Category Archives: grantmakers/funders

Well spent?

Many of us dance between thinking and writing about our work and being the practitioner fully focused on doing the work.  With this dance in mind, I took most of last year off from writing while focused on growing Sou Digna/ I Am Worthy and our partnership with an amazing community of women in Salvador, Brazil.  (I wrote about a previous visit with these women in February 2012.)  In addition, a few of us Seattle-based NGOs have grown the Collaboratory Network, building the capacity and connection of small NGOs working across cultures.  The dance continues, but I am excited to share what I can in between sets.

Yesterday, I had the pleasure of talking with a group of women working to improve the lives of women around the world.  Our topic was “Financial Accountability Across Cultures,” and what follows are the notes that I shared based on my experiences bridging the reality of small NGOs working in poor communities with funders somewhere else in the world.  Am I missing anything?  Please share…


Small NGOs are structured communities trying to address some problem in their society.  Their long term success depends on providing the services needed while building their internal capacity and external connections to deliver those services into the future.  Donors play a critical role in keeping an eye on the long term in the face of tremendous immediate need.

What should you look for in the finances of a small NGO to know if money is well spent?

First, “well spent” is in the eye of the beholder and culture-bound.  It could be interpreted to mean:

  • A lot is happening
  • Financials aligned with budget
  • Audited financials
  • Low percent going to administration

A financially-healthy organization has diverse markers in place.

  • A lot is happening, both tied to impact measures and not.  Remember that a lot of social change happens at the margins of pre-determined programs.
  • Capacity to track financials (staffing, technology)
  • Evaluation plan and practice in place
  • “Clean” reputation of local leader as determined by local people
  • Regular opportunities for exchange across cultures and borders

How do you give an international organization voice in explaining its work within the exchange of financial reports? 

Power and perceptions of power permeate the donor-donee-local partner relationship.

  • Look for ways to have direct conversations (in person, via skype)
  • Keep an eye on partnerships where one side is always speaking for the other side
  • Encourage local voice as a part of grant arrangement
  • Keep power in mind in cases of negative information
  • Put financial reports in perspectve… what matters is impact, not the exact accounting of funds in budgeted line items

How can donors help good organizations become more financially healthy through targeted investments?

Fund the internal infrastructure needed to sustain financial health.

  • Fund the administrative costs tied to financial oversight
  • Fund evaluation of programs
  • Fund capacity building and staff training
  • Fund staff exchanges in both directions

Take a learning approach.


When you see a word over and over again, its meaning starts to dilute.  It becomes common and everyday, not exceptional or unique.  Such is it with the word innovation, which appears in rosters of grant opportunities with increasing frequency.  One day’s listing from the Funds for NGOs listserve included a call for applications from USAID’s “Innovation Ventures,” ITU Telecom World’s ” Innovation Competition,” and Rockefeller Foundation’s “Innovation Challenge.”  This past week, the grant form of a major local funder asked me to report “the number of innovative activities offered.”  That word again.  Are the remaining activities therefore stagnant?

Four innovation-related grants out of sevenI understand the desire that foundations have to inspire us to think about the problems of the world differently.  In the fight against poverty, too many people remain at the edge of survival, and too many interventions have failed to make enough of a difference.  I know that new technologies have fundamentally changed the well-being of many.  I have sat amazed at some of the inventions I have seen produced by experts at large institutions like PATH and the Gates Foundation.

So I get the attraction to the concept of innovation, but I wonder if the pendulum swing to innovate comes at a disadvantage to projects where innovation is not the solution to their most pressing problems.  The poverty alleviation project I work with doesn’t need  a new invention but rather old fashioned education and training, tried and true capacity building, and plain old respect for their basic rights to live lives of dignity.

But maybe I am missing something here, so I reach for the dictionary.  Innovate, as it turns out, has two definitions.  The first is “to introduce something new,” which is what I imagine most foundations have in mind. Rockefeller Foundation talks about “new ideas and new ways of building solutions,” and USAID calls for “compelling new development solutions.”

The second definition, “to make changes in something established,” is more interesting to think within our projects that defined in terms of social change.  Social change by definition changes something established, namely society.  This definition inspires us to think about an innovative outcome rather than an newly invented means to an end that may or may not change the world.

I hope foundations continue to support the inventions that ease life for some of world’s most disadvantaged.  I also hope that they keep in mind the effect of a slow drip of water on solid rock… the gradual impact that programs like work training, access to higher education, and community installed latrines have on what once seemed like impermeable challenges.   Our innovation might involve subtle changes in leadership, program design, or concepts of community, and yet these subtle shifts may spawn new ways in which societies address their own most pressing concerns.

