Stanford Social Innovation Review

Is Philanthropy Going Open Source?

Several years ago, I wrote a book chapter about open source philanthropy. It is in The World We Want, edited by Peter Karoff and Jane Maddox and includes an interview with me called, “Open Sesame: Networks of Cooperation and Open Source Solutions.”

It presented seven building blocks for bringing open source principles to philanthropy.

These seven building blocks of open philanthropy are:

1. Facilitate adaptation; don’t hinder it
2. Design for interoperability; local specificity will follow
3. Build for the poorest
4. Assume upward adaptability
5. Creativity and control will happen locally
6. Diversity is essential
7. Complex problems require hybrid solutions

And more recently I’ve been thinking about public ideas, crowdsourcing innovation through Kluster or Social Innovation Camp, and now the folks at Social Edge are onto the idea - read this discussion on open source social entrepreneurship. If nothing else, the basic premises of seeking diverse input, trying some design methodologies such as rapid prototyping, and drawing from multiple disciplines are strategic approaches to solving social problems that are starting to gain some traction.

These concepts are all exciting, and they also raise some questions for philanthropy. Where are the lines between public and private when it comes to ideas for the public good? Can or should someone be able to own a policy innovation? Protect a service delivery process? Are all socially positive ideas public? How will new entities like L3Cs or B corporations re-mix the assumptions about ideas and innovation as proprietary sources of business proposition - or are they public goods?

What are the best ways to encourage creative thinking and bring the ideas to action? Is social entrepreneurship better at this than anything else? Are social entrepreneurs even paying attention to raging intellectual property debates - and, if so, how and why? What should they be asking? What should philanthropy be asking?

Lucy Bernholz is the founder and president of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award-winning blog about the business of giving and serves as executive producer of The Giving Channel on Fora.tv.

Posted by Katie Harrington

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The Poster Child for Failure in Philanthropy

A lot of people pretend that philanthropy is easy—that every grant meets its objectives, and that foundations, despite taking risks, knock the ball out of the park every time.

Wrong. Innovation and constant success are mutually exclusive. It is impossible to do anything noteworthy while consistently avoiding failure. If you never fall and skin your knee, then you’re hanging out in the kiddie section of the playground.

Jim Canales, the CEO of The James Irvine Foundation, has some badly scarred knees. And he’s proud of it; he believes that “failure” is the mark of someone who takes risks and pursues difficult tasks. Last year at the 2007 Council on Foundations conference, Canales was a panelist at the Demonstrating Impact session along with Joel Fleishman, author of The Foundation: A Great American Secret, and James Knickman of the New York State Health Foundation. While the session was nominally about the extent of philanthropy’s impact, at its core it argued that by being transparent and honest about what works and does not work in philanthropy, we will truly demonstrate impact.

Canales was back at this year’s conference, but this time he was accompanied by the brilliant Phil Buchanan of the Center for Effective Philanthropy. In his session, “The Advantage of Sharing Failures,” Buchanan pointed out that while the Council on Foundations conference has long booked sessions about innovations, session about failure have been nonexistent.

Jim went through a list of the pros and cons of sharing failure:

Pros

• You share knowledge. Knowledge and capital are all that foundations have, so we must effectively share both.
• You help others avoid common mistakes.
• You improve your own work by valuing self-reflection and learning.
• You reinforce your commitment to impact and effectiveness.

Cons

• You potentially harm your grantees.
• You might damage your reputation.
• You might discourage others from taking on high-risk ventures by highlighting the difficulties you’ve encountered.
• You provide fodder for people who are against foundations.

The pros are correct; the only legitimate con, however, is the potential to harm your grantees.

There is a risk to reputational damage if all of your colleagues refuse to recognize mistakes and foundations pretend to be infallible forces for good. Canales and Paul Brest (from the Hewlett Foundation) both published reports on their mistakes last year. As far as reputational risk, what they got for their trouble was coverage in The New York Times, an op-ed in The Chronicle of Philanthropy, and an enhancement of their already stellar reputations. Their colleagues hung them out to dry, but the lack of other foundations taking similar steps makes Canales, in his own words, “the poster child for failure in philanthropy.” Still, he hasn’t suffered any reputational damage. Instead he is asked to lead sessions at philanthropy conferences.

Confessing difficulties and then having nothing bad happen to you for doing so (as is the case with Brest and Canales, and will likely be the case in 99 percent of future cases), encourages people to take risks. The people who are not joining Canales in sharing failures discourage other people from taking risks.

Does talking about failure provide fodder for people who are anti-foundations? Last year at the Demonstrating Impact session, a member of the audience who identified herself as a professor of marketing stood up to say that people who admit their mistakes publicly are viewed as more trustworthy afterwards. Enough said.

At the Demonstrating Impact session, panelist James Knickman summed it up well:

“We need to frame our release of ‘failures’ as an attempt to learn. No one tells scientists they are a failure when one of their experiments [doesn’t] work!”

And my comment at the time, which I still stand by, was:

“That’s it right there. What philanthropy is engaged in is an experiment; an experiment in how we can all make the world a better place. We don’t know what the right answer is. In fact, the ‘answer’ is probably evolving as quickly as we can design experiments. But by being transparent, by sharing successful ideas and failed ideas, by judging ourselves not on the outcomes of each grant, but on the body of knowledge that we contribute to the field, we will truly transform philanthropy.”

I know this stuff is hard. But during the “Failure” session, moderator Toni Freeman of the Duke Endowment told a wonderful story that highlighted the difficulty. She described her decision to take a firefighter training class as leadership training. She was told, “You are going to climb up to the seventh floor and jump out the window.” She thought, that sounds good! But standing on the ledge, every fiber of her body was telling her not to jump. Yet she did. And then she climbed back up and jumped out of the window two more times.

And each time it was easier.

Sean Stannard-Stockton is a principal and director of Tactical Philanthropy at Ensemble Capital Management. Ensemble Capital provides families both traditional investment management and philanthropic planning. He is the author of the blog Tactical Philanthropy and writes the column On Philanthropy for the Financial Times.

Posted by Katie Harrington

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Fail Faster, Succeed Sooner

“Fail faster, succeed sooner” is a core axiom in the field of innovation design, attributed to David Kelley, founder of IDEO. It’s very popular with engineers, industrial and process designers, and creative folks. Most foundations and nonprofits don’t seem to have this ethic, though.

Before exploring some possible explanations for this, I want to highly recommend the cover story in the current issue of the Stanford Social Innovation Review: “Rediscovering Social Innovation” by James Phills Jr., Kriss Deiglmeier, and Dale T. Miller. The authors provide a clear definition of social innovation:

“A novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions, and for which the value created accrues primarily to society as a whole rather than private individuals.”

Avoiding the cheerleading found in so many articles on the subject, they make some very important distinctions and clarifications, such as: innovation can be both a process and a result; the concepts of “social enterprise” and “social entrepreneurship” are too narrowly focused on organizations and intrepid individuals, respectively; social innovation is fed by transfer and sharing of knowledge across the public, private, and nonprofit sectors;  and a social innovation can be not only a product, process, or technology, but also “a principle, an idea, a piece of legislation, a social movement, an intervention, or some combination of them.” The article is a really, really good read.

Now, back to the risk of failure. I’ve always thought that the reason so many nonprofits and foundations were so risk-averse was that they couldn’t (or didn’t believe they could) absorb and recover from failure. This is kind of like the way very small farmers in developing nations were inherently conservative in trying new seeds and techniques. The gains from innovation may be high, even proven to be high—but if the price of failure for farmers and their families is starvation, the cost/benefit wouldn’t balance.

Why the “fail faster” ethic isn’t stronger at foundations is more of a mystery, however.  For foundations, the failure=extinction calculus doesn’t apply. Let’s hope examples like Jim Canales’ open discussion of some of the Irvine Foundation’s failures (as profiled by Sean Stannard-Stockton here) will encourage others to follow, and eventually lead more funders to try, revise, and adapt approaches more quickly and openly.

Ironically, a focus on innovation seems “oversubscribed” in philanthropy, as Dr. Robert Ross remarked when accepting the Distinguished Grantmaker Award on behalf of The California Endowment, rather than for himself, at last May’s Council on Foundations conference. He observed that in many fields, the question is not what to do, but how to do it to scale, and in his view that’s why it is increasingly important for foundations to engage in and support advocacy. The old notion that government or “society” would expand and support proven innovations doesn’t seem to hold, if it ever did; but too many foundations still seem to think that their role is to develop new solutions, and let others figure out how to get them widely adopted. (That last observation and its faults are mine, not Ross’.)  Ironically, though advocating for taking proven approaches to scale runs a high risk of failure, and while the rewards may be very high, this path still may be difficult for many foundations to choose because it can be hard to say exactly what piece of success the foundation “owns” (the outcomes frame). Plus the work may not seem innovative and thereby lack the “cool” factor that attracts praise from peers.

How could we help see this become the path more traveled by?

Peter Manzo is the director of strategic initiatives for the Advancement Project, a civil rights advocacy organization, and a senior research fellow with the Center for Civil Society in the UCLA School of Public Affairs. Previously, he was the executive director and general counsel of the Center for Nonprofit Management. 

Posted by Kelsey Walker

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BoP 101: Essential Reading for Those Interested in the Base of the Pyramid

The leaves are changing and the mornings are becoming a little more brisk; it is clearly back-to-school season. In the spirit of this shift, I offer up the following list of books, articles, and cases that comprise what we here at NextBillion.net consider the essential pieces of base-of-the-pyramid reading.

I often get questions from students and readers about where to start. There is so much out there, and although NextBillion has done a great job of posting reviews of works as they are published, this post is designed to give a high-level overview of the literature over time. Therefore, the following showcases some of the most pivotal pieces that have influenced and continue to expand the base of the pyramid idea.

Genesis of an Idea

In 1999, CK Prahalad, Professor at the University of Michigan Business School, and Stuart Hart, then Professor at the Kenan-Flagler Business School at the University of North Carolina, wrote the article that first introduced the world to the term BoP. It was titled “Strategies for the Bottom of the Pyramid: Creating Sustainable Development.” This article attempted to raise awareness of the world economic pyramid and the vastly untapped market of four billion people living on less than $1,500 PPP per capita income. Organizations that were already involved in serving BoP markets, Hindustan Lever Limited, for instance, were highlighted as examples of MNC BoP strategy.

Although the early BoP theory was presented primarily as a business strategy for MNCs, it also addressed the potential for poverty alleviation, since the paper stated, “Foreign aid and charitable giving have not alleviated the problems for the world’s poor.” The paper called on MNCs to “recognize that the bottom of the pyramid poses a fundamentally new question: How do we marry low cost, good quality, sustainability, and profitability at the same time?”

