projects Posts

Why 15% Makes Sense

People sometimes ask me why we charge a 15% transaction fee.  My cheeky answer is, “So I can be sitting here having this conversation with you.”  As Chief Program Officer at GlobalGiving, my job is to make GlobalGiving more valuable to more organizations around the world.  We work with thousands of organizations, qualifying them, supporting them, disbursing funds to them, monitoring their activities, and maintaining an online platform for them to connect with donors.  Work at this scale would be impossible with an all-volunteer team.  Without great people and robust systems working full-time, GlobalGiving does not work.

Could we find a large donor to fund operations, making the ongoing transactions free?  Maybe, but we believe a transaction-based fee is a better idea.  Funders like Skoll Foundation, Omidyar Network, Hewlett Foundation, Packard Foundation, Rockefeller Foundation, and Kellogg Foundation have invested in our effort to make the transaction-based model work, and we’re almost there.  The model gives GlobalGiving a strong incentive to invest in the performance of our marketplace, which aligns nicely with our partner organizations’ goals and the needs of donors – the more funds flowing, the greater the social impact.  We are motivated to build better tools for donors and project leaders, we aggressively court corporate partners, we attract donors through a strong social media presence, we offer free training and development opportunities to our project leaders, and we find innovative ways to demonstrate results.  We strive to earn our 15%, and GlobalGiving only works if we deliver the value.

So, why do organizations decide that 15% is good value?  We connect them with new donors, we provide donor management tools, and for some organizations we save the expense of maintaining a transactional web platform.  For international organizations, the ability receive tax-deductible contributions in a secure, transparent platform is worth the 15%.  We do not charge organizations an up front fee to participate in GlobalGiving, so fees only exist when donations flow, and we’re careful to explain the fee to all prospective organizations.  Donors should feel good giving to organizations on GlobalGiving, because each organization calculates that our platform is worth 15%.  Donors always have the option of covering that 15%, and over 50% do just that.  Donors should expect to receive quarterly updates and can exercise the GlobalGiving Guarantee if the experience doesn’t meet expectations.  We just finished our best year yet, delivering more funding to more organizations than ever before.

That said, our 15% does not work for many organizations.  For organizations that maintain a web site with transaction processing, or have a staff dedicated to donor management, or do not like to accept project-specific funding, GlobalGiving is probably not a good fit, and that’s fine.  If a donor simply wants to fund general operations of a US nonprofit, that donor should give through that organization’s web site or a portal like Network for Good, both of which have lower fees.

Our commitment to this model holds us directly accountable to the donors and organizations connecting on our platform.  Organizations and donors do not have to use GlobalGiving  If we are not worth our 15%, people will stop transacting, and GlobalGiving will not survive.  If we are worth our 15%, more transactions will happen, we will continue to improve the platform, and we might just improve the efficiency of giving to the most effective organizations worldwide.

Crowdsourcing Social Innovation, or How We Learned to Stop Worrying and Open Up GlobalGiving

At GlobalGiving, we’ve been effectively crowdsourcing, crowdfunding, and crowdevaluating social innovation for years.  From early experiments with prediction markets, to collaboration with The Case Foundation and Network for Good on America’s Giving Challenge, to working with GOOD and Pepsi on design and implementation of the Pepsi Refresh Project, we’ve woven experiences into the core mission of GlobalGiving – creating open access to philanthropic markets for small and large organizations worldwide.

We just wrapped up our largest Global Open Challenge ever, an initiative started in 2008 which has become the primary way we find and qualify new organizations for the GlobalGiving marketplace.  Over 230 organizations headquartered in 38 countries serving beneficiaries in 55 countries participated and collectively raised $569,536.  Each organization, in order to secure a spot in the GlobalGiving marketplace, was required to raise $4,000 from at least 50 donors during the month-long challenge.   Over 75 organizations achieved this goal by mobilizing supporters to vouch for them with their donations.

This is not a public voting contest to determine which organization receives a grant, though every donation is a vote.  This is not simply crowdfunding a specific project, though specific projects get funded.  This is not a matching campaign, though there are modest financial incentives.  Using a design thinking approach, we fuse elements of voting, crowdfunding, and matching to identify and qualify organizations for participation in the GlobalGiving marketplace.  We’re using components of all four crowdsourcing models Beth Kanter describes in her recent post:  Creating Collective Knowledge or Wisdom, Crowd Creation, Crowd Voting, and Crowd Funding.

Why would organizations put themselves through this?  Every day, we receive online requests to be part of GlobalGiving, and our goal is to accept as many as can qualify.  We don’t want to turn away innovative, but unproven organizations.  Many of these applications are from individuals or organizations with questionable motivation and capacity.  Many of these applications are from great organizations that need exactly the kinds of tools and services that GlobalGiving provides – a safe, transparent and tax deductible way for donors to give, a set of donor management tools, ongoing trainings, and the possibility of connecting with new donors.  From the applications, it’s hard to tell the difference.

