Change Charity

End of Change Charity

2011-10-05T23:06:00.000-04:00

After almost two years, this will be the final post on Change Charity. As of tomorrow morning, I am launching my next venture, UnSectored, a group blog of individuals in the National Capital Region working beyond sectors and between sectors for social change. I'll be the editor, as well as a contributor. Check it out, follow myself and the other bloggers there, and let us know what you think.

Thanks to all of you who have followed my writings here. I appreciate your feedback and your dialogue, and I hope that can continue over on UnSectored. There are many reasons I decided to start something new, but primarily I think my thoughts on social change grew out of a charity/nonprofit mindset, and I needed to open up my writings to encompass more possibilities. Social change is no longer owned by nonprofits, nor should it be. UnSectored will explore the ins and outs of these new ways of creating social change.

Again, thanks to all of you who have read these words over the almost two years, and I hope I will not disappoint over on UnSectored. Check it out and let me know if I do.

Change Charity Update

2011-08-15T17:44:00.000-04:00

As of today, I am placing this blog on hiatus. I'm developing a new project and I'll be back with more information soon.

Thanks to everyone who has read, shared, and commented on these posts over the past year and a half. It has really meant a lot to me, and I hope you have gotten as much out of reading these posts as I have from learning from all of you.

Stay tuned!

Kill Charity, Solve the Budget Crisis?

2011-07-31T21:21:00.001-04:00

So, if you haven't noticed, Washington DC is absolutely mad now a-days. (Warning! NYTimes link! Not sure it's worth one of 20!) I don't know if it's the heat making our lawmakers set on economically ruining our nation, or just the normal bipartisan vitriol, but the last few months of budget talk keeps me coming back to the one point in the tax code I know enough about to blog: The charitable deduction.

Since getting into the funding side of nonprofits, I've been seeking out information on the efficacy of the charitable deduction in driving funding to nonprofits and, generally, spurring social change. My interest in this was piqued last December when I read this op-ed from the New York Times (sorry non-digital subscribers!), "It's Time to Re-Think the Charitable Deduction." The author, Richard Thaler of the University of Chicago, framed the charitable deduction in a different way than I've internalized:

Consider this scenario: Having decided that charitable giving is a worthy cause, the government subsidizes charitable gifts from certain households, and for those chosen to be part of the plan, every dollar donated to a charity is increased by a specified percentage. To qualify, taxpayers must have a substantial home mortgage; the subsidy rate increases with taxable income. Low-income taxpayers receive no subsidy, but donations from qualified high-income taxpayers are subsidized by as much as 40 percent — or more.

At this point, you may be wondering why I’d even mention something so preposterous. After all, why should a family’s eligibility for a donation subsidy depend on whether it has a large mortgage? And why should the government subsidize donations by the rich more than donations by the poor? The idea seems a nonstarter. And it would be, if not for one important detail: it is (approximately) the current law.

I was taught to reject anything coming out of the University of Chicago economics department, but I have to agree with Professor Thaler. Tax deductions and tax subsidies are essentially the same thing, when looking at government revenue. When the government writes off a charitable deduction, they are forfeiting earned revenue. Because the tax code is progressive, the wealthiest people are able to write off the most taxes with their donations, which means the government is forfeiting the most revenue from those donations--essentially subsidizing those donations more than someone in a lower tax bracket. The New York Times (sorry!) Economix blog has some excellent charts depicting these differences.

Additionally, many people who donate never see those tax write-offs anyways. I try to donate about five percent of my income to nonprofits each year, but I have never seen any tax benefit from my donations. I've never written them off because the amount I give is always less than the standard deduction (since five percent of what I make isn't that much), and since I don't have a mortgage, I don't have any real reason to do line-item deductions. I'm assuming many people who give are in my position as well.

This as an issue of democratic fairness alone is enough to warrant reform, but since it costs the government revenue, reform is more pertinent. The government could feasibly re-work the code to collect more revenue without decreasing charitable giving by much, or at all. This could close some substantial holes in the long-term budget.

But, I don't think this analysis of revenue gets at the full picture of the usefulness of the deduction as it relates to social change. Kelly Kleiman concluded in a recent Stanford Social Innovation Review post on this topic by saying: "[T]he question here is not, 'Is it good for the sector?' but 'Is it good for social welfare and social justice?' The answer is not clear...but let’s make sure we’re asking the right question."

The charitable deduction is justified by saying the money donated is going to solving social problems the government cannot tackle. This assumes that the government does not create social progress, which is an assumption I do not hold. I think the government can and does create social change and is an important player in the game. While there are issues with fairness regarding the charitable donation, and I think the deduction should be, at a minimum, fair, I think the more important issue is one of effectiveness.

There are clearly some things we need the nonprofit sector for, like advocacy, but there is no inherent reason to say that it cannot provide direct services, like health, to needy populations (see: Europe). If the government fully funded each nonprofit in the country (which it shouldn't), there would be no need for charitable donations in the first place. The Obama administration has created many innovative funding programs that have the potential to have significant lasting change at a broader scale than any foundation.

So, will re-working, or eliminating the charitable deduction solve the budget crisis and stop the madness in Washington? Definitely not. That is going to take way more changes than I know how to blog about. But, the charitable deduction needs to be re-thought and we all need to think a little bit harder about this foundation of the nonprofit sector. Does it make sense to write off donations? Should people give out of altruism and not financial benefit? Does diverting resources from the government hurt our cause more than it helps?

I have some thoughts on these, but I don't know. What do you think?

Shameless Self Promotion: July Edition

2011-07-21T10:50:00.000-04:00

The July VPPNews issue is out today! Check it out and let me know what you think!

Highlights:

VPP President and CEO Carol Thompson Cole's column on advice for board members of nonprofits looking to scale. This might seem like a column directed at a very niche market, but I think since scale can be defined so broadly, it has applications to boards at most nonprofits. If you are thinking about growing an organization in any way, this will be helpful for you.
An interview with Gene Steuerle, a tax economist at the Urban Institute. The most interesting part, for me, is his discussion on the impact of the economic recession on nonprofit budgets.
Michelle Obama visits VPP investment partner, CentroNía. The pictures are super cute.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Using Worst Practices

2011-07-10T17:01:00.001-04:00

My Google Reader is out of control. It has way too many subscriptions. I also have this obsessive-compulsive thing where I can't let something unread go unread, so I end up consuming a lot of literature (if blogs can be considered literature) on nonprofits and social change.

One thing that bugs me about the resources out there is this obsession with "best practices." Advice-giving blog posts, case studies, and reports usually focus on what makes a good organization good, or what an organization has done to be more effective at something than others. Seemingly helpful for those seeking advice, this deluge of best practices and "overarching themes" makes my eyes glaze over.

Granted, not everyone reads blogs (slash wastes time with blogs) as much as I do. I'm also not running an organization or making major decisions at an organization, nor am I starting my own organization. So all this advice might be taken to heart elsewhere. I think, though, that most of the advice given is too generalized to do much good to "influence the field," as it were. People recommend things (usually through over-used metaphors) like "engage with stakeholders," "think for impact," and (my personal favorite) "have an A-plus team." Does anyone think having a C or B team is any good? Does anyone think that ignoring stakeholders is the way to go?

Social Edge recently hosted a discussion on "Access to Information" for social entrepreneurs, and one of the questions asked was:

Do social entrepreneurs even need resources? Is part of starting a social enterprise figuring it out from scratch? Or is there a way to share resources among entrepreneurs, who are do-it-yourselfers?

My first reaction to this was no, they don't. Social innovation is all about getting out there and mixing stuff up for yourself, going down the path least traveled, creating audacious goals, winning the future, etc etc. Using someone's previous path as a guide might cause some to miss out on important advancements.

But, I went on to think, without shared resources, a lot of people unknowingly will repeat the same mistakes. In the interest in efficiency, the knowledge of these mistakes should be spread far and wide as a deterrent for others. Sharing knowledge and common practices to reduce the repetition of mistakes is a good thing.

The best way to do this, I think, is to not focus on "best practices," but instead focus on "worst practices." Setting out a framework of things that have worked in the past is all well and good, but social change and social innovation needs to be adaptive. One size won't always fit all. Putting the failures out on the table makes it easier to see what went wrong and what to avoid when trying something similar. It is easy to hear a general best practice and think, "Oh yes, I do have an A-plus team," even if you don't. Saying "Oh no, I'd never make that mistake" is a lot harder.

One recent article that I think uses the idea of "worst practices" well is "Letting Go" (pdf), by Kristi Kimball & Malka Kopell of the Hewlett Foundation. The article is about the tendency for funders to be overly-controlling of social initiatives, and why loosening that grip will help grantees and foundations alike. They use several examples of when the Hewlett Foundation didn't do this, and the problems that ensued.

Another publication that I think employs "worst practices" well (to be a little self-promotional) is VPP's Leap of Reason, written by VPP Chairman Mario Morino. Morino uses several examples from his own career to show how not paying attention to an organization's impact can be pretty disastrous.

Generalizations of best practices usually are platitudes that can be easily brushed aside or incorporated into an organization on a surface level without much change. Worst practices are more specific and serve as a warning sign to others journeying down the road of social innovation. Sharing these amongst ourselves will make that trip a lot more efficient and better for all.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Guest Bloggin'

2011-06-22T18:09:00.001-04:00

Well, dear readers, I've been neglecting you in favor of others. That's right, I've been writing for other blogs. But don't worry, you can still read those posts, thanks to hyperlinks:

I wrote a post for Good Intentions are Not Enough, about how to work with people to help them create more intentional giving and volunteering habits. I know I get frustrated with some when they don't give as much thought to social change issues as I do, but I've learned that anger isn't a good way to approach these situations.
Completely unrelated, I also wrote a post on Allison Jones' blog on how to start a nonprofit career with a year of service. I was in a year of service myself, and it helped me figure out what I want to do and land the job I have now.

Let me know what you think of them!

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Shameless Self Promotion: June Edition

2011-06-21T17:36:00.000-04:00

Hey everyone!

VPPNews' June issue is out! Check it out and let me know what you think.

Highlights:

A profile of Ebony Jones, an 18 year old woman that is working at KIPP DC to gain the experience she needs to open a daycare one day.
Mario Morino's column on the launch of Leap of Reason.
A video of Paul Carttar, Director of the Social Innovation Fund, talking about the government's relationship with philanthropy. Paul gives an inspiring speech on the potential to create some real change through government partnerships like the Social Innovation Fund and the Promise Neighborhoods Initiative.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Managing to…What?

2011-06-13T09:40:00.000-04:00

Regular readers of this blog (hi mom!) know that I’m not a big fan of jargon. I think it muddles thoughts and distracts from real issues, and encourages isolation within a field. Nonprofit and funding jargon is especially annoying to me because this sector needs all the clear thinking and new ideas it can get. (To read a great piece on this, read “In Other Words” by Tony Proscio. Free pdf here.)

So, when the first draft of Leap of Reason: Managing to Outcomes in an Era of Scarcity, written by VPP Chairman Mario Morino with essays by several people in the VPP community, came across my desk, I groaned inside and steeled myself in preparation for all the words and phrases that I was sure to encounter: “culture of effectiveness,” “mission measurement,” “human capital,” “performance management,” and of course, “watershed moment.”

“Managing to outcomes?” I thought. “I’m supposed to help distribute this book (available in pdf for free online, on Amazon for a small handling fee and in Kindle form for $1. Tell your friends!!!) with a title that’s going to get me blank stares. Awesome.”

Reading through the book, though, made me realize I was quick to judge. (I’m a millennial, after all, and I went to a liberal arts school full of snotty liberals.) Yes, “managing to outcomes” is a fuzzy term (which Morino admits in the first few paragraphs of the book), but that’s because what the book is talking about is some fuzzy, heady stuff. Morino and the other contributors have tapped into some very elemental and pressing problems in the nonprofit sector. The book touches on funder accountability, the overhead ratio problem, the need to recruit talented employees, capital stream constraints, technology system implementation, changing an organizational culture, etc. etc. These problems are interconnected, but have no overarching name to describe them. (I guess except for “things that are complicated.”)

The name Morino and the other contributors have given to the solution of these problems is the phrase that caused me panic as someone tasked with distributing it to the outside world—“manage to outcomes.” The way I see it, this book’s underlying message of managing to outcomes is this:

You need to collect the data to figure out how you are doing, and then make changes to do it better. Even if you find you are doing some amount of good, you always need to keep tabs and keep improving.

This is seemingly simple, and if you read the book (which you can get here, here and here—Tell your friends!!) you’ll see that for some organizations, it can be relatively simple and cost-effective in the short- and long-run. In other cases, it will require a complete organizational culture shift, significant investments of time and money, and asking yourself some pretty difficult questions. However, all organizations can begin to “manage to outcomes” in some ways, which shows the potential for this to catch on, and the potential for some real benefits.

The truth is is that many nonprofits (and funders) don’t know how they are doing, and they don’t know the changes needed to make their programs more efficient and effective. The reasons for this are numerous, but I think they stem from the general feelings about charity as something supplemental to society, and not integral and necessary. Morino is really calling for us all to get serious as a society about social change and get shit done.

The words found in this book are the same words that swim through most writing of the nonprofit sector, and I’m realizing that that’s maybe because what we are dealing with is hard to talk about. We all want to get stuff done in the best way possible, we just don’t always know the best way to say it. I’ll always advocate for clearer writing and speaking (who wouldn’t?) but I honestly don’t have better vocabulary for these jargon-y words that keep popping up all around me. I hope as things in the sector become more standardized, jargon will be pinned down and forced into one definition or another. That way, we can move beyond figuring out what we are talking about and start figuring out how to use these words to do stuff better.

I’ll end with a quote from Morino’s post on the Stanford Social Innovation Review Opinion blog, adapted from the book:

We need to rethink, redesign, and reinvent the why, what, and how of our work in every arena from education to healthcare to public safety...We need to reassess where we have the greatest needs so we can apply our limited resources to have the most meaningful impact. We need to be much clearer about our aspirations, more intentional in defining our approaches, more rigorous in gauging our progress, more willing to admit mistakes, more capable of quickly adapting and improving—all with an unrelenting focus and passion for improving lives.

It’s not longer good enough to make the case that we’re addressing real needs. We need to prove that we’re making a real difference.

You can’t argue with those words.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Shameless Self Promotion: May Edition

2011-05-17T12:01:00.000-04:00

VPPNews came out last week. This month, our theme of choice was "funder collaboration." Kind of nuanced and jargon-y, I know, but important. Why is it so important, you ask? Well, check out these highlights:

A summary of VPP's youthCONNECT briefing that brought together funders from across the region to discuss a new collaborative effort, which aims to help 20,000 youth over five years.
VPP President and CEO Carol Thompson Cole's most recent column, "Leaving Silos Behind," about why funders should collaborate and the different models for doing so. This is a very substantial piece with a lot of important insights. I think it can spark a lot of good conversations. It's what inspired my most recent post on system-wide collaboration.

As always, thoughts, questions and criticisms, constructive or not, are always appreciated.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

More than Collaboration

2011-05-13T12:59:00.000-04:00

Or: What This Really is All About

Something I've been giving a lot of thought to recently is the emerging buzzword (or possibly well-established buzzword), "collaboration." Collaboration seems to be everywhere in the nonprofit sector, and for good reason. I see collaboration and it's often-partnered friend "knowledge sharing" (yay for jargon!) as the real way forward to solve a lot of serious problems and help a lot of people who need it.

Collaboration can take many forms. At VPP, we are deep into collaboration through our youthCONNECT initiative, which has brought together six DC-area nonprofits to work together to try and help 20,000 youth over five years. Pretty big stuff, and clearly we'll need a lot of help to do it, not just from our nonprofit partners, but other funders and government officials. youthCONNECT is funded in part through the Social Innovation Fund, which is supporting a lot of similar collaborative networks across the country and helping the sector move towards a collaborative mindset.

Carol Thompson Cole, VPP's President and CEO, has written about the need for nonprofit collaboration and, most recently, the need for funder collaboration. She says that nonprofits often do not work together and society suffers because of it. Organizations--funders and nonprofits alike--can benefit from what others have learned and most problems the nonprofit sector deals with cannot be solved by one organization. Working together in a true and real way--talking with each other, sharing ideas about where organizations can fill in the gaps of others' work, developing theories of change with other organizations--can start to make a dent in these amorphous "big problems" we talk about.

I may have drunk a little too much of the Social Innovation Fund kool-aid (that's probably the nerdiest thing I've ever written), but I think this is great. Working together makes complete sense in the nonprofit sector, because the goal of the sector is to create social benefit, and that is done most effectively without competition getting in the way.

But, when I stop downing the kool-aid and take a step back, I realize that this trend toward collaboration might be bigger than I think it is. Collaboration might not be an end to itself, but merely a stop along the way of a longer journey. I think this is really about re-defining our economic priorities.

FSG Social Impact Consultant has put out a lot of research on collaboration. They have a lot of good stuff on what they call "Collective Impact," "Catalytic Philanthropy," and "Strategic Evaluation" (all of which expands upon the ideas in this post), but what excites me the most is their work on "Shared Value." Shared Value is the idea that corporations should integrate societal needs into their bottom-line business planning, and that by addressing social needs, corporations can actually benefit financially. It is a radical shift from the typical "Corporate Social Responsibility" work that is usually done by companies. This type of business strategy has companies like Nestlé working with farmers in Latin America to create better irrigation systems for their crops, ensuring a better product for Nestlé and a more stable community for the farmers. This collaborative approach creates value for all parties involved.

This puts a new spin on things for me. To bring business into the mix as a true collaboration partner, not just a writer of checks, really shows how powerful collaboration can be. To have nonprofits, governments and corporations working together under a common theory of change with universal goals and measurement indicators will shift the way our society works. Instead of having a three-way segmented economic landscape--with corporations making money at the expense of society, forcing nonprofits to clean up the mess using money made by the corporations, all while the government oversees everything to make sure no one gets too far out of line--it can be one integrated system with one goal: Make the world a better place.

I "attended" (listened? watched?) a recent webinar (pdf) on Shared Value that had several representatives of FSG's clients on it. In the question and answer session, Tony Kingsbury of Dow Chemicals said that government, nonprofits and business all had an important role to play in creating shared value. The government encourages and enables innovation; nonprofits identify social needs and target markets; and businesses create innovative products to address the needs. (I would argue that government and nonprofits can also play a role in addressing needs through innovation, but that's a discussion for another time.) Extrapolating from Kingsbury's points, you see that each sector has its own role to fill in a collaborative effort. One isn't inherently better than the other, nor is one more adept at creating change. Each is a tool to call on to help get things done. The same with financing: Philanthropic dollars, government dollars, shareholder investment, venture capital all have different places for different things and should be used in the most effective way possible.

Jonathan Greenblatt, in a recent Huffington Post piece on social impact bonds (another very cool tool), referred to this new type of economic collaboration as an "Impact Economy":

[In] an Impact Economy...market forces are leveraged to enable private gain but also to drive public benefit. In an Impact Economy, cross-sector collaboration is not the exception but the rule, a new mode of serving the national interest.

This is where I think the sector is going, where society is going. I think this is what this is really all about. If we can get to a place where everyone is working together to try and create shared value to benefit society, the world will be a better place.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Life on the Margins

2011-04-19T21:57:00.001-04:00

The conference season has started, full-steam ahead. If I wanted to, I could probably spend each week this spring and summer in a different city learning about some aspect of the nonprofit sector, social entrepreneurship or international development. But, I don't. Mostly because I hate airports and I can't afford the travel, but also because I've always felt very uncomfortable at conferences.

Granted, I haven't been to that many. I only went to my first big-time conference this year--the Harvard Social Enterprise Conference. It was fantastic, and even two months later, I'm still thinking about the discussion topics and presentations. But, while I was there, I had this lingering feeling that all of these meetings and discussions and talks were kind of a waste of time.

I had a similar feeling my senior year of college. After four years of academia and analysis of social problems, I was ready to get out there and make something happen. I was sick of talking, and I wanted to do. Sitting in a nice conference room in Cambridge, I was loving what was being said, but afterwards, thoughts crept into my head: What's the point of all this? Why should we spend time and resources talking about these things when we should really be putting them towards doing these things.

Well, I quickly dismissed those thoughts, just as now, two years out of school, I realized the role of education and discussion in effective social change. Without sharing experiences, we are all blindly going forward and hoping for the best. Without gathering in one place, we can't learn from each other and find ways to work together. Without discussions, we can't tease out the nuances and intricacies of the problems we are tackling.

So, I'm all for sharing and learning and working together, but there comes a time when we have to go back to where we came from, take what we learned, put it into action, and see what happens. Discussions and talks and keynotes builds an air of certainty and stability around a community or an idea, but really, everyone who has made something work at one time had no idea what they were doing, and decided to try something no one had ever talked about before.

My main (and really, only) criticism of shared learning and discussion has manifested itself in my consciousness as a Groucho Marx joke: "I wouldn't want to be a part of any club that would have me as a member." Sitting in the same room with the same people every year (not saying anyone actually does this, merely using hyperbole to illustrate a point) will only produce the same ideas. If you want to think of new things, you need to push yourself beyond what you are familiar with and go out to uncharted areas of activism and social change. In is in these margins of society where we will find the transformative change needed for society's problems.

And once you live on those margins and find those transformations, you can come back and speak all about it at next year's conference circuit. I'll be there, anxiously waiting to hear and learn from you.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Shameless Self Promotion: April Edition

2011-04-05T18:30:00.000-04:00

Another month, another issue of VPPnews. Check it out!

Highlights:

A profile of Veronica Nolan, the ED of Urban Alliance, which places DC high school students into internships. The organization does great work, and Veronica is an inspiring leader.
VPP Chairman Mario Morino's column on creating an organizational culture that encourages effectiveness.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

The Other Other City

2011-03-27T11:47:00.000-04:00

I moved to DC about a year and a half ago with a bunch of friends from college. Mostly, we are white, and mostly, we live in the same sub-sections of the city (Wards 1 and 2), which contain a nice blend of low-rent, nightlife, and easy access to transportation. After moving here, I met others my age through the volunteer service I was a part of. Again, mostly white, mostly living in the same areas.