The innovation may not be the solution.  The solution may be rethinking innovation.

Too many? I don’t think so.

Does the United States have too many non-profit organizations?  On April 3, 2012, the Urban Institute will take up this question in a public event being webcast for those of us outside of the Beltway.  According to the Urban Institute’s “Charity Challenge,” the total number of 501(c)3s jumped 19-percent over the time period of 1999 to 2009.  (The National Center for Charitable Statistics suggest even higher numbers.)  Whichever way you count them, the number of nonprofit organizations is on the rise.

This growth is a part of a disturbing trend, according to Therena Bailey of SISGI group, because it causes the resources dedicated to social change to be diluted by all of the organizations needing support.  She and others suggest remedies to this “problem” in order to maximize impact on a world needing change.

All of this outcry about whether there are too many nonprofits distracts us from a far more interesting question: Why are these new groups forming?  Perhaps we might yield more creative remedies to this challenge if we contemplated some of the  reasons why people who care about an issue might not look to some other organization to solve it but instead put some legal structure to their idea and call it a nonprofit.

Setting aside those individuals who create new organizations for non-altruistic reasons, I see three fundamental reasons why people start new nonprofits:

Values.  I believe that we don’t talk about values nearly enough in the public sector.  Values are the signposts that guide organizations forward, the unit of unity around which a group of individuals gather.  Our values guide our organizational culture, and that culture sets the tone for how we do our work.  We want to work for solutions that reflect our values.

Relationships.  Particularly in projects that cross borders— social change projects taking place in one country and resource raising in another—relationships matter.  The trust the builds between people does not necessarily transfer to another organization with similar interests.  The people who believe in me don’t necessarily transfer to believing in someone I tell them to trust.

Engagement.  We learn by doing, and within international partnerships, we learn by doing together across culture and language.  One of the most exciting trends in recent times is the growing level of engagement that people want to take in the projects that they support.  Increasingly, it is less about writing a check and more about joining a community.

I hope that someone on the panel on Tuesday acknowledges that the growing number of nonprofits might also indicate a higher level of activism among Americans that makes stronger our democracy and engagement with the rest of the world.  What kind of remedies could our nonprofit leaders devise if they recognized that people want to contribute within communities that share their values, build on relationships that inspire them, and roll up their sleeves alongside others?

I have some ideas on how foundations and others concerned about this issue can keep people focused on what they are good at:

1.   Increase funding for organizations with broad enough “umbrella missions” that they can serve as fiscal agents for smaller grassroots projects.  Many of these groups would gladly offload the legal and financial burden in order to focus on impact.  Several new nonprofits that I have worked with would have welcomed the chance to form their own identity without their own IRS filing.

2.  Fund open work spaces that eliminate the infrastructure costs that it takes to run a grassroots organization, thereby removing redundancies in the system.  In larger urban areas in particular, small organizations would welcome the chance to co-locate, share a copier, and exchange theories of social change over a shared office coffee pot.

3.  Create the “Common File”— including a common application, budget form, and financial and impact reporting tools used by most foundations under a certain size.  Too much time is spent recrafting the same materials to satisfy different funders, often by staff members who are paid as a part of overhead.  This may be the first step towards an excellent idea offered by Paul Shoemaker of Social Venture Partners: consolidated funding.

As I see it, we want grassroots communities here and around the world addressing their most pressing needs.  In the case of international partnerships, we want strong partnerships that cross borders, fostering deeper understanding about how the world works.  We want to keep alive the diversity of solutions that come out of communities with different sets of operational values because only a diversity of solutions will solve our world’s complex problems.  The increasing number of nonprofits is a manifestation of exactly what we want to happen.

Of course growth comes with challenges.  These challenges will be solved when we look at the system as a whole— nonprofits, foundations, and our communities at large— and find new ways to connect social change organizations with the resources they need.

Only A Diversity of Ideas Can Solve This Problem

I had a driveway moment yesterday while listening to my local NPR station.  Seattle Channel’s Political Analyst C. R. Douglas was responding to questions about the Gates Foundation when he said, “It still feels in a lot of ways like a family business. Bill and Melinda and Warren Buffet are the only trustees … At some point, the trustee level of the organization needs to look more representative. And that will help them ultimately, push their mission further.”

