The Nonprofiteer is rarely enthusiastic about e-this or cyber-that; but making information commonly available to people who have been deprived of it is an unalloyed Good Thing, and even she’s not churlish enough to withhold her thanks and praise from people who’ve figured out how to accomplish it and make a profit at the same time. Excerpts from the company’s press release appear below.

REDWOOD CITY, CALIF., July 15, 2008– NComputing, the leading provider of desktop virtualization software and hardware, today announced it is working with leading non-governmental organizations (NGOs) worldwide to help reduce the digital divide between developed and developing countries. The company has already deployed successful partnerships with such leading NGOs as U.S.-based Save the Children, France-based Ateliers Sans Frontières (ASF), Bangladesh-based BRAC, Latin America-based Organization for American States (OAS), UNESCO, and India-based Azim Premji Foundation to name just a few. NComputing further announced special discounts and programs to help NGOs on every continent reach their goals for digital inclusion in emerging markets.

The NComputing solution is based on a simple fact: Today’s PCs are so powerful that the vast majority of applications only use a small fraction of the computer’s capacity. NComputing’s virtualization software and hardware tap this unused capacity so that it can be simultaneously shared by multiple users. Each user’s monitor, keyboard, and mouse connect to the shared PC through a small and very durable NComputing access device. The access device itself has no CPU, memory, or moving parts so it is rugged, durable, and easy to deploy and maintain—especially critical in developing nations. The NComputing software and hardware costs as little as $70 per seat. With NComputing, people and organizations around the world are maximizing their investments in PCs.

No other attempts at bridging the digital divide have been as successful. Low-priced laptop solutions, such as the $188 OLPC XO, carry very high hidden costs—like maintenance and support—that far outweigh their benefits.

[S]aid Medhy Davary, director of DSF[,] “The virtual desktops are extremely affordable and durable, require very little maintenance, and use only one watt of electricity. This allows users in even the world’s poorest countries to benefit from computer access and the Internet.”

“Almost one billion users around the world who would benefit from access to computing have been unable to afford it—until now,” said Stephen Dukker, chairman and CEO of NComputing. “It is only by fundamentally changing the economics of computing that our industry can bridge the digital divide. We are going to deploy more than a million virtual desktops in the coming year and are honored to work with such prestigious NGOs to improve the daily lives of hundreds of thousands of people around the world.”

“In response to increasing interest from NGOs, NComputing is developing programs to help them better leverage their skills and funds,” said Ms. Lindsay Petrillose, Government Liaison for NComputing. “We offer seed units and special NGO discounts that multiply the impact of an NGO’s limited funds.” Interested NGOs and governmental institutions seeking NGO assistance can contact Ms. Petrillose at lpetrillose@ncomputing.com; (650) 454-4991.
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Kelly Kleiman, who blogs as The Nonprofiteer, is a lawyer and freelance journalist whose reportage and essays about the arts, philanthropy and women’s issues have appeared in The Wall Street Journal, Washington Post, Christian Science Monitor and other dailies; in magazines including In These Times and Chicago Philanthropy; and on websites including Aislesay.com and Artscope.net.

Government and business pay lip service to the important role charity plays in our communities and economy, yet treat it as a second-tier vehicle for social change, one that requires special treatment.

Nonprofits and philanthropic organizations reinforce the perception they are marginal players by acting as if their good intentions entitle to them to public and private investment, and free them of the need to compete in the marketplace under the same pressures and rules that other businesses face.

To increase their impact, people and organizations working and investing in the charitable marketplace need to be brutally honest about the value they add, the challenges they face, and their need to make their own way.

By moving beyond their sense of entitlement, confronting their strengths and weaknesses, and designing smart business models, nonprofits can more effectively engage customers, investors and partners and serve as leaders for change.

And nonprofits have a great story to tell.

Whether addressing problems at home or abroad, giving is built into Americans’ DNA.

Americans see problems and give their time, know-how and money to improve and enrich their communities.

As individuals and through their families and businesses, Americans create and invest in nonprofit and philanthropic organizations to address urgent social needs.

In 2007, charitable giving in the U.S. exceeded $300 billion for the first time, with individuals giving nearly 75 percent of those dollars, and bequests accounting for nearly 7 percent more, according to Giving USA 2008.

And in 2006, over 61 million individuals volunteered, representing over one-fourth of the U.S. population, with 15 million Americans volunteering on an average day, and the average volunteer serving over 200 hours a year, according to The Nonprofit Almanac 2008.

The U.S. nonprofit sector also is big, diverse and growing, the Nonprofit Almanac says, accounting for five percent of gross domestic product, over 8 percent of wages and roughly 10 percent of job.