Intead of sorting through applications and having our team decide which organizations gain access, we throw the decision out to the crowd.  We invite every organization that passes our rigorous due diligence process to participate in a Global Open Challenge.  If an organization can mobilize enough funding from enough donors, it’s a good indication that they can use our platform productively and that their idea has support.  It’s hard to get 50 people to give money to a really bad or fraudulent idea.  We’ve gotten pretty good at predicting which organizations will succeed, but there are always big surprises.

This model has the added benefit of sustaining itself.  The transaction fees generated during this process support the large amount of due diligence, training, support, outreach, and disbursement work that goes into throwing a challenge of this magnitude.  We do not charge organizations a fee to participate.  We feel strongly that any organization working towards social change should have a shot at articulating its work and raising philanthropic funds to support its growth.  Manmeet Mehta heads up this initiative at GlobalGiving and has continually enhanced the strategy, the incentives, the processes, and the support to make this an effective and sustainable program for GlobalGiving.

How do organizations hear about GlobalGiving in the first place? A quick Wordle of all responses to the question, “How did you hear about GlobalGiving?” reveals the interplay of offline and online networks that drive participation.  “Friend” and “Internet” figure most prominently:

Wordle: How did you hear about GlobalGiving?

Organization responses to the question, "How did you hear about GlobalGiving?"

I’m proud of the continuous experimentation that has resulted in this method of opening GlobalGiving’s doors as widely as possible.  We’ve tripled the number of organizations using GlobalGiving, and we’ve kept disbursements per organization steady.  Our marketplace is becoming richer in feedback and more self-sustaining.  2010 is already GlobalGiving’s biggest year ever, with over $10,400,000 in donations.

World Cup inspires seeing soccer/football as mechanism for social change.

Yesterday, I got a Tweet from @Alyssa_Milano reminding me that, “Before the #WorldCup is won, 100k Africans will die from malaria.” She encouraged me to, “Join players & fans: http://bit.ly/WC_a_m6 #endmalaria.

The link clicks through to the United Nation’s “Unite Against Malaria” Facebook page.

This was quite timely, as the Tweet came through just as I was creating GlobalGiving’s World Cup landing page, featuring projects related to soccer.

Not long after, Tobias Eigen, President of Kabissa, an organization that bolsters civil society in Africa, sent out a message asking everyone what they were doing to leverage the World Cup in their awareness-raising and social change efforts in Africa.

Indeed, when it comes to this kind of thinking about how to leverage this year’s World Cup for good, it seems everyone is on the ball. (Pun intended, but with apologies nonetheless.)

It’s 10 a.m. on the day the World Cup is launching, and, in addition to those above, I’ve already seen Tweets or emails linking the World Cup to issues of global awareness and social action from @growingupglobal and even @usaid, and, of course, @peacecorpsconnect.

It’s fun and exciting to see an international sports platform being used in such creative, inventive ways to draw attention to issues which are less fun, but even more important than a soccer game, such as malaria, poverty alleviation, and HIV/AIDS.

The projects GlobalGiving is featuring on our World Cup landing page drive this home.

In just the sampling of projects we feature that tie to soccer, the issues being tackled include using soccer to help inmates in South African prisons reintegrate into society, reducing stigmas associated with amputees in Sierra Leone through amputee soccer, providing soccer as recreation for children in a refugee camp in Rafah, and using soccer as a means to build leadership and self-esteem for military daughters in the U.S.

Those are just a few of the ways that GlobalGiving projects are using soccer to create social change for people around the world. (Here’s the full list.)

We’re looking forward to seeing how the World Cup is used to fuel awareness of and support for projects and issues like these as much as we’re looking forward to the matches themselves.

And trust us, we’re really excited about the matches.

A Tough(er) Sell

Poor kids, sick people and threatened animals. As is the case in much of the development sector, projects that deal with any one of these tend to have an easier time raising funds on GlobalGiving. The problem is easy to grasp and a remedy is obvious (at least conceptually in the short run): Give food; provide medicine; build an animal rescue center. These are big problems that warrant significant attention. But a recurring concern as I meet with organizations throughout Southeast Asia is how to engage donors for everything else. Some NGOs are particularly frustrated because their projects address the root cause of the problems of or have an indirect benefit to the hungry, ill and furry. But that takes time to explain—something they’re not likely to get much of from the quickly browsing Internet user.

