The black box of giving

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Today we can track nearly everything about ourselves. American Express and Mint.com will tell you how much you’ve spent each month, and where you’ve spent it. Sites like Klout.com and Memolane allow you to monitor your social media activity. And if you’re a video gamer, you’ve long been used to nearly every game tracking your achievements and scores. Heck, even Netflix does a half-way decent job of telling you what you’ve watched.

Yet where are the tracking tools for giving? There aren’t any.

The size of the charitable giving market in the US far exceeds industries like video games or movie rentals. In the US, individuals give well over $200 billion to charity each year, a multiple of what is spent on video games or movies. With so many dollars directed towards charity, it’s amazing that better tracking tools for giving haven’t been built. Why hasn’t this been done? Here are three reasons:

1. Decentralization – Giving is done through many different contexts: cash and checks offline, and donations online through a myriad of websites and portals. Until there is linkage among these methods, it remains difficult to track activity.

2. No greater return – What’s the upside for someone willing to create such a tool? You can’t make money off of other people’s giving unless you can deliver them a markedly better experience.

3. Lack of a common identity – Each time you give through a new site online, you have to register all over again. The philanthropic world hasn’t done a great job of tapping into existing online identifies, like those established through Facebook, Google Accounts, or even Amazon. Utilizing these tools would be a huge first step.

What do you think? Why aren’t there better tools available to track one’s charitable giving?

Why there is no such thing as corporate values

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Did BP lack good values, or did Tony Hayward?

Recently I’ve been reading about corporations and the effect they can have on society. A book called “We First“, by Simon Mainwaring, is a great example – it lauds companies that don’t just make money, but also pursue positive social outcomes. If you haven’t read Simon’s book yet, do it. At least check out his blog.

Outside of “We First”, you’ll find plenty of discussion around corporate social impact. There are “socially responsible companies“, “eco-conscious companies“, “socially conscious businesses“, and of course, the most “sustainable companies“. Whatever that means. Inevitably, writers ask why more companies aren’t acting responsibly: what they should or should not be doing, how they should change, what their values should be, and so on.

However, these discussions are missing the point. Companies can’t and won’t change themselves. But we talk about about ideas like “corporate values”, as if they existed in some independent space. But there really isn’t such thing as corporate values. There are only individual values. We seem to ignore that fact that corporations are made entirely of, and run exclusively by, individuals.

So if we are going to have a discussion about the behavior of corporations, we necessarily have to have a talk about individual values. The effect a corporation has on society is a direct result of the values possessed by the people running that company. In other words, corporate behavior is a reflection of the combined values, influence, and behavior of each individual within. So why don’t we discuss individual values more often? Why don’t we hear about the “500 Most Socially Conscious Managers”, or the “100 Most Responsible Board Members”?

I’ll admit that we do hear a great deal about celebrity individuals – the all-star CEOs, the point guards, the pop music stars, and the politicians. But these don’t count – their celebrity persona may not reflect the real individual, and too much of what we see is filtered by the media.

But it’s still easier for us to praise or vilify the celebrities, because they won’t do the same to us. It’s a one-way communication. We feel free to chastise someone like Tony Hayward, because he’ll never engage in a quid pro quo. So should we turn to criticizing our peers instead? Not if we want to risk destroying our relationships and are willing to open ourselves to the same critique. Are you willing to do this?

So where does this leave us? Who do we turn to if we want to improve ourselves and society? Socrates said, “A self examined life is not worth living”. I’ll extend that further, but saying “A self-examined life is the only way we can hope to have companies that are better stewards of society.” If individuals don’t change, nothing else will. We have to be willing find our faults from within! I know that’s not an easy proposition. But it’s the only way we can really hope for any change, in my view.

If this point resonates with you, I’d recommend checking out Sam Davidson’s blog. He articulates ideas about self-examination far better than I can. In fact, one of his recent articles inspired this post in the first place.

What role do you think individual values play in setting the behavior of corporations?

Freedom through giving

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Yesterday I tweeted that when you give more, you get more. What was I talking about?

Last weekend, I had decided to sell my bicycle on eBay. Not just any bike, but a sleek, carbon-fiber, racing machine that had brought me many happy memories. I didn’t take the decision lightly – I hadn’t ridden it in over a year, but I hated to part with such a cherished possession.

I had all but convinced myself to just sell the bike, pocket the money, and move on. But I knew that whatever the sale price, it wouldn’t feel like enough. Even if I used every eBay trick in the book to get the highest price, I would have felt shortchanged. That’s the part of me that can’t stand not getting the best deal. So what did I do? Instead of working against the feeling, I made it irrelevant.

I asked – what would make me feel good no matter what the outcome? An idea hit – give the money away. A terrible idea, I first thought. I paid a handsome sum for the bike – I wasn’t about to see it disappear! But as I prepped the bike for sale, the idea grew on me. By donating some of the proceeds, I wouldn’t care nearly as much about the sale price, I realized. If I didn’t care about the sale price, I’d be freed from worrying about whether I got the very best deal. What freedom! And I’d even help someone else in the process.