I am not intending to comment on the Gates Foundation’s work, simply the fact that a foundation based within a proud democracy can give away $2.6 billion in 2010 with so little democratic oversight.

What’s more, a recent Foundation Center report stated that the Gates Foundation was the top funder in social justice giving in 2009.  Their definition of social justice?  “The granting of philanthropic contributions to nonprofit organizations based in the United States and other countries that work for structural change in order to increase the opportunity of those who are the least well off politically, economically, and socially.”  It concerns me that so much structural change is taking place with so little input from people whose societies are being structurally changed.

But I don’t mean to pick on the Gates Foundation.  They are by no means alone in making significant decisions affecting society with so few people at the table representing the diversity of our local or global society.  A recent Nonprofit Quarterly story noted that it is mostly white men who make foundation decisions.  Women and people of color are under-represented in foundation decision-making.  In 2009, $42.9 billion was given away, mostly to non-profits, with few people at the table who understand the communities these non-profits are trying to serve.

The demographics of foundation boards has a direct impact on social change funding.  Large foundation boards are often made up of successful business people, and these individuals bring a certain mindset in deciding what types of social solutions should be funded.  The New York Times recently published “Distilling the Wisdom of CEOs” in which five essentials for CEO success were described:

  •  Curiosity
  • Confidence
  • Team smarts
  • Simple mindset
  • Fearlessness

Compare this list with a list of principles that Juana Bordas elaborates on in Salsa, Soul, and Spirit: Leadership for a Multicultural Age, an interesting book providing new approaches to leadership from Latino, Black, and American Indian communities:

  •  Sankofa: Learn from the past
  • I to We: From individualism to collective identity
  • Mi Casa Es Su Casa: A spirit of generosity
  • A Leader Among Equals: Community conferred leadership
  • Leaders as Guardians of Public Values: Tradition of activism
  • Leaders as Community Stewards: Working for the common good
  • All My Relatives: La Familia, the Village, the Tribe
  • Gracias: Gratitude, Hope, and forgiveness

There isn’t a lot of common ground between what makes a successful CEO and traditional approaches of leaders from communities of color.  Small non-profits working in collaboration with social change projects elsewhere in the world negotiate this space between foundation and indigenous leadership styles, hoping to foster greater understanding of the other along the way.

What to do?

Let’s keep our eye on the big issue.  According to a recent UN report, even if Millennium Development Goal reports are correct and we are on track to halve global poverty rates by 2015, around one billion people will remain mired in extreme poverty.  Dealing with that challenge will require structural change at all levels, including within philanthropy.  It will involve the integration of local knowledge into decision-making processes.  As Dione Alexander wrote in the Chronicle of Philanthropy, “Many of the inequities that philanthropy seeks to eliminate are rooted in cultural bias—and many of the opportunities for change are rooted in cultural awareness.”

How do we build structure around the space between foundation boards and indigenous NGO work around the world?

Foster Diversity:  We have every reason to believe that foundations understand the need to diversify their leadership.  We can help them by creating channels through which we all (foundations, NGO partners, etc.) can access the local knowledge of leaders from impoverished communities.  I have begun to envision an NGO association dedicated to creating forums in which international NGO leaders come together and share their solutions to their most pressing problems, informing foundations about the projects that would lead to long-term poverty alleviation.  Each discussion would be laced with cultural context that contributes to greater understanding of local conditions and opportunities.  Members could provide strategic advice to foundations (who would in turn fund the association), as well as collaborate with foundations in the development of financial and evaluation tools that work across cultures.  We could change structures that keep poverty in place so much better if the definition of problems needing solutions took place within communities rather than within far away foundations.

On the other hand, some foundations may resist change.

Impose diversity:  We have traditionally imagined elements of society concerning the “common good” as being governed through democratic institutions.  This has become less and less the case as private foundations tackle such common good topics as public education reform, and certainly many development projects elsewhere in the world bypass local democratic institutions entirely.  Our government, however, still plays a role in determining the tax deductibility of foundation assets.  While we can’t govern how wealthy people decide to spend their money, we can ask our government to require foundations to have a certain level of board diversity or advisory councils with certain voting rights.  Forcing the question of diversity among foundation leadership may put the topic higher up on the organizational agenda.

We are taught within our multi-cultural democracy that it is the diversity of our ideas that leads to a better system for all.  We need that diversity of ideas across class, culture, and race if we are going to make a dent in that figure of one billion people living within deep-rooted poverty .  What do you think?