In addition, the estimated value of volunteer time equals nearly half the wages nonprofits pay.

Nonprofit wages and employment both have been growing in their share of the economy, and nonprofit jobs in recent years have been growing three times faster than the rest of the economy.

Beyond those impressive numbers, the resources exchanged in the charitable marketplace simply make our communities better places to live and work.

But until nonprofits and givers get over their sense of entitlement and start building enterprising business models that break down the walls to true collaboration among nonprofits and with business and government, the charitable marketplace will remain a marginal force for social change.

In addition, the estimated value of volunteer time equals nearly half the wages nonprofits pay.

Nonprofit wages and employment both have been growing in their share of the economy, and nonprofit jobs in recent years have been growing three times faster than the rest of the economy.

Beyond those impressive numbers, the resources exchanged in the charitable marketplace simply make our communities better places to live and work.

But until nonprofits and givers get over their sense of entitlement and start building enterprising business models that break down the walls to true collaboration among nonprofits and with business and government, the charitable marketplace will remain a marginal force for social change.

Todd Cohen, a veteran news reporter and editor, is editor and publisher of Philanthropy Journal, an online newspaper published by the A.J. Fletcher Foundation in Raleigh, N.C. Cohen has taught nonprofit reporting and media relations at the University of North Carolina at Chapel Hill and at Duke University, and regularly speaks on the topics of nonprofit media relations and trends in the charitable world.

IDE Myanmar has been a quiet but compelling leader in the new market-driven approach. IDE and organizations such as Kick Start have successfully lifted hundreds of thousands of farmers out of poverty on a relatively small budget. I predict that one of the leaders of these organizations is likely to win the Noble Peace Prize in the next decade. Their success hinges on their ability to build reliable distribution channels while manufacturing and marketing products their customers really want and need. As a Stanford graduate student, I have been fortunate enough to work with IDE Myanmar over the last three months to design an affordable rice thresher, which will be introduced to Burmese rice farmers within the next year. It’s been a wonderful experience, throughout which I’ve been thoroughly impressed by IDE Myanmar and its compassionate capitalist culture (business-like, but driven by mission).

I want to get people thinking about better practices in disaster relief. IDE Myanmar has emerged heroically in the aftermath of Cycle Nargis. IDE has no political agenda, and over the years has convinced the regime that it is solely interested in market-driven development. IDE is one of the only foreign organizations that has permission to operate freely in the affected region. I won’t get into the depth of the humanitarian disaster, but it is unbearable to think about the misery of the country’s 60 million citizens.

IDE is successful because it is locally based and has the distribution channels, manufacturing capacity, operations expertise, product design capacity, and social mission. IDE reaches 25,000 victims every day, helping to satisfy their basic needs of water, food, and shelter. For example, IDE figured out how to combine three of its products, the WaterPump, WaterBasket, and WaterGuard ($40 for a combo package), to bring clean drinking water to 145,000people per week. IDE Myanmar never thought about these issues before the cyclone. Instead, its daily operations were geared toward commerce: selling low-cost farming products through a nationwide retail channel. Even though that was a far cry from emergency aid work, IDE transformed literally overnight.

Katrina, Asian tsunami, Nargis, and most recently the Sichuan earthquake: natural disasters seem to occur every week and clearly nobody knows how to respond effectively. It is not a question of money. Most critics are upset with the institutions in place (think FEMA) but do not offer any realistic solutions.  We should take a hint from IDE’s successes in Myanmar and support market-orientated nonprofit organizations, or social-mission-orientated, for-profit companies, playing a more prominent role. Governments and international aid agencies should respond, but they should also let local organizations have the protagonist role whenever they deserve it. Just as the new approach to international development has increasingly become bottom-up, so should disaster relief efforts.

Do you agree?  How would you incorporate the IDE Myanmars of the world into the relief system?

Lloyd Nimetz founded the online giving market HelpArgentina.org. While pursuing his MBA at Stanford Graduate School of Business, Nimetz has focused on for-profit business models that address social challenges. This summer he will launch a payments platform for India’s bottom billion.

Companies are increasingly aware of and planning around this aggregated demand approach, as we have seen through such examples as the William J. Clinton Foundation’s ability to bring down the prices of AIDS drugs through a guaranteed high volume of sales.

That said, there is a need for not only existing products and services, but even more so for innovation at the BoP – so what about aggregating demand in those cases? How do you assess the ability and willingness of the poor to pay for products and services that do not already exist, and how do you convince companies to take a risk on such a vast and fragmented market?

