Monday, November 27, 2006

When official aid works

I had lunch today with a friend who is leading some work on the effectiveness of the official aid industry. As someone who was formerly a senior aid official herself, she is a sceptic that traditional aid programs will ever work very well.

But both of us have been involved in non-traditional official aid projects that made a real difference, and we both know people who have done great work in the World Bank, USAID, DFID, and elsewhere.

The key is to find the innovative people and approaches that are working and to get more resources to them.

Someone who fits this mold well is Scott Guggenheim, a World Bank anthropologist who led an extraordinary team of Indonesians and expats who devised the "KDP Program" in Indonesia. Just like the Development Marketplace and GlobalGiving, which I had the privilege to help launch, the KDP program turns the old model upside down by just asking villages what their priorities are, and then gets them the money to do it - directly, without going through ten layers of government bureaucracy.

Rather than try to explain KDP, I will just reproduce the first page of a paper Scott wrote about it below.

It was a brilliantly clear morning in Central Sulawesi when the villagers first spied the large pile of lumber. One of the delivery truck drivers stood lazily by the wood, smoking a cigarette that he blew over his steaming coffee. He’d come from Palu, the provincial capital. The golden lettering embroidered on his hat told the villagers that he and the silent man in the neatly pressed green safari suit also sipping his coffee worked for the Public Works Department there.

The villagers were curious. Just last year they had gotten funds from the Kecamatan Development Project to build a stone road from their rice fields to the market route, and now here were the materials to repair a bridge. Had the government finally noticed their plight?

“Friend, what is this wood for?

“It’s to build a bridge”

“How much wood is there? What did it cost?”

“That’s none of your business. Just be thankful that the government will be building you a bridge.”

“But we want to know. This is our new rule here. You have to come to the balai desa and tell us about the project. Then you have to post a signboard so that all of us know how much this bridge costs. If KDP does it, we want you to do it too.”

“You are mistaken. KDP is KDP and it has KDP rules. This is a government project and we follow our rules. Just be thankful that you are getting a bridge”.

The villagers were troubled. That night the village elders met. Some people said they should just accept the wood because the village needed the bridge. But many more villagers were angry. This was now the era of reformasi and people had a right to know about projects.

Early the next morning, even before the first rays of sunlight pierced the dark clouds, the villagers had heaved the wood back onto a large truck owned by the son of the village council head. Two truckloads of villagers and scores of motorcycles joined the procession to the district parliament.

When the first parliamentarians arrived for work that morning, they were met by a quiet delegation of villagers standing atop a large pile of wood wrapped in an enormous white cloth.

“What is this? They asked”

“This is the cloth we use to wrap our dead,” the village head replied, “and dead is what this project is. We would rather have no bridge and no wood than go back to the corrupt ways of the New Order. From now on we only want projects that involve us in decisions. If KDP can do it, other projects can do it too.”

And with those words, the villagers got back on their trucks and went home.[1]

[1] Story collected by Enurlaela Hasanah.

The full paper can be found here.

Church vs. State vs. Alley

"Hey, Dennis - can you fix my bike?"

It was K, the seven-year-old kid from down the block, shouting up to my balcony from the alley below. By my count, this was going to be the eighth flat tire I had fixed for K in the last year.

I don't recall getting eight flat tires in my entire childhood - how could he get so many so often?

But I love fixing K's tires. He often brings his friends along, and I raise and lower seats, tighten wheels, and calibrate brakes for them, too. They watch me work, ask to help, tell me about school, and tease each other about girlfriends and boyfriends.

K and his friends are basically good kids. You can tell that their mothers or grandmothers have been a big influence on them. They don't need a lot of prodding to say please and thank you.

K's father is currently serving a little jail time for small-time drug dealing. I broke up a fight he was in on the street one day after another kid started taunting K: "Where's your daddy? Huh? Where's your daddy?" K is constantly in trouble at school, and has to go to special behavior classes.

But in fact, many of these kids these lack fathers at home.

A former professor of mine writes books about the arguments among religious figures in the middle ages over whether they could do the most good through the church as an institution or through personal acts and compassion. A modern version of this dilemma is often played out among graduate students I meet today: "Should I join the government or an official agency where I can influence policy that will affect millions of people? Or should I join a non-profit where I can roll up my sleeves and get something concrete done even if it is on a smaller scale?"

Over the past twenty years, I have worked this question from all angles, it seems. I did lots of policy work while at the World Bank, and I know some of it has improved lives. I have also made some hundred-million dollar infrastructure loans that should help increase economic growth rates and lift people out of povery. Now, at GlobalGiving, I am trying to provide a platform that enables a large number of small donors and small non-profits to come together to make a big difference in the world.

