Don't talk - Do.

"Don't talk - Do."

That is what a wise supporter advised me soon after we started GlobalGiving. He was referring to the hype surrounding the dot-com boom.

Lots of people were talking back then about all sorts of new possibilities in the philanthropy arena. There were meetings and conferences and papers and excited drawings - on whiteboards and napkins - of potential "ecosystems" And a number of experiments were launched.

Five years later, a lot of the hype has died down. Many of the experiments have failed or stalled. Some were all talk and no action. Others failed due to bad concepts, poor execution, or just bad timing.

But many others are succeeding. I was flattered when Monitor Institute called GlobalGiving the "most mature and established of the new philanthropy marketplaces." We have more than doubled in volume of donations each year since we started, and over seven hundred projects have been funded.

But as I said, we are not the only success story (I will highlight others in coming posts). And, together, the success stories now provide a critical mass for the emergence of a fully fledged philanthropy marketplace.

What would such a philanthropy marketplace involve? As my friend Venkat Krishnan, founder of GiveIndia, and I have often discussed, it would include the following components:

* Exchanges - where philanthropy transactions occur

* Investment Bankers - who help larger organizations secure funding

* Investment advisors - who advise large donors

* Investment analysts - who provide independent analysis of organizations and projects

* Private equity funds - managed on behalf of high net worth funders looking for high (social) return social investments

* Mutual Funds - baskets of philanthropic investments that help donors diversify risk and focus on a theme or country

* Venture philanthropists- funders who specialize in high-risk, high-return projects.

* Standards agencies - which develop criteria for effectiveness, transparency, and accountability

* Ratings agencies - organizations that give ratings to philanthropic organizations based on agreed reporting standards

In this emerging marketplace, the lines between for-profit and non-profit organizations will be increasingly blurred, with micro-credit institutions and even regular venture capitalists getting into the act.

Sometimes one organization will perform or enable several of the above functions. For example, at GlobalGiving we provide an exchange for transactions, but a major donor has also used the platform to create a mutual fund focusing on Human Capabilities. We have a mechanism for reporting transparently on project progress, and we have implemented the beginning of a feedback and rating system.

But a full marketplace will have many different organizations and institutions meeting varying demands of both donors and recipient organizations. There is not a single approach or mechanism that can meet all needs. "Different strokes for different folks" is as true in this sector as in other sectors.

The emergence of this full-blown philanthropy marketplace is not a foregone conclusion. It will take lots of hard work, an increase in cooperation and inter-operability among emerging components of the system, and significant financial investment. But unlike five years ago, the vision is now on the horizon.

In its excellent report "Future Matters," The Monitor Institute predicts we are at a tipping point in the emergence of the philanthropy marketplace. Lucy Bernholz predicts that we are about to see "meaningful commercial investments (in scale and scope) in social good, including online philanthropy exchanges." She continues: "2007 might be the breakthrough year I've been predicting."

I plan to write more on this topic - including highlighting some of the more successful emerging players such as DonorsChoose - in the weeks ahead. But in the meantime, I hear the voice of that wise advisor whispering to me: "Don't talk. Do." So I better get back to work.

[GlobalGiving]

Mr. Krejci goes to Indonesia....

A couple of months ago, our CFO Jim Krejci went to Indonesia. Last week he sent this email. It speaks for itself.

Dear Dennis, Check out this 60 second video from my recent trip to a hillside school in Java, Indonesia. Please click the image below to play. I was in Indonesia on business, and took a day off to visit a hillside school and meet this amazing group of kids and their teachers. I was the first American they had ever met, and I hope the video captures some of the energy and optimism that I experienced first-hand. I would like to ask you to join me in reaching out to these kids, to keep them in school, to make the world just a little bit smaller. I will match your donation. $40 keeps one child in school for one year/ $400 for ten students. (Donations are processed through a U.S. non-profit named GlobalGiving, which will provide you a tax receipt. I have supported and worked with GlobalGiving for several years.) Let me know what you think. Jim jkrejci@yahoo.com If clicking on the image or links do not work, copy and paste this link into your browser's address field: http://www.globalgiving.com/info/kaligathuk.html

[GlobalGiving]

Returned Peace Corps Volunteers Win Prizes

"You can provide schools, but children will not learn if they are hungry."
- "Foreign Aid," The Economist, April 1, 2006

Two Returned Peace Corps groups have won $5,000 prizes to be donated to their projects on GlobalGiving.

Returned volunteers from Burkina Faso and Morocco walked away with $5,000 each after each group mobilized more than 100 donations for their projects.

Friends of Burkina Faso supported a project called Noon Meal Improves Girls' Learning in Burkina Faso . This project delivers something very simple, school lunches. But this simple thing can dramatically improve educational outcomes and keep girls in school. And keeping girls in school is one of the most cost-effective things that can be done to spur economic and social development. What I like about this project is that $50 will enable a girl student to eat lunch for a whole year! You can't beat that.