Despite the fact that this seminal piece broke ground for the BoP movement, the idea did not really gain speed until it was picked up in 2002 by the Harvard Business Review. Al Hammond of WRI coauthored the HBR article with Prahalad, and it was titled “Serving the World’s Poor, Profitably.”

A Shifting Tide

So why was there a three-year lull between the original piece and the HBR article? Well, between 1999 and 2002 there were several books, articles, and discussions that may have shifted the business community’s openness to the BoP strategy. In the development space, scholars such as Amartya Sen and Hernando de Soto published outright challenges of what was then accepted as the traditional models of aid and development, and reframed the question of what was holding impoverished individuals back from reaching their full potential. They called on business to be part of the solution.

In 2000, the Millennium Development Goals were first established, as world leaders realized the reality of continued suffering despite years of international development spending. Fed up with government, the public began to call for the corporation to take on more of a role in sustainable development through what was termed Corporate Social Responsibility. The United Nations Global Compact, a voluntary initiative to promote socially and environmentally responsible business, was launched by the United Nations in 2000 as world leaders started to engage companies in deeper dialogue regarding their business practices.

Despite all of this pressure, companies were struggling to find the business case for most of their CSR activities, which were then framed as PR or risk-management strategies rather than strategies for top-line growth. The BoP theory, therefore, debuted on the world stage in 2002 as a potential strategy for business to alleviate global problems and tap into additional areas of growth—outside of the slowing top-of-the-pyramid markets.

The HBR article received a lot of attention, and both Prahalad and Hart decided to publish books on their somewhat divergent views of BoP theory. The books that followed this article were Prahalad’s 2005 “Fortune at the Bottom of the Pyramid” and Hart’s 2005 “Capitalism at the Crossroads;” both are must-reads for anyone wanting to learn more about the foundation of BoP. The “Fortune at the Bottom of the Pyramid” introduces the reader to many stories of early BoP actors, such as CEMEX and E+Co, which are still referenced today as prototypical examples of successful BoP cases. In “Capitalism at the Crossroads,” Hart addresses both poverty alleviation and the environment, as he asserts that “environmental and social concerns can be alleviated while spreading prosperity to those at the bottom of the pyramid.” Like Prahalad, Hart also draws on the real-world cases of organizations such as Grameen Bank to highlight his theories of linking profit to sustainability.

BoP Criticism

In August of 2006, University of Michigan professor Aneel Karnani posted a critique to the BoP theory on NextBillion.net. In many peoples’ eyes, the fact that the BoP perspective attracted criticism was a good indicator that enough people were taking it seriously. In Karnani’s article, titled “Fortune at the Bottom of the Pyramid: A Mirage,” he claimed that Prahalad’s estimates of the BoP market size were wildly optimistic, and he suggested that what impoverished people really needed was employment, not additional products. The basis of this article was the traditional poverty alleviation strategy of raising the real income of the poor, and it deserves a close read, alongside both Al Hammond’s and CK Prahalad’s responses. This debate is ongoing, and Karnani’s point of view has been adopted by a few other critics of BoP theory.

BoP Theory Subtopics: Driving Innovation, BoP as a Complementary Approach to International Development, Market Research

When one wants to move beyond these few seminal works that have mainly defined this space, it may be beneficial to take a deeper dive into one of the multiple BoP subtopics that have emerged over the years. As the field has expanded, so have the number of independent researchers that are carving their own niche areas.

One area that has been developed further by BoP originator Stu Hart, who is now at Cornell University and the William Davidson Institute, is the opportunity for business innovation through engaging with and building businesses with the poor. One of Hart’s early articles, titled “The Great Leap: Driving Innovation from the BoP,” was co-authored by Harvard innovation guru Clay Christensen. The piece discusses how emerging markets are ideal places to develop and incubate disruptive innovations. In the quest for furthering the BoP perspective on business innovation in the field, Stu Hart and his team have now produced the second version of the “BoP Protocol.” Drawn from best practices and field experience from the team, this document has laid the foundation for MNCs to engage in co-creating social businesses with BoP communities. It is an essential read for business managers who want to embark on a BoP project or people with a general interest in the startup phase of BoP businesses.

Ted London, who is at the University of Michigan, has carved his BoP niche in the role of the BoP strategy as a complementary approach to international development. London, who has on-the-ground experience with development projects, co-authored one of the early BoP papers with Stu Hart, entitled “Reinventing Strategies for Emerging Markets.”  He has now gone on to consider the BoP strategy first and foremost as a means for poverty alleviation. He believes that we need to measure the social, economic, and relational aspects of communities that engage in BoP projects in order to understand the full impact.

One of his most recent works, which addresses this niche area is the “Base-of-the-pyramid Perspective on Poverty Alleviation.” According to London, this paper is driven by “the development sector coming under increasing pressure to explore new approaches to reducing poverty … [and] a growing number of private sector and socially-oriented organizations viewing the poor’s unmet needs as untapped market opportunities.”

As London claims, it is true that many from within the international development community have also been calling for more accountability and more market-based approaches to development.  One of the most outspoken critics of aid-as-usual is William Easterly, and his 2006 book “The White Man’s Burden” may be of interest to those who see the BoP perspective as playing a role in this space. 

In terms of market research and quantification, WRI has created what is known as the most comprehensive document for defining and understanding the BoP market: “The Next 4 Billion Report,” published in 2007. This hard data-driven publication estimates both the size and composition of the BoP market. It should be read by anyone who is looking to better understand the particularities of the majority of the world’s consumers.

An Idea Turning to Practice: Finance at the BoP and Design for Social Impact

As the BoP idea has turned into practice in the field, noteworthy articles have begun to surface that address issues such as adequate financing, design at the base of the pyramid, and new models for distribution.

One of the most interesting and noteworthy trends in the base of the pyramid space is the growth of different kinds of “social investment” capital. MIT’s Innovations journal outlined this topic in Patient Capital, an article authored by Jacqueline Novogratz, founder and CEO of Acumen Fund, which is one of the pioneering organizations in this field. The article, titled “Meeting Urgent Needs with Patient Capital,” talks about the changing world of philanthropy (another driving force for more market-based approaches) and Acumen’s unique approach to investing in BoP businesses.  It also gives a good overview of some of Acumen’s main investments. Novagratz says that, “capital invested in businesses seeking to deliver basic goods and services to the marginalized majority will require long-term commitments, a lot of management assistance, and sustained relationship building.” This article is very useful for understanding the new approach to investment in SMEs that serve the BoP.

As adequate capital has begun to enter this field, there has been an increased push for innovative organizations and moreover innovative products and services that address the needs and aspirations of those living at the base of the pyramid. In 2007, the Cooper Hewitt Museum in New York City hosted an exhibition titled “Design for the Other 90%, which highlighted design-driven innovations in areas as varied and vital as water, healthcare, energy and housing. The book that summarizes the exhibition is definitely worth your time if you are interested in seeing how design can, for example, change the way men and women transport water and thus attain dramatic improvements in their quality of life.

“Design for the Other 90%” is the brainchild of Paul Polak, a prominent figure in the space of entrepreneurial approaches to the challenges of poverty who has revolutionized small scale agriculture through the design of affordable drip irrigation equipment at International Development Enterprises (IDE). His book Out of Poverty describes the path of building his organization and provides valuable insights from the field, emphasizing the importance of listening to and becoming aware of the specific context and conditions surrounding those at the base of the pyramid. 

Additional Resources

There are of course numerous other books, articles, and cases that highlight the growing adoption of the BoP approach. If you know of any additional pieces, feel free to comment on this post. Here are some in addition to those highlighted above.

Thanks to Francisco Noguera for his contribution to this post. Also, please note that this should not be understood as an exhaustive compilation of everything that has been written about the BoP. Please feel free to comment below if you want to add something to this list.

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.

Posted by Kelsey Walker

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Reviewing the Past, Predicting the Future

Ah, December. The anticipation of snow, unless you’re already several feet under. The warmth of a fire, unless you live in the south.  The excitement of winter holidays, unless you’re a grouch. Don’t forget the thrill of reviewing the year gone by and the accuracy of previous prognostications, while also prepping for the foolhardiness of sticking your neck out yet again and claiming trends, key changes, and buzzwords for the year to come. Ah, December.

Last year at this time on this very site I made several rather rash predictions. Briefly, they were:

1. One of the many philanthropic prizes launched in 2007 will succeed in motivating the solution it seeks;
2. At least one-third, and maybe as many as one-half of the world’s top 10 largest gifts in 2008 will be made by non-Americans to non-American institutions;
3. The lines between political giving, embedded giving, and giving will continue to blur;
4. Half of the glossy magazines dedicated to giving, launched in 2006 or 2007, will fold in 2008; and
5. Nothing significant will happen to the regulatory structure that shapes philanthropy in 2008.

My full accounting of these predictions can be found here in this article, “Alliance Magazine You can find additional discussion of it here and here  .

In brief, I was right on numbers three and four, wrong on number one, and we don’t have the data yet to assess number two. Number five was so poorly worded (my fault) that I can claim to be correct simply by being selective about which regulatory frames I meant. Apologies—I’ll do better next time. In that same post I also identified six trends or events that would matter to philanthropy in 2008. They were:

1. The economy
2. Health care finance will start down the same slope as subprime mortgages
3. Metrics
4. Markets
5. Bill Gates will go full-time
6. Race and age will matter

It is pretty clear in December 2008 that the economy and health care finance have profoundly shaped the direction of philanthropy in the last year—to say nothing of their effect on the U.S. presidential election. Discussions of metrics and markets were plentiful and some progress has been made—from the Acumen Fund’s Portfolio Data Management System and mainstream media’s attention to metrics to conferences on Social Capital Markets and the buzz around philanthrocapitalism. Bill Gates as philanthropist has garnered attention from his speech on creative capitalism to his retirement in June to his launch of a new company to the rapt attention paid to the Foundation’s investment policies and grants budgets. And, finally, the sector is beginning to pay real attention to racial diversity of leadership, grantmaking, encore careers, and next generation leadership issues—plenty more to be done, but I’d argue these issues have moved out of the wings and into the center of the room.