Lesley Perlman and Nick Marx of the Wildlife Alliance talk about how they have a relatively easier time raising funds for the care of tigers and elephants(!) than for the protection and restoration of their natural habitats. Jo Owen and Thomas Hansen of HOPE speak of the drop off in funding for orphans as they get older. Kim Sokuntheary of the Cambodia Health Education Media Service says it can be difficult to raise funds for TV shows like the ones her organization produces which seek to educate the public and prevent gender-based violence. An organization working after the fact with abused women would have an easier time, I would imagine (not to say it’s “easy” for any non-profit).

Before I left for Southeast Asia, I was heading up GlobalGiving Green for projects which address climate change in a sustainable manner. All of this reminds me of the financing available to climate projects. Carbon offsets and an alphabet soup of schemes (CDM, REDD, VCS) only provide funding to efforts that directly reduce the amount of greenhouse gases going into the atmosphere. But there are so many necessary activities to which it’s impossible to assign an exact number of tonnes of CO2 because the impact is indirect. Educating children about the environment, training farmers in organic agriculture or helping youth start eco-businesses can have an enormous impact over time but such things are not eligible for the typical climate funding.

During the tea break of the workshop I held in Bangkok yesterday morning on online fundraising, Vena and Somkid of Foundation for Life (FFL) told me about the great work their organization is doing to empower the next generation by engaging young people from a wide cross-section of society and teaching them about leadership and the power and benefits of volunteering and service. I said, “That’s great. Now the challenge is to take that 10-minute conversation and distill it down to four or five words.”

Like President Obama, I think some organizations are rightfully reluctant to rely on a few words to describe the nuanced work they are undertaking to address complex problems. But messaging, particularly online, needs to attract busy eyeballs and be easily understood by a brain that’s quickly sifting through an enormous amount of information for anything interesting or relevant.

I wish I had an easy answer of how to accomplish that for the more nuanced projects. One approach could be to tie the primary pitch to the meta-goal and holding off on details of “how” until after attention has been grabbed. For instance, with FFL we took the title of their project on GlobalGiving from “Character and Leadership Training for Thai Youths” to something like “Empowering Tomorrow’s Leaders in Thailand”. It seems catchier, but only time will tell if donors agree.

Gathering real-time feedback in haiti can improve disaster response

Judging from some of the comments GlobalGiving donors have made on recent haiti updates, I gather that television news falls short of presenting a multifaceted view of the earthquake recovery effort. There is a mix of ongoing challenges with some successes. Last Friday someone wrote in:

Sent: Friday, January 29, 2010 4:36 PM
Project ID: 4559 / IMC provides medical care to Haiti
Project URL: http://www.globalgiving.org/projects/haiti/

It gives me a first hand account of what medical relief is taking place as oppose to what’s being transmitted over the airways showing de-humanizing conditions with no relief nor help in sight!! They’ve aired trucks of food being returned to warehouse while Haitians are starving and waiting for FOOD!! KEEP UP THE GOOD WORK!! YOU ALL ARE IN MY PRAYERS!! IF I COULD GET THERE, I WOULD!! GOD’S PROTECTION FOR ALL OF YOU AND IMMEDIATE SALVATION FOR THE HAITIANS!!

We currently rely on our partners and their staff to provide eyewitness accounts of the ongoing work. But there’s no reason we couldn’t open it up to any eyewitness. Mobile phone texting may be an easy way for us around the world to get to know each other better. Great innovators like Ken Banks of FrontlineSMS and Erik Hersman of Ushahidi are turning phones into web 2.0 reporting tools. Highlighting this pressing need, Washington Post Writes:

“Much as truth is the first casualty of war, reliable information is one of the early casualties of natural disasters. Until fairly recently, disaster responders relied on their senses, and their common sense, to identify problems. The notion of measuring what you could see was viewed as an academic and slightly effete response to things such as earthquakes, hurricanes and tsunamis.

The survey this week didn’t ask questions of a random sample of Haitians in the way that a medical trial would. That would have been a huge and time-consuming undertaking. Instead, it sought out individuals expected to know what was happening to the people in their area: mayors, village directors, health officials. The places weren’t chosen randomly either. The designers chose fairly evenly spaced sampling sites, with extra ones in the heavily damaged Port-au-Prince area.”

What they [the CDC] found is that you can gather most of what you need to know to manage a crisis in real time with anybody, going anywhere, asking for feedback using a less formal system. To me, as a neuroscientist, it makes perfect sense. You need rigorous controlled trials to assess medical benefits that are small – like a 10% difference. But when the questions are knock-you-over-the-head obvious, like “who’s dying on this block” or “who’s handing out supplies?” and there’s no ambiguity from one witness to the next, you can do away with conventional sampling.

About a week before the electronic ink was dry on this Washington Post article, Ushahidi’s Haiti immediate SMS-based crisis response center had already logged hundreds of eyewitness reports from regular people about everything from looting to service delivery. See for yourself at haiti.ushahidi.com .