Ready...Go!

Many people have asked me about my last post. So let me allow Robert to elaborate here via video, because it is a *very* good deal.



If you have a favorite project on GlobalGiving, now is the time to act. With relatively modest effort, you can dramatically increase the chance the project may be awarded an additional $50,000.

This is the democratization of philanthropy at work. The Case Foundation and Parade Magazine are putting up $50,000 for each of the four projects on GlobalGiving that attract the most donors through a single fundraiser.

That's right - the highest number of donors, not the largest amount of donations. Minimum donation size is $10.

Go here to get started.

And even if your project does not win $50,000, it will still be eligible for one of fifty $1,000 runners-up prizes. Seriously, this is a great deal - don't pass it up.

[GlobalGiving]

Online Giving Challenge with $500,000 in prizes

The old thinking goes that to change the world, you have to give millions. But young tech-savvy philanthropists are trying to prove otherwise.

Leveraging new technologies and the growth of social networking Web sites, several online-giving pioneers have been trying to expand the pool of potential donors by democratizing philanthropy and making it more transparent.

"This is pretty revolutionary, that technology allows us to do this," Whittle said. "It used to be that if you wanted to give and have an impact, people thought you had to be Bill Gates or Oprah Winfrey. But because of the way the technology works, you can be an 'ordinary Oprah.' If you've got $10 or $100 or $1,000, you can come and find a school in Africa to support, and you can get updates from the field to get responses to your support.

This is from a very nice article by Philip Rucker in today's Washington Post talking about how the Case Foundation is working with GlobalGiving, Network For Good, and Parade Magazine to encourage online giving. Parade Magazine has 70 million readers!

The Case Foundation is providing $500,000 to the causes that attract the most donors - not necessarily the ones that raise the most money. This makes this a real exercise in the democratization of philanthropy.

You can participate in the $500,000 challenge here. It goes live on the web today at 3 pm EST.


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Smart + savvy = successful

Tyler Cowan is a rare combination of a good academic and a savvy self marketer. His blog is one of the most widely read in the world. One reason for this is that the content is good. But what separates Cowan from many others is that he reassures his readers early and often that he is an authority by prominently citing what others say about him.

Today, he quotes Arnold Kling's most recent compilation of the best economics books of 2007:

Two books that show economic intellect to advantage are Discover Your Inner Economist, by Tyler Cowen and One Economics, Many Recipes, by Dani Rodrik. Cowen's book is a set of observations on everyday life, while Rodrik's book looks at the high-level issue of which economic institutions to recommend for underdeveloped countries. I made the case for Cowen's book here and the case for Rodrik's book here.

Note that in this quote, he is careful not to single himself out to make himself seem to self-aggrandizing. Instead, he adds Dani Rodrik into the mix. This serves the additional function of signalling to the reader that he is in the same league with Dani Rodrik, someone who (at least until recently) was much more widely known and respected.

[GlobalGiving]

Flavor of the day? Not.

I finished The Metaphysical Club by Louis Menand last night. It is sort of an intellectual history of the United States, covering the period right before the Civil War until about World War I. The main stars include Oliver Wendall Holmes, William James, Charles Pierce, and John Dewey. These guys were discussing many things that we assume are "new" today - the wisdom of crowds, complex adaptive systems, and the nature of uncertainty.

But their main collective contribution was the rejection of the idea of firm dogmas in favor of pragmatism. Their common realization of this was forged by their varied life experiences during an extraordinary period of US history. (Holmes was wounded several times in the Civil War but went back to the front each time to face horrifying conditions; meanwhile, James had no stomach for fighting and stayed home on the couch.)

In the words of a citizen reviewer on Amazon:

They realized that hewing to rigid principles and old certitudes was futile, even dangerous. Together, they created pragmatism, in which keeping the public debate and political process open to dissenting views trumps any underlying theoretical framework, which, after all, might be proven wrong by the next round of scientific research.