So what about 2009? Here are some thoughts. I’ll be back with more:

1. I’m going to recycle prediction number two from 2008—big giving is going to come from off America’s shores in 2009—we’ll see at least 30 percent of the year’s biggest gifts coming from/going to non-Americans. And we’ll have data to show this.
2. The number of nonprofit organizations in America will shrink through mergers and organizations going out of business. Paul Light has pegged this decline at 100,000 organizations or just fewer than 10 percent of the whole. Others I know are predicting shrinkage in numbers of up to 25 percent.
3. On the other hand, social enterprises will increase. President-elect Obama is promising investment in them and has already established a working group on social innovation. Necessity is the mother of social innovation. One problem—we don’t have any accurate or longitudinal counts (or even definitions) of social enterprises—so I can’t be wrong on this, because we don’t have data. (What an opportunity….)
4. Related to number three, but not synonymous: new corporate structures, such as B Corporations and L3Cs will significantly expand in 2009. B Corps will double in number and market reach.
5. Overall giving in the U.S.A. from all sources (foundations, individuals and corporations) will drop in real dollars in 2009 compared to 2008. (There I go again, sticking my neck out.)
6. The market of online giving marketplaces will mature – we’ll see this in shrinkage and consolidation (there are more than 120 of these now, they’ll be fewer than 100 this time next year) and the solidification of market leaders.
7. Social action by young people and elders will keep us hopeful.

What do you think? What do you predict? What will you stick your neck out about?

Lucy Bernholz is the Founder and President of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award winning blog about the business of giving and serves as Executive Producer of The Giving Channel on Fora.tv.

Posted by Kelsey Walker

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From Blue to Green

I just finished reading an advance copy of The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World, Jacqueline Novogratz’s book on social enterprise due out in March—and it’s terrific, an unusually candid and highly personal memoir about the deep and often painful complexities of trying to make lasting change in the world.

Novogratz, the CEO and founder of The Acumen Fund, which invests money in companies run by and for the developing world, is also generous with her storytelling: Early in the book, she shares the memory of first landing in Africa some 22 years ago, at the Abidjan airport on a sweaty Ivory Coast morning. She had just left Wall Street, had cut her hair (“to the point of resembling Margaret Mead,” she told Cause Global) and gave away most everything she’d owned, arriving with “all the essentials, from poetry to new clothes to, of course, a guitar. I was 25 and I was going to save the world—and I thought I would just start with the African continent.” Yet within days of arriving, she was told—and in no uncertain terms by a group of West African women—that “‘Africans didn’t want saving, thank you very much’—and least of all, not by me.” Recalls Novogratz: “I was too young, unmarried, had no children, didn’t really know Africa and my French was pitiful. It was an incredibly painful time of my life and yet it gave me enough humility to start listening.”

And learning: To this day, Novogratz—cited last fall by Portfolio magazine as one of the “73-Biggest Brains in Business”—has let her experiences as a pioneer in the still-evolving field of social enterprise continuously shape and check her unique blend of idealism and flat-out pragmatism; her Acumen Fund, founded in 2001, remains passionately focused on “changing the way the world sees the poor” by alleviating poverty in ways that make the poor the customers of—and workers at—self-sustaining businesses seeded by donors but run locally, over time, without hand-outs. From her experiences running a bakery in Rwanda in 1986 with 20 unwed mothers to starting the first microfinance institution in Kenya, Novogratz has seen first-hand “the power of markets to end poverty, the discipline that running a business provides, and the pride that results from ownership”—in other words, an end to charity. She has also seen what doesn’t work, and retells the story of revisiting Rwanda a few months after the 1994 genocide there.

Of all the inspiring stories in her memoir—[the blue sweater in the title comes from Novogratz’ experience of seeing her favorite childhood sweater, which her family had given 11 years earlier to Goodwill, being worn by a child she met on a hilly street in Kigali—her name, written on the collar, still intact]—one of my favorites is her hard-won lesson in the importance of listening, closely, to those in need. “...I could have listened better,” she says about the women she met in and around the markets of Kigali while helping them to create a “blue bakery” to sell samosas and doughnuts as a local enterprise, even painting the walls blue until one of the women dared to speak the truth to their enthusiastic benefactor. [“Our color,” one of them finally told Novogratz, “really is green.”] “...Listening is not just having the patience to wait,” Novogratz writes, “but is also about learning how to better ask the questions.” Her efforts eventually transformed the bakery, which had been run as a charity when she got there, into an enterprise that earned $2 a day for each of the women. “When you’ve lived on charity and been dependent your whole life long, it’s really hard to say what you mean,” Novogratz says. “The poor often think no one really wants to hear the truth.”

But perhaps the biggest lesson, both from the book and the life it profiles, is that investing in businesses run by and for the people they’re intended to serve can actually work, grow, and create change across a neighborhood or a region or a country. For those looking for the “ROI” of social enterprise, it doesn’t get much better than that.

Marcia Stepanek is Founding Editor-in-Chief and President, News and Information, for Contribute Media, a New York-based magazine, Web site, and conference series about the new people and ideas of giving. She is the publisher of Cause Global, an acclaimed new blog about the use of digital media for social change. She also serves as moderator and producer of New Conversations for Change, Contribute’s forum series highlighting social entrepreneurs and new trends in philanthropy.

Posted by Kelsey Walker

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It is a recession, and it could be a restructuring

I’ve been thinking about this post since last November. Unfortunately, quite a few things have come between my thinking about it and my writing about it. My thinking on this is not totally complete, but let me put out some ideas because I think this frame is critical—this is an opportunity to reframe, rethink, re-set, and re-build some of the things we take most for granted. It is not (just) a recession, it (can be) a restructuring.

This video, which I found on Marty Linsky’s blog (with a big shout out to Virginia Clarke) is worth the 4 minutes and 50 seconds to watch—I bet it will get you thinking in a “re-set” kind of way.

So, beyond the alliteration, what does a restructuring mean? Focusing only on issues of the public good and how they get done and who contributes to them (what I might have previously called philanthropy) let’s think about this:

We know that nonprofits are under extreme duress financially. Our communities are filling with neighbors out of work, houses under water, questioning of the “American dream,” fear that the government won’t be able to “get us out of this mess,” closed shopfronts, under-performing schools, health care crises…you know the list.

Our collective financial assets have dropped by some un-imaginable amount—10 trillion USD? 30 trillion USD? These are numbers none of us can visualize, let alone really comprehend.

Most of us have also finally gotten the message that we live on “spaceship earth”—the resources of which are both finite and undergoing rapid changes for which we argue about the pace but can’t really begin to comprehend or plan for the impact of higher coastlines, arctic water passage, post-petroleum economics, and so on.

It doesn’t make sense to think of this as a dip in an otherwise upward trend. It is more like a turn off onto a different path. People born since 1990, all over the globe, have fundamentally different assumptions than those born before that year about where information lives, who controls it, where and how work gets done, what the “proper” role of government might be, where their friends live, how much personal privacy they have, want or value, what kind of resources will be needed to fuel their futures, what kind of innovation might fuel the economies in which they will live, and what their individual relationships to others—proximal and far away—are, could be, or might be.

So, what might now seem to be on the edge of philanthropy—or any industry—may very well come to its center. And quickly. Here are some ways restructuring might happen:

• Social enterprise begins to morph the philanthropic giving that exists to its left and the commercial enterprise that exists to its right (on a spectrum from giving to investing)
• Networks of individuals - deliberately or expectantly time-limited - get more done than organizations
• Individuals’ daily contributions and activities are a deliberate and recognized mix of paid and unpaid—and successful enterprises build themselves to catalyze those inside/outside, professional/volunteer, expert/amateur, user/producer contributions
• Philanthropic giving is really asked (read: required by regulators or purchased: in a marketplace) to prove its value in the funding food chain of producing social good. So are social investing, social enterprise, and socially responsible investing.
• Islamic finance and various Asian cultural practices regarding mutual aid, private capital for public good, and giving become as influential in practice as they are in number of people
• Enterprises and activities that generate economic, social and environmental benefits move from marginal to the middle—and innovation shifts elsewhere
• Schooling and educational systems evolve to prepare more kids for the skill, job and political markets they will actually face
• Cooperation on a global scale prevents or limits a global pandemic, and we learn from that
• We will no longer assume that nonprofit = social good, commercial enterprise = profit, rather we will think about what we need as a society (investigative reporters, an independent media, universal literacy, human rights) and figure out new forms of delivering those things
• Foundations will act like entities in the knowledge business, not as mere funders
• We’ll be working among a profoundly different set of dynamics between the public sector, commerce, and independent entities—and making the most of those changes

Such a future is already here. The debates about the future of the newspaper, working models in which indigenous knowledge informs medicinal innovation, free and open educational resources and tools to access them, debates on social innovation and business models, and the growth of the science commons, creative commons and (maybe even) a giving commons are early signs of movement in these directions. Linsky’s post above asked individuals which way they’ll go—hunkering down or resetting. These are choices at the individual level, but the larger forces are already in motion.

What do you think? Are we at a fork in the road? Which way will we go?

Lucy Bernholz is the founder and president of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award winning blog about the business of giving and serves as executive producer of The Giving Channel on Fora.tv.

Posted by Katie Harrington

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Remix Culture

As the recent copyright woes of Obama poster artist Shepard Fairey show, there’s a war raging over what some now are calling a new art form in the emerging Web 2.0 culture—remix. Broadly defined, remix is collage, a recombination of existing, reference images or music and video clips from popular digital culture, elements of which are mashed up into something new. As thousands of people share and produce their own mashups and remixes online, an urgent question is emerging across today’s cultural landscape:

Should remix be outlawed as a violation of an artist’s or photographer’s copyright or—as long as the remix is significantly altered from the original—should remix be permitted by law to be shared freely, via social media, across the Web and in popular culture at large?

At the New York Public Library last week, remixer/street artist Fairey, copyright scholar Larry Lessig, and author Steven Johnson all argued for free expression, saying remix is a form of self-expression and free speech that should be allowed to flow mostly unrestricted across today’s burgeoning digital world. “Remix is literacy in the 21st century,” Lessig said. The chief of Stanford University’s Center for Internet and Society, Lessig is the author of Remix: Making Art and Commerce Thrive in the Hybrid Economy. He said that failing to legally protect remixes as original forms of art and expression “will make pirates of our children…We cannot kill this form of expression; we can only criminalize it, drive it underground. We can’t make [remixers] passive, we can only make them pirates.”

For his part, Johnson, author of The Invention of Air, a new book about the history of information flows in American and British society, said remix has “deep roots in the Age of Enlightenment and among America’s Founding Fathers.” He said that Thomas Jefferson, no less, remixed the Bible to produce his own underground version of it; Johnson refers to that effort as “the original American remix.” Said Johnson: “Where do we think innovation and creativity come from—protecting ideas or setting them free, allowing them to circulate freely?”

Fairey rounded out the talk, citing remix as one of the early 21st century’s most popular forms of free political expression. Fairey said his most “potent” remix is not his iconic, 2008 Obama Hope poster [over which he is being sued by the Associated Press and is countersuing for the right to have made it]—but his 2005 remix, Greetings from Iraq, a reference to a 1930s-era, WPA-produced Yellowstone Park tourism poster. “This referenced something that advertised a geyser to go see; I’ve made that geyser into an explosion, figuring it as something to go run from,” Fairey said. “...Remix is all about making references; references are how you establish a point of view in popular culture, and they are crucial to my work as an artist.”