But I have to admit that, when K and his friends call up from the alley and ask me to come fix their bikes, I want to drop everything and go down there to help them out and talk about how things are going. Mari recently made up shirts for them with their own names and favorite numbers on the back. I told them that we would go play some ball in the park as soon as I had time. I need to make that time soon.

Monday, November 20, 2006

Hertz: Can This Brand be Saved?

"I am afraid you will have to talk to our new owners about that. It's one of a number of changes they have made. We're not happy either."

This was the response I got at the Hertz rental counter at a New Hampshire airport about six months ago when I returned my rental car only to find I was subjected to a whopping fee that I had never been charged before. I was shocked not only by the fee but by the response of the desk staff.

Peter Lynch, the legendary investor who ran the hugely profitable Fidelity Magellan Fund, believed that you can tell a lot about a company's prospects just by walking in the door and using their products and services. In his book One Up on Wall Street: How to Use What You Already Know to Make Money in the Markets , Lynch argues that you should invest in companies that: (a) you understand, and (b) produce things you like using. Warren Buffett has a similar philosophy.

So, I was shocked when the staff at the rental counter told me to "Talk to the new owners." Hertz has been a shining beacon of superb service at reasonable prices for years, and they really seemed to understand the concept of a customer "experience." If you were a member of their frequent renter program, your name was up on a board when you arrived, and you didn't even have to check in - you just got in your car and drove away. And when you returned to the airport, they had mobile checkout people who often arrived at your car even before you came to a full stop. The average time to checkout was about one minute.

In short, air travel was a real drag, but you could count on Hertz to make the car rental experience efficient and pleasant.

No longer, apparently. Since that rude encounter in New Hampshire six months ago, things have continued a slow slide downhill. Prices have edged up, counter staff are getting more surly and a lot more demanding, and service is slower. My car has not always been there when I arrive either.

This experience all came on the heels of the purchase of Hertz from Ford by a private equity group. Those investors announced plans this month to take Hertz public - at a very hefty profit.

Last week when I was returning my car to the airport in San Francisco, there was not even a mobile check-in person to great me. A bunch of us had to wait in a long line at a booth. After a confusing interval, a couple of check in people came slinking out of the shadows, went up to the cars, and started shouting "OK, WHO'S CAR IS THIS? WHO'S CAR IS THIS?" I went back to my car, and was rudely checked in, with nary a thank you.

A year ago, I would have followed Peter Lynch's advice and bought some stock in Hertz. After this, I am going to follow Peter Lynch's advice and not buy any Hertz stock. The investors taking Hertz public may make a short term profit, but unless the company turns its service around, the "Lynch Law" would predict a slow decline thereafter.

Wednesday, November 15, 2006

What would James do?

In the past month both Time and the Wall Street Journal have written about GlobalGiving. But one of the most meaningful mentions came last Friday from James Fallows, national correspondent of the Atlantic Monthly. Slate asked him what he would do if he had a million dollars to give away and he said:

A million dollars is really an awkward number. If you said, "What would you do with a billion dollars?" we could talk about setting up new research institutes or huge change-the-world undertakings. If you said, "What would you do with a thousand dollars?" I could name a specific charity worth getting a little more help. But a million dollars is in the gray zone - too much to feel good about blowing on just any old charity, too little to allow you really to change the world.

I'm tempted to say that I'd use the money to buy as many acres of forest land as possible in Malaysia, Indonesia, Brazil, the Congo, or elsewhere, because in the short run I fear that such ownership is the main way to keep the forests from being cut down. But I realize that on its own, that would probably yield parcels too small to make a difference. So, on reflection, I would probably divide the money between two organizations that have pioneered brilliant ways of matching entrepreneurship with good works of the environmental, medical, poverty-reducing, and democratizing variety, and that have delivered a lot of value per dollar spent. They are Ashoka and GlobalGiving. Each represents an inventive new model of deciding which projects to support, and each appears to work. I'd probably hold back
$100,000 or so and give it to Medecins sans Frontieres.

Wednesday, November 08, 2006

What would Susan say?...

Anyone who has observed the nonprofit and philanthropic sector over the last decade cannot help but be struck by its growth, evolution, and emerging sophistication. For anyone here who has wished growth upon this sector, you have certainly been granted your three wishes by the Growth Genie. There are more nonprofits and philanthropies, and more large nonprofits and philanthropies than ever before. While it is true that some 60% of all nonprofits have $100,000 or less in annual revenue, the number of nonprofits with revenues of $10 million or more has increased by 73% in the last ten years. The sector is growing both at the bottom of the pyramid and at the top. (From Three Wishes for the Growth Genie: Our Sector Confronts Expansion.)