At a recent “development”-focused event, I got talking with a friend involved with several giving circles.  She was interested in knowing what funding this particular organization needed to move forward.   I responded that we had a basket of projects that all needed funding—it was more about finding the match than finding a project in need of support.  “We have programs for women and children, programs to put in stoves and cisterns.  If you have a human rights interest, we have several projects in that direction.  Ecological sustainability, food production… indigenous medicines and health care.  What are your interests?  We probably have a great match for you.”

To the outside eye, the funding process for social change projects must resemble the job of a used car salesperson.  While not cars on a lot, the communities with which we work have defined a whole spectrum of initiatives that would help them to solve their most pressing problems, and these projects often range in scope, theme, and purpose.  Within certain limitations (and effective NGOs know what those are), the donor can drive the conversation because it is highly likely that their interests can be met with an initiative.

Perhaps this funding structure is one way that social change projects set themselves apart from traditional “transactional” NGOs focused on delivering one service or product (i.e. micro-loans, mosquito nets, technology).  (I have written about transactional vs. transformational “development” here.)  If you consider society as a vibrant, hand-woven piece of fabric, each element of a society—its politics and power structure, economics, geography, culture, class and race dynamics, gender roles, etc. – are woven together into a resilient textile.  Effective social change means more than just pulling out one of these strands, but rather reorganizing the layout of color so that an entirely different textile results.  The only way to permanently end poverty is to change the society that allows it to persist.


The needs of small social change organizations and the interests of funders are moving farther and farther apart, perhaps jeopardizing exactly the social change that we hope will decrease global poverty rates.

The Collaborative Learning Project based in Cambridge, Massachusetts, has been a leader in promoting dialogue with recipients of aid around the world.  Their “Listening Project” engaged nearly 6,000 people in discussions about issues that local people believe need to be addressed to make aid more effective.

The “Listening Project” recently published a summary of what they have learned through all of these discussions.  One important conclusion is that local people are concerned about the system by which funding is given, not the amount.  They wish that donors would work together to pool money and address poverty in holistic ways, not through piecemeal funding that leads to too many intermediaries and too much administration to manage it all.  They talk about having “projectitis.”

If you think about the ubiquitous “logic model” tool, our culture can be defined as strongly focused on linear relationships and clear outcomes.  We tend to believe that one shift in a poor society’s culture can lead to a domino effect of change.  (The Asian Development Bank published an interesting article about “complexity theory” within development, urging practitioners to reconsider “command and control” approaches to poverty alleviation.)  As funders become increasingly concerned about evaluation, it is easier to measure the effect of one change rather than measuring change caused by a whole range of variables shifting through multi-dimensional social change work.  Projectitis, however, is getting in the way of local leaders receiving the general operating support that they need for their holistic, interconnected approaches to poverty alleviation.  It is increasing their reliance on outside partners who can manage of all this, not giving them more ownership and sense of control.


Most NGO leaders were hopeful that the onslaught of social media tools would help them to reach new audiences and expand their funding base.  The first half of this has certainly happened.  Facebook, Twitter, etc. have allowed NGOs to create followings of people around the world, extending our communities to people beyond our direct vicinity.  On the funding side, however, The Chronicle of Philanthropy reports that most non-profits have reported very little money raised through social media.  I have been repeatedly stumped by the anemic results of Facebook Cause campaigns conducted by different small non-profits with which I have worked.

Social media tools have led to projectitis on steroids with new sites launched weekly to help connect projects with people able to support them.  Web Advantage recently posted links to 30+ social media sites that promote “social giving.”  I was elated to find such a comprehensive list of virtual venues on which to post my basket of important initiatives.  The problem?  Most invite us to use members within our existing community to promote projects to their social networks.  (We were already doing that.)  Some of them cost money to join, a risky investment for small NGOs just finding their way with social giving.  And managing these on-line micro-solicitations for funding adds another whole layer of administration on small NGOs.  It seems like the old rules of relationship-building still apply within this new virtual world.

I was talking this week with the development officer of a leading local mid-size non-profit, and she noted that she recently realized that she was not managing a single general operating grant.  With the exception of a small percentage of funds coming from individuals, all of her funding was for defined projects.  This reality leaves little leverage for exciting initiatives that come at the margins of these projects.  Non-profits in general have less and less leeway to be nimble in response to changing conditions, as well as a decreasing ability to invest in organizational capacity building, holistic evaluation of their work, and cross-thematic initiatives.