What do you think? [Fairey’s 2005 remix, left; the original Yellowstone poster, right]

Here are some of Lessig’s examples of popular remix, which he included as part of his talk:

• Johan Soderberg’s Read My Lips remix, a 2006 mashup of George Bush and Tony Blair news clips on YouTube, created to make a statement about their mutual support for the Iraq War;
• Will.i.am’s February 2008 Yes We Can video, a remix of an Obama speech set to music, was widely distributed on YouTube prior to the presidential election last November.
• Beyonce’s October 2008 performance video of Single Ladies got 1.7 million views on YouTube in original form, but a Saturday Night Live parody-remix produced a month later [see it here] got even more attention, Lessig said—some 3.2 million views. And those remixes led to dozens of others, including this one.
• The Grey Album, a mashup album by Danger Mouse, released in 2004, that uses an a cappella version of rapper Jay-Z’s The Black Album and couples it with instrumentals created from a multitude of unauthorized samples from The Beatles’ The White Album. [The Grey Album made headlines after record producer EMI attempted to halt its distribution.]
• Anime music video remixes, which began as a trend around 2007 by remixing images from Japanese cartoons with a music track from a movie trailer. See this March 2007 example, Disney in D Minor. Each AMV, Lessig says, can take between 50 and 400 hours to create.
• Social commentary remixes, including this March 2008 remix by experimental filmmaker Andrew Filippone, Charlie Rose by Samuel Beckett. It shows Rose engaging in an interview with himself about the future of the Web. [“It took about eight hours of editing to produce,” Filippone said. Added Lessig: “What is striking to me about remix is how hard it is to do well.”] Here is Filippone’s remix, below:

What do you think? Protect remixes or crack down on them?

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Marcia Stepanek is Founding Editor-in-Chief and President, News and Information, for Contribute Media, a New York-based magazine, Web site, and conference series about the new people and ideas of giving. She is the publisher of Cause Global, an acclaimed new blog about the use of digital media for social change. She also serves as moderator and producer of New Conversations for Change, Contribute’s forum series highlighting social entrepreneurs and new trends in philanthropy.

 

Posted by Kelsey Walker

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SkollFest

The annual Skoll World Forum in Oxford —called the “Davos for social entrepreneurs”—is always about celebrating up-and-coming and established entrepreneurs who don’t simply want to get rich but also want to forge innovative solutions to the world’s social problems. But this year’s event, sold-out despite the dismal global economy, was as much about achieving some legitimacy, at last, for the fledgling new field. At the time of the first Skoll Forum six years ago, social entrepreneurship was seen “as an interesting but ephemeral fad” by those in mainstream business, academia, government, and the media, said Skoll Centre Director Pamela Hartigan. But not anymore: these same people, Hartigan said, are now finding that social entrepreneurship has been “a harbinger of future organizations, systems, and practices.”

The forum—which was held in what Skoll’s Oxford Centre Chairman Stephan Chambers called “the most chilling economic environment we’ve ever experienced”—was hosted by Oxford University and Jeff Skoll’s social enterprise foundation last week. [Skoll, who was the first employee and first president of eBay, also is the founder of the independent movie company, Participant Productions.]

Some 785 delegates from 65 countries attended the event, the biggest-ever Skoll forum, including Kailash Satyarthi, chairman of the Global March Against Child Labor; Mary Robinson, former president of Ireland and currently the founder and president of Peace Worlds Group, and Soraya Salti, senior vice president of INJAZ al-Arab, a youth education and empowerment project in Jordan. A wide range of panels Thursday and Friday included talks entitled The Uses and Abuses of Power in Social Innovation, Capital Markets in Crisis, Powerful Women: Shifting the Status Quo, Technology and Shifting Power in a Hyper-Connected World, and Tomorrow’s News: Models for an Everyone-is-Media World.

Cause Global covered parts of the conference, which we at SSIR will be cross-posting this week. Among some of the first-day’s highlights:

• Roger Martin, the dean of the Rotman School of Management at the University of Toronto, urged conferees to be “the kinds of leaders who reject the traditional choices between two or more unsatisfactory alternatives and instead create new courses of action in the world.” Martin, during an opening ceremony at the historic Sheldonian Theatre, referred to President Obama’s inaugural speech, in which Obama asserted: “For our common defense, we reject as false a choice between our safety and our ideals.” Rotman said that time and again, highly successful leaders reject unsatisfactory options and create new alternatives. “They understand the power of the paradox,” Martin said.  “The critical take-away for social entrepreneurs, specifically, is that you must reject the notion that existing business models equal reality. The status-quo business model versus civil society is not a choice but rather the root of a new model, a new set of solutions for our times.”
• Mary Robinson, the former president of Ireland and now president of Realizing Rights: The Ethical Globalisation Initiative, underscored the importance of government to help bring order to the current “chaotic” climate of change that is being felt around the world. She said: “One of the shifts taking place in this severe economic crisis is a recognition that government matters and that it’s very important to the 21st century. We had been in a neo-liberal phase when there was a reduction of government and the private sector was supposed to be so efficient and we didn’t need regulation. I am hoping we are now seeing a new era of more appropriate government, governments that are more responsive and also more welcoming to younger people with their tools of the information society. We need for people to become more participative in their communities and societies and their movements. We need more people holding those in power to account. How are social entrepreneurs holding existing institutions to account? We need more of that. It’s important to do that and that’s what social entrepreneurs and young people with their tools can do very well.”
• Ken Brecher, the executive director of the Sundance Institute and an anthropologist by training, delivered an eloquent speech that underscored the importance of passion and persistence in the pursuit of the common good. He received a hearty round of applause when he compared the traits of social entrepreneurs to those traits which characterized and qualified the fearless crews recruited by the early 20th century explorer, Sir Ernest Shackleton.  [Brecher quoted an advertisement that Shackleton placed in The London Times in 1907: “Wanted: Men for hazardous journey, low wages, bitter cold, long hours of complete darkness, safe return doubtful, honor and recognition in the event of success.”] Brecher also spoke about the perserverance and resilience that characterized the life of the late Russian poet Anna Akhmatova, who received an honorary degree from Oxford in 1965, when she was 76 years old, during a ceremony in the Sheldonian Theatre [the spot where Skoll conferees were assembled Wednesday night]. Brecher urged social entrepreneurs to heed Akhmatova’s example of creativity and passion against brutal odds to bring new levels of sanity to the world. “You can use your skills to bring order from chaos and in doing so fulfill the highest human function, not as visionary but with a strong sense of reality. (Akhmatova’s life was) a reproach to those who feel that a single individual can never stand up to the march of history.”

We’ll be running more highlights through the week. For more on social entrepreneurs and the state of social innovation, see this recent article in The Economist.

Marcia Stepanek is Founding Editor-in-Chief and President, News and Information, for Contribute Media, a New York-based magazine, Web site, and conference series about the new people and ideas of giving. She is the publisher of Cause Global, an acclaimed new blog about the use of digital media for social change. She also serves as moderator and producer of New Conversations for Change, Contribute’s forum series highlighting social entrepreneurs and new trends in philanthropy.

Posted by Kelsey Walker

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SkollFest Wraps

A week ago today, the Skoll World Forum at Oxford University concluded, with its leaders and many of its delegates declaring that the failures of the global economy have given legitimacy, at last, to the new field of social entrepreneurship. The growing ranks of business innovators who also want to solve the world’s social problems, they said, now seem the best hope for institutional innovation in the 21st century. “Our trusted institutions have turned out to be stunningly untrustworthy, ” said Colin Mayer, the dean of the Said Business School, the site of the conference. “While governments around the world believe they are in control and that the old order will soon re-emerge, you can be sure they are not and it won’t. Now, more than ever, there is a need and opportunity for institutional innovations.”

Social entrepreneurship used to be seen as “an interesting but ephemeral fad,” said Skoll Centre Director Pamela Hartigan—but not anymore. Those in mainstream business, academia, government, and the media “are now finding that [this movement] has been, indeed, a harbinger of future organizations, systems, and practices.” Jeffrey Skoll, in concluding remarks, urged delegates to step up their leadership efforts in the coming year. He quoted the American economist Paul Romer as saying, “A crisis is a terrible thing to waste.”

Among closing-session highlights:

• Lord David Puttnam, a movie producer [best-known for the Oscar-winning Chariots of Fire, Midnight Express, and The Killing Fields] and president of UNICEF UK, called on conferees to act urgently to overhaul education. Quoting the British author, H.G. Wells, that “the future is a race between education and catastrophe,” Puttnam said it is time for every citizen to “get absolutely honest” about the serious challenges facing humanity and to demand “exactly the same degree of honesty from those who seek to lead us and make decisions on our behalf.” He quoted from the 1925 novel, The Great Gatsby, to sum up the failures of today’s wealth-society: “They smashed up things and ... then retreated back into their money and their vast carelessness and let other people clean up the mess that they made.” Puttnam, however, was most passionate about the need for education innnovation, and showed the first seven minutes of a soon-to-be released documentary that he hopes will do for educational reform what Al Gore’s film, Inconvenient Truth did for climate change activism. Here’s a short portion of the script: “What we have now is a [school] system shaped by historical forces but now almost totally bankrupt of ideas for education in the 21st century—and they’re betraying most of our children. Public systems of education, paid for by taxation, were invented to meet the needs of the Industrial Economy emerging in the 18th and 19th centuries, when we needed a work force that could do certain sorts of things…The high schools of today were centrally designed in the 19th century…and in the old days, we’d say one-size-fits-all—we’d put 30 kids in a classroom and teach them the same material, which they’d all be expected get in the same way…But just five years from now, much less in 25 years time, we won’t know what the world will be like. How adaptable are today’s kids going to be? The very best we can do is to prepare young people for a rapidly changing social, technological, economic environment, in which they’re going to have to be the most flexible, collaborative, creative generation that has ever been. Education is the most fundamental challenge facing human beings; it will be key to solving all the other problems we’ve got.”
• Soraya Salti, a new Skoll fellow and the senior vice president of MENA, INJAZ al-Arab, an education nonprofit based in Jordan, said the region has strayed far from “the Golden Age of Islam”—a time when “people of different religions and cultures were coming together to move humanity forward.” Today, she said, schools across the Arab world have failed their students, fueling unprecedented rates of youth unemployment—30 percent in Saudi Arabia, 37 percent in Syria, 40 percent in Algeria, and 30 percent in Jordan. The irony? A lack of qualified human capital is cited by CEOs in the region as the No. 1 obstacle for growth. “Those who would control and politically mobilize the youth of the Arab world will be the ones who will win in the end,” Salti said, paraphrasing a 2008 report by the Brookings Institution in Washington. “Is it going to be government or is it going to be the [radical] Islamists?” Salti, in this video clip of her talk at the conference, described her recent work to assemble a team of 27 would-be social entrepreneurs from a girls’ school in Jamallah to compete for a regional prize for entrepreneurship. It was an example of what her group, INJAZ, is doing to reach more than 100,000 Arab youth in six countries across the Middle East.