I asked myself this question while researching the myriad of innovative water filtration systems designed for the BoP. As I was getting ready to critique a few of the designs and business models, I realized that I wasn’t qualified to make those judgments. I have only had to use a water filtration system a handful of times, and I don’t know the numerous local realities well enough to criticize one design over another. However, the targeted population for these systems is geographically scattered, linguistically diverse, and resource-intensive to reach, so who would decide which innovations would move forward?

While many in the base of the pyramid movement have hoped that innovations to serve both developing and developed markets will come from BoP communities themselves, co-creation has been lengthy, intricate, complex and time-consuming. Hart and Simanis have invested countless hours in the field practicing their embedded innovation model, and although they have had numerous success stories, the businesses that have been created through this model are still primarily community-centric versus globally-reaching. As Al Hammond’s recent writings on transformative sector scaling have pointed out, “A number of community-initiated business models have produced good results, but they aren’t easily replicable and don’t scale.” Going from community to community and engaging each in participatory design may be the ideal for embedded innovation, but it is certainly not at the scale that is necessary to reach efficiency gains and profitability through aggregated demand.

So, how do we engage with and understand the needs of millions of geographically dispersed people? Part of the solution may come from the model of Internet-based networks that consolidate demand – which I was first introduced to through Pop!Tech’s curator Andrew Zolli.

Zolli spoke recently at Columbia Business School about forces shaping our society. One of the key determinants that he laid out was the power of networks. Zolli, who is known as an expert in global foresight and innovation, said that understanding networks will be an increasingly invaluable skill, and the power that networks yield will also grow in enormity.

He was not just referring to social networks or to personal networks, but also to technology-based demand networks. These are online communities that have been created to aggregate the demand of multiple users in order to attract events, boycott businesses, and even design new gadgets. He cited Eventful and CrowdSpirit as two leading examples of these technology-based demand networks. Thanks to the Internet, individual actors who would normally not yield much power on their own are able to connect virtually with people with similar demands and make something happen.

CrowdSpirit, though very much a start-up, is the type of platform that I feel could help bridge the divide between innovation and high-volume demand at the BoP. It was launched to “co-create” electronic gadgets through an online design community. In essence, innovators from anywhere can submit ideas to the site, and numerous people vote for their favorite designs and aspects and then agree to purchase the device if the producer adopts their preferences.

The inventor decides to go forward with the idea if he or she sees that there is sufficient demand. CrowdSpirit is built on community-based and participative design, and takes some risk out of the equation for the producer/inventor, since there’s an advance purchase commitment at the end of the R&D pipeline.

Although it is built for high-end electronics, the model is fascinating. The Internet is enabling people to overcome traditional boundaries and bringing together the voices of millions. In 1983 Pierre Bourdieu, an early economic sociologist, realized the power that could be created through networks of relationships, “enabling numerous, varied, scattered agents to act as one and overcome the limitations of space and time.”

That sounds like exactly the type of model that would work for the BoP, and with technology that Bourdieu could not imagine only two decades ago, it may be possible. In C.K. Prahalad’s latest book The New Age of Innovation, the author notes that “we have finally reached the point where the confluence of connectivity, digitization, and the convergence of industry and technology boundaries are creating a new dynamic between consumers and the firm.” He continues by observing that “today, instead of a small group of people sitting and thinking about innovation, you can have three billion people not only being micro-producers and micro-consumers, but micro-innovators…everybody has an opportunity to contribute to innovation.” I am certainly not saying that the ideal of participatory design and on-the-ground co-creation or the marrying of resources and shared risk should be scrapped altogether in favor of a tool such as CrowdSpirit, but perhaps more individuals could be brought into the conversation over a shorter period of time if we can use technological advances to enable these numerous, varied, scattered agents to act as one and have a voice in innovation.

An example of this more democratized design platform may be the collaborative competition put on by the Global Water Challenge and Ashoka’s Changemakers to find disruptive technologies and solutions to the water sanitation challenge. By sourcing design ideas from all over the world and opening up the judging to anyone with an Internet connection, Ashoka’s Changemakers may prove to be a leader in demand consolidation and technology-enabled participatory design. In a recent MIT Press article, Charlie Brown, Executive Director of Ashoka’s Changemakers, wrote that
“democratizing the processes of finding social solutions and judging their worth creates a market place where beneficiaries can spell out what they need and how they think those needs can be met, and where investors can play a more active role in selecting, refining, replicating and scaling up projects.”
As cell phone and broadband Internet penetration rates increase around the world, countless individuals are being brought into this vast network. But it is up to BoP-minded innovators to creatively ensure that this connection brings those people not only online, but also puts them first in line.