Coming to DC, I didn't realize I was a part of a major demographic shift for the city. The Washington Post reported recently that DC will soon no longer be a majority black city. Gentrification is quickly raising the rent in many of DC's neighborhoods (including the ones I live in) and condos, coffee shops, and high-end restaurants are popping up all over the place. My friends and I can walk safely around places that, ten years ago, we would never think to drive through.

This issue is usually framed as a "black vs. white" debate. (Especially during last election between then-Mayor Adrian Fenty and now-Mayor Vincent Gray.) But this assumption was recently picked apart by an article in the local City Paper called "Confessions of a Black D.C. Gentrifier," written by a college-educated reporter who did not grow up in DC, moved into the city for a good job and cheap rent, and happens to be black. I'm not going to try and outline all of the points of the article here because I won't do it justice, but I strongly recommend it to anyone interested in the complexities of gentrification and demographic changes.

The author did offer up a new definition of gentrification, one based on class:

And because we live in a “nation of cowards” (as U.S. Attorney General Eric Holder put it) where perhaps the only thing harder to talk about than race is class, it’s unsurprising that worries about gentrification boil down to white versus black, instead of educated and privileged versus uneducated and underserved.

I've always thought that privilege, rather than race, was the defining characteristic of a gentrifier. My friends and I are incredibly privileged, which gives us the opportunity to try to have it all: A good job, cheap rent, and a fun neighborhood. In this pursuit, we (not intentionally) push out others, less privileged, who have been here longer but do not have as many resources as we do.

But, this simplification does not capture the whole picture of what people my age moving into DC, usually for only a few years before we pick up and leave, are contributing to the area. Many, not all, but a majority, of my friends actually work in the community and are very engaged in trying to make this region a better place. We are all very privileged, but we also are trying to use this privilege to give back.

I have a very good sense of what is going on in the city because I have friends who work on a variety of different issues in local nonprofits. Most of these people are either in volunteer programs like AmeriCorps, or doing Teach for America, or who have moved into other nonprofit work after completing these years of service. I also remain very connected to the local issues because of my job. The profile of the typical white gentrifier is one disconnected to his or her community, who works in the day and parties at night. This isn't a reality for most of the people I know.

DC is usually thought of as two cities: The Federal Government and the (mostly educated) people it attracts, including the multitude of political lobbyists and contractors, and the "Other City" of usually poor, usually black or Latino long-time residents of the city. (Mayor Gray ran on a platform of "One City" to unify these two sides.) While I do have friends who are a part of that "Federal City," I like to think I'm a part of the "Other Other City," a bridge between the two. I'm not here to work, drink, sleep, repeat, but I also have not grown up here and I'm certainly not a part of the underserved population. I'm not planning on staying here forever (nor are most of my friends), but I want to help make this city a better place while I am here.

My main question is, then, is this any better than the stereotypical gentrifier? I am still contributing to a demographic and economic shift (which is arguably not all bad), even if I am trying to "give back" in some way. Do the negative aspects of my socio-economic presence outweigh the positive benefits of the work I am doing? And if I am only planning on being here for a few years, can I really create any sort of lasting change?

These are questions I ask myself each day. I don't know the answers, and there probably aren't any. I hope this is a discussion we can have, though. It is probably the most important issue affecting this city, and most metropolitan areas. We need to do it right. What do you think?

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Shameless Self Promotion: March Edition

2011-03-21T10:56:00.000-04:00

VPPNews came out last week! Here are some highlights:

Mostly, I'm interested in feedback on the redesign of the newsletter. I did this all myself, and my graphic design experience is limited to a semester as opinions editor and a semester in Digital Art. Any thoughts or suggestions would be appreciated.
An article about VPP's investment two amazing organizations; Urban Alliance and Metro TeenAIDS.
A summary of VPP's open discussion with DC Mayor Vincent Gray. He discussed his "One City" agenda and early childhood education.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Reminders

2011-03-14T21:58:00.001-04:00

Sometimes, I forget why I am doing what I'm doing. I work in an office all day, and I rarely see much beyond my computer. I talk a lot of talk about things I think are important, but I don't see those things go into action. Sometimes, I feel like the work I do doesn't go beyond the computer screen I create it on. Sometimes, I think that everything I feel passionate about--social entrepreneurship, growing and strengthening nonprofits and their programs, finding sustainable funding to support social change--are fads, ideas that only have value because people like me think they work.

I can feel disconnected working in philanthropy, one or two steps removed from the people who need help. The effects of what I do every day are far removed from the office where I work. The change I help to create is system-wide, and long-term, so I won't see the results for many years. Because of this, I sometimes worry if my work is helping anyone, at all.

But then, I hear a hear a story of a teenager who stopped doing drugs because of a program provided by one of the nonprofits that my organization supports. I walk down a street near my house and see some kids coming out of a school we help fund. While I'm waiting for the bus, I see an advertisement for a health fair sponsored by another one of our investment partners. Then, I begin to remember.

Yes, this is corny. But these reminders do help ground me and remember why I'm doing what I'm doing. Talking about "scale" and "capacity building" and "performance management measurement systems" all day long can be tiring. It sometimes disassociates me from the big goal: helping people who need it. Scale really means doing more to help more people. Capacity building means helping organizations serve people who need help better than they were before. And performance management is just a fancy word for making sure things aren't going wrong.

I don't work in direct service, I never really have, and I don't think I would be particularly good at it. I have great respect for those who do this type of work, but I don't think I have the skills (or the personal strength) to do that everyday. I think I am good at what I do, and I want to contribute as best I can. I wish I could always feel the connection through my work that direct service brings, but I can't. I've started to volunteer at a local service organization, I hope that will further strengthen my connection to my community. It is important to me to have this grounding for my work, and I think this is something everyone who works at a funding organization (local or national) should have. It teaches you about the reality we need to change for the better.

Without these reminders, we forget easily and lose ourselves in the jargon. So take a step outside and look around. See what impact you are creating.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Harvard Social Enterprise Conference, Part 2

2011-03-06T19:01:00.003-05:00

There’s a lot to say about today’s events at the Harvard Social Enterprise conference, so I’m not going to be able to synthesize it all into one post. I’m hoping some of the other attendees can comment here to add to the discussion.

The day started off with a keynote address from Willy Foote of Root Capital and his talk was probably the most entertaining of the day. He weaved interesting stories throughout the speech and even ended by pulling out a guitar and singing a Latin American revolutionary song. Definitely wasn’t expecting that.

Beyond discussing at length the need to support small and medium enterprises around the world, which is what Root Capital does, I think he gave an interesting story of how he came to do what he does, which serves as a useful model for all social entrepreneurs. He said he started the organization out of a combination of intuition and impatience; a worry that if he didn’t start doing what he thought was necessary, it wouldn’t get done.

The second keynote of the day, Robert Harrison of the Clinton Global Initiative, gave a different perspective on the journey into public service. He worked in the private sector much longer than most before switching to CGI, and he discussed the reasons for that. He told a story about how he worked on the Hill as a college student, and got the advice to go into the private sector, gain technical expertise, and then leave the private sector to “change the world.” He said in the current climate, young people don’t need to do that anymore, and should go right into social entrepreneurial and nonprofit careers. I thought that Harrison’s story was an interesting contract to Foote’s, and shows the many different ways people can get into (and excel in) creating social change.

Two of the panels I went to, “Accessing Transformative Social Enterprise Capital” and “Emerging and Traditional Legal Structures for Social Enterprises” complemented each other very nicely. “Enterprise Capital” was a discussion of the landscape of the different financing options available to social enterprises, and “Legal Structures” was on the emerging legal statuses out there for organizations. Both seemed to come to the same conclusion: Mission is more important than anything else. First you should decide on your mission and your goals, and then figure out the best financing and structure to help you accomplish that goal. Financing and organization structure are important tools to help you accomplish what you want to do, but they are only tools.

Related to this idea of prioritizing mission, the “Survival of the Fittest: Leadership and Scaling Up” panel had a great discussion on the role of scale for organizations. All of the panelists agreed that scale should not be a goal in and of itself. Scale should only serve the mission, and if done for the wrong reasons, can actually corrupt an organization’s progress. Caleb Shreve of the Global Fairness Initiative noted that there is nothing wrong with operating “at scale.” If something is working and doesn’t need to grow, don’t push it.

A theme that ran through all the panels, but was really brought out most strongly by Foote, was the idea of over extending oneself. He noted that Root Capital isn’t doing anything that innovative, it is just taking traditional models of finance and applying them into new markets. He encouraged people not be innovative for innovation’s sake, and instead to do one or two things really well, and collaborate with others to do the rest. I thought that this advice, along with that from the panels I attended, was a very realistic (and humbling) way to look at social innovation and social enterprise.

On a side note, I also attended a design workshop from the folks at IDEO. I’ve never been a part of design thinking before, and I have to say, I struggled to keep up. We tried to come up with dozens of solutions to health-related problems in India in under 60 minutes. People were thinking of ideas faster than I could process the words being said. I think I’ll stick to philanthropy, for now.

Unfortunately, I was unable to attend the final keynote because I had to head back to DC. Hopefully someone else can comment on it who stuck around.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Harvard Social Enterprise Conference, Part 1

2011-03-05T22:49:00.001-05:00

If there was one theme that emerged from today's installment of the Harvard Social Enterprise Conference, it was that the federal government should take on the role of scaling up social enterprises.

Well, that was a theme that seemed to tie the keynote address on the Social Innovation Fund together with the panel on "Social and Policy Innovation in the Obama Administration." The keynote address featured a conversation with Paul Carttar, Director of the Social Innovation Fund, and VPP's President and CEO, Carol Thompson Cole, which was moderated by CNN analyst David Gergen. The "Social and Policy Innovation" panel featured several members of the Obama administration that work on various aspects of his innovation agenda.

Something that clearly emerged from the keynote address was that the Social Innovation Fund does not aim to find or create social entrepreneurs, but to scale up tested and proven programs. Paul said that if they focus on finding these effective solutions to social problems, the right entrepreneurs and leaders will follow. Similarly, the panelists representing the Obama administration discussed how they seek to find innovations where they are--be they policy innovations, technology innovations, or product innovations--and scale them up across the country, and with the case of international development, across the world. Mark Newberg of the Office of Policy and Strategic Planning at the Small Business Administration noted that without the federal government behind a particular innovation (he gave the example of LEED certification for buildings), it's hard to create any sort of systemic change. This reminded me a lot of the government-as-an-exit-strategy concept of philanthropy.

Carol Thompson Cole, in the keynote, gave an interesting glimpse of how the SIF intermediary funders fit into the broader goals for the initiative. This is something I don't think most people have a good grasp on yet, (but, of course, I'm not sure if that's true since I work so closely with this stuff, as VPP is a SIF intermediary), so I think it was good to get that out there. She talked about how organizations like VPP are mediators between the social service subgrantees and the federal government, and how important it is that VPP has committed to five years of its SIF program, youthCONNECT, regardless of federal funding.

Something that both Carol and Paul discussed, which I've never really grasped before, was the idea that SIF is not just about giving out money to high-performing organizations, but actually advancing a theory of change that isn't typical in the philanthropic or social entrepreneurship field. Paul discussed how he thought SIF would be a success if it can advance the notion of collaborative work towards a shared-outcome framework, either in other areas of the government or in the private world. Carol talked about VPP's commitment to a network for social change, and how this really represents the way forward for the organization.

Completely separate from that, I went to another presentation with four panelist presenting academic research on the social enterprise sector. I was a little skeptical, to be honest, since it included the word "academic" in the title, but it was fantastic. There was a presentation on what organizations should measure for based on their theory of change and organizational services (which had a matrix involved), a presentation on the efficiency of social enterprises vs. corporate social responsibility vs. charity, a study on impact investing, and a presentation on conscious capitalism that included the question "Can you build a business on love?" (Which I think will be the new question I ponder while I meditate.) Unfortunately, these presentations got pretty close to blowing my mind, so I don't think I'm going to be able to summarize them here.

All in all, a great, informative, innovative day. Also, the food at the networking reception was fantastic. Harvard knows how to do it.

More tomorrow.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Harvard Social Enterprise Conference

2011-03-04T11:25:00.001-05:00

I apologize for not posting for a while, but it seems that life has gotten in the way of many things for me over the last few months, one of them being this blog.

But, fortunately, life has now brought me to something very exciting: I will be attending the Harvard Social Enterprise Conference this weekend. Carol Thompson Cole, President and CEO of VPP, will be giving the keynote address on Saturday, so I am going to support her, generally hang out and soak up as much knowledge as possible. I'll be blogging from here, and also tweeting from @jraders and @vppartners. Follow either account to get my minute-by-minute insights on all the amazing things going on at the conference.

Can't wait to tell you all more!

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Shameless Self Promotion: February Edition

2011-02-08T13:47:00.001-05:00

I know it's been a while since I posted on here, but I promise I haven't abandoned the blog. It's been a busy month, which is going to be followed by another busy month, so look for some more stuff soon.

In the meantime, check out this month's edition of VPPNews. This is an issue I'm particularly proud of and I think it has some very substantial content.

Highlights:

An article about the partnership between Year Up National Capital Region, a workforce development program, and Northern Virginia Community College. This partnership allows participants to receive college credit through the Year Up program, which doesn't seem very revolutionary, but is actually trying to reshape the way young people prepare for successful careers. I think this is the most interesting and substantive article I've written since I worked at the Seattle Times. I think this partnership--if it gets adopted as a model--has the potential to create some real lasting change around the country.
VPP Chairman Mario Morino's column on the importance of "organizational culture"--a pretty lofty subject, but he does an excellent job of breaking it down to make it applicable to real-world situations.
A profile of VPP's two newest investors--Jeff and Cal Leonard.
An article about JPMorgan Chase's support of the performance management system at Friendship Public Charter School.
And finally, an announcement from Year Up about their recent partnership with the federal government. Year Up--which places low-income youth, most without a college education, into corporate internships in the region--will begin to place four interns into the US Department of Agriculture. Additionally, two of its alums were also selected to be White House interns, one of whom will be Michelle Obama's sole intern on the "Let's Move" initiative. This news is very exciting to me, and shows that Year Up is leading in the efforts to re-shape the American workforce.

Hope you enjoy! Let me know if you have any questions or comments!

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

The Mountaintop

2011-01-17T17:55:00.002-05:00

I'm a person who thinks in the long-term. I'm not much for process or details, but I think about the bigger picture, the end-game. I like ideas and notions more than I like thinking about how to put those thoughts effectively into action. At one point in my life, I dismissed policy and practice as secondary to the concept they are trying to create, but now I'm beginning to realize how important those details are. If you can't make an idea work in the reality of a situation, it doesn't do anyone any good.

But I still tend to think of things in the bigger picture. Especially when considering nonprofit and social change work, I always ask myself, where is this going? What are the eventual goals of this work? Will there really be a time where there is nothing more to solve and don't have to worry about all of the problems we face now?

I'd like to say yes, but I'm not sure if that's based in reality. Last week, I wrote a post about the role of philanthropy in the long-term, and Sean from Tactical Philanthropy commented:

[W]hile I appreciate your goal of "putting yourself out of business", the underlying assumption is that if we work hard enough we can create a utopia where attempts to increase social welfare will not be needed.

That ain't gonna happen.

Sometimes, I agree with him. The intellectual side of me knows that there is no way we as a species can reach a point were we have no problems and there is no suffering. The law of unintended consequences shows that no matter how hard we try to solve all the world's problems, any intervention can spawn new problems where we least expect them.

This intellectual and rational side of me is constantly at odds with the side of me that completely and wholeheartedly agrees with the vision set out by people like Dr. Martin Luther King. He saw a world that was free of struggle and full of love and peace. In his final public speech, "I Have Been to the Mountaintop," he said that he didn't worry anymore, because he knew that one day, somehow, we'd get to that promised land. I'm not one to disagree with a visionary like Dr. King, so I don't know how to reconcile these two opposing thoughts in my mind.

I think the best that we, as those working to put Dr. King's vision into practice, can do is to create a world that can adapt and solve problems as quickly as they arise. As I said in my last post, that is not what the nonprofit sector does right now. There needs to be many changes to how resources are allocated before we can get to that point.

This tension between the desire to build a perfect future and the reality that we can never foresee all the problems we will face is a constant struggle for me. But I cannot keep worrying about the future and what it will look like. I need to trust the words of Dr. King that he saw the future promised to us, and whatever it looks like, we will get there. I can only do my small part to build on the legacy left by him. He was not worried on that night before he was assassinated, and so I too don't worry.

To celebrate the day honoring his memory, a clip from his "I Have Been to the Mountaintop" speech:

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Shameless Self Promotion: January Edition

2011-01-12T10:03:00.000-05:00

Another month, another issue of VPPNews. Check it out and let me know what you think.

Highlights:

VPP President Carol Thompson Cole's column on redefining "scale." I find this a fascinating take on a concept that is thrown around a lot in the nonprofit sector. She expands the definition to consider not just the number of people an organization serves, but its overall impact on a community or a sector.
A look at the innovative corporate philanthropy strategy of Capital One.
A review of the first year of VPP's investment partnership with the workforce development program, Year Up.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Turning the Dials on an Outdated System

2011-01-09T18:02:00.002-05:00

I think one of the hardest things for me to deal with in my professional life is that I am making a living off of the misfortune of others. Without the inequalities that exist in our society, the organization I work for would not have a purpose, and I would not have a job. I have a comparatively privileged lifestyle to those I am trying to help and I live comfortably while they do not. If their problems were solved, or didn't exist in the first place, I would not be able to do what I love, and get paid for it too.

Last week, Lenore Hanisch of the Quixote Foundation wrote a guest blog post on Tactical Philanthropy on its recent decision to spend down all of its endowment by 2017, which resonated with my struggle to be comfortable with my work. Hanisch commented on how the decision to spend all of the foundation's reserves will put her into some personally difficult situations:

Erik [her husband whose father started the foundation] and I have always been clear in our belief that the foundation and its assets exist for the purpose of progressive work—not to give us purpose. This field can be seductive: when you’re associated with a foundation you’re suddenly always funny and interesting, with people eager to hear your opinions. When the money is gone I’ll not only need a new job, I’ll also be left out of quite a few parties and someday, someone might even admit they don’t like me. In other words, spending everything puts us in a fairly normal situation as far as our jobs are concerned.

For those that work in the social sector, our goal should always to put ourselves out of a job, otherwise, we are just making money off of poor people. As I learn more about the field, I'm realizing that nonprofit funding is very donor-driven and subject to the whims of major donors and foundations. This creates a capital stream that is fragmented and variable, which doesn't help encourage organizations to focus on long-term solutions to society's problems. Instead, we get caught in a cycle of charity that aims to fill the needs of the underserved, rather than creating large shifts in systems and values. I benefit from this constant cycle, as I will be constantly employed.

I think the only way I can truly feel good about working the social sector (and, by extension, the whole social sector itself), is to create a shift away from donor-driven cycles of charity. These changes are happening all around with the rise of social entrepreneurship and venture philanthropy, but I feel like it is not enough. It is important for foundations to spend down their endowments and for organizations to work on accomplishing goals so they are no longer needed, but this is only one piece of what is needed. To make a true shift away from charity to solutions-driven change, we need to reshape the rules of the nonprofit sector.

Lucy Bernholz and Steve Goldberg recently had a fascinating exchange about the place of philanthropy in the long term. While discussing the different innovations going on in the nonprofit world (from those great social entrepreneurs and venture philanthropists), Lucy commented that:

[P]hilanthropy as an industry is "designed" by policies. It is a regulated industry. It is shaped by the rules. And the rules, currently, favor "donor centric, fragmented, etc"... The game itself doesn't change because there are new players - it needs new rules.

All of the changes to nonprofits that are currently going on, Lucy said, are mainly financial innovations, or business model innovations. Thinking about effective management or outcomes measurement for nonprofits is important and can create some lasting change, but those changes are just turning dials on an outdated system that can't respond effectively to the needs of the population. Instead, we should try to think about the assumptions that the nonprofit sector is built on and change those.

Developments on this level are the most exciting to me. The creation of L3C's, the growing market for impact investing, and reforming the tax-deductible donation are areas which seem to have the most potential to create some pretty profound systems-wide change. I think that if we can find a way to blend business and philanthropic capital effectively, we could create a capitalist economy that is based on solving society's problems, rather than creating profit. I'm not sure how to do this, but I'm excited to try to figure it out.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Music to Change the World By

2010-12-19T14:49:00.001-05:00

(I am indulging my inner do-gooder in this post. Please don't pay it any attention.)

In college, when some fellow students and I were creating what would become the Social Entrepreneurs of Grinnell, I would always joke about an "SEG Mix" of songs that we could listen to for our occasional pub nights. Because SEG is a microfinance organization, I couldn't come up with many songs that spoke to our mission and work of providing small loans to entrepreneurs around the world. The only two I came up with were Michael Jackson's "Heal the World" and "We Are the World."

But, with a few years of perspective and a broader sense of social justice, I'd thought I'd revisit my goal to find the perfect social change playlist. And as a holiday present to you all, dear readers, I'd like to share what I've come up with. It is by no means exhaustive, so please let me know what you would add, or remove. Some of them are pretty obvious (like the Michael Jackson tracks), but some are more personal and obscure. Listen to it when you are feeling inspired; listen to it when you are felling discouraged. Music has always helped me celebrate the good parts in my life and work through the hard times, and I hope these songs can do the same.

You can listen to the playlist on Grooveshark here.