Marcia Stepanek is Founding Editor-in-Chief and President, News and Information, for Contribute Media, a New York-based magazine, Web site, and conference series about the new people and ideas of giving. She is the publisher of Cause Global, an acclaimed new blog about the use of digital media for social change. She also serves as moderator and producer of New Conversations for Change, Contribute’s forum series highlighting social entrepreneurs and new trends in philanthropy.

Posted by Kelsey Walker

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Social Innovation in the White House

In the midst of a thoughtful discussion at the Wagner Center of the competing demands on philanthropies for funding of overtaxed social services and of social-change advocacy, big news: the White House is about to announce creation of the long-proposed Office of Social Innovation to bring together government responses and resources to the concerns of the philanthropic and charitable sectors.

Bureaucratic-style confirmation: the office appears on the list at whitehouse.gov.  Speculation about possible leadership has begun.

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.

Posted by Kelsey Walker

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The Innovation Imperative

I set out to write about President Obama’s forward-thinking decision to create an Office of Social Innovation to unleash new approaches to solving problems that have resisted traditional approaches. Even though the office and a related social innovation fund are still in their early planning stages and not even officially been announced, it is already clear to me that they represent a significant opportunity.

By creating this office and fund, President Obama is giving a clear signal of support for principles near and dear to Venture Philanthropy Partners: that the nation must invest in innovation targeted at the public good, that outcomes and impact matter, that dollars should flow preferentially to those who are having the greatest impact in addressing our growing social needs.

But a funny thing happened on the way to that blog item. After sharing a draft with others, wiser than I, to test ideas and “poke the system,” it became apparent that I was missing the forest for the trees. There’s no question that shining the spotlight on social innovation is remarkably important. Yet it will require innovation of the broadest possible breadth and depth if we are to solve our most vexing social challenges.

So instead of focusing on social innovation, I feel compelled to lift up a level and talk about innovation more broadly. I am convinced that, amid the many challenges facing our President, nothing is more important for the long-term strength of our nation than driving greater levels of innovation across all sectors of our economy, including the nonprofit sector.

From the halls of Congress to the rural towns in our heartland, we simply have to come to grips with the fact that the rest of the world is no longer ceding the role of lead innovator to America. Emerging powers like China are seriously challenging us in our core competency. As the journalist James Fallows concludes in an outstanding cover story in this month’s Atlantic Monthly, “China [is using the economic downturn] to design innovative products that will get it the high profits and the high-value jobs Americans kept to themselves for decades. And that is very bad news for the United States, unless it uses tough times to reinvent itself, too.”

Existential Urgency
My family and I visited Israel in 2006 as part of an awards program. I remember leaving extremely impressed by the positive attitude toward achievement, the concentration of intellectual talent, and the advanced thinking relative to the reuse and conservation of scarce natural resources.  I also remember that this attitude was present in everyone we met, from top officials and business leaders to the tour guides and shop vendors. In a trip report immediately following our visit, I shared this observation: “Israel is finding solutions to the scarcity of resources in ways we can’t yet comprehend. Their compelling advantage is that as a people and culture they know they have to in order to survive.”

America has a deep, proud tradition of innovation. But we don’t have this existential urgency and, in spite of all we’ve done, we do not enjoy a full cultural embrace of innovation. We desperately need that urgency and embrace.

Through radical innovation in our commercial, nonprofit, and public sectors, we must break the status quo that is too often miring us in mediocrity—from how we manufacture our products to how we educate our children, from how we consume energy to how we provide health care. We have no choice but to discover and deliver new, different, and better ways of dealing with our most vexing challenges. The aftermath of the financial crisis and threats to our global leadership will put America’s spirit of innovation and entrepreneurship to the test of its life!

Yes, We Can
We know we have it in us as a nation to meet this challenge. I witnessed the drive to innovate while growing up in the 1950s, when starting my career in the 1960s, and while riding the wave of information technology through the 1980s as an entrepreneur. But nothing in my experience compared to what I saw in the 1990s, when three forces converged to ignite an exuberant burst of innovation and entrepreneurship.

Motivation. The tumultuous industry shake-ups in the 1970s and ’80s caused a breakdown in trust for a generation of employees, blue and white collar alike. The shake-ups dramatically changed the mindset of millions who lost their jobs as a result of—pick your euphemism—“downsizing,” “restructuring,” “consolidation,” “merger,” “outsourcing,” or “reductions in force.”

I witnessed this in several ways. First, the software firm I co-founded helped a number of Fortune 500 firms consolidate operations, with resultant large, well, reductions in force. And, in our own firm, when I had the bitter task of telling good friends that I was letting them go, one looked me in the eye and said, “I understand what you have to do, but, @%*!, I’ll never work for someone again!” He struck out on his own; many others across our nation did the same.

Less obvious is how their sons and daughters internalized what they saw. When many of them started careers in the 1990s, they became entrepreneurs, embraced “free agency,” or went to work for smaller start-ups. They chased their dreams, drove change, and satisfied their desire for independence and self-actualization.

New Capital. Although wealthy individuals had invested through venture capital for a long time, the volume of capital exploded in the 1980s and ’90s as a result of changes in the Tax Reform Act of 1986 and an influx of large institutional investors. This vast source of capital funded many aspiring entrepreneurs and emerging business opportunities through the turn of the 20th century.

Disruptive Technology. Early in the 1990s, the Internet, previously the domain of the Department of Defense and academic researchers, went mainstream. It gave the Davids of the world the power to compete with corporate Goliaths. Suddenly, an entrepreneur working from his or her basement had the power to access the world’s resources—anyone, any place, any time. The price of basic business technology plummeted.

The Tailwinds Today
Great crisis and disruption can lead to important new inventions, as discoveries often emerge out of a period of economic collapse. I have a sense that something totally new and really big is going to emerge out of our current crisis. An innovator—or, more likely, a group of innovators collaborating across great distances—is going to create something that will fundamentally change the way we live. I haven’t a clue what it might be and, if past experience holds, I wouldn’t even recognize it if it were in front of me.

What I do know for sure is that I’m picking up the early signs of a new convergence.

Influx of Talent. The carnage in big corporations is going to drive millions of additional people—especially the young people who grew up in homes hit by corporate layoffs in the 1980s—to explore the entrepreneurial route. Clearly, the conditions are once again ripe for bright young minds to pour their energies into bootstrapping their own entrepreneurial ventures rather than tethering themselves to big companies.

In addition to young talent, we will also see an influx of seasoned Baby Boomers, the most highly educated generation ever, who are looking for purpose through an “encore career” rather than retirement. Not all encore careers are entrepreneurial in nature, but the potential for innovation is enormous. Just take a look at the remarkable winners of the Purpose Prize, sponsored by Civic Ventures. I love the story of the former lighting director who built a $28 nut sheller that has made a huge impact on the lives of farmers in West Africa!

In addition to these talent infusions, we will also see huge contributions from New Americans. A key ingredient to American success in innovation and invention has been its openness to new people with new ideas. A disproportionate number of innovators in America were born outside the United States, just as literally millions of small businesses were created by immigrants over the years. This is a vibrant source of talent for our future.

New Mindset. With youth setting the tone for this talent, a new mindset is emerging. Compared with previous generations of entrepreneurs, a far greater proportion of entrepreneurs today seek to do well by doing good. From engineering students at MIT developing an inexpensive shock absorber that harnesses previously wasted energy and uses it to improve fuel efficiency to Stanford grads selling hundreds of thousands of solar-powered LED lights in poor communities in Africa and Asia, the new entrepreneurs are rejecting the greed and ethical lapses they’ve witnessed in their young lives. They have been heavily influenced by macro events like Katrina, global terrorism, growing threats to our climate, and the meltdown of our global financial system. They are much more socially conscious, inherently global, more concerned about the state of our planet, less enamored of traditional political-party orthodoxy, United Way, apple pie, and Chevrolet. YouTube, Stephen Colbert, and the Smart Car are much more relevant.

New Network Technologies. Thanks to an entire new class of social networks, resource-matching and open-source models, and other innovations of the second generation of web development and design (Web 2.0), the Internet is becoming the ultimate tool, not just for connecting but also for organizing and coordinating across a broad and diverse continuum of resources—with a speed, ease, and effectiveness we’ve never witnessed before. The cost of coordination is falling to zero.

If you had a good idea in 1970, it was incredibly hard to move it forward and bring it to market; it was often one man or woman against the world. In the 1980s, the arrival of the PC allowed the little guy to look big and compete in new ways. When the Internet arrived in the 1990s, one man or woman could suddenly sell to the world. Now, thanks to the newest Web-based tools, it’s not just about selling to the world anymore. The next wave is collaborating with the world. The time from idea to result will—again—shrink dramatically.

We’ve only seen the first glimpses of this potential. For example, Barack Obama would still be the junior senator from Illinois if not for the online tools 20-something Facebook co-founder Chris Hughes and other innovators put into action. With a modest budget and small team of developers, Hughes and others created community-building tools for the Obama campaign website which made it far easier than ever before for motivated volunteers to organize themselves and mobilize others.

Even when the vast majority of the Obama campaign’s staff and budget were focused in the critical early-voting states of Iowa and New Hampshire, the Obama website was giving volunteers in every corner of the nation the training, talking points, images, databases, and other tools they needed in order to find supporters and get them to the polls. When it became clear that neither Obama nor Hillary Clinton was going to land a quick knockout, “all of a sudden it made a difference that we have 60 really organized groups in Kansas, a caucus state,” Hughes told Fast Company.

Dallas Mavericks owner Mark Cuban just launched a fascinating experiment in what he calls “open source funding.” He has invited entrepreneurs anywhere in the world to post business plans on his blog. He hopes that his open approach will produce not just good investment opportunities for his company but also spark widespread innovation. “I expect other people can and will comment on [your idea]. I also expect that other people will steal the idea and use it elsewhere. That is the idea. If it’s a good idea and worth funding, we want it replicated elsewhere. The idea is not just to help you, but to figure out how to help the economy through hard work and ingenuity.”

Half Full
These three converging vectors—talent, mindset, and technologies—could create the conditions for commercial and social innovation on a scale we’ve never seen before. This is the forest, the iceberg below the surface, the big kahuna. This is why our national cup could be half full even at this time of deep recession. This is what President Obama has a chance to harness.