Grace Augustine is a research associate with the William Davidson Institute, an educational institute focused on researching and supporting organizations in emerging markets. She writes for the NextBillion blog and has an interest in economic development and clean technology for the world’s poorest citizens.

Increasingly, people are calling for the new energy models in developing nations to be “sustainable” and drawn from “clean” and renewable sources. The accepted belief is that if we can get developing nations on a path of adopting clean technologies, they can completely leapfrog the dirty, self-perpetuating system we have created in the west. However, there are barriers to establishing renewable energy projects at the BoP, on both the supply and demand side. One recently-launched for-profit social enterprise that hopes to revolutionize financing in this field is MicroEnergy Credits Corporation (MEC), and I had the wonderful pleasure of conversing with its founders, April Allderdice and James Dailey, last week.

Allderdice and Dailey both have impressive resumes, from Peace Corps to Columbia Business School to McKinsey and Grameen; they have the research and the on-the-ground experience to move this field forward.

MEC realizes that even though clean technology pays off in the long-run compared to conventional sources, very few BoP consumers can afford to pay high up-front costs when they are concerned with day-to-day survival. According to Allderdice and Dailey, BoP consumers “cannot afford to pay extra for environmental or even social benefits, and therefore adopt traditional energy.” And let’s be honest, who are we to tell others that they should sacrifice their meager income to save a planet which we are primarily responsible for destroying? In addition to the high up-front cost, there has not traditionally been a local broker to provide financing to the poorest and the most remote clients who do want to adopt clean energy projects. That is where MEC hopes to create change.

MEC’s solution is to use existing Microfinance Institutions (MFIs) and the recent developments in the carbon credit markets on the supply side to facilitate the adoption of clean energy at the BoP. According to Allderdice and Dailey, “Putting a significant portion of the world’s population on a clean energy path could have a huge impact in the long term, and is an opportunity that should not be wasted.” Their idea has been well-received, by both the Tomberg Family Philanthropies and the judges at the Global Social Venture Competition.

To provide financing on the ground, MEC will go through the MFI network, since MFIs are embedded in the community, especially rural off-the-grid communities that need decentralized solutions. This is a very timely post, as Derek’s post last week highlighted in CGAP Senior Advisor Katharine McKee’s article on microfinance and climate change, which said that “A number of respected MFIs and networks – including ACCION, BASIX in India and Equity Bank in Kenya – are exploring products to respond to climate change.”

MFIs have expertise in structuring deals, establishing appropriate loan repayment schedules and interest rates. According to Dailey, “MFI field officers meet with millions of households every week; they are a channel to market for financial services, and financed energy services are a natural outgrowth.”

MFIs such as ACCION and Grameen have also proven to be incredibly scalable, and they can spin off renewable-energy focused businesses; the most notable example of this has been Grameen Shakti, a member of the Grameen family that provides renewable energy technologies for rural households. Allderdice recently worked for Grameen Shakti, and says that it is “currently scaling faster than Grameen Bank was at year eight.”

The other piece of the puzzle on the supply side is to provide incentives to the MFIs through the evolving world of credits for renewable energy projects. Carbon finance is a valuable source of capital, yet it is a complex and evolving field that is difficult for the traditional on-the-ground MFI to tap into. In order to reduce the transaction costs of carbon financing,

“MEC provides MFIs carbon revenues on a per unit basis for each system they finance. This gives them near term access to finance for the seed costs of starting an energy program. As their program scales up, they can pass on the subsidy to end users which enable them to achieve greater volume by reaching poorer clients.”

Allderdice and Dailey have developed two credit instruments, Microfinance-originated Carbon Credits and Millennium Development Goal (MDG) credits. With the first, MFIs can receive revenue when they lend for energy systems that create verified carbon emissions reductions, such as solar PV systems, improved cookstoves and biogas digesters. With the second, MFIs can receive MDG Credits when they lend for an intervention that enables an MDG household to meet all or part of an MDG. According to Allderdice, “There is no established market in MDG credits yet, but MEC is building the infrastructure to enable it.”

When I asked the founders about the possibility of using Kyoto-established Clean Development Mechanism credits, which I wrote about last month, they said that “MEC’s unique approach will create extremely high quality transparent, and verifiable carbon credits that will first be sold on the voluntary markets and as CDM policies evolve, MEC will be among the first to tap the CDM markets.” Well, I guess that there is my answer for the possibility for CDM credits in the short-term.

