NEWSPHILANTHROPY

I try not to consume much, but when I do, I like to buy products that make me feel morally superior. Chances are, you do too. Right? My point is not that we're better than everyone else and therefore have the right to be smug (even if we do); my point is that there is an obvious niche market for consumers who pay close attention to where their goods come from and where they can go when they're done with them. But do these companies have--either an externally imposed or internally genuine--moral obligation to the greater good?

Mark Dwight, Founder and CEO of Rickshaw Bagworks says yes. He left his last company when he told the Board that they had a moral imperative to stop using PVC. They disagreed. So he started a competing company that doesn't compromise on that value and leads by example in many other ways such as manufacturing quality products in the USA. They meet their bottom line through innovation and embrace their-self imposed limitations as part of their business culture. I recently met Dwight and other environmental leaders at the Opportunity Green Conference and Dwight's comments were a springboard for others in the field.

If there is a moral obligation to innovate, is there also a moral obligation to be philanthropic? Rick Ridgeway of Patagonia used similar language as Dwight: "We have a moral obligation to do our penance as a company...business is harmful to the environment; we are morally obligated to mitigate that harm." As a member of 1% for the Planet, Patagonia has donated over $40M to environmental nonprofits and has become an icon among sustainable companies.

The next question: is it more important to be sustainably innovative or philanthropic? In 1993, New Belgium Brewing Company was giving away$1 for every barrel of beer sold. They asked themselves, as Jennifer Orgolini recalls, "Should we give that much? Should we keep more for greening our own operations?" The company decided that their dollars could be effectively used in both ways. Some environmental progress is better done by nonprofits and the world needs both innovative companies and funding for grassroots environmental efforts.

It's an important distinction that companies do need to be both leading by example and giving to organizations that can do other things better than they can. A coal mine giving away money to a land trust is different than a sustainably-minded company supporting causes that extend their values. Of course, it is in these company's best interests to support environmental nonprofits: Patagonia's customers won't have anywhere to use their gear if their favorite mountain trail becomes a housing subdivision and New Belgium acknowledges that "no fresh water means no great beer." There's nothing wrong with a symbiotic relationship.

The fact that environmentalists are using words like "penance" and "moral" is fascinating. I emerged from an evangelical Christian background. In that culture, the prevailing view--not held by everyone of course--is basically that God created the Earth and then created humans to dominate it; we're going to die and go to heaven so why should we care what happens on this planet after that? That's God's problem to save us from. I don't like that the Religious Right has commandeered certain words and concepts. I like being reminded that morals are not just about personal choices like not having sex before marriage; they are about choices to do the right thing for the greater good. (And on a sarcastic note, it gives me a broader platform from which my smugness can emanate.)

Photo Credit: Kerri Feazell

On Wednesday, news broke that the 26-year old founder of Facebook, Mark Zuckerberg, would be donating $100 million to the Newark school district in an attempt to help transform public education in one of the most hard-up parts of the country. The gift is a pretty remarkable entrance into the world of philanthropy for the young billionaire, and portends exciting things for the future.

The New York Times was the first to scoop the story. According to their article, the arrangement will see Newark's well known major, Cory Booker, will have a larger role in managing the school district than any Newark officials have since the state of New Jersey seized power from the district in 1995 due to the horrible performance of students and teachers. The gift is supposed to be the first for a foundation that Zuckerberg will set up to focus on education issues.

The news coverage since the announcement has been, if predictable, extremely disappointing. Most of it has written off the announcement as just some PR stunt in the face of the annual release of the Forbes 400, which suggests that Zuckerberg's stake in Facebook makes him the 35th wealthiest person in the country. Even more importantly, these pieces argue the donation is meant to counteract the portrayal of Zuckerberg in the forthcoming movie "The Social Network," which paints him as an arrogant, awkward, sex-crazed jerk, and is based on the largely-fictionalized book "The Accidental Billionaires."

First, I think this is stupid logic. If one thing is clear from Zuckerberg's tenure in the public eye, he is not the type who would spent a hundred million bucks just to look a bit better. You're talking about a guy who has continuously created new features on his product that make his users scream and holler and make the press call him every name in the book, without flinching. Beyond that, it's just patently obvious how stupid a strategy it would be to try to drop this news just to counter negative perception. A piece by the author of "The Facebook Effect" suggests the timing was actually driven by Booker and Chris Christie, the governor of New Jersey.