If necessity is the mother of invention, then this crisis, which has laid bare the depth of our needs, provides us the dramatic necessity to drive innovation and spur entrepreneurs of all types and sizes to find ways to deal with our challenges. The real change makers will be those throughout the land in small and big enterprises, the new and the old, the scientific innovator to the obsessively compelled entrepreneur, across all sectors, who take up this challenge.
So while I could not be more supportive of the Office of Social Innovation, I believe this is a chance for the President to systematically foster a mindset in America that is nothing short of a cultural and economic ground-shift. He must broaden the focus across and among the private, public, and nonprofit sectors—to seek and spark the most promising innovations whether they come from commercial or social entrepreneurs, executives or line workers, community leaders, public servants, researchers, or citizens who don’t fit into any of these categories. The real opportunity before the President is to supercharge innovators from all walks of life and make commercial and social innovation our national imperative.

Mario Morino, a former software entrepreneur, is the chairman of Venture Philanthropy Partners, based in Washington, DC.

Posted by Kelsey Walker

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Giving Sector Should Invest in Social Media

The giving sector, especially in the face of the continuing economic crisis, needs to retool its model for charitable giving and fundraising.

Nonprofits, for example, should start looking at building social media into their overall fundraising and communication strategies.

Often reluctant to move beyond traditional strategies, whether or not those actually produce positive results, nonprofits should look at social-media tools that are changing the way people communicate, connect and spur one another to action.

“If you don’t get started now, you’re going to be playing catch-up,” says Beth Kanter, a social-media strategist who is serving as scholar in residence for nonprofits and social media at the David and Lucile Packard Foundation in Los Altos, Calif.

Consider Facebook, the wildly-popular online meeting place for young people that has been attracting a growing number of Baby Boomers.

Membership on the site hit 200 million active users in April, double the total just last August.

Or consider the unprecedented use of social media that Barack Obama made in raising money and recruiting supporters in his successful 2008 presidential campaign.

Kanter says nonprofits should be strategic about their use of social media, starting with small experiments linked to their marketing or fundraising plans.

At 3:01 p.m. on Dec. 13, 2007, one minute after the Case Foundation launched a social-media contest, promising to contribute $50,000 each to the four social-media campaigns that raised the most money, Kanter entered the contest, using several tests of social-media tools and strategies.

And while conducting those tests, she also was blogging to her network of readers about the progress she was making.

Through GlobalGiving, using an application on its site, along with email and blogging, she raised $43,000.

Altogether, including seven different campaigns she launched, plus the Case Foundation match, she now has raised over $215,000 for The Sharing Foundation, a charity that works to address the needs of children in Cambodia living in poverty.

The key was “starting small, figuring out what worked and what didn’t,” she says. “And by doing it over and over, I built up a community of donors who donate through social media.”

In addition to starting small, Kanter says, nonprofits should pay close attention to what people are saying about their cause or organization in the blogosphere.

“You listen and you learn and you adapt,” says Kanter, who with Allison Fine is co-writing a book, to be published by Wiley, about how social media are reshaping the way nonprofits operate, creating a more networked nonprofit.

It also is important to remember that social media do not represent an “either-or” strategy, Kanter says. “It’s both-and.”

And nonprofits cannot afford to ignore new social media, she says.

“Nonprofits putter along and, yes, they tend to keep doing what works,” she says, “but they also need to understand that the old way of fundraising is not going to work forever.”

While nonprofits should “not throw out the baby with the bathwater,” she says, they cannot stand still and simply expect old fundraising tools are all they will need in world increasingly driven by social media.

Nonprofits also should not use the failing economy as an excuse to avoid social media.

“Look at everything you’re doing in fundraising and marketing,” she says. “If you’ve been going on automatic pilot, look at the effectiveness of everything, and make room for a small amount of experimentation. Stop doing stuff that doesn’t work.”

As they regroup and rethink how they do business to survive the economic crisis, nonprofits of course need to get back to basics.

But innovation always has been basic to the giving sector, and nonprofits need to begin testing social media and building those strategies into the way they operate.

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.

Posted by Kelsey Walker

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Nonprofits’ Attraction to Stimulus Funds Could Prove Fatal

Smitten with their new best friends in government, nonprofits need to be careful not to betray what makes them essential to a healthy democracy and civic marketplace.

The job of nonprofits is to take on social and global problems and make our communities better places to live and work.

To do that, nonprofits need to deliver effective services, find innovative ways to address both the symptoms and causes of problems, and ride herd on government lawmakers and policymakers.

But with Democrats controlling the White House and Congress, and spending billions of dollars to build the capacity of the giving sector and stimulate social innovation, nonprofits face a big temptation and a run a huge risk.

Seeing a chance after years as outsiders to get a piece of the action, both in federal spending and influence with policymakers, nonprofits risk losing the independence and incentive that have been essential to their work as civil society’s conscience and research-and-development arm.

On the political left and right alike, experts on the giving sector warn that nonprofits should not to abandon or abdicate their role as social innovators and government watchdogs.

Rick Cohen, a left-leaning watchdog who is national correspondent for The Nonprofit Quarterly and former executive director of the National Committee for Responsive Philanthropy, says keeping quiet about the Obama administration and Congress is the worst thing nonprofits can do.

“No, there’s something worse,” he writes in The Cohen Report, a publication of the quarterly.

“We can transform into an uncritical handmaiden of the handful of insiders who have grabbed the ‘nonprofit expert’ roles in the new administration, rather than doing what the nonprofit sector should always do, which is to stand apart, critique, mobilize the communities we represent, and demand social justice.”

Howard Husock, vice president for policy research at the right-leaning Manhattan Institute and head of its social entrepreneurship initiative, wrote recently in The Wall Street Journal that the Edward M. Kennedy Service America Act that President Obama signed into law threatens to stifle the social-entrepreneurship movement that has flourished in recent decades.

Standing in “notable contrast to established, large organizations – from Catholic Charities to the Salvation Army – which, in many cases, have come to rely on government contracts,” the social-enterprise movement has been fueled by “new, inventive nonprofits established and operated with little or no government support, says Husock, former director of case studies in public policy and management at the Kennedy School of Government at Harvard University.

But the Kennedy Act “will throw so much money at nascent programs that these otherwise independent efforts will lurch after federal dollars and bend toward government directives,” he says.

Nonprofits are known as the “independent sector” because their effectiveness in serving people and solving problems is rooted in their separation from government.

Nonprofits indeed stand to gain from a closer partnership with government that would generate more investment in the giving sector and give nonprofits a greater voice in shaping public policy.

But nonprofits should be careful that in chasing government money and access to power they do not devolve from entrepreneurial watchdogs into lazy and dependent lapdogs.

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.

Posted by Kelsey Walker

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Why Innovation Matters

As we all know, America has no shortage of foreign and domestic challenges. But I am convinced that nothing is more important for the long-term strength of our nation than driving greater levels of innovation across and between all sectors of our economy—for-profit, nonprofit, and public.

In the early 1990s, a seasoned executive shared a metaphor that has stayed with me ever since. He said that innovation is like a coral reef. Marine biologists don’t understand fully what causes reefs to form, he said, but we do know that human actions can nurture (or harm) the process. The same is true for innovation. Innovation is a natural, chaotic, unpredictable process that is hard, perhaps even impossible, for well-meaning outsiders to foster. If we try to control or micromanage innovation, we risk squeezing out the very life forces that give rise to successful new ideas. Instead we must focus on finding ways to nurture and accelerate the natural processes of innovation once they’ve begun organically.

For almost a half century, Silicon Valley has been the country’s most compelling example of a healthy innovation ecosystem. Yes, first the dot.com implosion and now the Great Recession have dampened the exuberant spirits in the Valley—and the exotic Italian sports cars in the parking lots of Sand Hill Road now seem jarringly out of keeping with the somber reality of our times. But even after the deluge, Silicon Valley is the kind of reef ecosystem we need to support and nurture across our nation.

Over many decades, Silicon Valley developed a unique, creative, informal, hierarchy-leveling culture. It developed an interconnected web of talented engineers, risk-taking entrepreneurs, big-think investors, and service providers that inherently understood the Valley’s culture. It became the world’s most fertile breeding ground for innovative technology businesses—starting with HP, then Intel, and then other successes like Apple, Cisco, eBay, Google. This ecosystem is now nurturing a disproportionate share of promising tech startups like Tesla and Facebook that have great potential to transform markets.

Academia, government, and the nonprofit community have also played a big part in the success of Silicon Valley. Stanford University, the alma mater of many of the Valley’s most prominent leaders, played an enormously catalytic role following World War II and continues to do so in the commercial and social arenas. Today, for example, Stanford engineering students and graduates are at the forefront of efforts to create inexpensive, culturally appropriate technologies for helping people in the developing world meet their basic needs.

The federal government, which rarely gets credit for its catalytic role in any field, provided critical infusions of innovation capital through the Department of Defense, the Department of Energy, and NASA. The Valley’s successful entrepreneurs—such as Hewlett, Packard, Jeff Skoll, Pierre Omidyar, Sergey Brin, and Larry Page—often start charitable foundations and other ventures to support innovators (nonprofit and for-profit alike) working to address the world’s hardest social and environmental challenges. Today, Silicon Valley and the Bay Area as a whole are every bit as much of an epicenter of social innovation as they are of commercial innovation.

It is critically important to point out that there has never been a defined, structured way to connect the dots in the Valley. Instead, it has been this organic ecosystem—with its interrelated professional and personal networks—that has allowed the “dots” to connect themselves. A good example of this phenomenon is the remarkable TED conference, which brings together the brightest minds in a wide range of fields to advance its mission of “spreading ideas.”

Of course, Silicon Valley is not the only ecosystem of commercial and social innovation in America. However, most regions, and the nation as a whole, default to linear thinking with formal structures to define and control innovation. What they need instead is to turn the forces of innovation loose—to create the right conditions for that reef ecosystem to grow on its own and take hold.

I have come to believe that nurturing innovation at the national level will require both top-down and bottom-up strategies.

First, our nation needs an overarching framework—perhaps it could be called a “national innovation strategy”—that would define a shared vision, create a clear direction, and identify priority areas for innovation. This national innovation strategy could be drafted by a Presidential Commission made up of A++ innovators and thinkers from across a host of relevant disciplines (and outside the political process), and then quarterbacked by a high-profile Innovation Czar appointed by the President.

The priorities might naturally start with the three top priorities the President spelled out in his address to the joint session of Congress in January: “harnessing the power of clean, renewable energy,” “addressing the crushing cost of health care,” and “expand[ing] the promise of education in America.” It should also embrace other needs, such as the enormous challenge of rebuilding our infrastructure and developing more robust emergency response and homeland security.