It is hard to fundamentally change a hand-woven textile if you can only reweave a few of the strands.

A visual: Two slides that demonstrate how funding occurs now

Slide 1: A model for social change

Slide 2: Projectizing social change work.  The challenge is to fill in the gaps between projects.

Give Better

We are an analytical people.  A whole industry of charity evaluators has taken root to help individuals and foundations suss out effective projects.  Non-profit development officers spend hours keeping up with Charity Navigator, Guidestar, and the Better Business Bureau.  Now Givewell enters the scene to offer rigorous research and analysis so donors don’t have to.

The Three Cups controversy coincided with widespread discussion of Dean Karlan and Jacob Appel’s well-reviewed book, More Than Good Intentions: How a New Economics Is Helping to Solve Global Poverty.  Their research supports two main conclusions: (1) understand poverty, and (2) be rigorous in your analysis.

I agree with Karlan and Appel’s conclusions and would like to offer these points to those advocating for greater evaluation:

1.  We evaluate programs through our worldview, which may or may not lead to long term social change.

A few years ago, I adapted the Inter-American Foundation’s Grassroots Development Framework (GDF) for a project in Brazil.  The GDF is very thorough, providing a full range of metrics with which to create benchmarks to show year-to-year improvement.  I asked local staff for feedback (none given) and later to fill out an spreadsheet about their “basic needs.”

The results were entirely unsatisfying in terms of demonstrating need: the data they provided showed nearly everyone as living in houses with electricity and sewage.  Well after the evaluation cycle required by funders, I learned that most families crowded into abandoned houses, using tarps to create a space against a few walls and pirating electricity off of municipal wires.  Many of the families were mobile, moving in with family members or moving across town for work.  The evaluation failed to deliver anything that accurately depicted the dire circumstances of people’s living arrangements or provided a benchmark for future evaluation.

Local staff had no investment in the process of evaluation—yet another form from afar—and had no  idea how to represent the dynamic nature of people’s lives in raw data.  For example, the question “number of people served” is so insufficient.  Directly served?  In a school with 100 students, how do you categorize the people who get jobs from the project, the parents who stop beating their other children because of what they learn through parenting classes, the girls who drop out but still postpone pregnancy for another three years, and the maid who became so inspired that she took university prep classes?   Within social change projects, the change affects everyone who comes in contact with the work.  It is hard to count them.

Evaluation often presents a worldview that rewards large NGOs and those aligned with Western-style middle class culture, not indigenous activists who are often the best leaders of local social change projects.  The worldview of “more is better” is represented with “project cost per beneficiary” and concepts of “return on investment,” encouraging high numbers of beneficiaries.  NGOs can skew data towards large programs that “touch” a lot of people over focused programs that fundamentally change the course of a few people’s lives.

2.  From rigor to rigor mortis

Within our current paradigm of donor-driven priority-setting, more evaluation of NGO programs resembles a school that implements more testing in order to deal with children who are not learning. (Sadly, comparing NGO leaders to children accurately conveys the condescension many of them feel in dealing with donor requirements.)  Too much or inappropriate evaluation results in a decrease in innovative and potentially risky social change work.  As Steven Lawry writes in the Nonprofit Quarterly, “Too much rigor can lead to rigor mortis.”

Rigor leading to rigor mortis captures Givewell’s attempt to advise donors on good international education projects through thorough research and analysis.  In reviewing charities, Givewell begins “by reviewing all publicly available information about your organization including your website, external evaluations, and other relevant information.”  The requirement for external evaluations knocks out at least 90% of small to mid-size NGOs.  Indeed, the only education project anywhere in the world that Givewell endorses is Pratham in India.  Its external evaluation was conducted by MIT’s Poverty Action Lab, for which a Givewell board member worked in 2007.  “Thousands of hours have gone into finding our top-rated charities,” as their website claims, and they could only find one good education program in all the world?  With hurdles this high, the funding of good NGOs will be dead on arrival.

3.  Evaluation is rarely funded.

Raising money for small NGOs is much like patching together a quilt.  Most foundation funding comes in terms of project budgets, with NGOs using individual donations, event proceeds, and any fees for service they can muster to cover overhead.  In fifteen years of writing grants for international programs, I have only received one with full funding for evaluation.  The typical foundation proposal for small NGOs is for $10,000-$50,000 with little room for evaluation if the requested project is going to be funded out of this same pool of money.  In fact, charity evaluators focus on administrative spending, creating incentives for NGOs to skip rigorous evaluation lest they be accused of overloaded overhead.