Second, I think this is sad. The only thing we seem to love as much as propping celebrities up is tearing them down. The fact that we're so obsessed with this cosmic fame game that the coverage is all about some armchair Freudian analysis of the gift's motivation is depressing. We're spending no time talking about the potential for the gift in terms of repairing one of America's worst examples of the failure of public education. The only major voice I've seen express this opinion is Arianna Huffington.

Here's what I think: It's a powerful, powerful symbol that a 26-year old just gave $100 million to a single school district in a place he doesn't have a personal history with to fight what will surely be one of his -- one of my -- generation's great fights. Can you think of a less sexy way to start giving?

Zuckerberg is going to be a billionaire for a long time. He just brought philanthropy into his life in a major way less than half a decade after starting his company. It took Gates decades to made that leap. That means something, and we should be damn excited about it.

Photo credit: deneyterrio

The much buzzed about volunteering 2.0 startup Catchafire has just opened its public beta. Based in New York City, the platform is trying to be the best place to connect nonprofits with skilled volunteers. Here are three reasons it matters:

1. It actually takes on the core challenge of volunteering - management: The transformation needed in volunteerism is not just a more efficient mechanism for finding volunteer opportunities, but a better managed execution of the volunteer relationship. Managing volunteers is really tough - their incentives aren't all the same, their effort can be inconsistent, and they can leave at any time. But being a volunteer isn't easy either. It's often unclear to feel like your effort actually contributed to something meaningful.

Catchafire takes this on directly in the way its product is design. Volunteering isn't just about matching a person to an organization, but about matching them to a specific, discreet project that has a specific timeline, hourly requirement, and deliverables. It's more like a pro-bono consulting engagement than what we normally think of as volunteering. And instead of a bill, the volunteer can prominently see how much they're saving the organization.

2. Their product is really well designed: Most products - whether nonprofit platforms or new consumer web technology - just aren't very well thought out. Catchafire has a clear simple user experience. Volunteers come to the site, sign in, fill out a skills profile, and can browse projects by organization, field, or by the type of skill required. Catchafire also makes suggestions about projects that seem like a good fit for the volunteer.

The news in social entrepreneurship this week is from all around the world. Sustained questions of how America will enable talented immigrants to build companies and lives on our shores appear in the Economist; a profile of a Middle Eastern venture capitalist making the region safe for startups makes it to TechCrunch, and more in this Weekend Entrepreneur Links.

Importing Job Growth: This piece in the Economist is yet another smart argument against our stupid immigration policies which make it difficult for the world's most talented to come here to work, or even worse stay here after investing four years in a degree program. There are all sorts of sensible ways to fix these problems  -- including programs like the Startup Visa that would carve a portion of an existing class of visa to give founders of venture-backed companies time to build their businesses here. Alas, "sensible" tends not to enter the immigration debate these days.

Entrepreneur to Entrepreneur: Meet the Ron Conway of the Middle East: Ron Conway is a legend in Silicon Valley. He is the godfather of the new class of "superangels" - highly active seed stage investors who are disrupting the traditional model of early stage venture financing. This interview, conducted by Social Gaming Network and seed investor Shervin Pishevar, profiles Fadi Ghandour (pictured above), a Jordanian entrepreneur who is now parlaying his success into investments and mentorship for new ventures in the broader Middle East.

The Ewing Marion Kauffman Foundation Commits $500,000 to Astia: A few weeks ago, I wrote a post about women in social and technology entrepreneurship. There is a perennial conversation about why there aren't more women in entrepreneurial fields. Luckily, there are also organizations like Astia who are more interested in providing resources to change the situation rather than just discuss the reasons for the status quo, and funders like the Kauffman Foundation who are willing to give those organizations the support they need.

Giving Pledges by Rich Disclosed: The Shanghai Daily reported last week that, in advance of a visit by Warren Buffet and Bill Gates, more than 100 Chinese multimillionaires had committed to giving away a significant portion of their wealth -- or in some cases, all of it -- to charity. Chen Guangbiao, worth about $440m, has been a leader in organizing his countrymen to the pledge, committing his entire fortune to charity before he dies.

Photo credit: Joi

There is a concept that good entrepreneurs know only too well, but nonprofits could stand to explore. A "value proposition" is the unique value a product or service provides a consumer. Without a value proposition a business has no place in the market. For a nonprofit, a social value proposition is just as critical to success, but often ignored. In an increasingly competitive marketplace, due in part to the growth of for-profit social entrepreneurs, nonprofits must analyze, articulate, and deliver on a social value proposition.