Take something as simple as the rebuilding of our highways, bridges, and rail systems. In spite of the infusion of stimulus dollars, our approach to infrastructure is, for the most part, no different from how we’ve done things for decades. Where are the breakthroughs, the new materials, the embedded communications, smart transportation systems, and digital sensors for safety and maintenance that would give us smarter, better, longer-lasting transportation systems?

The national strategy would have to identify, to the fullest extent possible, the specific inflection points and/or tipping points within each of the priority areas—that is, opportunities where targeted innovation could have a disproportionate impact. This would be an even grander version of what the Bill & Melinda Gates Foundation has done in the field of global health with its $100M Grand Challenges initiative.

Simultaneously, we will need bottom-up approaches to engage tens of millions of Americans and nurture reefs in every part of our country and society. For example, building on the “stock exchange” approach used by innovative companies and outlined in this New York Times article, the Administration could create a Federal Innovation Stock Exchange and open it to any federal employee who wanted to float an out-of-the-box idea for addressing a tough societal challenge or creating new innovations that add to our economic engine.

All of the ideas listed on the “stock exchange” would be available for all to see on the Web—sparking additional ideas from inside and outside the federal government. All federal employees whose innovations were adopted would receive some form of bonus and some form of recognition from the President. And if this works for the federal government, one could imagine a network of innovation stock exchanges in which states, metropolitan regions, large universities, hospitals, and civic-minded corporations put in place similar mechanisms to advance innovation to address key social and economic needs.

With a national strategy combined with efforts to seed the creative chaos from bottom up, the Obama Administration could put America on the right path for the long term. Helping to unleash, channel, and connect the millions of innovative minds across all regions, all disciplines, and all walks of life is the most important form of long-term stimulus the President can provide.

Mario Morino, a former software entrepreneur, is the chairman of Venture Philanthropy Partners, based in Washington, DC.

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Now Media

These past days have been a fascinating time for those studying social media. Even as Iranian authorities continue to prevent most mainstream journalists from reporting on citizen protests, Twittering citizen reporters have been able to bypass government censorship to share events on the ground as they unfold. Many of their rapid-fire, 140-character dispatches are uncommonly empathetic, hyper-personal, and unforgiving, prompting even some of the more sober and astute observers of the Net’s impact on society to recently wax hyperbolic.

“That a new information technology—[so-called “now media” such as Twitter, cellphones, mobile vlogs]—could be improvised for this purpose so swiftly is a sign of the times,” blogger Andrew Sullivan gushed in a post titled, “The Revolution Will be Twittered.” “ …You cannot stop people any longer. You cannot control them any longer. They can bypass your established media; they can broadcast to one another; they can organize as never before.”

Meanwhile, political blogger Maegan Carberry told last week’s 140 characters conference in Manhattan, the nation’s first all-things-Twitter thoughtfest, that “social media are pushing us into an era of post-partisanship,” where political parties become far less important as wider and more personal communication among groups start to blur the political distinctions that authoritarian institutions of government have previously used to divide us and mute our penchant for dissent.

That statement followed remarks by NYU new media scholar Clay Shirky to TED interviewers earlier in the week that “we are living through the the largest increase in expressive capability in human history” and that the surge of Twitterized news reporting out of Iran has made the Iranian uprising historically unprecedented. “This is it. The big one,” he told TED. “This is the first revolution that has been catapulted onto a global stage and transformed by social media.”

Iran, of course, isn’t the first world hotspot where social media have played an abrupt and interventionist role in focusing the world’s attention to urgent social causes and events happening on the ground. Text-messaging and vlogging (video-blogging) was instrumental in revealing government corruption around foreign aid to victims of Cyclone Nargis in Burma last year. Social media also helped to leak word out to the world about the pro-democracy uprising by Burmese monks, hardline censorship by Chinese authorities during last summer’s Beijing Olympics, and the extent of the devastation of the Chinese earthquake —details of which, says Shirky, would have otherwise taken months to go public.

But whoa, Nellie. Indeed, while Twitter with its velocity to spit out information can expose the undercurrents of dissent and the underbelly of corruption, hunger, and the abuse of power in often shocking detail, social media haven’t been able to drive those undercurrents of dissent, nor bring about widespread reforms—at least not yet. For every successful social media-fueled protest, such as the Facebook-fueled protests last year to destabilize FARC in Colombia, there are at least a dozen more digitized uprisings that end when authorities shut down the Net or, as in the case of the as-yet unmutable Twitter in Iran, track down the people whose tweets have been most prominent and revealing and “disappear” them, creating a chilling climate of self-censorship that all but cedes power to those abusing it.

More significant, perhaps, is how Twitter and other forms of social media are accelerating the rate at which events play out, regardless of outcome, and how that speed can be potentially destabilizing, in and of itself. Jason Calacanis, a social media entrepreneur and cofounder and CEO of mahalo.com, speaking on a panel I convened and moderated for the recent Milken Global Conference 2009 on social media and politics, said: “The good news is that the Internet is an accelerator, probably the greatest accelerator since the advent of the written word. Truth gets wrestled away from the rumors more rapidly now; if you’re on the wrong side of society, you get outed in hyperspeed.” Further, he says, activists are better at the conversations spawned by social media because “those on the right side of society are the most willing to engage in conversation; when you’re on the wrong side of an issue, it’s very hard to be involved in a discourse because if you are involved in one, the quicker you get to the inevitability of being wrong.”

Just how much power, ultimately, social media can have will be debated again widely at next week’s Personal Democracy Forum in Manhattan, which opens Monday with a late-addition workshop entitled “Social Media and Iran.” Such debates are likely to go on for months, if not years.

As Twitter co-founder Jack Dorsey queried the a standing-room-only crowd of Twitterati at the 140 characters conference:  “We have this brand new tool to help us in this experiment in democracy but where are we taking this? What are we doing with this technology and how are we sustaining these concepts of immediacy, approachability and transparency to open up the process of every social community from families to the largest governments in the world?”

Marcia Stepanek is Founding Editor-in-Chief and President, News and Information, for Contribute Media, a New York-based magazine, Web site, and conference series about the new people and ideas of giving. She is the publisher of Cause Global, an acclaimed new blog about the use of digital media for social change. She also serves as moderator and producer of New Conversations for Change, Contribute’s forum series highlighting social entrepreneurs and new trends in philanthropy.

Posted by Jason Chua

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Time for nonprofits to declare independence

Nonprofits are society’s unsung heroes.

Sadly, however, many see themselves as victims and supplicants, or at least act as if they are.

Nonprofits are heroic because they address the symptoms and causes of urgent social and global problems that government and business cannot or will not take on.

Nonprofits work hard for little pay, continually are expected to do more with less, and face growing scrutiny and expectations from funders.

And in the current economic recession, with rising demand for services, nonprofits face growing pressure to reduce costs and increase their fundraising and impact.

With those kinds of seemingly intolerable working conditions and stress, people who work at nonprofits often feel alone, under siege and burned out.

They stick with it, however, because they care, and because they find fulfilling the job of making a difference and working with people in need and with other people who care.

Yet, needing revenue to meet their payroll and pay their rent, and fearing they lack the know-how to map a business strategy to sustain their organizations, they are too quick to swallow funders’ demands and consultants’ advice without critically questioning it.

Nonprofits are not victims and should not underestimate the knowledge of their staff and board, the value of their programs and services, the extent of their impact in the communities they serve, or their potential to generate even more contributed and earned income.

Rather than falling prey to the herd hysteria the recession has unleashed in the giving sector, nonprofits should treat the economic crisis as an opportunity to get back to basics and recognize the value and impact of the work they do and the untapped potential they possess to do more and do it better.

That means scrutinizing their mission, board, staff, operations and programs with brutal honesty.

It means using common sense to look for ways to improve their efficiency, impact, fundraising and communications.

And it means finding smart supporters and partners who care about their cause and understand that getting involved by making a donation, volunteering, serving on a board, collaborating or even merging requires recognizing the organization’s true needs and potential.

Nonprofits play an indispensable role in America, serving both as the safety net for the most vulnerable among us, and as the research-and-development arm to find ways to fix our biggest social and global problems.

America’s economic crisis has underscored nonprofits’ role and value, and compounded the challenges they face.

To fulfill their role, expand their value and meet those challenges, nonprofits must stop acting like victims and start thinking and working as independent and entrepreneurial agents 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.

Posted by Jason Chua

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First and Foremost: Know your Community

Have we replicated our offline social dynamics and barriers online? I believe we have—and Danah Boyd does, too. As reported by the New York Observer, Danah recently spoke to this when she presented at the Personal Democracy Forum about the data uncovered in her four years of research on new media use.

If we truly are reproducing our offline social divides online, then it’s further proof that the central part of your social media strategy needs to be focused on your audience.

“MySpace has become the ghetto of the digital landscape,” Ms. Boyd explained to the crowd. And many of us in these social environments, she said, “have gotten into the habit of crossing the street like we always do to avoid the riff-raff.” —New York Observer

You’ve probably heard of Facebook; you may even have set up a group or a fan page there for your organization.  But did you do that because you heard of Facebook in the news, or from a friend? Did you choose Facebook because you evaluated your existing community as well as the audience you wanted to bring into your community, and they were already using Facebook?  Did you consider MySpace? or Orkut? or Bebo? Maybe you’ve never heard of those platforms, but for some large demographics they are the hot spots online, not Facebook.

Let’s step back a minute and consider why a nonprofit or social benefit group wants to include social networking as part of a social media strategy.  Why would your organization want to have a presence on a social network?

• Go where the community already is!  Don’t expect the community to come to you, or even find you, online. Instead, go where they have already set up shop.
• Make your calls to action part of the routine!  Creating calls to action that match the community and can be accomplished, or promoted, in the same space will increase the overall participation you can garner.
• Join the community!  Don’t just come to the party and start asking questions or push calls to action; instead, actually join the community, answer questions, share links or information (even ones that aren’t related to your work but you may just know!), and be a genuine part of the ecosystem.

“The fact that digital migration is revealing the same social patterns as urban white flight should send warning signals to all of us,” she said. “It should scare the hell out of us.” —New York Observer

Choosing the platform or platforms to concentrate your efforts online is crucial.  You may hear about Facebook, but if your audience is on MySpace, it doesn’t matter how much time and energy you put in.  They won’t be there to find you.  When evaluating your community, some of the most influential items to consider regarding social networks include:

• Age: Facebook users can skew older than MySpace; many organizations in the UK have had great success joining the ecosystem on Bebo to extend the opportunity for teens to reach out for social services in a private way.
• Actions: What kinds of “actions” do you want your community members to be able to do? Each platform offer unique functionality and it may not match what your community members want to do with/for you.
• Data: Is your work reliant on certain data (whether for eligibility, age, etc.) that you will need validate, or at least advertise? Each platform displays profile information in different ways and you will need to check your settings and profile customization to ensure you are disclosing what you need, and offering opportunities to connect outside of the public messages.
• Goals: What are your goals for the inclusion of social networking in your social media strategy?  Be sure you don’t get caught up only on functionality that’s new and cool; remember why you’re there.