Here's the list of songs, in no particular order:

For What It's Worth, Buffalo Springfield
Chicago, Crosby Stills Nash and Young
If I Had a Hammer, Peter Paul and Mary
Heal The World, Michael Jackson
We are the World, USA for Africa
Man in the Mirror, Michael Jackson
Get By, Talib Kweli
The Message, Grandmaster Flash and the Furious Five
Sound is Vibration, Atmosphere
What's Goin On, Marvin Gaye
Inner City Blues, Marvin Gaye
Ball of Confusion, the Temptations
Lean on Me, Bill Withers
Chimes of Freedom, Bruce Springsteen
The Times They Are A-Changin', Bob Dylan
One Fine Day, David Byrne
If You Want to Sing Out, Cat Stevens
Peace Train, Cat Stevens
Changes IV, Cat Stevens
A Change is Gonna Come, Sam Cooke

And here's some other songs I would have added if Grooveshark would have let me:

Imagine, John Lennon
Give Peace A Chance, John Lennon
We Shall Overcome, the Freedom Singers

What should I add? What should I remove?

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

The Inefficiency of Cost-Benefit Analysis

2010-12-12T22:14:00.001-05:00

I've been learning a lot about social impact measurement and metrics recently, and I've realized something: I don't care about cost-benefit analyses.

My economics professors would be so disappointed in me, I know. But it's true. Out of all the different methods for deciding why to donate to a certain nonprofit, or for why an organization should pursue a particular program, I think a cost-benefit analysis is the least effective way to determine what to do.

I'm not in charge of a large foundation (yet!), so I can't speak much to the different justifications for funding a particular nonprofit, or a particular program. But I do try to be informed and intentional about my charitable donations, so I can (try to) speak to the justifications behind individual donations.

The organization I decided to support is the Village Enterprise Fund. I did not make this decision based on any sort of cost-benefit ratio. That is, I did not look at where my money would, in a strict numbers and results sense, make the most difference, but rather, where I thought the most important work was being done. I care about opportunity access, and I determined that VEF--which provides start-up business grants to entrepreneurs in East Africa--was the most effective organization working on this issue.

If I was strictly looking at a cost-benefit ratio, I would have given to Village Reach, GiveWell's top-rated charity, which has an "excellent" cost-effectiveness rating. GiveWell says that Village Reach, which strengthens health systems infrastructure in rural areas of developing countries, averts a child's death for ever $545 it spends. By contrast, VEF, while still recommended by GiveWell as a charity to donate to, has only a "moderate" cost-effectiveness rating, the lowest of all the top-recommended charities.

I'm not trying to claim that giving to VEF over Village Reach is inherently better because economic empowerment is more important than health infrastructure, but that is a personal conclusion I've made. I've made that decision mostly for emotional reasons that most others probably don't share with me. And because of that decision, I am comfortable knowing that my money is not going as far as it could if I gave it to another organization.

I am very uncomfortable saying that one problem is more important to fix than another, and I don't think cost-effectiveness measurements claiming that one program is more cost-effective than other changes my opinion about that. It does get tricky to support this position when I consider that we have limited resources, and we want to maximize the most good with what we have, but I am comfortable living with that conflict, for now.

I think the reason I am drawn to the nonprofit sector is because a nonprofit's bottom line is not based on a cost ratio, but on its mission. All problems need solutions, no matter how much money it takes. Improving the lives of the poor in the US is as important as improving the lives of the poor abroad, it just takes different resources and different solutions. Because nonprofit work is about more than money, looking at a monetary bottom-line to determine where we should contribute our own resources will always miss out on something. And missing something is always inefficient.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Shameless Self Promotion: December Edition

2010-12-09T14:54:00.001-05:00

It's that time of month again! VPPNews came out today. Check it out and let me know what you think.

Highlights:

VPP Chairman Mario Morino's reflections on the last ten years of VPP's work
A profile of one of our investors, Jack Davies

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Politics and the Nonprofit Language

2010-12-05T21:59:00.001-05:00

"As soon as certain topics are raised, the concrete melts into the abstract and no one seems able to think of turns of speech that are not hackneyed: prose consists less and less of words chosen for the sake of their meaning, and more and more of phrases tacked together like the sections of a prefabricated henhouse."

- George Orwell, "Politics and the English language," 1946

I think it's widely accepted in the nonprofit field that there is no common set of terms to describe the work we are doing. I recently read Melinda Tuan's "Measuring and/or Estimating Social Value Creation," about the different ways to measure social impact, which comes with a helpful glossary of terms at the end. She says that she created this glossary because: "The organizations we profiled in this paper often use different words to describe the same thing or use the same word to describe different things. This can be very confusing and obfuscate the true methodologies or results behind the various approaches."

I came up with my own Glossary of Useful Terms a few months ago, but these were much less helpful than Tuan's, by design. Defining things in the most abstract sense (Social Return on Investment: Helping people with your money; Social Enterprise: The thing that you do when you do things) was supposed to be humorous, but also tried to get the point across that the words that we use when describing what we are doing have no real meaning outside of the contexts they are used in.

The use of language has been important to me since I read George Orwell's "Politics and the English Language" in high school. If you are a writer (and if you are a blogger, you are a writer), I strongly recommend you read this piece.

In it, Orwell discusses what he sees as the denigration of the English language by lazy writers, which influences the way people think and the way people behave. He says that hiding in the abstract, rather than explaining the concrete, reduces the need of critical thought and critical dialogue, which can create a level of complacency with the status quo in society. If a writer describes the bombing of a village during wartime, he says, as "pacification," the images of the reality of that violence will never spring into the reader's mind, and therefore, no one will question the action. (If you've read his most-famous work, "1984," this theme isn't anything new.)

Now, I'm not trying to argue that the nonprofit sector is guilty of misconstruing language to the point that war crimes are glossed over. But I do think we are guilty of what Orwell described in the quote that started off this post. We quickly fall into the abstract, either in writing or in talking, which can lead to the confusion between organizations that Tuan describes. If one person thinks of social enterprise as strictly a for-profit venture, but another thinks of it as anything that is working to create social change, whether it be for-profit or non, that can create issues as both of them try to work out the concrete details needed to get anything done.

I think the most obvious example of this is the word "nonprofit" itself. We throw around the phrase nonprofit for anything with 501 (c) 3 status, which is technically accurate, but fundamentally devoid of any real meaning. A nonprofit can be a grantmaking organization, a community-based health center, or a gun lobbyist organization. Making statements about the "nonprofit sector" are general and broad, and therefore, most certainly inaccurate. I've read studies or blog posts with authors who describe trends for community-based organizations, or funders, or educational institutions, or high-net worth philanthropists, but instead of keeping their conclusions concrete and specific, they rely on the word "nonprofit" to make general conclusions. The lack of specificity confuses and is counter-productive.

There are many reasons for this reliance on the abstract, and most of the are reasonable. The nonprofit sector (see, even I do it!) has only recently, compared to the business sector, been accepted as a "sector," with best practices, a capital stream, professional development, etc. The difficulty with measurement of social returns, as described in Tuan's article, makes it difficult to come up with a standard set of reporting language, which I think influences general language use regarding nonprofits. These are real issues, but they need to be addressed. Collaborations among nonprofits are becoming more and more essential, and standardized and specific language use is necessary to create successful collaborations. If we can't talk to each other in the same terms, it'll be a lot harder to get things done, and we will just keep shooting in the dark when we talk to each other about our work.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

We can only do so much

2010-11-29T21:42:00.001-05:00

I've been oscillating between being a vegetarian and eating meat for around three years now. There are some times when I'm able to go weeks or months without eating meat, and other times when I don't go for more than a day or two. I've tried to limit myself in different ways (no meat on weekdays, no meat on weekends, don't cook meat, don't eat meat when going out), but nothing has seem to stick.

I know and believe all the intellectual arguments for not eating meat. I know the overall social costs do not outweigh the individual benefits for me. But I always tend to slip back into eating meat in one way or another. Mostly, my degree of meat consumption depends on my life circumstances at the time. Right now, I'm eating more than I have in the past, probably because I'm making decent money for the first time in my life. My emotional state of excitement over a (sort of) new lifestyle outweighs the overarching intellectual arguments in the back of my mind. It probably shouldn't, but it does.

I lay this out because I think it's important to recognize that at different points in our lives, we are able to do different things. I write a lot about working for social change through nonprofits on this blog, but, in reality, we do not all have the privilege to do that at all points of our life. Brigid Slipka commented on one of my posts awhile back saying that she would like to work in a nonprofit, but the low-salary might not be able to meet the needs of her or her children.

This is a point well taken. I am able to work in a nonprofit for (relatively) low pay because I have no dependents, no debt and not many needs. I also scored a sweet deal on cheap housing. The nuances of nonprofit and social change work I and other bloggers discuss isn't an option for the majority of the population. I, and many of my fellow nonprofit employees, have the privilege to be able to give back, instead of having to focus on what is best for us or our dependents. (Not that we are all completely selfless. Like I said, I'm making decent money for the first time in my life and spending accordingly.)

I think we always need to keep this in mind when we consider the actions of others. Not only limited to the decision to work for social change or not, but also when considering what people doing with their positions at certain times. People cannot always give everything to their job. Creating change can't always be the most important thing to people. We shouldn't feel guilty about that. We can only do so much, and we should recognize that in the actions of others.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Embedded Giving, Redux

2010-11-21T21:33:00.001-05:00

It's that time of year again! Soon we will be walking through the aisles, stumbling from product to product to try to figure out just what all those special people in our lives want this year. And after we leave the check-out counter, it's important for us to not forget our favorite nonprofits, who also need gifts from us during this season of giving.

Luckily for all of us American consumers, we can do our shopping and give to charity at the same time. The gracious and good-willed corporations of the world are making it easier for you to give to your favorite charity in these times of small-budgets, while also buying that perfume your sister wants. Several companies have started partnerships to give a portion of their profits to the well-deserving charities, so you don't have to make those hard choices.

This is the phenomenon of embedded giving, the act of tying a charitable donation along with a purchase. I've written about this before, so I will try to not go much into what I've already said. You can also read all about it from people much smarter than me on Philanthropy 2173, GiveWell, Tactical Philanthropy, and, most recently, Good Intentions are Not Enough and AidWatch. What I'd like to go into a little more with this post is Lucy Bernholz notion of "charitywashing," which is related, but not limited to embedded giving.

Bernholz defines charitywashing in this way:

Charitywashing. Verb. Gaining the trust, good faith, or simply the business of customers by aligning your product with a charity. Often takes the form of statements that claim "...x% of sales of this object will be given to charity."

I think I would push this a little further and say that this is not only about aligning a product to a specific charity, but to the notion of working for social change in general. As Nathaniel Whittemore observed, doing shit is the "new cool" thing. It's cool to be trying to make a difference in the world, and corporations are catching on. There are countless charity-corporation partnerships that are branding corporations as "socially-conscious" in the hopes to sway consumers in their direction. Most recently, GAP released a new ad (which Whittemore discusses in the post linked above) that highlights the charity work of several very attractive people, wearing attractive GAP clothing. (Side note, Tim Ogden has been working on a system to rate these partnerships. Check it out, it's pretty cool.)

I tend to not have a problem with these charitywashing partnerships, as long as they do not increase consumption, and instead just shift it towards more socially-responsible choices. But the one area that I am concerned about is the complacency that it might create. I think this was best summed-up in a recent episode of 30 Rock, where the main character, Liz Lemon, played by Tina Fey, buys jeans from a socially-conscious store and says wearing them makes her "not feel bad for all those long, hot showers I took because I was bored." (In the end, it turns out the jeans were made by Halliburton.)

When engaging in these purchases, we always need to constantly analyze our behavior to determine our motivations behind our actions. Are we doing it to feel good? Are we considering this our good deed for the day? Or are we just making a logical and rational decision that if you have the choice between a product that helps a nonprofit or one that doesn't, clearly you should buy the one that does. I'm concerned that most people engage in embedded philanthropy to be a part of the social-change lifestyle without having to do much work.

I'm reminded of a lyric from an Immortal Technique song, "Beef and Broccoli," (warning, strong language in that one):

"Being a vegetarian should never be associated with being a revolutionary or being open-minded. That's a dietary choice."

Buying something should never be associated with being revolutionary. It's a consumption choice. There's nothing wrong with consumption, but don't pretend it's anything more than that. I think there is a lot of potential to try to change consumption habits in revolutionary ways: For example, there are some group coupon companies that focus solely on bringing people to social enterprises. That's cool, and it's trying to shift our consumption patterns, which is necessary if we want to accomplish systematic social change. But there are also group coupon companies that simply give some of their proceeds to charity. That's cool too, but it isn't as revolutionary as upsetting consumption habits. And we shouldn't think of it in that way.

So, as you walk through those aisles, make sure you are aware of the motivations behind your giving at the checkout counter. If you want to give, then do it. But don't pretend that it's anything more than what it is. And if you want to be a part of the "new cool" like those attractive people in the GAP ad, remember, you can't buy your way into that club.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

A Communications Associate Speaks Out Against His Profession

2010-11-15T12:55:00.001-05:00

I love my job. I really do. I love working in communications, promoting my organization's work, talking to people about it and trying to raise our profile within the sector. I've loved doing that at other organizations I've worked for. But there is a by-product of my profession that makes me uncomfortable.

As communications professionals, we try to make everyone else see why our organization is the best thing out there. I do genuinely believe that my employer is doing some of the most important work in the field and doing it in an innovative way; that's why I work for them. But not every organization can be the most important thing to every individual, or doing the most important work in every field and sub-field. The image that is created when looking at the sum of communications from all nonprofits--foundations, community organizations, research institutions, etc.--would make it seem like each alone has the all answers to social problems. The contributions of others is recognized in person, through presentations or informal contributions, but rarely do I see the prominent display of another organization's work on websites or promotional materials.

Now, this isn't the worst thing in the world. Most people accept messaging with a certain level of skepticism, just like they do not believe everything a corporation's advertisement tells them. But what makes me uncomfortable is the level of competition and isolation it creates amongst nonprofits. (In management speak, this is called "building silos.") We want to prove that our work is better than our peers, which limits how much credit we can give them in their work. Because communications is always linked to fundraising, a constrained and restrained capital market intensifies this competition.

I think this phenomena is most pronounced, and most problematic, between grantmakers and the nonprofits they support. This relationship is inherently collaborative, but I feel like neither parties typically tend to acknowledge the contribution of the other as much as they should. At conferences for grantmakers, the focus is almost always on the strategies of the foundations, not the innovations on the ground coming the community organizations. At meetings of nonprofit community organizations, funders are seen as bureaucratic overseers, rather than partners. Looking over grantmakers' websites, there is always some sort of mention of "partnership" or "collaboration," but you have to dig to get into any specifics. This is the nature of communications to have a broad focus on the organization up front, and only get into specifics of the work later.

I attended a talk by Ralph Smith of the Annie E. Casey Foundation a few months ago about the new federal innovation programs coming from the Obama administration. He discussed how the requirement for match funding on the Investing in Innovation, Race to the Top and Social Innovation Fund awards actively increases collaboration among grantmakers, and between grantmakers and their sub-grantee nonprofits. He said that this collaboration has many benefits for the nonprofit sector and can cut down on a lot of inefficiencies. I think communications professionals need to find a way to tell the story of their organizations that includes the acknowledgment of these collaborative efforts going on around them. Collaboration is key, and the messaging should reflect that.

I also don't feel like acknowledgment of collaboration--stating that some result couldn't get done without the insights and connections of a funder, or that a community organization's sensitivity to local issues was essential to completing an initiative--always reflects poorly on the organization who did not come up with that solution. The players in the nonprofit sector should recognize that everyone has different roles to play in accomplishing the end goal of social change, and we should find where we fit in and celebrate those different roles. This can also help us focus our energy on our strengths and let our weaknesses be supplemented by others' work. (I think this is also pretty good personal advice, too.)

As the sector shifts towards a more collaborative effort to solve social problems, those of us telling that story need to include the efforts of all the organizations working around us and with us. This more accurate portrayal of the work being done can only help the nonprofit sector as a whole.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Shameless Self Promotion: November Edition

2010-11-12T13:36:00.000-05:00

That's right, VPPNews came out today. Check it out and let me know what you think.

Highlights:

An advice column from President Carol Thompson Cole for funders looking to scale across local jurisdictions
Coverage of VPP's recent conference on the "Suburbanization of Poverty."

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Hang one more year on the line

2010-11-10T10:41:00.001-05:00

Today is this blog's one year blogiversary. Ch-ch-changes.

Thanks to all of you for your insightful thoughts and continued support. It means a lot to me.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Thoughts on the Rally to Restore Sanity

2010-10-31T22:23:00.003-04:00

I know this is an unabashed detour from the typical content on this blog, but I felt like I needed to write about my experience at the Rally to Restore Sanity yesterday. I've written several drafts for this post, but I can't seem to put something together that I'm proud of, or that does the event justice. I've become frustrated at myself for not being able to put this event into context, because I feel like it might be something that I've been waiting for my whole life.

I've been watching Jon Stewart since I was 11 and I've followed the stand-up comedians of my era in the same way that I idolize the rock stars of the 60s. I've continually compared myself and, by extension, my generation, to the generation 40 years before me. I am always searching for my generation's Woodstock, a cultural convergence that symbolizes a generation while also propels it forward at the same time. I anxiously analyze my history as it is being created around me instead of living it, always in the shadow of the people that have come before. Every major event I witness I think to myself--is this it? When I went to rebuild in New Orleans after Katrina--maybe this is it. Obama’s election--maybe this is it. And the Rally yesterday--maybe this is it.

I've poured over comedy in the same way I poured over the lives and words of the musicians of the 60s. I memorize lyrics, I memorize punch lines. I try to get in the head of Jon Stewart, I try to get into the head of Bob Dylan. I try to tease out what each of their actions--and the actions of the people around them--mean for the broader trajectory of a generation's development. When Stewart and Stephen Colbert announced their rally over a month ago, my thoughts on what it could mean built on top of each other with each new episode.

Needless to say, when I went to the Rally (and it will always be simply known as "the Rally") on Saturday, I was nervous. It had already been labeled my generation's Woodstock, but I wasn't sure. I wanted it so badly to be, I wanted so badly to have the privilege years from now to say "I was there, and I remember that" to those that wish they could have been there, in the same way that I wish I was at Woodstock or the '68 Chicago protests when people tell me they were there. So today after I shook off the sleep that followed a Saturday night of instant reminiscence; (Where were you standing? Could you hear the whole thing? How many people do you think were there? How pissed were you when Ozzy Ozbourne cut off Cat Stevens? But it was pretty sweet...), I sat down ready to write about my generation's moment, how it was better than Woodstock, and how comedians deliver better messages than rock stars ever could.

It didn't come out. I ended up with scattered paragraphs and half-thoughts in full sentences. I forced myself to keep writing: This is what I've been waiting my whole life for. I was part of a crowd of over 200,000 people, who took to the streets of my nation's capital with a common goal of understanding and civility, and a shared dream of a better tomorrow. I watched as one of my heroes stood in the shadows of the Capitol building saying that our presence here alone was enough for him, that when everything is amplified we hear nothing, that the only place where we can't work together is in DC and on cable TV. And I did it with some of my best friends with me scattered throughout the crowd. I should be able to say something about this.

But I couldn't find the right words to give a deeper meaning to all of these moments. I tried to compare this possibly-historic event to Woodstock. I tried to talk about how comedians were the rock stars of our generation. I tried to talk about how comedians were the only ones who could keep us sane in these complicated times and the messages of the 60s were too simple now. But nothing seemed to fit together.

I was reminded of a quote from, either fittingly or ironically, the Dylan biopic, "I'm Not There." One character tells a young Dylan, who at that point in the movie will only play songs from the Great Depression and not about what he is experiencing; "Live your own time, child, sing about your own time."

I can't say what the Rally means, because I don't know if it means anything yet. I lived through it, but I'm not sure if my three hours on the Mall will mean anything more than a fun afternoon, some good stories and the chance to be apart of something that I thought was pretty cool. And I guess it isn't really for me to say what it meant for my generation--that will be determined by historians smarter than myself--but I know it meant a lot to me. I've always admired the way that the Daily Show and the Colbert Report (and all of my favorite comedians) can point out the flaws in our society by making humorous connections no one else can see. I think they put on a great Rally.

The message that they delivered was exactly what I think our country needs right now. The Rally wasn't an anti-Tea Party message, or an anti-establishment message, or against really anything at all. It was more about stating the obvious for those in power--media or government--that might have forgotten it: These are hard times, but they are not end times. We will continue to work together and do the things we need to do, as we have always done.

I hope this message makes a difference in the near future, and the long-term future, but I don't know if it will. I hope I can, at some point, look back on this day--this period in history that I was lucky enough to live through--and say something more substantial that I have said with this post. But until then, I will be glad I was there to share it with everyone else who was there, or who watched it, or who shares the sentiments. That is good enough for me, for now.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

A Glossary of Useful Terms

2010-10-23T13:14:00.000-04:00

This industry has a lot of jargon. I know I get confused with all the terms thrown around these days, so I thought I'd put together a helpful guide for myself and others. They are below, in no particular order. Let me know if I've forgotten any or if you take issue with any of the definitions:

Social Return on Investment: Helping people with your money.

Entrepreneurship: Doing things that may or may not help people, including, but not limited to, things you can make money on.

Social Entrepreneurship: Doing things that may or may not help people, including, but not limited to, things you can make money on.

Social Enterprise: The thing that you do when you do things.

Leverage: Doing something that helps and/or inspires others to do something.

Effectiveness: Doing the thing that you do really well.

Capacity: As in, "increased capacity" or "capacity building." Actually, I'm not totally sure on what this means. But I know it's important and I know I say it a lot.

Scale: Making the thing that you do bigger.

Growth: See "Scale."

Growth Capital: The money that you need to make the thing that you do bigger.

Evaluation: Making sure the thing you are doing isn't the wrong thing.