In the past, nonprofits could exist without a value proposition. Donors wouldn't argue that a library, homeless shelter, food pantry or school provided a necessary service. But as we move further down the road of social innovation, the assumption that money will automatically follow good works is no longer valid.

The issue is complicated by the fact that nonprofits have two sets of consumers: those who benefit from the product or service (clients) and those who buy the service (funders, investors, philanthropists). There is increasing competition for both sets of consumers.

In order to attract the consumers who buy services (and who, by the way, increasingly want a social return on their purchase) nonprofits must articulate the value that the consumer (donor, investor, philanthropist, sponsor, whatever you want to call them) receives by writing a check.

In the nonprofit sector the closest thing to a value proposition has been a case for support. But when this is created (which isn't often) it tends to focus on the organization and its needs rather than on the potential social return on investment for the funder. A good value proposition articulates how an organization is uniquely positioned to create significant social impact that is much greater than the costs associated. It involves an organization analyzing, understanding and delivering on three very important things:

1. Capability: What is the organization uniquely positioned to provide to the community (the marketplace). Why is this organization better positioned than other organizations (nonprofits, for-profits, government) to deliver it?
2. Social Impact: What change is the organization creating in the community, region, world? Why is this significant? Why should/will consumers (funders) care?
3. Cost: How do the costs of the service being delivered compare to that social impact? Is there a social profit being achieved, i.e. are the costs involved in delivering the service significantly less than the benefits? Will a funder (who is paying these costs) receive a significant social return on their investment in the organization?

A value proposition is less about a well-articulated statement and more about an organization's ability to think through these questions and really understand the marketplace in which they operate. More and more the nonprofit that can effectively execute on a social value proposition will find the financial stability that ultimately leads them to create lasting social change.

Photo Credit: Tim Snell

[Ed. Note. We're thrilled to brass MEDIA founder Bryan Sims share the story of his very own "Giving Pledge."]

When I was a kid I used to read stories about people like Bill Gates, Michael Dell and Steve Jobs. People who were first time entrepreneurs and started off like everyday people just like you and I. One of my particularly favorite things to learn about them was what they did for their first job.

My first job started at 15 while in high school at the local athletic club. I did maintenance and janitorial work, cleaning work-out equipment and scrubbing toilets in the locker room.

I first began investing as a teenager, taking my janitor’s paychecks and putting them in the stock market. Later in school I decided to create a teen investment club as part of a business class project so my friends and I could all invest together.

It was here that I learned two very important lessons:

1. The power of time and compound interest when it comes to money.
2. The power of a having many people involved in a project.

As 16 year olds investing in the stock market, we had one major advantage going for us, and that was time. Upon graduation and the disbanding of the investment club, many of participants took their money out and immediately reinvested into retirement accounts. In all likelihood, if they stick with it, they’ll be millionaires by the time they retire because they began so early.

The second piece I learned was the value of multiple perspectives. Statistically speaking, investment clubs with both men and women perform better than those with just men or just women. By getting a group of people together who shared a similar interest, we were able to benefit the group as a whole.

It’s because of these two philosophies that I’ve become a big believer in the Giving Pledge recently administered by over 40 billionaires and led by Bill Gates and Warren Buffett. It takes these two concepts of people who have built wealth over time, and combines it with a critical mass of people to have a compounded effect for a greater good.

10% of Billionaires Commit to Give Half Their Wealth: I haven't had a chance to dig into the full implications of this here, but the first announcement following the public launch of the Gates-Buffet billionaire giving pledge is pretty impressive. So far, about 40 billionaires have joined the pledge, and many of them have written publicly about their reasons. How far can they tip this commitment for the world's wealthy? And how effective can these dollars be?

Needles in a Haystack: A legitimately good piece by Newsweek (noticed the skepticism there?) about "hacktivism" -- the phenomenon of software engineers turning their talents towards promoting freedom, stopping oppressive regimes, or helping relief organizations better coordinate their responses. This piece focuses on the story of Haystack, a piece of software developed during the Iranian Green Revolution that obscures what site a user is actually visiting, making it safer for dissidents to search for vital information and connect with one another.

VCs plan to invest $53 mn in social biz over 6 mths: A story from the Economic Times of India that tells the story of the burgeoning social enterprise scene in the country. Interestingly, many of the issues brought up in the article -- for example, a question of from where financial "exits" will come -- are similar to what we experience in the US.

