend of mine was watching TV with her dad and he (79 years old) said, "Check this out - the news now helps you make donations." They watched a few more minutes and then switched over to the laptop to log on to the IMPACT feature of cnn.com.

Here's how it works - you're sitting at home (or on the bus with your wifi-enabled tv-receiving cell phone) watching the news. A story comes on that moves you - perhaps about homelessness, hunger, or wildlife conservation. You surf over to cnn.com/specials/2007/impact. There you can choose among a number of causes and organizations that fit your interests (data on nonprofits served up through a partnership with Charity Navigator). Click - read - donate - go back to watching the news.

Now, here's the sentence on the CNN website that really caught my eye:

"The lists are composed of some of the highest rated charities by CharityNavigator.org...and are vetted by CNN journalists for credibility."

In the interest of transparency its good to know that the organizations are vetted, and by whom. Hats off to CNN for this disclosure. We know what Charity Navigator does - crunches numbers from a nonprofit organization's tax form, focuses on operating costs as a percentage of total budget, and ranks nonprofits by this ratio. The lower the costs of running an organization, relative to its total budget, the higher the rating by Charity Navigator.

Given the misleading nature of this ratio (Does it make any sense to equate "best quality" with "cheapest?" - We don't do this in any other area of our consumer-driven lives, why do we make this assumption when it comes to nonprofit organizations?) I don't put much stock in the Charity Navigator ratings.

But how and by what criteria are the journalists vetting the organizations "for credibility"? The site doesn't give us any more information than the sentence quoted above.

This arrangement sparked (at least) two questions:

1) What does it mean for philanthropy if the media begin assessing it, not just covering it?
2) What does it mean for journalistic independence if journalists become analysts?
This new service may have further-reaching IMPACT than intended.

P.S. I started out calling this post "cross-platform embedded giving." I am not trying to start the week with an entry for "longest jargon phrase," but long time readers of this blog will know that a "tech meets media meets philanthropy" story is right up my alley. Talk about blending sectors and industries.