After some mental wrangling, I decided on a 50/50 split – whatever the bike sold for, half would go to charity. Fortunately, eBay has a tool that makes this very easy to do, called eBay Giving Works. I started the auction later that day, eager to see what the experiment would bring.

What happened? The bike actually sold for far more than I expected. Maybe some good karma was in effect that day! I still received less than if I kept 100% and sold the bike for a more modest price, but that’s not the point. I gave myself the freedom of thinking that I needed more money, which is a gift more valuable than money itself. And since I didn’t actually need the cash, it’s more fitting that it went to someone who did. Not a bad deal. I just hope I can convince myself to do it again.

Have you had a similar experience? What are some ways you’ve freed yourself from thinking that you need more of something?

From “Tales from the Hood” – Aid cannot and will not fix anything

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There is no shortage of arguments to be found for or against humanitarian aid. Occasionally one comes across a perspective that is both well-articulated and grounded in reality. A recent post from the blog “Tales from the Hood” is such an example, so I chose to include it here. The original posting can be found at the “Tales from the Hood” site.

If I was to ever teach a course in humanitarian principles and action, it would go something like this:

Lesson #1. Aid cannot and will not fix anything.

One of the most important lessons that we’ve never really learned is that, in fact, aid does not fix anything. This is most likely a difficult one for you to wrap your head around. It certainly was for me, and I only managed it after of several years in the humanitarian aid world. Aid cannot and will not fix anything.

You wouldn’t know this from reading NGO promotional material. Actually, I would say that in general it is probably not a good idea to try to learn about or understand humanitarian work by reading stuff published by NGOs, because NGOs, for a long list of complicated reasons that I won’t go into right now, have very little (basically zero) motivation for telling anyone this particular truth. This particular truth being, specifically, that they cannot fix poverty. NGOs cannot eradicate hunger. NGOs cannot stop human trafficking. NGOs cannot and will not transform communities, empower the marginalized, stop climate change, or educate the global illiterate…

It is important to understand that this is true whether we’re talking about socially conscious grad students starting causes on Facebook, a small new-kid-on-the-aid-block NGO whose marketing shtick is that they “cut through the red tape and get it done”, or a huge global household charity with a gazillion dollars in annual revenue, massive programs and a long list of impressively titled publications. Aid cannot and will not fix anything.

We (inside the industry) have allowed ourselves believe and then sold to our constituents (our donors, those outside the industry…) a fiction about what we can actually do. Although we rarely say it directly in so many words, the implication is clear: To hear us tell it, you would think that we can fix anything.  And we’ve sold this fiction so well that now when we fail to fix things, it comes back to bite us. The media gets mad. Ordinary citizens get mad. We get cynical and disillusioned.

We’ve drunk our own Kool-Aid, we believe our own propaganda, and then when the harsh reality sets in and it’s disconcerting. We’ve allowed ourselves to believe that our structures and our systems, our warehouses and our team houses, our fleets of white SUVs and our armies of volunteers will “fix” Tsunamiland or post-Katrina Louisiana or Port-au-Prince. We look at our own annual reports and those numbers look really big. Our annual budget number, the numbers of “beneficiaries”, the numbers of NFI kits distributed or MT of food handed out, the number of mothers who give birth with the help of a trained midwife or the number of pairs of shoes sent overseas feel really… well, significant. We begin to feel as if we can do more than we actually can, and we believe that we have done more than we actually have.

But despite the best efforts of an aid industry that grows daily, despite more and more effort by more and more people, and despite the ever better application of even better science – be that social, environmental, political or economic science – poverty, hunger, abuse, disenfranchisement… all the ills of the world also grow at even faster rates.

Aid cannot and will not fix anything.

I don’t mean any of this to sound like I think that aid doesn’t matter. It does.

But over the past two decades I have become convinced that we come to the aid enterprise with too great a sense of self-assurance, with a quantity and quality of confidence not yet rightly earned. Aid cannot and will not fix anything. As humanitarian aid and development workers, we are struggling against forces – economic forces, political forces, social forces – more vast and deep and far reaching than the vast majority of us are aware.

It is hard and uncomfortable, but we have to keep in realistic perspective what we actually can and do bring, and scale our rhetoric – both internal and external – to match. We bring drops of relief in oceans of human suffering. Far too often we simply put band-aids on malignant tumors. And no amount of passion or “getting back to the basics” or being accountable will change that.

And so, while on one hand I understand and even applaud the energetic, entrepreneurial, Obama-innagural-address-esque “Yes we can!” sentiments of both passionate apologetics, and also the  strident, scathing critics of the aid industry alike, it is important to have realistic expectations of what aid can actually accomplish.

Aid is a good thing to do. I fervently believe that. Aid matters. Aid makes a difference. But if you have delusions of grandeur or even delusions of something less than grandeur, understand this: Aid will not fix anything. Aid is “a measure of humanity, always insufficient…” Aid makes incremental, fragile progress, often at great expense. This is not a call for self-flagellation or self-deprecation, but rather a call for confident humility.

Aid chips away at the stone.