Rigorous Evaluation: Really making sure the thing you are doing isn't the wrong thing.

Metrics: The numbers that you use to make sure the thing you are doing isn't the wrong thing.

Innovation: Doing something new, or something in a different way, that may or may not help people.

Social Innovation: Doing something new, or something in a different way, that may or may not help people.

Social Capital Markets: All the money that there is to help people do the things that help people.

"Triple Bottom Line": Making money, helping people and helping the environment all at the same time.

Philanthropy: Money that helps people.

Charity: Money that helps people.

Social Investment: Money that helps people.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Looking Back, Looking Forward

2010-10-18T21:44:00.003-04:00

Two years ago next month, I was able to cast my first vote in a presidential election, for Barack Obama. I was a college senior at the time and in the months leading up to the election, my college campus was full of the hope and change that the Obama campaign was spreading around the country. I went to a extremely liberal school and Obama buttons and stickers could be seen attached to every backpack outside the dining hall and on the door of most professors' offices. Topics of conversation didn't stray much from the idiocy of Sarah Palin, the fall of John McCain from his pre-2007 persona and the most recent stats on the Democrats' assured takeover from FiveThirtyEight.com. Our older professors told us this is what it felt like when Robert Kennedy was running for president. I don't know if that was true, but I've never felt such a collective sense of joy and hope for the future from my peers.

I was an aspiring journalist at the time, and being the downer that I am, I decided it would be a good idea to go around and interview people about what they thought would happen if Obama lost. I had memories of the tears on my high school classmates' faces the day after Kerry lost in 2004 and I couldn't bear the thought of my generation having to go through another loss like that. I wanted to be prepared for the inevitable and I considered it my civic duty to go around and bring everyone down a notch, just to make sure things didn't get out of control. Because you never know.

The response was encouraging. There was no doubt that if Obama lost, things would not be good, and on my college campus especially--we were so liberal we considered Tom Friedman a war criminal. In the course of my interviews, I was able to talk with the then-Vice President of the College Democrats of America, who happened to be my classmate. He said that the enthusiasm surrounding the election and the political activism that had arisen from it was not contingent on Obama alone. With or without him, the sense of hope and the drive for change would stick with this generation for life.

Two years later, I think he's right. Things have not dissipated since the Obama administration has come into office and my peers seem to still be fighting for change. There's talk about youth voter turnout (and general turnout) being lower this year, but there is so much evidence to suggest that my generation is much more engaged--politically and socially--than the previous. (You would like to see some of that evidence? Well, here's a few nice anecdotes I feel justify that previous statement completely: Young lawyers are deciding to work in nonprofits, Americorps' applicants are sky-rocketing, as are TFA's.) The decision of many of my peers to flock to the nonprofit sector is probably partially due to the crappy economy, but I have a feeling we might stick around for a while.

And this engagement stretches to younger members of my generation too: USA Today recently ran a fascinating article about tweens who volunteer regularly and even start their own nonprofits. For some anecdotal evidence on this, I just wrote a profile (shameless self-promotion alert!) on a young woman who has already founded a nonprofit at the age of 18. It's clear that even if my peers don't stick around to push for social change, our younger siblings will.

Thankfully, for many reasons, Barack Obama did win the election on that cold November night. (Best Tuesday night party ever.) I am very proud that my first vote for president was for the first black President of the United States, and for one who (I think) will have the most social impact on our country in my lifetime. If I am wrong and Obama's reforms do not pan out to be what he claims nor what we all hope (or his efforts are derailed after the mid-terms), I'm not worried. I know my friends and I will still be around, picking up the slack to drive the country in the right direction.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Shameless Self Promotion: October Edition

2010-10-11T17:24:00.001-04:00

It's that time of month again! VPPNews came out last week. Take a look at it and let me know what you think.

Highlights:

VPP Chairman Mario Morino's column about transparency. Very powerful piece that gets to the heart of the issue: "Transparency is about our value set and how we act on it—not about checking a set of boxes or posting a set of documents on a website. It is about the honesty, openness, and integrity we live by in governing and running our organizations and doing our jobs"
An article on Adri Smith, founder of the nonprofit YouReach. At 18, she is already well on her way to making a big difference in the world.
A profile of the two leaders of KIPP DC. With all the buzz surrounding "Waiting for 'Superman'", it's nice to hear the stories of people working on these issues on the ground.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Doin Good

2010-10-06T23:10:00.001-04:00

Since I choose to work in the nonprofit sector, I've been told that I'm "doing good work" or "doing good" many times through my life. This never sat well with me. I never seem to feel good about doing good and tend to have a visceral reaction to hearing those words. When I try to explain this feeling to people, it mostly comes out as a spewing tirade against the traditional do-gooder, activist model of change. This explanation also never sat well with me and I don't think I even convinced myself.

Related, I've also struggled with people who say they give donations or volunteer or work on a cause to "feel good." I'm beginning to understand these motivations a little better, but I still think "doing good" and "feeling good" are non-starters when it comes to creating change. I do feel good about my donations and I do think I am doing good work at my job, but that really isn't my motivation. I'm motivated by what I think is right and what I think is the most effective way to create change. It's great that you may think I'm doing good, but that's a bonus. I don't prescribe any moral judgments to what I'm doing.

I consider myself in the Jon Stewart camp of sanity, so I try to keep these feelings mostly to myself and not convert others to my side, except for the occasional spewing (I am a blogger, after all). But then, in a black-hole of blog surfing a few weeks ago, I came across this article, "Leverage Points--Places to Intervene in a System," written by Donella Meadows, the systems analyst, in 1999. She outlines 12 "places to intervene in a system" to create change, in increasing order of effectiveness. They range from "Constants, parameters, numbers" (least effective) to "the power to transcend paradigms" (most effective). I'm sure you can tell by those snippets alone that this is some pretty heavy stuff. It completely blew my mind.

I won't go into what exactly the different "places" to create change are or what they mean, because Meadows does that quite effectively and succinctly. But I will focus in on second most effective place to intervene and create change on the list (which was originally #1): "The mindset or paradigm out of which the system--its goals, structure, rules, delays, parameters--arises."

When I read this, something clicked. I realized that "doing good" is the mindset the entire nonprofit sector has arisen from. All of the nonprofit sectors' structures, rules and goals have arisen from this notion of "good", as have all of its subsequent problems--inefficient capital markets, low pay for nonprofit employees, a hesitancy to blend for-profit/nonprofit ventures, etc. I think I fundamentally disagree with this mindset and have begun to recognize the problems that it creates. Meadows' list showed me that changing this mindset is actually one of the most effective ways to fix these problems on a large scale. (For more on this check out Uncharitable by Dan Pallotta, where he traces this moral framework all the way back to the Puritans.)

Now, I think the label of "doing good" is less of a pet peeve and more of a cause for action for me. (I think I should have realized this sooner because a synonym for "doing good" is charity and I did name my blog "Change Charity.") Being able to shift something as fundamental to a sector as the "mindset or paradigm out of which the system...arises" is pretty powerful. I'm not sure how we can make this shift, but I know there's a lot of people working on it. If anything speaks to that, it's the recent Social Capital Markets Conference.

But until that shift, if we ever meet, please make sure to refrain from telling me how great I am for working at a nonprofit. I don't care, and you don't want to hear me spew.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Will It Blend?

2010-09-23T22:35:00.000-04:00

I'm not a big fan of YouTube videos. Normally I can't be bothered by the most-recent two-minute fad and I prefer to consume music through the vinyl medium, which leaves me little use for it. But there is one* series I couldn't stop watching once it went viral on my college campus a few years ago.

"Will It Blend?" is the brilliant marketing campaign by Blendtec that puts its blenders up against anything viewers would like: marbles, change, golf balls, cellphones, and, in an attempt to either completely reject or completely embrace consumer culture, a brand-new iPad.

These videos and their catchphrase, Will It Blend?, have resurfaced in my subconscious recently. I find myself asking that question internally whenever something new is put out into the ether to be critiqued and cut apart by the masses. I imagine the new development--be it an idea to donate shirts abroad, directing growth capital to small nonprofits or some sort of Rally to Restore Sanity--being thrown into one of Blendtec's blenders to see if it makes it through the blades, or if it ends up being no different than your everyday hockey pucks. (That one is pretty cool.) In my mind, those that make it through the blades mean something and go on to create real change, and those that don't end up being white noise that blends back into the normal fabric of society.

I think, especially in the blogosphere, we can sometimes focus too much critique on the things that surround an idea (or an organization or an initiative), but not on the effectiveness of the idea itself. We can get caught up in a narrative rather than the substance of a movement (Tea Party, Liberals) or focus in on representatives of two camps sparring off (Jeff Sachs vs. William Easterly or, if you want something a little more humorous, Jon Stewart vs. Bill O'Reilly). Instead, we should be asking ourselves this question: Will it blend? Or will it work?

The most obvious example of effectiveness being lost through debate is the health care reform bill, which has many proposed changes going into effect today. Democrats defend it as sweeping social legislation and Republicans condemn it as ignoring middle class needs. Both of these stances reinforce political narratives and further political causes, but don't look at the efficacy of the proposed solutions behind the debate.

Developments within the nonprofit sector can be given many different labels--new, innovative, entrepreneurial. While those labels hold value, they do not answer that ultimate question. To determine if something works, we need testing, evaluation, planning and, above everything else, failure. Only through vigorous self-awareness and time can it be determined if something has made it out of the blender.

Of course, those parts of the debate that surround the issue of effectiveness still inform overall results. If a new program isn't actually new, but an old idea that didn't work the first time, it probably won't work this time. Trying to stop someone from going ahead with an objective bad idea is a good thing, like what happened in the 1 Million Shirts debacle. Someone wanted to give away t-shirts to poor countries, and aid workers who had seen this kind of program fail before put a stop to it. The debate became petty and personal, but ultimately the campaign was halted. There are limited resources in this world, so we cannot afford to have every idea or program tried and tested.

If you are thinking about doing something, whatever it is, the bottom line must always be: Will it work? Will it create meaningful, sustained change? Not: Is it new? Has it been done before? Will people like me if I do this? Those questions can inform the answer to the blender question, but they aren't the ultimate answer that can guide you.

So, if you are trying something new, always remember the sound of that blender. I hope you remain intact once it's been shut off.

*Well, actually, there's another YouTube video that I couldn't stop watching, but that's mostly due to my afore-mentioned vinyl interest.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Listen to Your Neighbors

2010-09-15T08:00:00.013-04:00

During my recent job search, I had to make the hard (but privileged) decision on where to focus my scope of work: domestically or internationally. Two years ago, this wouldn't have been hard. I grew up fascinated and horrified by the stories of need abroad and always felt drawn to help those living on less than a dollar a day. In college, I studied global development and was introduced to Muhammad Yunus and his concept of microfinance as poverty alleviation. Setting out into the "real world," my goal was to do my part to end global poverty.

Instead, for a variety of reasons, my first job out of school was at a community health center with a hyper-local focus. I also ended up living only two blocks from where I worked. For the first time in my life, I was living and working within a community. When it was time for me to move on from the community health center, I again started to look into global development work, but kept in mind what I could do on a local level. I saw myself going down two paths, not knowing which one was right for me.

My reasoning for focusing on global poverty has always been that internationally, there is more absolute need than on any domestic cause. Income levels and standards of living are so low that, fiscally, it does not make sense to use resources for social good elsewhere. Lives can literally be saved for a few hundred dollars (as many international charities remind you in their advertisements.)

However, as I looked into the international development field, I learned that many problems arise when foreigners attempt to help the less fortunate abroad. Little to no awareness of local cultures, lack of understanding of local needs, hidden domestic interests and slow responsiveness to unsuccessful projects can cause more harm than good at worst and perpetuate the status quo at best. These problems have become (or always have been) so rampant that some have dedicated their careers to fixing the international aid system.

As you can see from my bio, I ended up choosing to continue to work on the local level, but it was not because of these intellectual and academic arguments. I'll deal with accountability issues with any sort of philanthropic work, regardless of location. What instead pushed me to consider focusing my time back home (besides my aversion to frequent trips abroad--I don't do airports well), was the feeling of connection I get from knowing that the time I spend at work effects the people I live near and the places I go to when I'm not in the office.

On my last day at the community health center, which served Latino immigrants, I was given a beautiful poster that read: "Ser revolucionario: Hablar con sus vecinos," which translates to "Be revolutionary: Talk with your neighbors." It is a quote from the 1968 Paris uprising. I've always associated the summer of '68 with an international push for peace/love/harmony and that quote--imploring the young, radical minds to learn what's going on right next to them--seemed out of place. But now, through my community work, I realize that any local initiative can be radical. A global push to eliminate poverty is revolutionary, but so is listening to your neighbors to see what they need. In either case, you are doing something, you are trying to change something for the better.

Ultimately, my decision wasn't based on where I was needed, but where I belong and what I understand. If you need someone to listen to you, you want to talk to your neighbors, not a foreigner. I feel that I am better equipped to listen to the people around me than someone in Botswana, as I am sure a woman in Botswana is better equipped to listen to the people around her than I am.

So, for now, while I live in DC, I will learn and do what I can to make it a better place. If I can one day get over my repulsion to airline food and jetlag, maybe I'll end up as a foreigner living in a foreign land, listening over there.

Thanks to Saundra at Good Intentions Are Not Enough for talking through this with me. (And apologies to all my global development professors in school.)

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Election Day!

2010-09-14T00:00:00.003-04:00

If you live in the District, get out and vote today! It's an important primary for many different races, not just the hotly-contested mayor's race. There's same day registration if you are new to the area, you just need proof of residency. You can find your polling place here and the polls are open from 7 am to 8 pm.

I know the last few posts have been meager content; there will be more soon, I promise.

Shameless Self Promotion: September Edition

2010-09-09T14:06:00.000-04:00

One of my primary responsibilities at Venture Philanthropy Partners is to produce and edit VPPNews, its monthly newsletter. The September edition came out today and you should check it out to see what I've been doing for the past month. I'd love to hear any thoughts on it.

VPPNews is generally made up of a feature story, updates from the nonprofits we invest in and an in-depth column from either VPP's President, Carol Thompson Cole, or its Chairman, Mario Morino. This month, Carol's column discusses the Social Innovation Fund and the need for a collaborative approach for social change.

I'll be posting these on here as a part of my monthly "Shameless Self Promotion" series. I hope you enjoy. Again, let me know your thoughts.

The Toolkit

2010-08-30T23:38:00.002-04:00

I'm frequently annoyed with the blanket lionization of the nonprofit sector. When I stumbled upon this video on the industry, via Tactical Philanthropy, called "Know Your Sector," I was expecting inspirational music and wide-reaching facts about how the nonprofit sector employs one in ten people and generates $1.1 trillion every year. And that is exactly what I got:

The video (which was produced by Philanthropy Reports) presents a very broad picture of the nonprofit sector, which I felt was not as inspiring as the music that went along with it. Phil Buchanan at the Center for Effective Philanthropy blogged about the video, saying it could help address the issue of the greater public's "ignorance of the nonprofit sector," but I do not see any real value in an education of the greater public on how many people are employed by one type of organizational structure. A similar movie could be made about the for-profit sector, or the governmental sector, which would most likely be very boring or very funny, depending on who made it.

Many times, I talk with people who clearly conflate the nonprofit sector with "doing good things" or "saving the world." As this video makes clear (although I doubt that was its intention), there are many nonprofits out there doing very bad things. It states that the sector is diverse, and covers organizations from the Sierra Club to the NRA. I personally think (but know there are those who disagree) that the NRA is one of the worst organizations in this country doing things that are fundamentally against social progress on many different levels. However, the head of the NRA and I are both included in the statistic that states "one in ten people work for the nonprofit sector." I do not like to be grouped-in with anyone who works for the NRA.

I will tell another story to illustrate my point: When I was job searching, I scoured job postings daily on Idealist.org like they were my ticket to salvation. (And judging the current state of the economy, they turned out to be just that.) I came across one posting for an editor position at a magazine dedicated to the promotion and well-being of cats.

Again, for emphasis: Cats.

My friends and I talk a lot about selling out, and when I saw that job posting online, I knew if I applied to it, I would officially be a sell out. But, that magazine was a nonprofit and it could post on Idealist. Working for that organization, I would have felt like more of a drain on society than at most corporations. Especially since I would probably have been able to make more in the corporate world and then donate more to charity.

My point is to not argue about which nonprofits are doing "good" or "bad" or "nothing at all," but to show that there is nothing special about the nonprofit sector. Do not limit yourself to thinking that only nonprofits can do good. At this place in time in our history, I feel like the nonprofit structure is the easiest organizational type to use if you want to create social change, but others are quickly adapting. (If you want to learn more about an interesting cross section of this transition, check out recent developments at Unitus and SKS. A good summary and analysis is here.) Even consumer goods manufacturers can be creating social change.

If you are looking to "change the world," nonprofits are only one option in your organization toolkit. Don't limit yourself to thinking they are the only thing in there. As I've said before, they are typically the most adaptable organizations working on the ground to solve problems and tend to be at the front of social issues, but there is nothing inherent in the tax structure that makes them better at working for social change than another type of incorporated organization. This is not a particularly profound conclusion to draw, but an important one to keep in mind.

Edit: Phil Buchanan at the Center for Effective Philanthropy responded to this post. You can see our back and forth here.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Managing Fate

2010-08-20T10:22:00.003-04:00

Throughout my life, I’ve been guided by the words of many. Recently, I’ve been thinking a lot about Warren Buffett’s op-ed in Fortune, coming off of the heels of the Giving Pledge announcement. In the piece, titled “My Philanthropic Pledge” he discusses the main reason behind his vast wealth: Luck.

He writes:

My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well. I've worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate's distribution of long straws is wildly capricious.

If you haven’t read the op-ed yet, do. It’s probably the best rationale for philanthropy and giving back that I have read. As I continue on in the nonprofit sector towards the broader goal of social change, I think it’s important to take a step back and think about why I am doing what I am doing—why we are doing what we are doing.

To steal from Buffett’s imagery, I am motivated by fate’s capricious nature. I agree that our market system is generally the best way to serve the most, but it does produce distorted results. Market failures allow some to come out far ahead of others for no real substantial reasons. Philanthropy helps repair those failures and allows the system to run as smoothly as possible.

Some people (meaning, me) would say that philanthropy is the most important part of a true capitalist society. Funding social service organizations helps mitigate the inherent flaws in our system while still working within that system. It attempts to make capitalism function as perfectly as possible to leave no one behind.

Some people (meaning, not me) have argued against the Giving Pledge, saying that it is undemocratic or it will cost the government too much money in foregone taxes and ultimately stifle social services. I think these arguments are silly and do not recognize that nonprofits are probably some of the most adaptable and responsive organizations working to improve the lives of people in this country and others. But I also think these detractors from the Giving Pledge—and probably some cosigners on the pledge themselves—miss an important point about what they are talking about.

As I see it, the Pledge—and to extend it out a little further, all of philanthropy—is about social change, righting wrongs, dealing with market efficiencies, a redistribution of wealth, whatever jargon and talking points you want to use. But what is important to remember is that there is no set way to accomplish these end goals. There is no unification of approach or strategy on how to get where we need to go. There isn’t even an agreement on if philanthropy is the best way to accomplish sweeping social change, as the rise of corporate social responsibility and for-profit social enterprises have shown. If you spend a little time exploring the nonprofit conference circuit (which I just recently have started to do), you’ll see that there’s a lot going on and a lot of disagreement.

So, I’d like to use this blog’s space in the ether from now on to explore those disagreements and those changes as I explore them myself. I am young, if you did not know that already, and I have a lot of exploring to do. I would love to know more about your explorations and I would be honored if you listened to mine.

I hope that, through these documentations, the approaches and strategies to that end goal—managing fate—can become a little clearer.

Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Social Innovation Fund Round-up

2010-08-11T00:01:00.014-04:00

Update 8/12/2010:
Adin Miller has been generous enough to compile a huge list of Social Innovation Fund commentary, going back to May of 2009. Check it out.
End update

I know this isn't the most exciting first post back, but I've been tracking and compiling commentary on the recent Social Innovation Fund announcement. As you can see from the posts at the bottom of the following list, things are getting a little interesting, so I thought I'd share this "round-up" with the general public. I'll come back to this and update as things develop, adding at the bottom. Post go in chronological order and the original SIF announcement can be found here. Please, if I've missed something, let me know.

I've got some more posts lined up so I promise I'll be back soon with something more exciting.

Background (not comprehensive):

The Economist: “Let’s hear those ideas”
-Excellent overview of the SIF annoucement, puts it in broader context of the social innovation/social entrepreneurship movement. Compares British and US efforts.

Tactical Philanthropy: “What exactly is the Social Innovation Fund?”

Tactical Philanthropy: “Why the Social Innovation Fund Matters”

Tactical Philanthropy: “My comments on the Social Innovation Fund”

Adin Miller’s Blog: “Analysis of the Social Innovation Fund Update”

Commentary:

Tactical Philanthropy: “Social Innovation Fund Announces Grantees”
           -Initial coverage, positive of the overall choices

Change.org: “The Social Innovation Fund Grants Focus on What Works”
           -Initial coverage, critical of choices, laments choice of intermediaries with established records, rather than riskier start-ups

JustMeans: “First Social innovation Funds Grants Announced”
           -Initial coverage, critical, agrees with Change.org analysis

Education Week: “Social Innovation Fund Grantees Announced”
           -Initial coverage, disappointed education award winners don’t focus more on younger youth

Tactical Philanthropy: “Builders, Buyers and the Social Innovation Fund”
           -Response to Change.org post, defends choices, says government is working on building capacity, not “purchasing” social services

Adin Miller’s Blog: “Analysis of Social Innovation Fund results”
           -Very in-depth analysis of SIF grants, including link to data sheet. Echoes issues raised in Change.org/Justmeans, concerned about funding “what works.” Also brings up issues of transparency.

