Grass roots philanthropy – where’s the corporate connection?

Socially-minded grass roots organizations like media darling Kiva.org and virtual networks such as NED are changing the development and aid industry. Is your company thinking about extending its CSR activities to include these upstarts? We are. I’ll tell you more about that, but first allow me defend my assertion that a sea-change (that link is only for those who lean towards the literary) is occuring in the development and aid industry.

If you’re in CSR or otherwise work alongside development agencies and NGOs, you probably aware of books like Despite Good Intentions and the polarizing The Lords of Poverty: The Power, Prestige, and Corruption of the International Aid Business. And you know there’s controversy as to the effectiveness of Development Agencies and NGOs in their efforts to help the world’s poor. I’m not going to go on about the industry’s shortcomings, mainly because these two books do a better job than I ever could – even though they are somewhat dated – and also because I don’t want to get in trouble. To be balanced, I’ll add that the development industry has done a lot of good in the world and it would be a gross overgeneralization to say that the whole industry is rotten. There: fair and balanced. :-)

But when you consider the upstarts and the results they’re producing, it’s plausible that in the not-too-distant future “development” and “aid” will be more directly dispensed by “we the people” instead of being bureaucratically administered on our behalf by international, bilateral and large aid agencies.

I may be wrong. Perhaps there’s room for everyone at the table. Afterall, the problems these agencies are working are big. But with the growing effectiveness of these new entrants, I think the game’s been changed.

Consider Kiva.org. In Fortune Magazine’s March 8, 2008 issue Jeffrey M. O’Brien calls Kiva “The only nonprofit that matters.” Reading his article, I see his point. Some key facts:

Kiva’s overhead cost recovery model: voluntary contributions, effectively making a donor’s overhead costs zero if he or she so chooses.

Default rate on donations: .14% – not a typo, that’s point-one-four (I’m sure bank loan defaults are higher and, oh, banks would never tell you what that number is, while Kiva’s is right in the open)

Number of lenders: nearly 250,000

Distributions to borrowers: $22 million in $25 increments

Recirculation of that $22 million: 90%

There are other, new, Kiva-like orgs out there operating in full or near-full transparency including Global Giving and Progreso Financiero according to O’Brien’s article. Another is DonorsChoose.org which has created an innovative way to fund education in the U.S.

And don’t forget Nobel Prize winner Muhammad Yunus’ work that’s so well known I don’t even have to go into the details, or provide a link.

As I wrote above, there also are growing social networking sites popping up around social entrepreneurism, social innovation and serving the poor. One I’m very keen on and have been in talks with is NED. An offspring of the Omidyar network, NED is growing into an amazing collection of individuals in action in a wide array of socially conscious pursuits. NED founder Mark Grimes has great ideas up his sleeve for attracting corporate involvement and I support what he’s doing. I’m still waiting however for their conversations to translate into meaningful action on the ground, but already my programs in ComSol have benefitted from the vast mindshare that exists on NED and Mark promises on-the-ground action shortly.

Which brings me to my question. Intel is currently working with the Grameen organization on a project involving our Classmate PC platform. In addition to consulting with NED on our projects, Community Solutions is in talks do to more with them in the future as they develop. And I’m thinking about possible ways to perhaps interact with organizations such as Kiva and DonorsChoose. All my thoughts are conceptual at this point and I’m a bit embarrassed to share them. But the whole idea of blogging is to get the ideas out there and have a dialogue, right? So, is your company is heading in this direction? Are you all working with or thinking about working with these organizations? Or is it too early in the game to say?

2 Responses to Grass roots philanthropy – where’s the corporate connection?

  1. marnie webb says:

    Good thoughtful post, Perry. From my position inside the NGO sector, I’m bound to want to quibble with some of it. Though I agree with the central idea: individuals and organizations are able to come together as never before to create change. Most importantly, they don’t have to wait for anyone’s permission to act (that may be a bit of an overstatement but I think it’s directionally right).
    I think what’s important here is the possibility of creating bridges between different sectors — biz, govt, ngo, local communities — to work together on big problems in small and large ways. I do think that incremental changes — the kind of stuff that happens on the ground in grassroots movement — has to work hand in hand with policy and legislative changes so that the best of that grassroots work can be supported at an institutional level.

  2. Perry Gruber says:

    Thanks Marnie. And I appreciate your positive comment. I agree there are lots of opportunities for building bridges/working together, but there also are lots of opportunities for traditional NGOs and development agencies to steal with pride from these upstarts. From what I’m seeing develop, traditional approaches NGOs use to help the poor are becoming archaic and less effective. Their effectiveness – in some instances – is being hampered by bureaucracy and layers of inefficiencies and individual egos. Their abilitly to be innovative is being hampered by these same impediments. Of course, not all NGOs are suffering from these. There are organizations in this space doing great work. I attended a summit where 22 of such organizations (http://blogs.intel.com/csr/2008/05/nethope_summit_assignment_take.php). The upstarts I mentioned in the post above I think represent a disruptive technology that should be viewed by traditional NGOs as an external risk to their continued operations. They will change the landscape for relief aid, poverty eradication and the ability to raise funds. There will still be room for legacy NGOs, but my speculation is their effectiveness – and their ability to raise funds – will be eclipsed by the effectiveness of upstarts: they (the upstarts) have designed a better mouse trap.
    Policy and legislative changes are important, especially in regions that are not conducive to innovation and entrepreneurship. However, I’m growing more convinced (and I’m a liberal) that the best way to effect policy and legislative change is to do it from the grass roots: that is helping the poor become unpoor by helping them cultivate their own style of innovation to wealth creation. It’s a better, more sustainable long-term strategy and may be the best way to effect policy and legislative changes…to wit: I heard a great story on WHYY’s Fresh Air program about a guy named Paul Polak and how his personal experience working with the poor revealed some very interesting new conclusions that buck the traditional trend of how eradicating poverty is done. You might want to take a listen. It’s only 20 minutes and very informative. I’d love to hear your reaction.
    http://www.npr.org/templates/story/story.php?storyId=89848686
    Thanks again for your comment!