Posts Tagged ‘hybrid’

 

Hybrid Models for Non-Profits

Posted by mari on October 26th, 2010

Stephanie Strom’s article in the New York Times about hybrid organizations highlighted some of the challenges social entrepreneurs face as they innovate. Having experienced these challenges first-hand at GlobalGiving, we wanted to offer some additional thoughts about the trial and error process, and what it takes to keep iterating to Plan B.

We originally structured GlobalGiving as a hybrid organization because we believed that doing so could bring the discipline and capital of the for-profit world together with the mission focus of the non-profit world. As it turned out, after the tech bubble burst, it was easier to raise funds for the non profit, which became the dominant partner. Respected innovative funders like the Hewlett Foundation, Omidyar Network and Skoll Foundation provided up $7.6m of grants to GGF specifically for the purpose of investing in MFI. The founders contributed $1.4m as well. It was structured as a convertible note until a 3rd party could set a price–that happened at the end of 2008, and the result is that GGF owns 98% of MFI (and the founders have donated the proceeds from their shares back to GGF). At that point, we decided to consolidate all operations under the GlobalGiving nonprofit umbrella, explained here in detail.

As Ms. Strom notes, we believed so strongly (and still do!) in the power of connecting people, ideas, and resources that we were willing to put up our own money to get it started. Although our original business model is not our current business model, the bottom line is that it is working; GlobalGiving has now facilitated over $40 million to over 3,500 projects projects in more than 110 countries around the world. Thanks to the power of the internet, many of the community groups that list projects on GlobalGiving are able, for the first time, to reach out for ideas and support from around the world, not only their immediate neighbors. And we are doing this at a cost well below the cost of fundraising through typical mail, telephone, and other solicitation campaigns.

There are few silver bullets in any endeavor. Rarely does a single approach to any problem prove to be magic. We make progress in the world through trial and error and through incremental improvements–punctuated by an occasional breakthrough. The wonder of it is that so many of the people we know in this hybrid space have been willing to try different things, and keep trying others when they–and we–run into roadblocks. That’s why we are proud of what we and our colleagues in this field have accomplished over the past decade, and we look forward to even more progress in the decade ahead.

Dennis Whittle and Mari Kuraishi, co-founders.