SSIR: “REDF Leverages First Social Innovation Fund Grant”
           -Testimony from award winner. Defends funding of intermediaries, talks about adding value to funds and leveraging

Adin Miller’s Blog: “Where’s the Capital Market for the Social Innovation Fund?”
           -Reiterates transparency concerns about SIF

Non-profit Quarterly: “Questions of Transparency Cloud the Social Innovation Fund.”
           -Brings issues of transparency into the center of SIF debate. Strongly attacks Obama administration as being hypocritical

Adin Miller’s Blog: “Transparency Lessons the Social Innovation Fund Should Learn from the Investing in Innovation Fund”
      -Discusses NPQ article and re-iterates SIF transparency concerns. Compares SIF process with i3 (Investing in Innovation Fund) process and states SIF should follow i3’s example.

The Corporation for National And Community Service: “Summary of FY 2010 Social Innovation Fund Selection Process”
            -Responds to NPQ’s requests for more transparency. Outlines some of the processes behind the grantmaking decisions.

The Chronicle of Philanthropy: “National Service Grant Agency Explores More Open Grant Process”
             -Covers the CNCS’ response to issues of transparency. Unnamed official states the CNCS is looking into a more open grant process for the FY2011 and states they will release all of the 11 winning organization’s applications in a few weeks

The Nonprofit Quarterly: “Social Innovation Fund Disclosures Good But Insufficient”
              -Responds to Chronicle article and CNCS annoucement. Calls for more transparency and the release of all applications, including those not selected for grants.

Money and Mission--The Chronicle of Philanthropy: “The Social Innovation Fund's Challenge: Helping Nonprofits Survive Failure”
             -Overview of the whole Fund, discusses the risky process of innovation and the need for constant evaluation and learning

PND Blog: “A Networked Approach to Social Innovation”
   -Discusses the Fund as a networked and collaborative effort

Andrew Wolk’s Blog: “Social Innovation: The Next Chapter”
   -Discusses the mainstream acceptance of innovation, but raises concerns that the strategy will turn into a buzz word with no real meaning

Washington Post: “Stonewalling at the Social Innovation Fund”
   -Written by Paul Light, a reviewer of SIF grants. Highlights extreme concerns with transparency. Calls out one unnamed organization as being “rated as weak and nonresponsive in a first-phase review, but won a grant anyway.” In comments, Steve Goldberg defends the process and calls out the rhetoric used

Adin Miller’s Blog: “Why do we care about the Social Innovation Fund?”
           -Responds to the Post op-ed. Highlights concerns about loss of SIF credibility as well as potential Congressional oversight.
Tactical Philanthropy: “Transparency Controversy at the Social Innovation Fund"
         -Details the transparency debate and asks for reader’s opinions. States SIF is too important to screw up.

Chronicle of Philanthropy: “Social Innovation Fund Stirs Controversy”
         -Contains response to transparency issues from SIF administrator the Corporation for National and Community Service. States that the reason they cannot release more information and unselected applications is because they did not tell applicants they would do so at the beginning of the process.

Steven Goldberg: “Open letter to Nonprofit Quarterly”
         -Responds to NPQ’s “Social Innovation Fund Disclosures Good But Insufficient” article in incredible detail. Provides evidence as to why claims of wrongdoing and deception on SIF’s end are incorrect.

New York Times: “Nonprofit Fund Faces Questions About Conflicts and Selection Procedures”

Tactical Philanthropy: “New Profit Releases Social Innovation Fund Application”

Nonprofit Quarterly: “CNCS Says the Social Innovation Fund Will Release Ratings”

Geri Stengel: “The Power of Social Media: The Social Innovation Fund Increases It’s Transparency”

Adin Miller: “What Should the Social Innovation Fund Do Next?”

Steve Golberg: “The Social Innovation Fund Kerfuffle”

Chronicle of Philanthropy: “Sharing What Works”

Seliger and Associates: "Social Innovation Fund Not Terribly Innovative"

The Examiner: "Questions Arise as Millions in Federal Grants Got to Former Employers of Obama Administration Officials"

Tactical Philanthropy: “Next Steps for Social Innovation Fund: A Call to Action”

Dana Goldstein: “The Personal Connections and Small Government Ethos Behind Obama’s Social Innovation Fund.”

Chronicle of Philanthropy: “Amid Concerns of Favoritism, Federal Officials Disclose New Details on Selection Process”
       -Contains Paul Light’s response to the release of the applications and ratings

Social Velocity: “Beating Innovation to Death”

Tactical Philanthropy: “Social Innovation Fund Repository”

Transcript of SIF Twitter debate

Empax: “Leading by (Wrong) Example”

Ventureneer: “SIF Debate Generates Transparency, Recommendations for Future”

Tactical Philanthropy: “How the Social InnovationFund Selected Grantees”

REDF Blog: “Be the best of whatever you are”

Philanthropy News Digest: “Conversation with Matthew Bishop”

Steve Goldberg: “SIF Intermediaries: More Drops in Fewer Buckets”

Matt Klein: “The Next SIF ‘Controversy’”


Disclaimer: The postings on this site are my own and do not represent the positions, strategies or opinions of Venture Philanthropy Partners

Moving Forward: Raising the Right Questions

2010-07-26T11:09:00.001-04:00

Content on this blog has been sparse as of late, I know. But I do have a good excuse: I've been job hunting and recently got an offer to be a Communications and Assessment Associate at Venture Philanthropy Partners. VPP is a great organization, serving non-profits in the DC area that focus on low-income families and children. They provide sizable investment capital, along with leadership development and support. I am very excited to join this team and continue my career in the non-profit sector. I will be joining at an exciting time, as they were named recently as a recipient of one of 11 grants in the inaugural Social Innovation Fund portfolio.

As it stands now, this blog is in limbo. They want me to continue my work on it, as do I, although I think it will end up being in a different format. I'm not sure how dramatically it will change; it will be distinct and separate from my work at VPP, but of course related.

I'm thinking now I will start to focus more on my personal thoughts and experiences as a young professional exploring the changing non-profit sector. I hope to use it as a guide for other 20-somethings as they explore and make their mark on the sector with me. If you have any thoughts on which directions I should go in, please let me know. This blog will probably be quiet for a while as I get into the swing of my new position and I'll start it back up when I've got a solid grasp on where I want to take it.

On a related note, in this time of reflection, I'd like to talk a little bit about my exploration in the last few months since I started this venture. Recently, I was cited by (link to? given a shout out by?) Lucy Bernholz at Philanthropy 2173, probably the biggest mention I've gotten so far. She discussed a post I wrote on collective venture philanthropy, not because of an insightful and interesting comment I made, but because, in her words, I was "raising the right questions."

In this blog, and in my professional career, I have mostly striven to do exactly this. I know I don't know much about much, but I do know that I'd like to know more. Maybe as I get more experience, I'll be able to create some posts that I see as a definitive message or opinion on something, but right now, I'm more interested in the discovery. Sasha Dichter expounded on this as a blogging technique quite eloquently.

So, I appreciate everyone who has come along on the ride with me. In the times to come, I hope to continue asking the right questions and discover the answers with all of you. Look for more soon.

I am a Patriot

2010-07-06T15:47:00.000-04:00

This past weekend, I got to celebrate our nation's birth in our nation's capital. It was quite an experience, full of heat, fireworks and BBQs. While mulling over my bacon veggieburger (don't ask), I began to think about something that comes up a lot when I discuss effective giving with other people: Where should we focus our charitable donations, here at home in the US of A, or abroad?

Undoubtedly, there are more problems abroad than there are at home--pick out any macro or micro economic indicator you want to support this. I know I have always felt compelled to help those abroad because of the images of destitution I see in the news and the fact that my quality of life is significantly better than most people in the world for absolutely no reason other than luck. I know that, using purely cost-effective based metrics, my resources are better spent abroad because they can go further there. What might be able to fund a small portion of a doctor's salary at a health clinic in the US could actually provide life-saving medication for several people in the developing world.

However, I also know that I am not African (or Asian or South American), I will always be an outsider and I have limited experience with foreign aid. I sometimes question if foreign aid can actually decrease (or eliminate) poverty and know that many aid projects are inefficient at distributing resources precisely because they are an external force on the community or the country. (See also White Man's Burden and Dead Aid.) I can gain experience in international development, but I will never actually have the same life experience of those I am trying to help, nor be from the same culture of the communities I am working in.

On the other hand, I am from the United States and I have a large understanding of the history of the country, it's culture and it's issues. I know that I will never have the same life experience as those I am trying to help here in the US as well--as I come from a privileged background--but I have a greater understanding of things than I would in a foreign country. There are many issues here to work on and I have trouble saying that they are not as worthy of my support simply because they require, comparatively, more resources.

Which brings me back to the Fourth of July. Maybe it was just the patriotism in the air, but as I chewed over my bacon veggieburger, I felt like my place is here and the people I want to help are those around me. It reminded me of the chorus to the Little Steven song "I am a Patriot:"

I am a patriot and I love my country
Because my country is all I know
I want to be with my family
With people who understand me
I got nowhere else to go

I do not want to discount the efforts abroad, because I believe those are important too. They both require equal support. For me, I've decided to try to navigate this support by committing my time--which Warren Buffett called the most precious asset--to domestic issues, while committing my money to organizations working abroad.

Of course, I could draw a different conclusion from this discussion and say that the differences between the developing world and the developed are not as distinct as one would think, therefore their problems are comparable and we shouldn't create false dichotomies. But the spectacular DC fireworks display instilled quite a bit of love-of-country in me, so I will leave you with this bleated happy Fourth of July message (sorry for the language):

More Thoughts on the Four Types of Donors

2010-06-29T16:31:00.000-04:00

I wanted to write a follow-up post to my piece on the "Four Types of Donors." For a refresher, here's the matrix I used to divide up the donor market into four quadrants (for more information on this, see the original post):

The type of donors organizations want are in the top right quadrant: Donors with a high interest in whatever the organization is working on, as well as a high capacity to give. Organizations have many options to mobilize their donors into the top-right corner of this matrix. I discussed the movement upwards in my previous post on this topic--that is, making it easier for donors to give their resources through simplified ways of giving, like texting donations or social networking sites. (Of course, another way to do this would be to increase donors' overall resources, which is a lot harder to do and probably not the goal of most fundraisers.) But what I didn't really touch on was how to move donors to the right--that is, make them more interested in what an organization is doing.

To do this, I think non-profits need to have a broader communications strategy, focused on increasing awareness and engagement in their issues. Which is much easier said than done. When thinking about non-profit advocacy, I always come back to the marketing adage: "I know that half our marketing is working, I'm just not sure which half." It's hard, if not impossible, to tell if information being put out there is increasing engagement or donations and what is wasted on deaf ears. With limited resources, it makes sense most non-profits don't devote a lot of time to raising awareness in the broader public. Philanthropy Action did a study a while ago about the ineffectiveness of social media on leveraging support for non-profits, which I think shows the difficulty of using engagement techniques to increase support--i.e., moving donors from the left of the matrix to the right.

However, the original reason I created this matrix was to discuss my issues with "slacktivism"--the notion that we can do good without doing a lot. The most concrete and (unfortunately) prevalent example of slacktivism is embedded philanthropy, like the RED campaign, where people make a consumption purchase that has a small donation to a specific organization tied into that purchase.

This is only one of many examples of corporations partnering with non-profits to help increase support. I think it's these partnerships that have the most potential to increase engagement. Instead of a simple donation, why not include some information about child labor in the garment industry along with that GAP t-shirt? When Apple starts marketing their next generation of I-Pads, why not create an advertising campaign about the use of conflict materials in common electronics? These types of campaigns could have a much larger impact on what non-profits are working for than any amount of increased monetary giving. Corporations with the expendable resources to get behind these initiatives could start a new wave of corporate responsibility not just centered around dollar donations. This could really get people moving into that ideal top-right corner of the donor matrix.

Pledgers need to not just give smart, but be engaged

2010-06-20T16:32:00.000-04:00

While it was overshadowed by the unveiling of the Buffett/Gates Giving Pledge,* another significant announcement was made this week in the world of philanthropy, back in my home town of Minneapolis: Winston Wallin received the first "Minnesota Engaged Philanthropist" award from the Twin-Cities based Social Venture Partners.

This announcement has personal significance for me--I was one of Wallin's "Wallin Scholars," a program that has given over $20 million in college scholarships to help people like me afford tuition. But the award's importance also resonates beyond Twin Cities youth and serves as a message for the average billionaire joining the Gates/Buffett entourage. Giving is simply no longer enough, but now it has to be smart and engaged.

Adding another dimension to the "smart giving" mantra, the concept of engaged philanthropy (which had its third annual conference in Minneapolis last week) pushes philanthropists to not only give and not only give smart, but be involved in the supporting organization's work. In the case of Wallin, he fundraised to build a new cancer center at the University of Minnesota and then came on--at no pay--to turn around the floundering health sciences division. He also has met every one of his Scholars--there are around 3,000 of us now. (He's a very nice man, with a very nice family.)

For me, engaged philanthropy is about doing whatever the philanthropist can do to support the organization's mission with the skills and resources he or she has. This could be technical assistance, fundraising, helping with staff hiring, in-kind donations, whatever. Being engaged means finding those needs in the organization or in the community and then filling them.

In an op-ed piece at the Chronicle of Philanthropy, Susan Wolf Ditkoff and Thomas J. Tierney said that those philanthropists willing to sign on to the Giving Pledge and donate half their fortune to charity can't just jump into "check-writing mode," but need to direct their resources to programs that work. I would take that a step further and say that these philanthropist need to get into the thick of it to figure out what programs work and how they can offer the full extent of their resources to the organizations they support. Like the Wallins and the McCary family--who funded my scholarship from the Wallin Foundation and sent me cards and Christmas presents to keep in touch--those new Pledgers need to not only give smart, but be engaged.

The flip side of this increased engagement--which was brought up in the Star Tribune article linked above--is a donor who takes too much control over an organization. I can see this being a problem in certain cases, but a continued focus from both the donor and the organization on its mission can help mitigate those issues and guide an organization's actions. And, considering the lack of interest most donors have for impacts, an increased awareness and involvement in an organization can never be a bad thing.

*For more information on the Giving Pledge see the Chronicle of Philanthropy coverage, Tactical Philanthropy's analysis and the strangely Skull-and-Bones-esque back story on Fortune.

Four Types of Donors

2010-06-13T20:56:00.000-04:00

I've written a lot about my feelings on the rise of "slacktivism"--that is, the growing prevalence and acceptance of all the small, simple, easy things people can do to make a difference: Embedded philanthropy, tweeting for donations, virtual volunteering, signing petitions, running races, etc. When I saw this new list of "5 Cool Things You Can Do RIGHT NOW To Make a Difference" (OMG!) I thought I'd fire off another snarky post lambasting this degradation of the philanthropic community. But then I remembered this satirical post a friend had passed on to me on the BP Oil Spill and I realized I couldn't really out do that (it's hilarious). Instead, I decided to do something a little more productive.

My main issue with slackivism and the products/services that cater to the slacktivist model is the level of complacency (I think) they breed in people. I recognize that we all have varying degrees of interest in a cause and varying degrees of resources, but I also do not accept that those varying levels can't be pushed to get more out of people. To help illustrate this, I created this graph:

(Sorry for the kindergarten image quality.)

On the x axis, we have an individual's level of interest, be it in a cause, specific field or in social change in general. For the purposes of this discussion, let's be general and assume we're talking about a person's interest in social change. On the y axis, we have a person's capacity to devote resources to that cause--in our case, social change. The dots on the graph represent individuals. We can see that someone can have a high interest in social change, but not a lot of resources (time, money) to devote to "the cause," while there can also be someone with a high capacity to donate to "the cause" but not a lot of interest to do so. And there also is every variation of people between the two.

(Before going further explaining this model, I think it's important to note that I conceptualize these individuals represented on the graph as being in a singularity prior to the act of donation--that is, they have not yet given, but could do so in the future. These two axes represent an interest and a capacity that can be captured by non-profits, social change organizations, or what have you, at any point in the future. Moving on.)

To make things simpler, I decided to divide up the graph into segments:

which quarters off the plane and allows us to nicely divide up the donor market into this matrix:

Now, again, this is a simplification for the purposes of the model. Obviously, people don't just have either "high" or "low" interest in social change, or "high" or "low" capacity to give. But, this simplification helps us talk about the different characteristics. (Another note: I think it's safe to ignore the individuals who fall directly on either axes of the graphs; either people with no capacity to give whatsoever or those with absolutely no interest. Neither of those groups concern us in this model.)

In Q1, we have people with a high capacity to give, but a low interest. These are wealthier, privileged people with access to resources that make it easy to give, but, for whatever reason, don't want to. In Q2, we have people with a high capacity to give and a high interest. These are privileged donors with a strong desire to give. In Q3, we have people with a low capacity to give as well as a low interest. In Q4, we have people with a low capacity to give, but a high interest. In this quadrant, people are willing to give and be more engaged, but don't have the resources to do so.

Now that these markets are segmented, we can see the effect of the slackivist methods of giving on each of them. I will start with the easy ones. For Q2, the methods will have little to no effect. These donors are already highly engaged and contributing greatly. They do not need anything to help them give. For Q3, these donors don't have much to give and not a lot of interest to do so. If they use the slacktivist methods, it will be only slightly.

But the methods will have a large impact on Q4. For a Q4 donor without a lot of time or resources to be engaged, but a strong desire to make a difference, the "slacktivism" technologies actually make it easier for these donors to be a part of the philanthropic market. Their capacity to give is increased by the easier accessibility and increased connectivity of slacktivist modes of giving, which "mobilizes" them from their position in Q4 to a position in Q2. Woo! Alright!

So, the Q1 area is where I come up against my issues with slacktivism. For these people with low levels of interest, but high resources, slacktivism becomes a stopping point. Instead of feeding more information and aiming for increased engagement, the slacktivist methods instead simply extract increased-frequency, but still small donations from this quadrant. A raising of awareness could mobilize people from Q1 to Q2--which would lead to higher engagement and contributions--but instead, the Q1 donors remain stationary.

Now, you might ask, what's the big deal? Q1 people are giving more than they would have, as are the Q4 donors, so what's the problem?

Well, I would answer, it matters precisely because the slacktivism methods are not mobilizing Q1 people into Q2. There are huge amounts of time, resources and energy to be gained from the Q1 market share (especially in the Western world) and slacktivism is holding those people back. While it may mobilize the Q4 donors, the market share of Q1 (again, especially in the Western world) is much, much higher than the market share of Q4. There is so much to be gained from these potential donors, but slacktivism allows them to remain on the left side of the matrix.

Given a choice between buying a coffee bag that comes with a contribution to the Global Fund and one that does not, it's obviously better to choose the one that does. But accepting this as the only choice out there to potential donors is a huge misrepresentation of the possibilities of the philanthropic market and the world of social change. Things that mobilize the donors from Q1 to Q2 is where we need to be focusing our energies, not on making t-shirts with charitable donations woven into them.

That is my issue with slacktivism, embedded giving, texting donations, tweeting for charities, whatever you want to call it. People (especially in this country) can and should be doing more to be a part of social change.

(I recognize this was a lot. I appreciate you reading it all the way through. If you have any questions or thoughts on my model, my matrix, my subsequent analysis of it or anything, I'd love to hear from you through email or in the comments.)

Collective Venture Philanthropy for the Small-Time Donor

2010-06-06T22:50:00.004-04:00

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.

End Edit

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.

Advice from People Smarter than Me

2010-05-17T16:28:00.000-04:00

Last week I posed a question in the form of a blog post: What advice, if any, can be given to those of us interested in donating to small, unproven charities without the resources to evaluate their programs? I was unable to answer my own question, so I reached out to people smarter than myself to help me find out what to do.

Looking through the responses I got, I realized I made two false assumptions that led me to pose this question in the first place: One, that small charities do not have the capacity to evaluate in any way, and two, small charities inherently need more resources than large charities.

Saundra Schimmelpfennig, over at Good Intentions Are Not Enough and Charity Rater, made the point that it would be absolutely ridiculous if a non-profit did not evaluate their programs even on a minor scale (all of the following quotes are from email exchanges):

Even lacking the money to do a large scale assessment of their [the charity's] impact, they should still be regularly assessing their work. This should include regular chances for beneficiaries/recipients to rate the assistance they receive and provide suggestions for improving their work. This could be something as simple as a questionnaire sent to the parents at the end of an after school program or feedback from group discussions.

Holden Karnofsky at GiveWell agreed that small-size does not necessarily mean charities aren't able to assess their projects. He pointed our that Village Reach is their top-rated charity but only has a budget of $1 million. He said that "[i]t's rare for any charity to have demonstrated impact, but I'm not sure size is the major factor there." So small and unproven are not synonymous. A large charity can be unproven, just as a small charity can be proven.

Schimmelpfennig also noted the importance of creating a needs assessment before expanding or creating programs to ensure there is no unnecessary duplication of work. This seems essential to any organization regardless of size and should be able to be done relatively low cost. The resulting assessment could serve as some proof that the organization's work is needed.

Karnofsky also called out my assumption that a donation matters more at a small charity. Some small charities are over funded, while some larger, established charities could use more funding for program expansion. He also made the distinction between a donation mattering more "to an organization" versus "to the people you're ultimately trying to help." Stop TB, another one of their top-rated charities, is a large organization, but he said your donation will go a long way in helping the communities the organization serves. This distinction isn't something I had thought of before. I think looking at how far a donation will go in a community is a better starting point rather than how far it will go in supporting an organization. (Although don't get sucked into being concerned about an organization's overhead.)