Danah’s research shines a bright light on an issue many activists and organizations have been concerned about ever since the media hype around Facebook VS MySpace rose as a loud voice in the conversation about social media use.  The issues our social service agencies and social benefit organizations are dealing with offline, in local communities, are showing up online.  It’s imperative that we recognize the social divides permeating online social networks and carefully consider how we craft our online strategies to truly reach and serve our communities.

What do you think? Has your organization had experience reaching your core constituents in an online social network? How did you identify the best place to concentrate your efforts?  What lessons have you learned?

You can download Danah’s dissertation here.

Amy Sample Ward’s passion for nonprofit technology has lead her to involvement with NTEN, NetSquared, and a host of other organizations. She shares many of her thoughts on nonprofit technology news and evolutions on her blog.

 

 

Posted by Jason Chua

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Speaking YouTube

YouTube contains a lot of content: according to cultural anthropologist Michael Wesch some 20 hours of new video is uploaded to YouTube every minute. But all of it represents a new form of cultural literacy, Wesch says—a new language of shared images and intensely personal revelations that can be used to connect people in new ways and, perhaps, even get them to care more about each other.

As a professor of introductory anthropology at Kansas State University, Wesch says he has a “front row seat” from which to watch new cultural trends emerge from the youngest adult generation, and for the past two-and-a-half years, Wesch has been inviting his students to help him analyze the vast YouTube community.

After trawling through mega-gigs of content, watching hours of videos and posting videos of their own, Wesch says, he and his students “are finding that the same conditions of ease and anonymity that enable people to get snarky online” can also encourage them to participate in meaningful and collaborative new projects. In fact, he’s discovered that YouTube and social media can mitigate the cultural tension between teens’ conflicting needs for independence and community by offering them “connection without constraints.” What looks like narcissism and individuality is actually a search for identity and recognition, Wesch told the digerati attending this week’s Personal Democracy Forum in Manhattan. “In a society that doesn’t automatically grant identity and recognition, you have to create your own.”

Wesch says he’s hopeful that social media will ease the “narcissistic disengagement” of many young people and encourages them to be more politically and civically engaged. Already, he says, some heroes have emerged—including the anonymous YouTube character who filmed himself giving hugs to strangers in the streets, and One World, the person who wore a Guy Fawkes mask and used his anonymity as a platform for collaboration, asking people to write messages on the palms of their hands and to hold them up to their Webcams for sharing. Millions of people shared this way, mostly about the need to love one another and to look beyond themselves.

“When I’m using a Webcam,” Wesch explains, “I’m not talking to you, I’m talking to it. When you’re Twittering, you’re not talking to me, you’re talking to it. Or when I’m on Facebook, I’m not talking to you, I’m talking to it.” The point, says Wesch: When communicating face-to-face, people bring many different versions of themselves into a conversation based on the context of that conversation. “But when you’re sitting in front of a camera, or twittering to hundreds if not thousands of people in a community who you cannot see and who cannot see you, you don’t know who you are talking to or when or in what context, and so [communication via social media] it is forcing a kind of context collapse—a deeper level of self-awareness not present in simple, everyday conversation. People can get deeply self-reflective on YouTube and confessional…and reveal things they would otherwise refuse to reveal, even to their family and close friends.”

Wesch urged the journalists, techno-geeks, business developers, and academicians attending the PDF conference to start thinking of YouTube as a new kind of public sphere, where new types of conversations and forms of communication can occur. “The YouTube debates [during last year’s presidential election] were flawed in that they allowed TV to dictate that conversation,” Wesch says. “We have an opportunity, on YouTube and with other social media, to create a whole new groundwork for the way these [civic] conversations work.”

Wesch then challenged attendees to help the culture move away “from its current state of ‘whatever, I don’t care’ ...to one in which we can say ‘I care, let’s do whatever it takes by whatever means necessary.’”

Wesch connected: attendees stopped tweeting long enough to give him a standing ovation.

For more about Wesch and his observations about the cultural signifiance of social media, see the lecture he gave last summer at the Library of Congress.

Marcia Stepanek is Founding Editor-in-Chief and President, News and Information, for Contribute Media, a New York-based magazine, Web site, and conference series about the new people and ideas of giving. She is the publisher of Cause Global, an acclaimed new blog about the use of digital media for social change. She also serves as moderator and producer of New Conversations for Change, Contribute’s forum series highlighting social entrepreneurs and new trends in philanthropy.

Posted by Jason Chua

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Rethinking Compensation for Nonprofits

Imagine that you’ve built a business that generates $10 million in revenue per year.  What would be a fair level of compensation to expect?  Now, imagine that this enterprise is a program that helps low-wage workers receive Earned Income Tax Credit funds, and that the $10 million is the net amount of value the program brings to low-income neighborhoods.  How did this change your estimate of fair compensation?

As a society, we pride ourselves on our generosity of spirit and purse – on helping people in need and on championing causes that matter to us.  Why, then, do we pay so little to the people who work for the things we say matter most to us – the well-being of our children and the elderly, our environment, the interests of groups like disabled veterans or disaster survivors?

In his book Uncharitable, Dan Pallotta makes a compelling case for completely rethinking compensation in the nonprofit sector .  (Incidentally, chapter 2 of Pallotta’s book should be required reading in all business, law and management courses claiming to put the nonprofit sector in context.)  The challenging question Uncharitable poses to all of us is what would a new approach to nonprofit compensation look like?

Let’s start off by looking at approaches to compensation in the for-profit world.  While nonprofit workers struggle to get adequate compensation for their contributions, the for-profit world, of course, presents compensation problems at the other extreme.  Most recently, the bonuses AIG paid out using federal bailout funds has symbolized these excesses, but over the past 20+ years we’ve seen leading executives receive shockingly high amounts of pay.  In the aftermath of the financial meltdown, the government’s response to the problem so far has been to appoint a “compensation czar” to set executive pay limits.

A more promising approach being discussed in the finance world is tying compensation to longer-term results and productivity gains. The argument is that such an approach, sometimes referred to as “Silicon Valley Compensation,” may both preserve high rewards for innovative or significantly superior performance and simultaneously reduce the potential for kleptocracy.  As noted economist Brad DeLong explains in a recent post:

The engineers of Silicon Valley startups are significantly smarter and work a lot harder than do the traders of Wall Street.  Some of the engineers of Silicon Valley make fortunes: they are compensated with relatively low salaries and large restricted equity stakes in the startup businesses they work for, and so if the businesses do well they do very well indeed—in the long run, in the five to ten years it takes to assess whether the business is in fact going to be a viable and profitable going concern.  And the engineers of Silicon Valley have every incentive to use all their brains and all their hours to make their firm viable and successful: they get their cash only at the end of the process.  They don’t get big retention bonuses if they stick around until the end of a calendar year.  They don’t get big payouts if they report huge profits on a mark-to-market basis. 

Nonprofit pay dynamics also call out for Silicon Valley rules, not because pay is excessive but because it is too low. When successful nonprofits deliver extraordinary results, we all benefit, but the sector does not capture and recycle any of that value into attracting and keeping more talented people.  Because it is hard to “see,” and therefore put a price upon, the value that nonprofits produce, funders, employers and watchdogs alike all focus solely on the pay nonprofit leaders and employees receive, rather than the value they create. That leaves them – and more importantly, the people and causes they serve – at the mercy of the perverse expectation that nonprofit workers should sacrifice financial stability and secure futures for themselves and their families. (Pallotta traces this distortion to the carry-over effect of Puritan ethics). 

Remember the thought exercise from the first paragraph?  In the first example (for-profit), “fair compensation” would include a nice salary, bonuses and perhaps an exit package that will allow you to maintain a comfortable lifestyle.  In the second case (nonprofit) however, you could expect no more than a base salary, simply because you work for a charitable organization.

Paying people tied to the value they deliver over a longer term would seem to make sense for any enterprise.  But for nonprofits, the problem is two-fold; the challenge is not just how to measure value creation, it is also where to find the surplus revenue to fund increased compensation.

For all the talk and debate about results in our sector, in practice, results are rarely measured for a number of reasons.  These include the time lag between providing a service or activity and the manifestation of the results, the difficulty in determining what share of the results is attributable to the service or activity rather than other factors, the lack of adequate resources to enable meaningful measurements, and the reluctance of most donors to pay for costs they do not see as essential to the continuing mission of the organization.

But assume for the moment we could measure productivity gains and added value. Where, then, would the funding to pay deferred compensation for superior performance come from?  Given all the attention venture philanthropy and social enterprise has received over the past 10-15 years, we’ve seen surprisingly little discussion about how to compensate organizations and people who make extraordinary contributions.

There is much that funders and the government could do, such as offer loan forgiveness or ROTC-type programs that cover education costs for people who choose to work in the sector (as I’ve argued in SSIR previously). 

The much harder question is how to offer higher performing nonprofit workers a reasonable chance at increasing income over their careers – the ability to make a living that allows them to stay in the sector without asking their families to sacrifice too much.

In a recent post, Robert Egger posed the question of whether the economic downturn, which has created a buyer’s market for talent, offers the nonprofit sector the chance to try out what he calls the “Starbucks” model .  This model is one in which moderately increased compensation, significantly improved health and other benefits,  could help nonprofits compete for the best people .  It would be a very positive sight to see more public good organizations and their donors adopt this model.  Unfortunately, the dominant trends at the moment – layoffs, hiring and wage freezes, sharp cuts in foundation and government funding – are pushing in quite the opposite direction.

It will likely take years of experimentation (and yes, venture capital) to solve this challenge. There has been a great deal of energy put into prize philanthropy in recent years. What if a similar amount of funding and attention were put into bonus pools for collaboratives working on challenges suitable for result measurement?  Might we learn something from the way cooperatives measure and reward contribution to the whole? Perhaps the workforces of different organizations could be assigned shares of a pool of “success funds.”

Think about your favorite cause or nonprofit. If you could prove that your favorite charitable venture produces, let’s say, $5 in value for every $1 invested in it, how would you persuade donors to pay a premium for that rate of value creation, what would that premium be, and how would you allow your workers to participate in that success?

Peter Manzo is President & CEO of United Ways of California, which improves health, education and financial results for low income children and families by enhancing and coordinating the policy advocacy and community impact work of California’s 37 United Ways.

Posted by Jason Chua

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