Many of us are drawn to rigid principles and sweeping theoretical frameworks, because in the short term they make life easier to understand and navigate. But Holmes, James, et al realized that the world is too complex to be described -- much less navigated or molded -- by any such certainties.

We should all keep this in mind next time we are seduced by the latest book or idea. And students starting a graduate program in any field would be especially well advised to read this book. It will help them avoid falling under the spell of that charismatic advisor or theorist whose world view is so compelling...

[GlobalGiving]

Rising Star

GlobalGiving is featured as a "Rising Star" in this month's FastCompany Magazine.

Check it out!

[GlobalGiving]

GlobalGoodness...

Check out GlobalGoodness, the new blog that allows you to see what's going on behind the scenes here at GlobalGiving. It features posts from GlobalGiving staff and an occasional guest blogger. The goal is to provides a preview of upcoming features and to point out trends we think are important. We will also highlight other organizations we love.

Even in its infancy, GlobalGoodness is already showing evidence of the wisdom of crowds. You will find the posts there, in total, better than the posts from me alone on this blog :)

I will keep writing here at Pulling for the Underdog on a variety of topics that strike my fancy, but if you are looking for the inside scoop on GlobalGiving, then GlobalGoodness is the place to go.

[GlobalGiving]

How marvelous collaboration can be

Much of the joy was social. Almost all of Amos' work was collaborative. He enjoyed working with colleagues and students, and he was supremely good at it. And his joy was infectious. The 12 or 13 years in which most of our work was joint were years of interpersonal and intellectual bliss. Everything was interesting, almost everything was funny, and there was the recurrent joy of seeing an idea take shape. So many times in those years we shared the magical experience of one of us saying something which the other would understand more deeply than the speaker had done. Contrary to the old laws of information theory, it was common for us to find that more information was received than had been sent. I have almost never had that experience with anyone else. If you have not had it, you don't know how marvelous collaboration can be ...

That is the concluding paragraph from Danny Kahneman's Nobel prize autobiography. Kahneman, a professor at Princeton's Woodrow Wilson School, was awarded the Nobel for economics in 2002. Much of the work he was recognized for was done with Amos Tversky, who died in 1996. Kahneman's piece is one of the most lovely autobiographical sketches I have ever read. It provides a highly engaging survey of breakthroughs in economics and psychology over the past forty years. So if you are a student in either field, that makes for mandatory reading. But more important, it is a generous and moving account of the nature of friendship, which makes it great reading for everyone.

[GlobalGiving]

"Social return" is not the point...

O swallows, swallows, poems are not
The point. Finding again the world,
That is the point, where loveliness
Adorns intelligible things
Because the mind’s eye lit the sun.

I am not a big poetry reader. But occasionally I run across something that really speaks to me personally. This poem, by Howard Nemerov, called The Blue Swallows, also speaks to me about the nature of philanthropy. There has been much discussion - and some good work - over the past few years about the "social return" on philanthopic funding. But with few exceptions, the abstract idea of social returns does not drive most philanthropy or international aid decisions. Philanthropy and aid funding are ultimately driven by intensely personal considerations - even at many (most?) large foundations and agencies.

In Nemerov's view, abstractions are something that we impose on reality to make sense of our experience. But if we are not careful, these abstractions obscure the underlying phenomena. In this poem, he goes on to say:

Some seven centuries ago.
It’s taken that long for the mind
To waken, yawn and stretch, to see
With opened eyes emptied of speech
The real world where the spelling mind
Imposes with its grammar book
Unreal relations on the blue
Swallows.

Hopefully it will not take seven centuries for us to "waken, yawn, stretch, and see" the underlying nature of philanthropy. In fact, I think we are in the midst of a fundamental transformation right now - something that Peter Drucker referred to as the emergence of an "economy of meaning."

Even if, like me, you don't read much poetry, I strongly urge you to read the full poem here.

[GlobalGiving]

Guaranteed - Period.