The hope for the future is clear – to put households and communities on a clean energy path that allows them to be owners of their own reliable and renewable systems. This is what Allderdice was able to see first-hand during her work with Grameen Shatki in Bangladesh:

“some villagers now use solar for electricity, light, tv and radio and biogas for cooking and heating. They are full owners of their own energy generation, without being susceptible to the price of oil, or the fallibility of the electric grid. And they enjoy the environmental benefits of clean, silent, reliable, continuously renewing energy. As their income increases they are demonstrating a preference to buy another solar panel for a fan or a color tv — rather than switch to a diesel genset, or pay a high connection fee for unreliable grid connected service. Once they are on the clean energy path, there is less incentive to get off it.”

Grace Augustine is a research associate with the William Davidson Institute, an educational institute focused on researching and supporting organizations in emerging markets. She writes for the NextBillion blog and has an interest in economic development and clean technology for the world’s poorest citizens.

Everyone in the nonprofit world knows what a slow grind it is to get funding from foundations. It can take up to nine months. Since foundations are frequently compared to venture capital firms because they supposedly take risks, I hope they are paying attention to the ways in which venture firms are making it easier than ever for entrepreneurs to get seed funding to prove concepts and launch.

Earlier this month, Charles River Ventures announced its QuickStart program, offering rapid $250,000 investments to startups. And by rapid, they mean they’ll get back to you in one business week. 

The firm’s website reads, “the process of raising seed capital can consume precious time that can be better spent actually building out your idea.” Wouldn’t it be nice if foundations agreed?  There seems to be a conflict between foundations’ stated goal of supporting innovation and the long-winded application process to which they subject entrepreneurs.

Once a nonprofit has submitted a Letter of Intent, it takes four to six weeks just to get a reponse. Then, it’s another couple of weeks before the foundation staff reads your proposal, and another couple of weeks, if not months, before the board votes on the grant. If the grant it approved, it takes a few more weeks to dispense the money.

The Ford Foundation claims its process is so long because they receive 40,000 grant applications a year.  But Charles River Ventures received 1,000 emails on the first day of their QuickStart program, and they managed to respond to all of them within one business week.

Obviously, there are many differences between venture firms and foundations. For starters, in the venture capital world, $250,000 in seed is considered puny. And Charles River Ventures is happy to attract a crowd of entrepreneurs to their doors—a status that no foundation wants.

There are many areas in which the venture model doesn’t translate to philanthropy. And I am critical of many behaviors that rule the venture capital world. But in a sector that claims to support social innovation, providing easy, fast, and friendly access to seed money would make a worthy goal. (Then, of course, comes the battle for sustained funding from foundations.)

Perla Ni, founder and former publisher of the Stanford Social Innovation Review, is the founder and CEO of GreatNonprofits. She is also a co-founder of Grassroots.com.

There’s undoubtedly a lot of energy around the idea of social entrepreneurship, but I do wonder if the discussion is too much skewed towards the business and organizational side of things rather than on what we really want to achieve. So I was interested to receive an email from Paola Grenier, who’s doing a PhD on social entrepreneurship at the London School of Economics, who’s thinking of writing an article ‘challenging the dominance of business schools in the development of research and and education into social entrepreneurship’.

Nonprofits with large visions but shrinking governmental and private funding resources can quickly tire of getting back to basics or doing more with less solutions.  Yet, real innovation continues to be rare in many of these organizations.  Perhaps this is so, not for lack of leadership or the willingness to risk, but because the approaches we take to innovation are themselves inconsistent with being innovative.  As just one example, there is our rather automatic insistence on asking how something can be done in advance of fully developing the what, i.e. the possibility we are setting out to realize. 

Why is that?  When we ask how, we immediately limit ourselves to what we already know can be done.  Many organizations find it difficult to sustain a conversation for whats that they or others do not have either existing or anticipated hows for. 

Our reflexive demand to know how something can be done, coupled with our reliance on experts, comes from a desire to understand.  Yet our best innovations are actually understood only in the aftermath of their creation; understanding is rarely present in the beforemath of innovation and, in fact, can block the creative process.  Ever try to duplicate a successful program that you or another organization did indeed invent?  Getting it right and understanding how it was done seem only to obscure the source of what made the original innovation shine so brightly.

Try as we might, we simply cannot conduct our search for innovation while holding to our need for predictability.  We may fear that we are left with random and arbitrary; indeed, donors and boards do hold us accountable for bringing innovation into reality.  Yet, those same innovations simply will not arise within the confines of reality (as we know it).

We often overlook a third path to innovation, one lying just outside this false choice between predictable and random, one clearly within reach for most nonprofits.  What inspires you!  This in turn shifts our thoughts away from can we do it and brings us close to the heart of the matter—can we just say it! 

Bruce Cameron, OPENINGS* ? 2004

*OPENINGS delivers programs on leadership development and organizational redesign
for value based institutions in SE Wisconsin.