Valedictorian Speaks Out Against Schooling in Graduation Speech: An absolutely awesome speech about the ultimate folly of American education. This valedictorian talks about how, to her, the honor is only an indication that she learned the system better than the rest. The most moving part to me is when she talks about what she could have been doing with all the hours she spent studying instead, and laments that her subjects were always so totally about "work" that she forgot to even discover which ones she actually loved.

Photo credit: José Goulão

[Ed. note: With this piece, we welcome iContact founder, social entrepreneur, and social angel investor Ryan Allis to the site. While this piece is more comprehensive than what we normally publish, we think you'll agree it's an incredible read. Please join us in welcoming Ryan to Change.org!]

A Vision in a Time of Peril

It's hard to see the big picture in times of turmoil. Let's go back to Wednesday, March 4, 2009. That day, Bill Gates and Warren Buffet, the richest individuals in America, wrote a letter to David Rockefeller, President of the Rockefeller Foundation. The letter suggested a gathering of their billionaire friends to discuss giving.

The letter was mailed in the backdrop of a tumultuous week. By that Friday March 6th, the Dow Jones Industrial Average reached its lowest point in twelve years, free falling 52.9% from two years before in the good 'ole days of 2007 prosperity.

March 6th, 2009 brings back vivid memories. I was visiting the White House with a group of young entrepreneurs with The Summit Series. The White House Office of Public Engagement had put together the session to discuss their plans for the Economic Recovery Act. As Jason Furman, the Deputy Director of the National Economic Council, spoke to our group, the market was in freefall.

While the media was anointing The Great Recession and debating whether it would become a depression, Gates and Buffet had the fortune and foresight, to bring together their friends for dinner in New York to discuss how to give back.

Bill Gates and Warren Buffett have been leaders by example to others of extreme wealth since they committed major parts of their fortune and energy to changing the world while they were still alive. With the just-launched Giving Pledge, they're making that leadership explicit and asking other billionaires to commit at least half of their wealth to philanthropic causes.

Bill & Melinda Gates have been philanthropic leaders for years. Their foundation was first formed in 1994, but has grown into the largest private foundation in the world largely in the last half decade or so. The turning point event was a gift by Warren Buffett worth approximately $30 billion in June 2006. The gift coincided with Bill Gates shift from his role at Microsoft to full-time leadership of the foundation.

According to an extensive Forbes piece published today, the immediate origins of the Giving Pledge came at a clandestine billionaire meeting a few months ago, at which the Gates and Buffett convened some of the more philanthropically active wealth in the country: David Rockefeller played host and the event included people like Ted Turner, Eli and Edyth Broad, and yes, Oprah. The conversation was ultimately focused on how to increase giving among the rich, and while many ideas emerged, the only consensus was that it would take lots of engagement and lots of work.

Over the course of the next few months, meetings were held in secret around the world getting the ultra-wealthy -- the targets of this cohort were and are, at first, the Fortune 400 -- to increase their giving. At these meetings, the idea of pledging some percentage of net worth was floated and not shot down.

The Giving Pledge has set the bar at asking people to pledge to give away 50% of their net worth to philanthropic causes. The Gates and Buffett seem to think that number should be even higher, but made the decision to set it at a level that they thought they could pull people in with.

What to make of this?

Some social entrepreneurs love fundraising. They love being able to passionately tell the story of their work to new audiences and engage donors in a growing relationship for change. But then there are a lot of social entrepreneurs (and nonprofit leaders in general) who hate fundraising. Sometimes it's just a question of personality type. Sometimes these leaders feel like their time is better spent on the ground or creating organizational capacity and impact.

The latter group includes Appropriate Infrastructure Development Group (AIDG) founder Peter Haas, and for all the development professionals out there, he has a suggestion: create a company based solely on outsourcing the fundraising process.

Writing on the TED Fellows blog, Haas lamented the lack of good options for external organizations that could help him reach their fundraising goals -- goals currently undergoing new pressure because many of AIDG's regular donors have already given their annual donation to help with the organization's post-Haiti efforts.

One of the interesting things about Haas' post is that he sort of pokes a hole in the consultant's approach to this problem. He basically argues that, although he's done a number of different fundraising coaching and support programs, at the end of the day, his strength as founder is not as fundraiser, and there are pretty good reason's to think that it's a bad use of his particular strengths to have him, as he puts it, labor over every word in a fundraising pitch.