So, after analyzing these two assumptions, I realized that criteria for evaluating small non-profits is the same as for any non-profit: Look for efficiency, transparency and effectiveness. Organizations like GiveWell, GuideStar or Charity Navigator are great places to start evaluating, but they don't cover everything. To evaluate on your own, use things like the Charity Rater (which I erroneously stated was only for aid organizations in the previous post; it has now been updated and is applicable to all non-profits) or New Philanthropy Capital's "How I'd Analyse a Charity in Two Hours" (pointed out to me by Sean at Tactical Philanthropy). Also GiveWell's Giving 101 is a great guide.

Commentor Mark and Karnofsky at GiveWell both brought up the idea of venture capital and the different stages of growth for non-profits, which I will attempt to tackle in another post.

Which one of these things is not like the other?

2010-05-10T14:49:00.005-04:00

It's time to play a fun new game! It's called "Guess which one of these passages opened up a recent New York Times article on the AIDS epidemic in Africa?"

Is it #1?:

On the grounds of Uganda's biggest AIDS clinic, Moses Nsubuga, a D.J. known as Supercharger, rehearsed his troupe, the Stigmaless Band, composed entirely of teenagers on AIDS drugs.

One of their songs is “America, Thank You So Much.”

Karen Morgan, an American who runs a laboratory at this clinic, said: “Just today, a patient came up to me in the parking lot and said, ‘Thank you, American.’ I said, ‘For what?’ He said ‘For my medicine. You care if I live or die.’"

This once strong support from the American government and international organizations for AIDS initiatives has been waning in recent years. Beleaguered by the high cost of treating and combating the epidemic, donors have started to focus on child killers like stillbirth, pneumonia, diarrhea, malaria, measles and tetanus. Cures for those diseases--which kill significantly more people than the AIDS epidemic--are more cost effective, ranging from $1 to $10.

Or is it #2?:

On the grounds of Uganda’s biggest AIDS clinic, Dinavance Kamukama sits under a tree and weeps.

Her disease is probably quite advanced: her kidneys are failing and she is so weak she can barely walk. Leaving her young daughter with family, she rode a bus four hours to the hospital where her cousin Allen Bamurekye, born infected, both works and gets the drugs that keep her alive.

But there are no drugs for Ms. Kamukama. As is happening in other clinics in Kampala, all new patients go on a waiting list. A slot opens when a patient dies.

“So many people are being supported by America,” Ms. Kamukama, 28, says mournfully. “Can they not help me as well?”

The answer increasingly is no. Uganda is the first and most obvious example of how the war on global AIDS is falling apart.

If you guessed #2, you're right! Unfortunately.

The first one, written by myself, uses information and phrases, almost verbatim, taken from the article. (Excluding my shameless editorial cut-away phrase "which kill significantly more people than the AIDS epidemic," which is true.) The second, actual opening, follows the guidelines of "How to Write About Poor People" and "How to Write About Africa" as if they weren't a joke. The juxtaposition of these two alternate articles show how the media portray the continent as dark and troubled, while ignoring or burying any positive aspects of a story.

Now, I'm not trying to say that the AIDS crisis is anything but, or that problems aren't getting worse (and I certainly wouldn't want people to think that I support a Bush foreign-policy initiative). I just mostly feel bad for the Ugandan woman, Dinavance Kamukama, who was caught on probably the worst day of her life and exploited to draw readers into a story, only to have her identity dropped a few lines later and her image transformed into a representation of all African women through phrases like "pregnant women and young mothers like Ms. Kamukama" or "[f]amily members like Ms. Kamukama."

The outlook of the AIDS epidemic is surely bleak, but there is no reason to make the picture any worse. Both of these passages deliver the same information--funding is shifting--but the first goes against stereotypes while the second reinforces them. Readers might want the latter, but I'm hoping we'll put up enough of a fight that that kind of language will go the way of Joseph Conrad.

Small and Effective

2010-05-06T15:57:00.001-04:00

Over this past year working for a small non-profit, I've been thinking about how someone could reasonably make a social investment in a small organization without much capacity to prove its impact, or without a established history to show the changes its made in a community. It's easy to make a donation to one of these smaller organizations, but harder to see how your donation (and by extension, the organization) is making a difference.

To do this, one needs data. Most small organizations do not have the resources to evaluate, making it difficult to know if you will ever see any returns on your social investment. GiveWell lays out some pretty good criteria that need to be met before a donor should donate to a small, unproven non-profit (abbreviated here):

The donor has significant experience with, and/or knowledge regarding, the nonprofit’s client base and the area within which it’s working...
The donor has reviewed whatever information is available about past similar projects and about the assumptions underlying this project. If similar, past projects have failed, the donor has a clear sense of why they failed and what about the current project may overcome those obstacles.
The donor has a good deal of confidence in the people running the nonprofit, either because s/he know them personally or because s/he has an excellent sense for their previous work and past accomplishments...
The donor feels that the organization is doing whatever it reasonably can to measure its own impact over time. The donor is confident that– within a reasonable time frame – if the project succeeds, it will be able to prove its success; if it fails, it will see this and it will fold. Until impact is demonstrated, there is no need for the kind of scale that comes with taking many donations from casual donors... [Emphasis in the original]

As you can see from the last sentence, this is not advice for the casual donor. Following these steps is a lot of work for someone who only wants to give a small donation. For the microphilanthropist social investors, it might make more sense to donate to a larger charity with proven impact, rather than risk wasting our money on a small non-profit with nice stories but not a lot of data to back up the smiling faces on its website.

However, there are many non-profits who have made it out of the initial stages of growth, but haven't made it to the level where rigorous impact evaluation is possible. These organizations have been around for a while, have somewhat sustainable funding sources, but are constantly looking for new funding to ease the financial tension that comes with being a small non-profit. For these organizations, small contributions can go a lot further than at larger organizations which aren't as strapped for cash. It is also these small organizations that do not have the resources to prove their impact as well as the larger ones, or decide not to spend time on rigorous evaluation because it will disrupt the flow of services. Unfortunately, because of this, small organizations can usually only offer potential donors nice stories and smiling faces.

So, I don't really know how to offer advice to those who want to invest in a small organization while also ensuring whatever organization chosen will have a real impact on the population it serves. One way goes off of GiveWell's point #3: Actually knowing the individuals who work there and having an extensive knowledge of how the organization works. Another piece of advice I can think of is to use Charity Rater, which guides you through the evaluation process for a non-profit you choose. Besides those, as much as I hate to admit it, all I can come up with is to find one you have a good feeling about and support capacity building efforts to help it prove its impacts.

Each of these options has drawbacks--most casual donors are not intimately involved in a non-profit, Charity Rater is set up to evaluate aid organizations and (most significantly) a small donation can't go far when it comes to supporting evaluation techniques. But I'm hesitant to admit defeat and say that these are the only options out there for those of us interested in choosing a small, effective organization, but without a lot of time or money to put into our investments. There has got to be more guidance out there, I just can't think of them.

Thoughts?

Thanks to Mark for passing along this post idea.

The Armchair Microfinancist Moves Home

2010-04-29T14:37:00.002-04:00

A few weeks ago, the New York Times brought some disturbing news into the homes of armchair microfinancists across the country. Then, the Washington Post delivered another shock to the traditional microfinance narrative: Microfinance was coming to the United States.

Well, actually, the article reported on Grameen America expanding into the nation's capital on top of its operations in New York and Omaha. Also, Kiva started loaning to US entrepreneurs a few years ago and other person-to-person loaning sites have US options. One focuses exclusively on people form the US. And if you've read Muhammad Yunus' autobiography, Banker to the Poor, he talks about his partnership with Bill and Hillary Clinton back when Bill was governor of Arkansas.

So, this news isn't that shocking. Microfinance has been in the US for a long time. But even though microfinance has been proven to work domestically, there might still be some lingering questions for the armchair microfinancist.

Besides the person-to-person connection, microfinance is appealing because it doesn't take a lot of resources on the donor side: Big change can be made from small amounts of money. This might not be the case back home, as $25 cannot go nearly as far in DC as it can in San Ramon, Nicaragua. You typically see about a $200-$800 figure for most loans on Kiva (with some exceptions, to be sure), but the US loans are significantly more, some reaching $10,000. And when comparing purchasing power parities for countries, it's clear that money in the developing world goes a lot further. On top of this, the poverty in the US is not as extreme as those living on less than $2 a day in the developing world.

But chucking out domestic microfinance opportunities based on this reasoning alone ignores the fundamental purpose of microfinance: Giving credit (or savings) to people who don't have access to it. In a country like the US with a bank every few blocks or so, it may seem like there's a plethora of financial options, but people here are still left out of the domestic financial market.

While working with a microfinance institution in Iowa, I was shocked to learn the poverty levels in my immediate surrounding community. Poweshiek County, where the organization is based, has about a ten percent poverty rate and the state of Iowa overall has about a 11 percent poverty rate. Looking deeper into these numbers, myself and others from the MFI talked with community leaders and learned that people in the county suffered from loan sharking and pay day loans, sometimes paying exorbitant interest rates because they didn't have good enough credit to take out a traditional loan. Others were forced to rent their household appliances like a dishwasher or a dryer at high interest rates because they didn't have the money to buy it and couldn't find someone to make a small loan to help them with the purchase.

At the time, the MFI was focused only on making loans abroad and when this local issue was brought up to the membership, there was some hesitancy at first to expand domestically. Many people cited the issues I outlined above, among others, as a reason to stay focused internationally. (I also hesitated to fully commit to a domestic program for the same reasons.) But then when we were approached formally by several community organizations encouraging us to create a domestic loaning program, we decided to do it. We've already made our first few loans to local community members and the project has been met with great enthusiasm.

These issues of poverty are not limited to rural Iowa. In researching for this post, I learned that the US as a whole has a poverty rate of around 13 percent. I found this shocking. About one in ten Americans lives below the poverty line and many more hover around it. This is the reason that Yunus expanded operations into the US so early on and why other organizations like Accion have domestic programs as well. A focus on global poverty is a good strategy for all the armchair microfinancists out there, but I hope they won't forget the domestic poor in their decisions. The US is not excluded from that globe in "global poverty," after all.

Profit From the Poor

2010-04-20T20:40:00.003-04:00

No longer, it seems, is microfinance the go-to feel-good story for the news cycle. The New York Times, which first brought microfinance into the homes of millions Americans, has now torn it a new one.

The article, released last week, exposes the extremely high interest rates of some microfinance institutions. There have been a few deliberations over what this means (and even how accurate the end conclusion is), but the responses to this article, I think, miss the main question it brings up for the average armchair microfiancist: Is it ok to make money off the poor?

Before I get into that question, I will first tell a story. It takes place at a new student activities fair, where I was promoting a campus microfinance group. We had run out of candy, so no one was stopping by our table. I started calling out "Want to give loans to poor people?" to the passers-by, which didn't help the cause much. One bright young mind did wander over and I started to explain to him how microfinance worked. He put down a brochure he'd picked up and said: "I don't want to be a part of this, because I don't think we should put poor people into debt."

I thanked him for his time and moved on to the next potential customer.

While this incident may better highlight activism's general distrust of business and finance, it also raises the question begged by the Times article damning the high interests rates of microfinance institutions: Is it ethical to make profit off of poor people? And if so, how much?

My friend at the activities fair may think any amount of profit is too much, but I think most, when pressed, would disagree. In the case of microfinance, loans with interest may be more effective then no-strings-attached grants.

But there is a line. No one (I hope) wants to extort the poor. He Who Can Do No Harm, Muhammad Yunus, founder of the Grameen Bank, said in the Times article that any MFI charging a interest rate that's more that 10-15% above the cost of raising the loan is too much. Seems fair.

But when analyzed, as Give Well did, this guideline becomes arbitrary. They say that no interest rate is too high, given that the reasoning behind the rates are transparent. Assuming all information is accessible, then loanees should have no problem making the best decision on where to get their money.

Selling necessary goods and services to the poor can only increase their quality of life. If you look at poverty as a deprivation of services or products (for more on this read Development as Freedom), there really should be no limit on how much can be offered to the poor, and therefore, how much profit one can gain from the poor. If the prices aren't affordable (such as in the case of loan sharks), another MFI can just come in and undercut the price, stealing away their customer base and helping out those people who were paying too much. Ah, the beauty of capitalism.

I think my friend at the activities fair still wouldn't buy this (or any) defense of capitalism, but for you, the armchair micofinancist, do not despair over your money-making endeavors. No consumer market should be exempt from profit. And it might even inspire you to get out of your chair and into the field to grab some of that money for your own profit-making, life-saving idea.

If you are interested in going a bit further beyond finance and applying the idea of making profit off the poor to products, I would suggest reading Fortune at the Bottom of the Pyramid, which is essentially several case studies of companies that have successfully developed and sold products to the global poor that help improve their lives. (Edit: Whose author, I just learned, recently passed away.) One book I haven't read, but will when the DC Public Library gets its act together, is Africa Rising: How 900 million African consumers offer more than you think. Also, the Acumen Fund blog always has some feel-good stories on this topic.

Satire Roundup Part 2

2010-04-09T11:41:00.001-04:00

Or: D.O.S. (Death of Satire)

Edit: Whoops! I forgot this hilarious video. I don't know where it came from, but if anyone does, please let me know.

Since my last satire roundup, a lot as changed in the market for humorous blog pieces regarding effective philanthropy and aid. William Easterly was attacked for being too "mean spirited" with his satirical pokes at the aid industry. Easterly took the hint and toned down the snark. Because Easterly is the king of satire and I am merely a jester compiling his writings that fall to the ground, this feature may have limited content from here on out. But, fortunately for myself, some satire has gotten through recently and I thought I'd share it with all of you. Please note that I am not trying to encourage personal attacks or hurt feelings; merely humor.

Aid Watch's April Fools joke, "Aid agencies announce they will be accountable to independent evaluators; This blog to permanently close"
One commentor's response to my stab at satire, titled "Big Corporation Does Less than it Could to Save the World." I think mine was better.
A whole blog devoted to international aid industry satire, which chronicles the misadventures of one organization, Hand Relief International.
Funny, and unfortunately true: A time line of celebrity relief to Africa.*
This list made me think of "How to Write about Africa" and "How to Write about Poor People," (continued here), two pieces so classic I forgot to post them in the last roundup.

Needless to say, these were all given to me by Aid Watch. Again, Easterly is king and I but a jester.

*On a side note, this list pokes fun at one Kim Kardashian (I didn't know who that was either) for visiting a diamond mine in Botswana and stating: "I used to assume after watching the movie Blood Diamonds
that diamonds were not acceptable to buy from Africa. However, it is the complete opposite!"

While it is misguided of Ms. Kardashian to assume one diamond mine in Africa is as good as all the others, it is equally naive for Mother Jones, the compiler of the list, to imply that one diamond mine in Africa is as bad as all the others. I visited the same diamond mine as Ms. Kardashian and it was nothing like the stereotyped African diamond mine. Diamonds have done a lot to contribute to Botswana's "African Miracle" and people should not be discouraged from purchasing its diamonds. I only hope Ms. Kardashian realizes the difference between Botswana mines and others, and limits her purchases to conflict-free Botswana diamonds.

Kids and Their Science

2010-04-05T13:54:00.000-04:00

I may be preempting the Acumen Fund here, but I wanted to pass along this very cool invention from a team of homeschooled kids from New Jersey. They've invented a treadmill-like sorghum and millet thresher for the world's poorest.

Typically, it would take a person (usually a woman) 3-4 hours to thresh the family's daily sorghum or millet consumption. This extended labor can actually cost the food preparer more calories than she gains from consuming the food. The machine reduces the amount of time spent on threshing to about an hour, saving expended energy.

The kids say this machine can be made for around $100 USD, all from materials that can be found locally. Obviously, $100 USD is a lot for most of the people who will benefit from this, but the team of kids are looking for investors to bring the machine to production. If you have a pile of money around, or know someone who does, let them know.

Thanks to Tom for passing this along to me.

Donors Aren't the Only Ones Online

2010-03-30T16:26:00.000-04:00

If you visit any social service non-profit's website looking to donate or volunteer or just learn more, you'll be happy to find a well placed donation link, ways to get more involved and content on the success of its numerous programs. But if you go looking for information on how to enroll in those programs or benefit from those donations, you might be out of luck.

For most small- to medium-sized social service non-profits, websites are a way to recruit donors and volunteers, not clients. Many organizations have a bare-bones site to give people an idea of what they do and (of course) how to donate. Most charity evaluators (Charity Rater, GiveWell, Charity Navigator) rely on an organization's website to learn about a non-profit and then use this information to make recommendations to donors. In turn, non-profits have developed their sites as vehicles to draw in money. But as internet use grows, clients themselves are now going to the sites looking for information about programs and services.

When I started my job at a community health center a few months ago, my first task was to completely overhaul its site. Almost none of the programmatic information was up-to-date and the site was explicitly maintained to engage donors and volunteers. I updated content, shifted things around and designed pages exclusively for patients. It's not perfect, but at least someone thought through the process with our patients in mind.

Similarly, one of my friends at a legal assistance non-profit recently sent out a frustrated email to a listserv decrying local social service organizations for not having updated contact information and hours, making it very difficult for her to refer any of her clients to other organizations. The lack of information makes it seem like clients are expected to have someone help them navigate the system, instead of just having the information up front, which she said creates a "paternalistic" vibe.

Each non-profit has many constituents to serve--clients, donors, volunteers, other organizations. A website is the public face of an organization and its important to cater to all constituents with it. If you are in control of a social-service website, or are involved with a social service organization, make recommendations to revamp the site with clients in mind. Making necessary changes to can be as easy has having the organization's contact information and hours of operation on the main page. The site of the organization where I work has a resources page "For Patients," "For Donors," and "For Volunteers." Including these changes will not only benefit clients, but also can help other organizations seeking to learn from or partner with your non-profit.

It's Not About You

2010-03-24T16:16:00.003-04:00

Recently, I was reading a new study on "Virtual Volunteering" (which I mistakenly thought was about volunteer opportunities in Second Life) for Haitian relief efforts. This passage jumped out at me:

"For our purposes, virtual volunteering is understood by the volunteer herself or himself as helpful to those most directly affected by the events surrounding a crisis or those in need of volunteer assistance. Some observers may not agree that a specific form of volunteerism is useful or efficacious. For example, a volunteer who prays two hours a day for the safety of Haitians rendered homeless by earthquake damage believes she is helping, even though many third-party observers might doubt the utility of her actions." [Emphasis mine]

Say what?

The study was released in conjunction with the College of Charleston and Hope +, a social networking site where "[y]ou can use your social network to volunteer with your friends, support organizations and projects around the world, or start your own." The most important part of Hope +, they say, is you:

"HOPE+ is all about giving YOU and millions of others like YOU a way to change the world...We want to know what inspires YOU. Ultimately, we want to use HOPE+ to help turn your hopes and dreams into real change on the ground."

Needless to say, this language makes me very, very uncomfortable. The emphasis in this is on the giver, the volunteer, the donor, not the recipient. For the Hope + virtual volunteer (which is actually someone who volunteers remotely, not a digital avatar) it doesn't matter what he or she is doing, even if it is praying, as long as the volunteer feels like he or she is making a difference.

Social networking sites like Hope + help connect individuals to create change. At their best, these sites can leverage action and donations for good causes, like Kiva does for microfinance institutions across the world. At their worst, the sites can shift accountability from the people needing help to the people doing the helping. If you visit the "Virtual Volunteer" section at Can-Do, one of Hope +'s partners, you will find a message board at the bottom of the page full of people asking how to get down to Haiti to help. Anyone who does even a little bit of research on Haitian relief will know that this is not a good idea. These types of forums build on the assumption that donors and volunteers know best and let people think of their own projects, instead of asking what is best for the recipients.

Besides encouraging little to no critical thought about donations, mobilizing social networking (or text donations) to fundraise or leverage free labor can also create too much of a focus on engaging the donor or volunteer rather than serving the organization's constituents. Dan Morrison, CEO of Citizen Effect, wrote a guest piece for Social Citizens defending "slacktivism"--the idea that we can make a difference by not doing a whole lot, like texting for Haitian relief. He says that instead of mobilizing a slacktivist to do more, we should be finding easier ways for him or her to give.

While I agree that social media/networking is a good tool to use to get people more involved more easily--whether that be through microdonations or virtual volunteering--it's also important to remember what Uncle Ben told Peter Parker: "With great power comes great responsibility." Texting donations or pointing people towards easily-done volunteer opportunities is great, as long as those donations go to good organizations and those volunteer opportunities actually benefit the people that need help. The focus should not be on how to get more out of people, but how to put untapped resources to better use. Organizations like Hope + and Citizen Effect put too much emphasis on the giver and not enough on the receiver.

So when volunteering or giving, remember: It's not about you. If you want something more ego-centric, try blogging.

Thanks to Adam for sending me the slacktivism article.

Congratulations to....You!

2010-03-18T14:31:00.000-04:00

Over the last two weeks, the almighty William Easterly and the omnipresent Laura Freschi released Aid Watch's Best and Worst in Aid winners (kind of like the Oscars, but much more entertaining.) The Worst in Aid prize went to the US's 3D approach to foreign aid: Defense, Diplomacy and Development, which Freschi and Easterly say distort aid priorities. But the winner of the Grand Prize in the Best in Aid went to....

The Smart Giving movement!

Besides combining two of my three interests* and setting me up with some nice blog content, this announcement underscores the real importance of a push for accountability and efficiency in the non-profit sector. For casual social investors, it might seem a little redundant or annoying at times to keep hearing, "Think about your donations, push for transparency, don't accept a non-profit's promotional materials as truth," especially if you are donating $25 here and $50 there. But this "award" shows how those small and sometimes-annoying questions can make a large impact.

When it comes to international relief efforts, there is nothing more important than efficiency and effectiveness. Disasters like the Haitian earthquake show what's really at stake when we give indiscriminately, rather than think about our investments. Instead of contributing to boatloads of unnecessary shoes clogging up ports, we can focus on cash donations going to on-the-ground organizations, which can be the difference between good development and good intentions. Applying this line of thinking to all of foreign aid, like Easterly and Freschi did with their award, aid workers can create systems of accountability to truly benefit the global poor.

