Edit: Holden from GiveWell and Lucy from Philanthropy 2173 responded in the comments, and Lucy responded on her blog. Check out what she said and join the discussion. I started a twitter account to better coordinate and respond to the comments. (Sorry I couldn't use vowels.)
I agree with what Holden said that, in practice, this type of site might not be able to promote a lot of necessary due diligence. Both he and Lucy bring up constructive ways to harness the power of social media and use it effectively to help both donors and non-profits. Check out Lucy's response and continue the discussion there or here.
I wrote a post a while back criticizing GiveWell--a charity rater that looks at effectiveness--for their own tendency to criticize ineffective charities rather than encourage them to be better. One commentor on that post made the point that GiveWell's strategy is to find the "blue-chip" charities that are a safe bet for small- to medium-level donors, not to help individuals find charities that will be or could be effective. GiveWell reiterated this strategy in a recent post.
In some ways, it makes sense that casual donors should only focus on these sure-bets for effectiveness. It doesn't make sense for the small-beans donor to give to an up-and-coming charity, because if that charity goes under, the money would have been better spent on those "blue-chip" options. In an email to me regarding a previous post, Holden Karnofsky of GiveWell made the point that most start-up non-profits, like most start-up businesses, are funded by professional venture capitalists with lots of money and the "capacity to hold them accountable." People with less money typically don't have the means (or the time) to make sure their contributions are going to good use.
However, in some comments on my previous post on supporting small charities, a few ideas were tossed around about how to get small donors connected to these up-start charities. Mark made the point that now people are more willing to invest in companies before they turn profit, as long as they think they have a good vision (think of Google and many other online start-ups.) This discussion when applied to the non-profit world is the difference between supporting organizations with "high performance"--those charities with a good vision--versus "high impact"--those charities with proven impact, i.e. "blue chip" investments.
Of course, as Karnofsky alluded to, these high performance organizations can completely fail before they obtain their blue-chip status (like the dot com bubble bust.) But I wonder if there is a way for casual donors to be a part of this venture capital stage and still try to maintain some level of accountability.
One viable solution already in place is the prevalence of social media connecting people to charitable means. Many organizations are out there to bring small-time givers together so they can pool their resources and support different charitable projects: DonorsChoose, Kiva, Hope+, and a myriad of corporate-sponsored, Vote For Your Favorite Idea! contests, like the Pepsi Refresh Project. Could this social media technology be harnessed to raise funds for upstart non-profits? (For a cool example of this donor social-media at work, check out this article about some kids who are trying to take down Facebook.)
Accountability will still be an issue with collective venture philanthropy, but several things could be done to try to mitigate the risk: Frequent updates to the donors, a la Kiva, a strict screening process and a focus on best-practices. There will always be risk with venture capital, as many small-time donors have learned from defaulted loans on Kiva. But I know there are many people out there interested in helping something start from the ground up and this site could give people's new ideas a way to get out there and gain support. It would also give non-profits a stronger, broader donor base from the get-go that they can continue to engage as they expand.
Of course, if done poorly, this type of site could end up being a Craig's List of random charity ideas. Things that should have stayed in the dark could be brought to light and fully funded.
Thoughts? Any takers on funding this idea? I'd probably first need a social-media based venture philanthropy site to get it off the ground.