If I buy shoes from Zappos.com and they don't fit, I can send them back for a full refund — no questions asked. They even refund shipping costs! If I buy a coat from Nordstrom's and my wife doesn't like it, I can take it back to the store — no questions asked.

But what would happen if you asked your favorite nonprofit or charity group for a refund? Margaret Su, one of our colleagues here at GlobalGiving, asked this question earlier this year. "We claim that GlobalGiving is a 'whole new way to give.' We place a premium on showing donors exactly where their money goes -– and the impact it makes. Why shouldn't we provide a refund if a donor is not happy?"

I told Margaret, as gently as I could, that she was naive: "That is crazy, Margaret. Philanthropy doesn’t work that way. We can't do that." I had a thousand reasons to blow her off.

But her idea nagged at me, and I couldn't shake it. I brought it up at the management team and then at the board. The response was always the same: "That's crazy, we can't do it, it's impossible, etc. etc."

Over time, though, we started to think that the idea might be not only possible -– but critical. And not just to donors, but also to the organization. A guarantee could compel us to put front and center questions of how to amplify the impact of our work, hold ourselves accountable to our partners, and ensure donor trust. Each and every day.

Today we’re putting our money where our mouth is with the announcement of GlobalGiving Guaranteed. Starting today, if a donor is not happy for any reason with his or her experience on GlobalGiving, he or she can get a refund. The refund comes in the form of a voucher the donor can use to give to any other project he or she wishes. (If the IRS allowed it, we would even refund donor's money in cash.) The guarantee will cover up to $10,000 per donor, per year, at the beginning, but we may increase this ceiling if it makes sense in the future.

We see GlobalGiving Guaranteed as a new way to demonstrate the confidence we have in our project leaders, who are good people making a big difference with a relatively small amount of funding. But the guarantee also brings direct market discipline to bear on us. We make promises about the speed at which donors' money will get to the field, and we promise donors that they will get regular updates from the field from project leaders. Starting now, the guarantee creates a feedback loop with teeth.

We also believe that donors deserve to be treated at least as well as consumers. After all, they are trying to help improve the world with their dollars. They have the right to know how their money is being used — and to redirect that money to a different purpose if they are not satisfied.

You may be thinking this is a real financial risk for a small organization to be taking — and you are correct. But we believe that ultimately the benefits far outweigh the risks. Study after study has shown that the positives outweigh the drawbacks for providers of guarantees.

Does the guarantee mean that all projects listed on GlobalGiving will succeed in terms of their objectives? Of course not. Most projects on GlobalGiving succeed in improving hundreds or even thousands of lives. But, like anything else in life and business, sometimes development initiatives fall short, for all kinds of reasons. We will, however, guarantee that from here on out, donors can play an active role in the conversation.

Months ago, I told Margaret that a donation guarantee was a crazy idea. That isn’t how philanthropy works, I said. But today, I believe that it is. What do you think?

Note: This post can also be found on the Philanthropy News Digest Blog

[GlobalGiving]

Targeting subsidies for micro-credit

I also think that there is a role for grants in generating the funds necessary to continue helping the poorest borrowers and savers take baby steps towards establishing themselves as legitimate financial services consumers.

That is Julia Brown over at the Women's Initiative, whose good post I recommend reading in full. She was responding to my earlier post arguing against subsidizing interest rates on microcredit in most cases.

Julia goes on to say:

Reaching the poorest of the poor, especially in rural areas, requires a great deal of overhead in terms of physically reaching the borrowers who may be widely scattered and maintaining the contact necessary to reduce default rates.

I agree with Julia on the high overhead cost of reaching the poor in rural areas. I also agree that in some cases subsidizing this overhead may be a more cost-effective way of helping the poor than many other aid programs.

However, experience has shown that the best thing is to subsidize this overhead directly. Subsidizing interest rates tends to distort incentives at the margin, politicizing the loan process and masking the true cost of doing business.

In any case, thanks to Julia for a nice post.

[GlobalGiving]