Why I’m in love with Kickstarter

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Why can’t more systems work like Kickstarter? If you haven’t heard of it, Kickstarter is a way for creative artists to propose project ideas to the public for crowdsourced funding. Here’s a project I recently supported – a solo violin album by a young artist named Robert Gupta. 216 people (including myself) each contributed between $5 and $2500 to provide the $25,000 the project needed to get off the ground.

I love the site because it flips the “creation —> funding” model on its head. By allowing artists to receive funding prior to beginning a project, Kickstarter promotes both trust and risk-taking. What do I mean?

Trust is required because funding is made up front. Supporters not only have to be confident that the artist will deliver, but they must also believe that the result will be worth buying. After all, they are paying for the product sight unseen. And risk-taking? If an artist has to front the money herself, she’s going to adopt a degree of caution in deciding what to produce. Too many projects without any buyers will make for a short artistic career. But the Kickstarter model removes this risk – if a project isn’t funded, it simply isn’t done. The model has certainly proven itself; Kickstarter now provides more than $1 million per week to artists.

Think about the community this system has built. Artists are free to propose anything they choose, and supporters get to call the shots about what gets funded. It’s a win for both sides. Individuals artists and supporters are both empowered to participate in the community in a manner that suits them best.

So why can’t this model be applied to other contexts?

What if businesses worked this way – instead of trying to sell us crap we don’t need, what if companies only produced products that we really wanted? Or how about philanthropy? What if there was a model in which donors and recipients collectively funded and decided upon projects for NGOs to execute?

The possibilites are pretty incredible. The lesson here is that it’s not just technology that advances humanity – innovating new ways for people to work together can be pretty powerful too.

3 Ways to Improve Cause-Related Retail

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I love the idea of joining retail purchases with charitable donations. It provides shoppers with both the prompt and the opportunity to give, creating an easy donation transaction. Here are a few examples: you purchase (RED) coffee from Starbucks, and some of the proceeds are donated to the Global Fund; you check out at Kroger and are asked to donate $1 to a local charity; you buy a bottle of Merlot at onehopewine.com, and a few dollars is sent to the charity of your choice.

These examples have undoubtedly raised a great deal of funds for charity – (RED) alone has garnered over $170 MM since 2006. But does that mean that cause-related purchases are marketed as well as they could be? I don’t think so. The “make a purchase/make a donation” model is still relatively new, and sometimes a bit awkward. Here are three suggestions on how to improve it:

1. Add value, not price

As a business, if you’re going to donate 10% of a product’s sale price to charity, don’t just mark up the price by 10% and expect me to buy it. You’re not adding anything to the equation. Instead, add value in some other way. Tell me that because you donate half of your profits to charity, you can sell your product at a competitive price and give 10% to charity. Or offer a matching donation from a third-party, so shoppers feel like that their donated dollars go further. Be creative. Have some skin in the game. But don’t simply pass the buck to the customer.

2. Give me some credit

Hey, I just bought your product, and I supported a charity! But so what?! If you want customers to feel really good about what they’ve done, show them you appreciate it. Talk about the customers who’ve done the most to support causes on your Facebook or Twitter feed. Give customers who patronize your cause-related products discounts on future purchases, or special access to sale events. A ‘small thank’ you can go a long way.

3. Don’t overwhelm me

Are you asking customers to make a donation every time they interact with your business? Maybe I already made a donation earlier in the day, and I’m tapped out. So I might get a little annoyed if I feel like I’m getting shaken down each time I pick up a bag of groceries. If you ask me too often, or make me feel guilty if I decline, then I’ll just shop somewhere else. Make me feel good for giving, but not bad for saying no.

These are just three ideas – what other ways can cause-related retail be improved? What are some good examples of this being done well?

What it means to give socially

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I’ve recommended this TEDx talk to at least 10 people over the past few weeks, so I can’t help but post it here. If you’ve ever thought about what “social giving” might mean, but struggled to understand or explain it, Taylor Conroy does a great job of illustrating the concept in his talk “How to Build a School in 3 Hours”. He outlines 5 “must-haves” to truly make giving social:

  1. Group mentality
  2. Tangible outcome
  3. Microgiving
  4. Personal connection
  5. Recognition

Watch his talk and you’ll hear how he was able to raise money for a school in three hours, just by texting a few of his friends. What’s most interesting are the reasons his friends choose to give – not because it was to a 4-start charity, not because they personally understood the underlying causes of poverty – but simply because a group of friends committed to participating together.

Taylor’s points are right on, and I will continue to recommend his talk. However, I can’t help but wonder – what happens they next time his friends receive a text asking them to raise money for a school? What happens the third time? The fourth time? Not to sound cynical, but my guess is that engagement would decline with each cycle, unless there was a deeper reward than merely being recognized by one’s friends.

Using social pressure is a powerful way of getting people to give in the first place, but I don’t think it keeps them there. Ultimately, the giving experience needs to be captivating in and of itself for donors to give long-term. One way to do this is to show donors the good they’ve accomplished and the people who’s lives they’ve affected. Through that, donors will be better able to see why its important they give in the first place, and will stay better engaged as a result. But that sounds like a great topic to discuss further in a later post. What are your thoughts?