No one is a more astute observer of trends in philanthropy than Susan Raymond, who writes for Whether you are a newcomer or an old hand in the field, I highly recommend Susan's columns. She often sees trends well before others, and she is an expert at teasing out interesting insights from boring reports you might see elsewhere. The article above talks about the dramatic growth of the philanthropy sector, and how it brings about increased scrutiny, a greater need for transparency, and ultimately better leadership.

Simple, Part III

My recent visit to Silicon Valley illustrated vividly the degree to which it is a major engine of creativity. And one of the most important elements in useful creativity is simplicity. Earlier I blogged about Pinger and Presto, services that dramatically simplify voicemail (for everyone) and email (for some users).

The third company I met last week is OneTrueMedia. If you thought you needed a degree in graphic design and film making to create high quality photomontages and even movies with accompanying music, you were wrong. This service dramatically simplifies the whole process. You supply the photos and raw video footage, and it provides easy-to-use editing tools. You can then view the thing on the web, burn a dvd, or even download it to watch on your iPod.

Simple, simple, simple.

And the winner is....


India beat out Pakistan to win the first GlobalGiving Olympics by raising the most money for projects listed on GlobalGiving over a 3-week period in October. Projects from India won both the Gold and Silver Medals. Congratulations to "Educate 100 slum Children of Sex Workers in India," led by Ray Umashankar, which raised over $43,000 to take first place. Ray did an extraordinary job mobilizing donors for this project.

Gold: Educate 100 slum Children of Sex Workers in India
$50,000 gold medal prize
Donation total: $43,357

Silver: Helpline for Women in Distress
$10,000 silver medal prize
Donation total: $37,110

Tuesday, November 07, 2006


"I think I got your email but nothing came out of the computer."

My mom told me this right after she got a new computer at her home. She was used to a fax machine, where the messages "came out" and then you read them.

My mom now sort of knows how to use email, but to be honest she doesn't like it - the computer may hang and need rebooting, or the wireless network may need to be reset. So she often waits for her brother to come by for a visit and gets his help. Sometimes she even makes him READ the emails to her. (She doesn't have a printer.)

As I said in my last post, technology is still too complex, and I am always looking for things such as Pinger to make life easier.

Here is another service I really like - it is called, appropriately for my mom - "Presto." Presto is kind of like a fax machine. Your mom just plugs it into the phone line, and when you send her an email (even one with a photo of your new puppy), it automatically prints out on the device and is there waiting when your mom gets home. One of the best things about it is that it uses a "white list" approach. It will only receive emails from addresses in its addressbook. So it cuts out the spam that scandalizes your mom and just delivers messages from her kids.


PS: It does not take huge imagination to realize that Presto could be used for business purposes as well.

Monday, November 06, 2006

Ease of use is hugely underrated. One thing we hear all the time here at GlobalGiving is to please make giving as easy as possible. People don't want to have to click a hundred times to make a donation.

So I am always on the lookout for products and services that are very easy to use.

Today I draw your attention to Pinger. This service enables you to leave voice messages for others without having their phone ring - perfect for when they are in a meeting or when it is the middle of the night their time. What's even better is the ease with which they can pick up those messages. In most cases, they get a text message (SMS) on their cell phones telling them who has left a message, and how long the message is. All they have to do is hit one button, and they go straight to the message - without all the usual extraneous action (password) and information ("You..... have....two.... new....messages.......... First..... mes....sage. .....From num...ber.... 1 2... 3 - 4... 5... 6... - 7... 8... 9....... Sent...... Nov.... em .... ber.... 3, two..... thou....sand.... and... six... at... two..... p...m").

This service dramatically reduces the time required to listen to your messages, and it allows you to listen to the messages in any order you want.

Joe Sipher, one of Pinger's co-founders, told me that cell phone companies claimed it was impossible to improve on the existing voice mail interfaces,which had been honed over the last twenty years. Luckily, Joe and his co-founder ignored them.

Try Pinger - I bet you will like it.

Friday, November 03, 2006


As most readers will know, YouTube was sold to Google recently for $1.6 billion. This sale was announced exactly one day after someone sent me a memo arguing that YouTube had absolutely no chance of sustaining itself longer than one more year.

Now our friends at CharityFocus have launched something called KarmaTube. CharityFocus is a very special organization, and I would not be surprised if they are onto something with KarmaTube. Check them both out.