And its people like you that help solidify this distinction, not only for non-profit organizations, but for aid officials, government organizations and all helping professionals. So congratulations! Thank yourself for being a part of something growing and powerful. The actions to take may be complicated or small, but the more we push, the more people will start paying attention.

*Smart giving and international development. The third is stand-up comedy. Profs. Easterly and Freschi, please work on combining all three.

Microphilanthropy as Financial Planning

2010-03-15T18:43:00.001-04:00

I attended YNPN's discussion last Friday given by Rebecca Schreiber of Solid Ground Financial Planning, titled "Micro-philanthropy: Making a Big Impact with Small Contributions." I showed up expecting to hear several iterations of "Never doubt that a small group of thoughtful, committed citizens can change the world," but instead I heard something much more selfish.

Schreiber centered most of her talk on how charitable giving, particularly small, recurring amounts, can actually help balance your budget. She did touch on how easy it is to be a part of that small group of committed citizens in the digital age, as well as a brief overview of giving advice, but what interested me the most was her discussion of how charitable giving can help you prioritize your purchases and get your financials in order.

"Anything that makes us stop and think 'Is this really what I want to spend my money on?' is a good thing," said Schreiber. Taking a step back to think about where we want to donate is an important part of smart giving/social investing, but that framework for decision-making can also apply to more typical, everyday transactions.

Schreiber said that the feeling we get from making a donation should be the same feeling we get from every purchase or financial transaction. We should feel confident about every purchase just as we feel confident that the donation we make is going to the right cause. This discernment will help to make less sporadic purchases and keep an eye on budgeting.

Taking an intentional step to give and give regularily may also help some of us (younger) people budget for the first time. To prioritize smart giving is to prioritize smart budgeting, as we need to be aware of our financials to be able to give back. We also need to know how much we have to know how much we can afford to give, and Schreiber answers the difficult question of how much to give by suggesting "No more than you save." (Of course, this then asks the question, How much to save?) She underlined the importance of smart giving, both in recipient and quantity, to ensure "your ability to give in the future."

Overall, I thought the presentation, while not exactly what I expected, helped me see charitable giving in a new way. I know it's unreasonable to think I can feel as good about every purchase I make as I do with my social investments (and it might not even be good to feel good about them), but it is interesting to think about how the tangible benefits of giving go not only to the recipient, but also to the donor.

The full version of the presentation is here, posted with permission.

Big Corporation Does Less Than It Should To Save World

2010-03-11T12:12:00.001-05:00

So a few weeks ago, I wrote this post poking fun at Product RED and the consumers that purchase those products. (Full disclosure: I own a RED t-shirt from the GAP. I enjoy wearing it. Gasp!) This post was picked up by the almighty William Easterly and re-posted on his site.

The comments that resulted are a very engaging and thoughtful discussion of the benefits and drawbacks of the RED brand and embedded philanthropy in general. It even prompted a response post on New Millennial, which is a good summary of the merits of RED.

In the comments, there was a lot of speculation about what I was getting at in the post, and honestly, I was just trying to be funny. (Not incidentally, Professor Easterly has taken a lot of heat recently for his focus on satire. I am truly sorry I contributed to that.) One commenter took it upon himself to fight fire with fire with his own response satire, titled "Big Corporation Does Less Than It Probably Could to Save the World."

Most of the defenses of embedded philanthropy and Product RED--besides the awareness-raising aspect of it, which I think is valid--are centered around this point: "It's not a lot, but hey, at least it's something." Besides being funny, I think attacking this claim was what I wanted to accomplish with my satire. That line of thinking, when applied to both consumers and organizations, breeds complacency in the current situation and mediocrity in our actions.

The New Millennial post linked above states that the point of Product RED is not to increase consumption, but to alter consumer behavior. Whether or not this is true is up for debate, but even if that were the case, altering consumer behavior should never be the stopping point of any social-change campaign. I have no inherent problem with RED products (see note about shirt above) or the non-profit it works with, but I think the fact that the arguments for embedded philanthropy are "Hey, it's something," shows how detrimental this option is to the consumer.

We always need to push ourselves, whether that be in our giving or in the work that we do. We must never accept a small purchase as "our part" to create change. Even it is something, it is not enough. And it most certainly doesn't preclude you from doing more.

Microphilanthropy Discussion

2010-03-08T20:31:00.001-05:00

If you are in the DC area and don't mind taking a long lunch this Friday, check out this event: "Microphilanthropy for the Young Professional." (I don't think they'll turn you away if you aren't young. And that's a pretty relative term, isn't it?)

From the site:

No one understands the importance of philanthropy better than nonprofit employees, but many young professionals feel as though they are not able to donate enough money to truly make a difference for organizations that are important to them. Certified Financial Planner Rebecca Schreiber joins YNPNdc and Capital Area Asset Builders returns for the final session in our wildly popular Financial Management Series. This time, she focuses on "microphilanthropy" and ways that you can make a difference with just $25 per month.

It'll be this Friday, March 12th from 12-1 at Capital Area Asset Builders, 1801 K St, NW, Suite M100. It should be a good discussion for those of us without a lot of money to give, but who are still interested in making a difference through social investments.

I can run and not help Haiti for free

2010-03-01T21:48:00.001-05:00

If you live in the DC area and enjoy running, clean water access and Haiti relief efforts, you are going to love April 18th. Live Earth is sponsoring a global run for water, when people around the world will run the distance the average child or woman walks for clean water each day (6k). To make the event all the more enticing, Corrigan Sports Enterprises, Live Earth's local partner for the DC run, has offered to donate five gallons of clean water to Haitian relief efforts for every DC-area participant that signs up .

I was all on board up until that last part. I don't have to argue here that in-kind donations for disaster relief are ineffective. (Because that's done here, here, here and most succinctly, here. Email me for more if you'd like.) However, bottled water can be a necessary thing for disaster relief, depending on the situation, so I wanted to learn more. I emailed a representative at Corrigan Sports to see how exactly they planned to ship five gallons of water per DC runner to Haiti, and how they planned on distributing it once it got there.

The representative didn't know. He said the donations would be made to Live Earth's non-profit partner for the event, the Global Water Challenge, earmarked for the purchase of water. From there, the Global Water Challenge would go through one of its Haiti relief partners to get the water out to the people who need it.

There are a few things wrong with this plan of action, in my mind. Assuming Corrigan Sports does want their money to go to purchasing bottled water and nothing else, it will be difficult (or impossible) to track it, since there are so many intermediaries to go through. (GWC's website actually says to donate to one of their partners directly to help with Haitian relief, not to GWC itself.) Second, the Global Water Challenge partners are not organizations with long-standing development efforts in Haiti, which is essential to effective disaster relief. Third, and most fundamentally, Corrigan Sports is not basing its earmarked donation on any expressed need. It seems like they want the donations to go to water efforts because it fits nicely into the Live Earth event (which is not linked, except in DC, with Haitian relief at all.)

I expressed these thoughts to Corrigan Sports, saying I was concerned that their money might be wasted. I suggested a general donation to an organization with a history in Haiti that has committed to development in the long term, like Partners in Health, might be better. The representative said that the charity partner for the event was Global Water Challenge and they were not concerned with a misuse of funds.

Obviously, my prodding alone isn't enough to change the minds of the people at Corrigan Sports. But I thought I'd ask the readers of this blog to express their views to them. If you live in the DC area, email Corrigan Sports and tell them you won't run in the event unless they change their donation to unrestricted funding for an organization with a commitment to long-term work in Haiti. (Even if you don't live in DC, email them anyways and tell them how you feel.) This will be a significant donation by Corrigan Sports that could be put to better use elsewhere.

It's hard for me to suggest this call to action because I want people to participate in the run. I think it will be informative and inspiring, with opportunities for further action. But, ultimately, I think it's more important to better serve those who need our help rather than feel good about participating in a global event. And plus, I can save that forty dollars, run beside the race and make a donation on my own to Partners in Health.

So please, email Corrigan Sports and tell them why they need to think more about where their money is going.

Area Man's Starbucks Purchase Finally Ends African AIDS Epidemic

2010-02-26T11:52:00.000-05:00

After deciding to add a bag of (Starbucks) RED brand coffee on top of his vente mocha latte order, area man Bill West completed the final piece of the puzzle to end the AIDS epidemic in Africa, which claimed the lives of over 1.4 million people in 2008 alone.

The mood was subdued at the local Starbucks where the historic purchase was made, as many did not realize the gravity of West's last-minute decision to purchase the $11.95 bag of coffee. But as the news spread around the world, communities erupted in celebration.

"This is a great day for humanity," said Michel Kazatchkine, Executive Director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, where Starbucks made the $1 donation--taken from West's purchase--needed to rid the continent of the disease that had crippled it for decades. "All of our work, all of our time, all of our hopes are now validated by this one last push to end AIDS in Africa."

Health workers from Cairo to Cape Town were finally able to rest after years of working against an overwhelming stream of growing infection rates. People in even the most remote villages of the African Savannah joined together in the mass celebration that pulsed with joy and spread around the world.

"It's over! It's over!" cried one formerly-affected African as she danced with her friends and family in Ghanzi, a remote village in Botswana, a country which once had the highest rates of the disease before its eradication. "We are free!"

Most people received news of the disease's defeat but glossed over how the victory was won. Bono, humanitarian activist and U2 front-man, reached out to the broader global community to recognize the efforts of the people that made it possible.

"It is important to remember what went into this momentous occasion," said the rock star, one of the founders of the Product RED brand. "The Product RED line successfully mobilized Western consumers to go out and buy things they either already had or only moderately desired under the guise of social responsibility. With out these compassionate consumers, or the compassionate Starbucks marketing directors who decided to give up razor-thin amounts of their profit margin to the Global Fund in exchange for the Product Red partnership, this debilitating disease would still be destroying Africa."

RED, in partnership with the Global Fund and the One Campaign, created an website where individuals could go to thank West for his purchase. In a matter of hours, over 10 million had visited the site.

West was tracked down by reporters minutes after the purchase, halfway through his latte. He remained calm and humble when he learned the service he had done for the world.

"I was just doing my part," West said.

Satire Roundup

2010-02-23T13:27:00.000-05:00

There are only two things I like more than comedy. It's hard to be funny and even harder to be funny about something as nuanced and complicated as philanthropy and social change, so I thought I'd feature those items that make you laugh (and make you think!) here, in my own digest of sorts. It will be periodic (or maybe never again, depending on the feasibility of this feature) and will stretch out of the blogosphere and into my other comedic interests, which are mostly SNL, the Onion and the Daily Show. I hope you enjoy.

The Onion on the inherent value of money. This article is a perfect example of how a good bit of satire can reveal more on a topic then any serious attempts. I especially like the end.
The Daily Show on Global Darkening.
The Daily Show on Hawaiian health care. (This doesn't really relate to philanthropy and only kind of relates to social change, but it's hilarious. Starts at minute three.)
William Easterly on suing NGOs for royalties. Who says economists can't be funny?
New Beat on using stakeholders to kill vampires. (A re-post from Easterly's blog Aid Watch.)

This list has inspired my to do my own philanthropic satire. Look for that soon.

Capitalism Cop-out?

2010-02-19T11:30:00.000-05:00

I've never met a Tea-Partier, but if I did, I think I'd ask his or her opinion on philanthropy. Decidedly anti-socialist, I know the Tea-Party has a strong stance against government spreading the wealth around. But I wonder how they feel about capitalism doing the same thing.

Capitalism's venue of wealth-spreading is a result of its beneficiaries sharing their wealth with the less fortunate (or depending on how conservative you are, the less able) through their philanthropic donations. I imagine the Tea Party people wouldn't have a problem with this form of wealth-spreading, as it's nicely explained through market forces. Because they don't take issue with philanthropy, it makes me think I should. (As much as I hate the culture wars, they are pretty crazy.)

Philanthropy, after-all, may just be a convenient way to justify (or at least, minimize) the excess and greed of our society. Micheal Edwards, a guest blogger at Philanthropy Central, calls philanthropy the "path of least resistance" for our consumer society. Georgia Levenson Keohane, writing at the Center for Effective Philanthropy on the banking industry, says that "charitable giving is no substitute for sector reform."

So what am I doing here, discussing the intricacies of philanthropy, when charitable donations only justify the corporate greed at the heart of the American society? My employer, a community-health center, occasionally receives in-kind donations from a local Wal-Mart. Essentially, these "gifts" are the rejected, returned, or damaged goods the store can no longer sell. Instead of tossing them into the trash, Wal-Mart donates them and lets us deal with it. Are charitable donations just the equivalent: Spill-over from the capitalist machine, given away to the losers of the economic game as an after-thought?

Well, it might have been at one point, but now, I'm not so sure. There are still organizations and individuals who operate under that paradigm (see my Wal-Mart example above), but those are becoming the minority. I see philanthropy (or more broadly, civil society) not as a by-product of capitalism, or in conflict with it, but as an integrated part of the economic sphere. As charitable donations come more and more from individuals in small increments, and those individuals start to see what those donations really are (social investments), it will be clear that social change is the foundation of any economic system. Corporations can even benefit from it.

Of course, I could be wrong. Then let's hope President Obama actually is a socialist, otherwise nothing will ever get done.

New Charity Rater!

2010-02-15T20:36:00.004-05:00

A new charity rater site was unveiled today! It's called, well, The Charity Rater.

This release from Saundra Schimmelpfennig, the long-and-confusing-last-name blogger at Good Intentions are Not Enough, might not have an innovative title, but it does offer an innovative and, I think, necessary approach to charity evaluation.

The site is essentially a step-by-step guide (a "toolkit," as Schimmelpfennig calls it) to evaluation for individuals interested in donating to a specific charity. It offers a survey with questions that vary based on the type of organization, but include basic questions about financials, accountability, advertising, organizational structure and mission (the last of which I was very glad to see included.) It takes about 20-30 minutes and at the end, the survey spits out a score.

To make good social investments, people need to understand why an organization is more effective than another. Charity Rater provides an easily-understood glimpse into the complicated world of evaluation, efficiency and effectiveness. It creates more engagement and allows the lay-donor to be as critical of an organization as he or she would like. This is a necessary component of an effective evaluator, as any evaluation site that simply tells people where to donate is only slightly better than advertising directing those same donations.

I played around with it to evaluate two non-profits I've worked with to see how they'd fare. Unfortunately, I was disappointed by the results. Both got shoddy marks.

Mostly these poor scores are due to Charity Rater's limited scope--it was rushed to completion to help donors vet their Haiti relief organizations. It is currently designed only to evaluate aid organizations. Soon, it will be expanded for all charities and will more accurately be able to assess the worth of any organization.

However, the negative scores my organizations received also reflects one major problem I have with most charity evaluators: They assume an organization's lack of transparency means the organization is ineffective. Charity Rater has you use an organization's website to answer the questions in its survey and if the website doesn't have the information needed, the organization is penalized.

Charity Rater does mention this weakness and the site approaches the lack of transparency issue in a positive way: "Let the charity know what information you need and that you expect them to make this same information readily available to all donors in the future." For the organizations I rated, most of the information is available, it just isn't available on the website. The organizations didn't put them online to deceive, they just didn't think about it.

Charity Rater's survey will be a great guideline not just for donors, but also for non-profits to learn what types of information should be made accessible to donors, as well as how to approach programmatic decisions. I've asked Schimmelpfennig for a copy of the survey and I hope to use it as a tool to make the organizations I work with more transparent and accessible.

I am excited to see how Charity Rater grows and for the eventual data it releases. (Schimmelpfennig says the site will publish averaged scores of surveys from the same organization over time.) Check it out and give your feedback.

(Edit: A change to Charity Rater's database had artificially deflated scores. They are working on fixing it. I feel better about my organizations' scores, but both still need work to meet Charity Rater's transparency standards.)

Can't Buy Me Love

2010-02-11T15:43:00.000-05:00

So this is my second post discussing how much a person should give, which also, somewhat coincidentally, has a classic-rock theme. In the previous one, I discussed how any advice on how much to give will be fundamentally arbitrary. In this one, I will discuss the real question behind anyone asking how much should they give:

How much is a human life worth?

Now, bear with me. In my last post, I outlined three conditions that I think need to hold true before any system can be created to determine how much an individual should be donating:

First, that your donation (investment) will be used effectively and efficiently. Second, your donation (investment) will be used with similar amounts of effectiveness and efficiency across all causes and across all organizations. Third, you will be able to measure a return on that donation (investment) that will justify the amount of money you put in.

I write about the first condition all the time. The second two require metrics that are able to accurately measure social change and life improvement resulting from an organization's efforts. This system of social output measurement would be able to quantify the social output from an organization, and therefore, tell you your return on a social investment. While some have tried to do this, I am not sure it is obtainable, or something investors should seek out.

This isn't obtainable because, fundamentally, it requires the measurable value of a human life--whether that be at the individual, group of societal level. To know how much change your money is creating, you would need to be able to quantify that change. Change is always centered on improving individual's lives and an improvement of a life can only be measured if that life can be measured. We, as humans, do not have the tools (or probably the consciousness) to do this. Determining the value of life has been tried, but using money to value humanity isn't much different than letting monkeys figure out how many bananas their friends are worth.

Charles at Social Edge posted this discussion on "The Fetishization of Metrics," where he compares "Quants," (those who are interested in measuring impact through numbers) with "Qualits," (those who "know there's more to human life than numbers can possibly capture.") Quants want to determine outputs and see the numbers, while Qualits recognize that real change comes in unmeasurable units.

I encourage you to be a Qualit in your investments and in all things. Quants have their place--we must measure what we can to determine what is working and what is not. (The authors of a study cited in Charles' post even propose a metric to better measure the intrinsic, unmeasurable value of social change.) But when pushed too far, social change measurements will always fall apart.

I ain't no fortunate one

2010-02-06T12:06:00.001-05:00

A simple Google search on how much to invest will overload you with advice--for 401(k)s, IRAs, stocks, bonds, commodities, beanie babies, whatever. But a similar search on giving offers up meager results at best (including some links about rat poison).

There is a lot of talk about smart giving, but not a lot of advice on how much money individuals should fork over after vetting their organization. The do-gooder answer is simple: more, more, more, but that doesn't hold much weight in a country with high-unemployment, tight budgets and normal people wanting to make a difference.

For those who live a life of excess, like the demon bankers of Wall Street, the mantra of more can be a good financial guide (or shame tactic). But for those of us debating between donating $100 and $200, or even $25 or $50, it would be good to know the optimal levels of giving.

Luckily, Peter Singer, a philosopher whose most famous work is The Life You Can Save, created a giving calculator for this specific purpose. Just type in your income and boom! there's your charitable donation for the year. I entered in mine, $12,000, and it spit out $120.

Now, I like to think of my self as generous, but, based on my stipended-volunteer budget, my expected donation is 120% of my monthly personal spending, which covers everything but room and board. I looked into the rational behind these figures and found this explanation. The levels for giving Singer devised seem a little arbitrary.

And I think that's what the answer to the question "how much should I give?" will always be: arbitrary. Asking that question assumes many things: First, that your donation (investment) will be used effectively and efficiently. Second, your donation (investment) will be used with similar amounts of effectiveness and efficiency across all causes and across all organizations. Third, you will be able to measure a return on that donation (investment) that will justify the amount of money you put in.

As it stands now, only the first of those assumptions holds, and only in certain cases. Until all those assumptions are reality, any guide on how much to give won't hold a lot of weight. One day, social impact measurements may be able to make the other two assumptions true, but I doubt we will ever (or even should) posses the tools to accurately measure social change in quantifiable amounts. (More on that later, but until then, read this.)

So, my answer to the "how much?" question is a modification, but as equally a cop-out, on the do-gooder answer. You should give what you think you can. Pushing your limits is never discouraged, but ultimately, because the return on social investments is unquantifiable social change, you are the only one who can decide what you can afford.

Unless you are one of those people living a life of excess. Then, you don't really have an excuse.

What do Sudanese goats and Carolinian lunches have in common?

2010-02-01T22:08:00.001-05:00

Last month, the Lieutenant Governor of the great state of South Carolina made this argument about free and reduced school lunch programs for poor children:

"You're facilitating the problem if you give an animal or a person ample food supply. They will reproduce, especially ones that don't think too much further than that. And so what you've got to do is you've got to curtail that type of behavior. They don't know any better."

This is a misguided statement to say the least. Cutting off food to underserved children won't help anyone. But even if Lt. Governor Bauer's comments are ignorant at best and malicious and racist at worst, it does highlight the tension between helping others and letting others help themselves.

Part of social investment is finding the most efficient, easily scalable programs that can help the most people. But providing inexpensive and easily-replicated solutions always comes with a flip-side of creating a reliance on those services, never allowing the social investor's work to end.

A recent post on AidWatch from Diane and Dennis Bennett illustrates how a program that ultimately failed can decrease dependency. The Bennetts discuss their program to diminish the need for food assistance in southern Sudan. They gave three goats to different villagers, hoping to receive the offspring back as payment to reinvest in other community members. Instead, two of the villagers defaulted on the loans and gave the resulting goats to other villagers to start their own herds. The project failed financially and ended. But the villagers kept the goats and are no longer dependent on external food assistance. Thus, in the eyes of the Bennetts, it was a success.

I am not trying to compare goat loans in south Sudan to school lunches in South Carolina, but I think the juxtaposition of these two programs can teach us about the relationship between dependency and effectiveness. One, the goats in south Sudan, creates less dependency, but the other, the school lunches in South Carolina, is more effective. While the Bennets say their program was successful, other villages in south Sudan (or across Sudan, or in all of Africa, or across the world) could have benefited if the program was scalable. The South Carolina lunches provide more food for more children, but because of that, more people are reliant on the program.

One does not always have to sacrifice dependency for effectiveness, or vice versa. Free school lunches can be used as a part of programs aimed at poverty-alleviation. Agricultural microloans can be done on a broader scale. And, long-run dependency might not even be a concern for you.