Returned volunteers from Morocco supported the High Atlas Foundation’s project Tree nursery to benefit 10,000 Rural Moroccans . As the project description notes:

This nursery will provide a cash crop that will increase the income of 10,000 inhabitants by at least 150% after two years, offer a more diverse diet with fruits, improve soil and water quality, and combat overgrazing and deforestation.

A $100 donation to this project plants 400 seedlings and sustainably increases incomes for 4 families. Not bad bang for the buck!

Thanks to the National Peace Corps Association for partnering with us on this initiative. Special thanks go to Kevin Quigley, the President of NPCA for proving the leadership to allow this possible. And hats off to Tony Gambino for coming up with the original idea, designing the whole thing, and getting out the vote. Check out Tony's Blog for more details and discussion!

==================

The prize money was provided by an anonymous donor to see if there is potential in mobilizing networks. The results of round one have been very positive, and we will likely run similar competitions in the coming year. If you have ideas for future competitions, please send them to me.


[GlobalGiving]

We can do this, no problem

"Carefully planned and intelligently directed philanthropy may be the best answer to the claim that aid doesn't work."

In an excellent article in this week's NY Times Magazine, Peter Singer considers the moral case for philanthropy. He discusses whether donors give away money out of a sense of duty or because it makes them feel good.

He concludes that people give away money for both reasons. His punchline is that, in the end, the motivation is not as important as the incredible potential for leveraging philanthropy to solve poverty.

A UN commission has estimated we need to spend an additional $50-75 billion per year to meet the Millennium Development Goals - which would mean the end of most poverty worldwide.

Singer calculates that Americans alone could provide over $800 billion per year in philanthropic funding without substantially reducing their standard of living. This is ten times the amount needed, and it does not even take into account the money available from philanthropy in other countries.

The availability of money is not the problem. The system by which the money flows to high impact projects is the current binding constraint. If we create a system that allows donors all over the world to connect directly with useful projects that resonates with their personal interests and values, we can harness this $800+ billion and substantially wipe out global poverty within a generation.

That would be a legacy worth leaving.

[GlobalGiving]

The long tail...

Globalgiving seems to me a formalised way to search for these kinds of projects and give directly to them. What I find interesting about this is that it’s another example of how the internet is helping to create a long tail economy - this time in the charity / NGO sector. It exactly parallels the changes going on in other forms of commerce, one great example being the music industry.

This quote comes from a blog by Antonio Gould, who says that his knowledge of international development is limited. His blog is the perfect example of why even people with limited experience can have a large positive impact if they are empowered to get involved.

Mr. Gould explains how he came to this conclusion:

When in Cambodia I met some incredibly committed people who were raising money in Canada, then physically taking it to Cambodia and spending it on sending children to the doctor, sending them to school, trying to find ways to get them away from living on rubbish tips and all sorts of other direct action. You couldn’t help but be impressed by the directness of what they were doing. After I met these guys I decided I’d much prefer to give my money directly to them than to any of the large NGOs, just because I knew it was going to have a real, direct impact.

One thing to make clear is that some large NGOs do outstanding work, and often they are either the precursors or enablers of the types of people Mr. Gould met in Cambodia. But he is absolutely right about two things: first that there are amazing (and usually unheralded) people doing extraordinary things at the grassroots level all around the world. And second, that the old system for finding and supporting these people was incredibly inefficient.

We are working hard to create the "long tail" in international philanthropy and aid. The internet revolutionized shopping via eBay and Amazon; it revolutionized search via Google, and music via iTunes. It is now revolutionizing philanthropy.

There is a long way to go still, but we are on our way.

[GlobalGiving]

Let's buy the World Bank

David Rubenstein of the Carlyle group gave an interview to the Financial Times recently in which he described how good private equity funds make money. Equity funds look for companies that have assets that are being poorly used. Often the existing managers and workers know what needs to be done, but there is something keeping them from doing it - lack of capital or permission from the board. So the equity fund buys these companies and helps them better leverage their assets to exploit market opportunities. The profits and therefore the value of the companies rise, which means that the equity fund can sell the companies, make money, and start the whole process over again.

Although there have been mistakes and excesses, overall Rubenstein argues that private equity funds have driven substantial productivity increases, especially in the US.

I worked at the World Bank for over 14 years, and it is hard to imagine many organizations that have a greater abundance of underutilized assets. The Bank has thousands of extraordinary experts in an amazing range of subjects. The Bank has billions of dollars of financial assets and lending power. The Bank has an unparalled global network of access to top policy makers. And yet, and yet...