Ultimately, what is most effective should be the priority. But ignoring dependency will ultimately ignore end-goals. When thinking about your investments, keep the long term in mind, even if it isn't at the front.

Changing Tide?

2010-01-28T10:20:00.000-05:00

The general consensus appears to be that the philanthropic response to the Haiti earthquake disaster shows donors no longer just want to give, but they want to give smart. Traditional media have responded to donors' desires for more information about their investments and the donors themselves have found their way to the non-traditional medium (see comments section) of blogs.

However, saying this disaster reflects a change in donors' behavior ignores the fact that disaster relief is one of the worst things to donate to. Donors gave in response to the devastation the earthquake caused, but the devastation could have be lessened by preventative investments. If donors actually thought about the full cycle of their investments, they would have supported development organizations in Haiti, ranked 157th among countries by GDP per capita, before a major disaster knocked them back even further.

Of course, that assertion above ignores the fact that a major disaster is an incredible, globally emotional time and people can't help but give. (Not to mention all the capital needed to rebuild.) I gave, my family gave, my friends gave, my co-workers gave. I hope you gave too. (Or will.) But, when giving, don't give: invest, especially if it's in response to an overwhelming emotional pull to help.

I encouraged everyone who asked my advice to give to Partners in Health. They've been in Haiti for a long time and they will continue to be there after the recovery is over and national attention as shifted. This long-term investment is what's needed for any sort of improvement. If you have given, consider staying involved in your organization regardless of how much thought you put in the decision, or at least, remain aware about the Haitian reconstruction efforts.

I'm not sure how this demand and supply for good donor information surrounding Haiti will translate into results or if it will remain when people consider their yearly donations. But I hope the tide has actually changed.

Measuring on My Mind

2010-01-26T13:05:00.003-05:00

So I've got measuring on my mind. I wrote another guest post at Philanthropy Action about how a focus on measurements of programmatic effectiveness, when pushed from the outside by donors, could actual harm non-profits' efforts. It's in response to Mario Morino's most recent column for Venture Philanthropy Partners (which is fascinating and something everyone should read.)

This post, I think, synthesizes the arguments of my last two and makes a fundamental conclusion to keep in mind when looking at an organization's effectiveness: a lack of measurement does not mean a lack of results. As a donor hoping for accountability, that's hard for me to admit, but as a person who has worked for and with non-profits, I know it's true.

Of course, that doesn't mean every non-profit is doing good. But until social outcome measurements are the universally-accepted standard (and there is money to support the process), social investors shouldn't be discouraged by a lack of data. Instead, they should encourage measurement and evaluation whenever possible.

The Search for the Holy Grail

2010-01-22T11:45:00.000-05:00

If social investors are looking for returns on their investments, they need to see some numbers. Some things, like health programs, are more easily measured than other things, like environmental advocacy, but the burden of proof is on the organization to show what they are doing makes a difference.

Unfortunately, most organizations don't have the capacity to effectively measure their outcomes. Measuring takes time and resources and there isn't one all-encompassing measurement tool to determine an organization's impact--you can't do a randomized controlled trial on increased awareness about factory farming. You can support some of the few organizations that have the capacity to prove themselves, but if you aren't interested in the work they do, I would recommend supporting "high-preforming" organizations.

"High-performance" non-profits are up-and-coming, have good management and are attempting to evaluate. They differ from "High-Impact" organizations, the type that have made a difference and can prove it to you. As Sean says at Tactical Philanthropy, funding is needed at all stages of growth. High-impact is the "holy grail" for social investors, but like the holy grail, it's something to aspire to and not something we should expect. (Others would disagree, and for good reason.)

If you find your own holy grail out there (again, I'd recommend looking at this list to start), stick with it. But if you can't find a non-profit you are completely satisfied with that can give you good measurable results, don't despair. Look for one moving in that direction and support its capacity building. With your support and encouragement, you can help it develop the practices it needs to prove to you (and other funders) that what it's doing is making a difference.

Maybe I'm Wrong

2010-01-20T11:48:00.001-05:00

I recently wrote a guest post at Philanthropy Action about how blogs like this one might not be reaching enough donors. I argue that information about the merits of accountability and efficiency might be more useful if directed towards non-profit employees. Check it out.

The takeaway for social investors from this post is not to give up on hoping for more accountability from your organization, but to encourage from the inside. Obviously, don't put your money into a failing organization, but give it time to develop the practices you want to see.

I'd love to hear any comments about it here or at Philanthropy Action.

Oskar Schindler's Path to Insanity

2010-01-15T10:36:00.002-05:00

My dad made me watch "Schindler's List" as a kid. I remember being particularly moved by the ending, where Schindler realizes that with more money, he could have saved more lives. His (or rather, Liam Neeson's) emotional reaction to this realization stuck with me.

As a Western consumer, I am inundated with this same scenario every day. Faced with daily pleas of "$10 can save a life" or "Sponsor a child for 2 cents a day," I go back and forth between ignoring them and trying to keep myself from slipping into the same insanity that Schindler must have felt when he looked at his pin and saw in it the value of a human life.

Of course, once I realized that most of these claims are blatantly false, it was much easier to ignore them. But ignoring organizations that lie about their operating expenses can't change reality. The money sitting in your bank account or the money you just spent on that I-pod can actually save (or dramatically increase for the better) another human being's life, assuming you donate to the right organization. It's enough to make you take a vow of poverty. Or loose your mind.

I've struggled to balance my desire to live the life I want with helping others as much as possible. I don't have any answer to this struggle other than to continue to work on balance. But I think it would be helpful, and maybe stave of insanity for a little while longer, to remember that our money isn't actually saving anyone's life.

Schindler was wrong. Money alone didn't keep the people on his list from the concentration camps, he did. His pin held no value beyond the labor that was put into it and what another human would give him for it. The money you give to those organizations claiming to save lives isn't saving anything by itself, it's the organization's employees that do all the work. Money (or in-kind donations or time) transfers resources to these people to help them, but money alone is worth nothing. It's people that save lives, not money.

To conclude, I am going to quote Marx (I'm a capitalist, I promise):

The distorting and confounding of all human and natural qualities, the fraternisation of impossibilities – the divine power of money – lies in [money's] character as men’s estranged, alienating and self-disposing species-nature. Money is the alienated ability of mankind.

As you look to invest, especially during these times of great need in Haiti, don't be distraught because you aren't turning over all your savings to help the under-served. Those messages of small amounts of money making a big difference are compelling, but, like Marx's critique of currency says, ultimately alienate the true power behind your investment. You are not paying someone to save a life, but investing your own resources in life-saving (or society-changing) organizations. You are not making a transfer of funds, but a transfer of ability.

Do not confuse the money in your pocket with the value of a human life. That currency is worth nothing. The only real thing of value you have is yourself and all the people around you.

Alliance for Effective Social Investing

2010-01-11T15:22:00.004-05:00

I just read this great report from the Alliance for Effective Social Investing. They discuss how to determine the level of risk associated with a social investment. They call a low-risk, guaranteed-return non-profit a "blue-chip" investment and a high-risk non-profit a "social venture" investment. These types of investments are evaluated based on three "domains": technical data use, strategic data use and program value. Each of these procedural domains includes a matrix to determine the degree of risk involved in each non-profit.

Needless to say, it's technical, but also accessible. I would strongly recommend it if you are interested in pursuing social investments. At the end of the report, they lay out a five step guide to social investment which is, needless to say, much more in-depth and detailed than my own. I'll summarize it here:

1. Select the domain(s) in which a given investment is intended to produce social value
      Also known as "choose a cause."
2. Decide whether to make a “blue chip” or “social venture” investment.
     They don't discourage either. You just need to consider how much risk you are comfortable with, the time you want to put into the process and the amount of money you have to invest. They have a rigorous 26 question survey that helps you determine what type of non-profit ("blue-chip" or "social venture") you are dealing with once you start your analysis.
3. Perform rigorous due diligence.
     This includes their survey, but also an assessment of the non-profit's financials, leadership and stakeholders.
4. Invest with high intentionality.
     If you are making a "social venture" investment, make sure you want to put in the time to be assured your donation is getting a high return. If you don't want to, it's better to go for a sure thing. (They mention that health-related organizations "lend themselves rather well to 'blue chip' investments.") Even with a "blue chip" investment, you need to keep tabs to make sure your organization is reporting results you are comfortable with.
5. Share investment performance data.
     "Social investing should not be secretive and competitive." This goes without saying.

Would you change your giving?

2010-01-06T21:46:00.062-05:00

I recently signed up for GiveWell's periodic updates (which I strongly recommend) and the initial email came along with a this survey question:

Would you consider supporting different organizations if you found options that could accomplish more good with your donation?

I read this and thought: "Of course. That's what I'm all about." But then I thought about my recent first-time decision to donate. It was to a small organization working on economic empowerment, the type of organization I've always worked with and been interested in. It was the type of organization I set out to donate to.

So, then I thought: "Would I really? Or am I just blind to all, potentially better, alternatives?"

If your favorite organization (or your favorite cause) ended up on the naughty list, would you accept it and move on, or would you defend it to the end? Maybe you'd make up an excuse, like it is working to solve broader, more difficult to measure problems or it is a small organization finding its way. Or maybe you'd say: Who's to decide what organization is better than another?

I hope that's not what I would do. What would you do?

In the business of putting yourself out of business

2010-01-04T21:14:00.003-05:00

GiveWell celebrated the New Year by bringing a constructive-criticism smack down on to Philanthropedia, another alternative charity evaluator. (Philanthropedia's eloquent and respectful response is here and here.) This behemoth of a post was preceded by their year-end wrap up, where they reiterated their guiding principle that by donating to their top-recommended charities, individual donors can actually save another human being's life.

While their year-in-review may seem less controversial than an expansive critique of a partnering organization, I am going to set myself up for my own smack down (assuming they even read this blog) and say that focusing on how to save the most lives is a misguided view of charity. Instead of trying to save lives, charities should tackle and confront the major underlying cause of the world's problems: Injustice.

I am not an expert on the philosophy of injustice, so I will let Dr. David Hilfiker make my argument for me in his essay "Justice and the Limits of Charity." In summary:

[T]he fundamental problem for the poor in our country is not homelessness or AIDS or hunger or the like—or even any combination of these. They are just symptoms; the problem is injustice. In promoting our institutions, it is natural to emphasize the importance of our own project. But this can lead to subtle impressions that if we just distribute enough food, or create enough bed space, or find enough homes—that is, if we just treat the symptoms—we will have solved “the problem.”

The essay is a little outdated and focused on the importance of advocacy, but the takeaway is powerful: Donating to charities based on their capacity to save lives uses a fundamental approach of treating the symptoms of problems and not the problem of injustice itself. This approach is ultimately unsustainable and therefore detrimental in the long run. The plight of the African slum dweller, or the Southeast Asian farmer, or the inner-city American youth isn't that they don't have health care or that they don't have enough to eat, but that they are not entitled to receive those services. Offering those services in the short-run is necessary and essential, but it does not confront the reality of injustice and work toward a more just world.

Six out of the ten top-rated charities on GiveWell are health-related. I do not think health organizations are doing detrimental work, I think they are offering necessary services to those who need it. But providing necessary services to individuals (also know as saving or changing lives) should not be the end goal for charities, or for the individual who invests in those charities.

Instead, charities should see themselves as a band-aid solution to fill in when governments and traditional institutions cannot (or refuse to) meet the needs of their communities. My friend who works at the DC Rape Crisis Center told me her organization wants "to put themselves out of business." This should be the end goal for all charities: Creating enough transformative change in society to rid the world of the need for them.

It should be noted that many health organizations are working to change the overarching structures in society. Village Reach, GiveWell's top charity, works to improve the health structures in rural Africa. The second highest-rated, Stop TB Partnership, aims to, well, stop tuberculosis. But choosing (and evaluating) based on the capacity to save lives ignores the fact that even with every individual life saved, the need for those charities still remains.

So what to do? You can do what I did and invest in charities that work on economic empowerment, which I think can create systemic transformative change from the bottom up. But if everyone did that, charities would fold and lives would be lost. (I made my decision with the safe assumption that most people don't act based on what I do.) It's tricky. But what's important is to remember, whether you evaluate charities, you work in a non-profit, or if you are a social investor, you should always be in the business of putting yourself out of business.

(Additional thanks to my other friend, Nora, who sent me the Hilfiker essay.)

2009: The Year Microfinance Died

2009-12-30T16:31:00.002-05:00

If microfinance was born in 1976 with Muhammad Yunus' $27 loan, 2009 was the year it died.

Ok, not really, but it did catch a lot of flak. Once heralded by some as a "silver bullet" to end poverty, this year people got real about what microfinance is and isn't and owned up to the limitations.

This reality check was fueled mostly by the release of several studies on microfinance, which used randomized controlled trials for the first time to measure microfinance's impact on its clients. The results were not so hot; with no study illustrating the transformative change people expected.

Then, not shortly after these studies were released, Kiva, the largest microfinance proselytizer in the US, took a fall from grace (at least in the blogosphere), admitting that its microfinance loans did not actually create a "person to person" connection. Since then, GiveWell, a powerhouse of a charity evaluator, has unrelentingly pounded against the microfinance ivory tower and recently discouraged people from donating to Kiva and other US microfinance charities, including the Noble-Peace-Prize affiliated Grameen Foundation.

Microfinance certainly has taken a hard fall, but I'm not sure if that's its own fault. I think we've built it up too much and overreacted to the recent detractions from the typical rosy narrative. Abhijit Vinayak Banerjee, Esther Duflo and Dean Karlan, three professors who worked on the aforementioned studies, recently wrote a guest post on Nicholas Kristof's blog about the microfinance critiques and the response. They concluded:

[A]s we see it, microcredit seems to have delivered exactly what a successful new financial product is supposed deliver—allowing people to make large purchases that they would not have been able to otherwise. The fact that some people expected much more from it (and perhaps they are right, may be it will just take longer), is perhaps inevitable given how eager the world is to find that one magic bullet that would finally “solve” poverty. But to actually blame microcredit for not promoting the immunization of children is no different from blaming immunization campaigns for not generating new businesses.

I think that sums up the whole year in microfinance perfectly. Microfinance only does what normal loans do: gives access to credit. It provides a service where there was none before. (For a broader perspective on the effects of the microfinance sector on development, see David Roodman's forthcoming book.) This certainly can't hurt, but it might not help as much as people expect.

If you are still interested in investing in finance-related programs (as I am), you do not need to admit defeat. Remember, microfinance isn't limited to microcredit--it can encompass all financial sectors, including savings, which actually might create more transformative change than microcredit. If you want to improve the economic situation for the underserved, look for organizations that provide services beyond one type of finance, like the Village Enterprise Fund, which gives business training on top of their start-up grant capital. A combination of services might have a larger effect than just microcredit alone.

Of course, they might not. We will see just have to see what the next year brings.

(Edit: If you are serious about investing in microfinance, check out this guide from Good Intentions are Not Enough.)

Putting my money where my blog is

2009-12-17T22:31:00.001-05:00

I have a confession. For as much as I talk about it, I've never actually made a social investment. So, I decided to own up and finally do it. After much deliberation, I chose the Village Enterprise Fund to support.

I chronicled how I came to VEF for Yes! Magazine. I laid it out as a simple three-step guide to social investment, so if you have never done it before, or if you are a casual donor interested in taking the next step with your donations, check it out. I hope my example can help.

Frequent readers of this blog will notice I don't use the same language in the article as I do here. I don't actually even mention the word "investing" once. Some people are uncomfortable with business-y terminology and I didn't want to exclude through word choice. As long as people are doing it, it doesn't matter what they call it.

Personal thanks to Holden at GiveWell for talking through this process with me.

Generosity Abounds

2009-12-14T19:44:00.017-05:00

or: How I Learned to Stop Worrying and Love Emotions

I recently had a (kind of) discussion with Sasha Dichter about his proposal for a month-long "Generosity Experiment," where he decides to give to whomever asks him, whether they be family, friends, organizations, or just people on the street. My initial reaction was "AHH! NOO! STOP!" I was able to recompose myself and offer this more timid and respectful response:

I’m not sure if I support this. What would you say to someone who told you to buy anything anyone offered you? Your generosity experiment is the same concept, but instead of buying a product, your donations are going to a service: change within the charity’s area of focus.
I don’t want most of the products out there and I don’t want to support most of the charities out there. I have no issue with other people supporting those charities, assuming that they have a good reason to. I just don’t think “because they asked me” is a good enough reason.

Basic social investment stuff. Dichter responded with this:

Jeff, solid points all, and aligned with why I try to be very discriminating most of the time. What about the personal angle of generosity as a practice?

I was not placated. I responded with this:

I think being generous as a practice is a wonderful thing, be it personal, professional, or casual, but we have to remember who is being helped by our giving. I feel like its irrelevant what we learn about ourselves through giving when looking at the broader goal in mind, i.e., helping others. If our donation to the homeless man on the street could have been better used at an organization that provides services to the homeless, then our money should go there. If it is actually better spent by giving it to the homeless person, then it should go there. But determining that takes discernment and thought, and not indiscriminate generosity.

This discussion (as well as the other comments on the post) represent the tension between giving with your head and giving with your heart, or as I've usually thought about it, the difference between social investments and giving. I think I've always had a knee-jerk negative reaction to anyone who claims emotional reasons for his or her giving, because it's hard to work towards efficiency and build systems of accountability when people are just motivated by "doing a good thing," rather than "getting something done." I am not interested in people who are looking to "feel good" or for "personal growth" through service or giving, because ultimately, the people in the position to give are usually not the ones who need the help.

But that does not mean the emotional side of giving (or social investing) should be ignored. I think I've always assumed emotions have no place in effective philanthropy and anyone motivated by their emotions must be a do-gooder who doesn't understand what it takes to get things done. But emotional connections can be used to increase giving and to make connections between donors and organizations. And you can't dismiss the emotional toil that comes from seeing and working to change an imperfect world.

I think Philanthropedia's philosophy of “choosing a social cause with one’s heart, but choosing an organization with one’s mind” is the best way to combine the emotional side of giving with the scrutiny needed for social investments. It recognizes the emotions that are a part of any motivation to create change while still leaving room for accountability and effectiveness. It separates those out who are motivated by their emotions from the ones who act solely based on them.

I now realize that the heart does have a place in social investments. I don't know why I did think that before. Maybe its because, deep down inside, I'm afraid of my own feelings, or maybe its because I'm a cold-hard capitalist underneath it all. I still don't agree with Dichter's "Generosity Experiment" in practice, mostly because I don't have the income to support that, but in theory, it helped me see that emotions are a key part of social investments.

Something good has begun

2009-12-08T13:28:00.032-05:00

Late at night, when I can't sleep, my thoughts turn to the good things to come. I think about what the future social investment market will look like. Will it, I wonder, look anything like the current investment market? What will change? Obviously, it will not be a one-to-one transfer: We can't trade dividends on social change or purchase futures in the numbers of lives saved. What will be the differences between a social investor and a traditional investor?

I don't know enough about philanthropy or traditional investments to tell you. But two organizations are shaping that future social investment market today.

Philanthropedia has created a "mutual fund" for social investors. Using a panel of experts, it constructs a list of organizations working within a certain cause (right now they have climate change, education and Bay Area homelessness) that a person can divide their donation amongst for maximum impact. Each organization is weighted within the mutual fund based on their effectiveness.

The Social Impact Exchange has created a sort of "stock market" of non-profits. Its Investment Clearinghouse (free registration required) has a list of high impact and effective non-profts for investors to scrutinize. Sean at Tactical Philanthropy says that this Clearinghouse serves as a sort of non-profit stock market not because you can watch the shares go up and down, but because it lets charitable organizations "go public" and reveal information to individual investors in the hopes of gaining more support. (Edit: For more info on the Social Impact Exchange, read one of its founders' response on Tactical Philanthropy.)

I think that this quality--accessibility of information--will be key to any sort of future social investment market and its resulting "investment products." Philanthropedia offers a neat way to get people thinking about social investment, but the concept of a mutual fund might cause people to just take the advice and not think critically about their donations. Philanthropedia does provide reviews of the organizations within the funds, but most of them are just basic information combined with quotes from their experts. I would prefer to see more information on the organizations to allow the donors to make their own decisions on who to give to.

The Social Impact Exchange, on the other hand, does offer more room for critical thinking. It provides an almost-overwhelming availability of information on its "public" non-profits as well as resources for scaling social initiatives. (It's a "Knowledge Center" as well as a Clearinghouse.) I prefer this wealth of information to Philanthropedia's method, which isn't much more than a marketing technique to encourage donors to invest. Clever marketing isn't a bad thing, but I am not sure that a mutual fund is actually something the social investment market can support, as individuals are getting social returns, not monetary. Diversifying a "portfolio" will not get you greater returns that fully supporting one organization, especially for small donors.

Evaluation based on impact and effectiveness should never be discouraged, regardless of its packaging, but information access must always remain at the foundation of any evaluation. Anything that gets good information out to donors helps create the reform needed. I don't know what the future social investment market will look like, but I do know that without information allowing individuals to think critically about their donations, that market may never arise.

(Thanks to Sean at Tactical Philanthropy for pointing me to both these organizations. To read his more detailed, more eloquent vision for the future, see his 2008 Financial Times column.)

BIG EDIT: Philanthropedia responded. They make an excellent point, saying that they do not include too much information in their reviews so they don't overwhelm people (I would say the Social Impact Exchange is currently guilty of that, but their market also isn't causal donors.) I would like to see every individual behave like a serious investor, but that probably isn't likely, and Philanthropedia's method and marketing meets them half way, like the post says.

Also, the post includes a great quote from one of Philanthropedia's founders, saying that its philosophy is about “choosing a social cause with one’s heart, but choosing an organization with one’s mind.”

Good stuff, all around.