The Bank as a whole is far less than the sum of its parts. It achieves far less impact than it could, and its influence is declining as it fails to adapt to the new era of globalisation and the rising influence of civil society and the private sector. Despite some significant reforms, especially under Jim Wolfensohn from 1995-2005, the Bank remains constrained by its post-WWII structure and has an exceedingly risk-averse culture and board of directors.

So here is a crazy idea: What if a group of folks got together and launched a leveraged buyout of the World Bank? Though this is likely infeasible politically, in theory it is not only possible but desirable. There is plenty of both philanthropic and private money available to finance the deal, and the amount of expertise that could be brought to bear in running the place better has never been higher. These excellent people come from all sectors - many are from top-notch NGOs, others from private companies, some from government agencies, and many from within the World Bank itself.

I am starting to compile a list of my own dream team of colleagues at such a revitalized institution. If you have suggestions, please send them to me at dennis at globalgiving.com.

[GlobalGiving]

Give and Get

Last Friday, I was invited to write a post in the Fearless Voices section of The Huffington Post. Below is the full text.

If you are like me, you are getting inundated with year-end appeals from charities and non-profits. Many of these requests are compelling, and you want to drop some money in the envelope and send it back.

But here is the sad truth. According to the Chronicle of Philanthropy, if you put $100 in the return envelope, the charity itself may wind up with only $35. Considering list acquisition, printing, production and mailing, costs can be as high as 65%, and most organizations don't have the size and scale to lower that ratio. And to top it off, you usually don't even know exactly how your money is being used, or what impact it ends up having.

That is one of the reasons I co-founded GlobalGiving. GlobalGiving is a far cry from my previous life at the World Bank, where I spent 14 years and oversaw over a billion dollars of large projects. There, too, the waste was significant, and the impact of the projects often not all that clear.

GlobalGiving allows you to direct your donation to any of 400 projects of your choice in over 70 countries around the world. If you want to support women's education in Afghanistan, we have it. If you want solar power in Nepal, we have that too. How about nurses on motorcycles in Zimbabwe (for $10 you can pay for one nurse to deliver healthcare to 90 people for a year)?

When you give to a project, we ensure that 85-90% of the money gets there - within 60 days. Furthermore, we believe that you deserve to know what impact your money has had. So project leaders in the field send in progress reports, in many cases with pictures and color commentary. And you don't have to come looking for them - we'll deliver them to your inbox.

We recently introduced Gift Certificates, which allow "shoppers" to give meaningful gifts, and recipients to choose the projects they want to support. They have been a huge hit. Parents are giving them to their children, friends are giving them to friends, companies are giving them to employees and clients. A friend sent me an email the other day that said "I am so tired of sending my siblings stuff they don't need - this is great."

GlobalGiving gives everyone choice, provides a direct connection with powerful work around the world, and enables people to give the gift of giving. What could be more fulfilling during the holiday season?

See for yourself - GlobalGiving.com.

[GlobalGiving]

Goodbye, Eli...

"So here's the rub. I have just been offered the job as Executive Director of the Maine Women's Fund. "

Mari and I were stunned. We were having a general check-in and strategy lunch with Eli Stefanski, GlobalGiving's Chief Program Officer. We had just started talking about the end of the year campaign and our ambitious plans for next year when she dropped this bombshell on us.

Silence. It took us a while to assimilate this. "And...?

"I have decided to take it. You know I have always wanted to live in Maine, and this is the perfect opportunity, even though I hate the idea of leaving GlobalGiving and the timing is lousy."

Mari and I were floored, but there was only one right answer, and we both said it at the same time: "You have to do it; it is too good to pass up."

But I was devastated.

Eli had been a key part of the DNA of GlobalGiving since she joined, three years ago. She came on board at a critical time, and had become integral to the growth and success of GlobalGiving. In particular, she had built up our Project Sponsor Network from about three organizations to over forty. This meant we had a worldwide partner network with operations in over 100 countries that could vet projects. This network had been critical to our success in getting millions of dollars of funding to over 700 projects. And Eli was integral to nearly all the strategic decisions we had taken in the last three years.

Of course, this is not the end of the world; there are plenty of talented people out there, and some fresh blood will probably help take us in good directions we had not anticipated. In fact, we have already talked to a few candidates, and the gloom has lifted.

But still. Eli is one of a kind and cannot be replaced as a person or colleague.

========
Last Thursday was Eli's last day, and on Wednesday night we had a big party for her where we told stories, showed pictures, and had a good time. On Thursday, she packed her boxes, and left the office. We all said goodbye as if she were headed off on vacation.

Eli called yesterday. She said that as she drove into Portland with her husband Scott and Lab George, it was starting to snow. She was starting a new life, far from the hustle and bustle of Washington. She sounded very good, excited, but relaxed - and at home.




[GlobalGiving]