Let’s fix the system

While the current system is not working, we can change the system to help NGOs run better and donors give better.

First, effective systems for measuring the effectiveness of social programs will require local NGO leaders being at the table during their development.  The current system has donors dictating what needs to be fixed and then dictating the metrics (sometimes implicitly through the application process) to measure how well local people have achieved what we want them to achieve.  Engaging local NGO leaders will help us to understand poverty and the biases that filter our understanding of its decline.  Academia has the concept of peer-review for publications; philanthropy needs a concept of peer-review when it comes to asking the right questions about projects engaged in poverty alleviation.

Second, let’s invest in the capacity building that local NGOs need and want with regards to evaluation.  Foundations  should fund a cross-sector team of philanthropists and NGO leaders to develop common evaluation tools that support local capacity building.  With every proposal, they should  add 10% to fund staff time to conduct evaluation that informs that organization’s and our learning about the issues at hand.  As I wrote about in Being Wrong, we need to create an environment in which it is okay to make mistakes within a setting of learning.

A few years ago, my colleague in Brazil won a prestigious national award.  During the nomination process, I was told that all nominees would be visited by a private detective to check out the validity of their work.  This seemed unnecessarily sinister—certainly out of the ordinary.

At the award banquet, my colleague said that a detective never did come by.  Yes he did, insisted the award staff.  My colleague then recalled a builder who stopped by one day to find out what type of program was running up the street from a property he claimed to be about the develop.  He was immediately surrounded by children who chattered with him for thirty minutes about the project and their experiences with it.  My colleague never had a chance to talk with him—she watched from afar while caught in a conversation.

As I think back, this was the best form of evaluation we could have asked for.  Beneficiaries were given the space to speak about their experiences in a form and venue comfortable to them.  As we invest more thought and money in the best ways to evaluate local programs, sometimes it is most helpful just to stop by and witness the work in person.

Public/Private Ventures gives us an excellent white paper on ways to improve evaluation of small social programs.  Here they describe The Benchmarking Project which engaged 200 workforce development organizations to develop collaboratively new systems for evaluation that responded to their organizations’ realities. 

From Crowd to Community: Part 2

This post represents the second of two exploring crowdsourcing and crowdfunding.  The first one can be found here.

Heather Gold, a comedian and speaker, caught my attention soon into my reading on crowd-related innovations.  Gold gives us the term tummler, a term that comes from Jewish tradition and means a “noisemaker hired to entertain and make sure everyone had a good time.”  Adapting this term to new media, Gold argues for a new way of engaging in critical conversations guided by a tummler, someone who helps make sense out of the vast amount of information now available.  The tummler moves the conversation forward, providing multiple points of entry and acknowledging diverse expertise based on experience and point of view.

This term resonated with me because it opens the conversation about the need to build new roles and systems for managing communities that respond to the needs and interests of crowd participants.  It is already extremely difficult to manage the exchange of financial and evaluation information between small grassroots project and its U.S. or European-based partner in the best circumstances.  Adding web-based crowdfunding projects onto a fragile bi-cultural infrastructure could damage the trust between partners.  If ever there was a need for an organizational tummler, it is now.

 I began to imagine how we could use crowd concepts within the two international development projects I know well.  While I have read that crowdsourcing techniques have been used to monitor elections in Afghanistan and are being explored as ways to monitor aid effectiveness in Africa, neither of those applications relate to social change work with which I have been involved.  The people I work with don’t have smart phones or even internet connectivity.  Nevertheless, I remain curious to explore further how modified crowdsourcing could be used to take a quick pulse of community needs or receive rapid updates following up on services in places where poor people have limited technology.

Crowdfunding, on the other hand, directly relates to what organizations already do: write grants.  I already need to create budgets, describe outcomes, and shop around proposals.  Why not do the same thing on crowdfunding sites, resulting in a whole lot of people funding that Lorena stove or water cistern?

I began my mapping the environment in which partner NGOs currently work:

I then overlayed the funding mechanism… the creation of projects on one side, and the adaption of these projects into funding proposals on the other side.  This image that shows my interpretation for what crowdsourcing and crowdfunding might look like with these small, bi-cultural partnerships:

In applying crowd concepts to my work, I am left with three thoughts…

Values, communication, and capacity.  The most effective NGOs already tackle these issues regularly with robust conversations at all levels.  Before inviting totally unrelated people into your community, make sure that you are clear on the values that guide your work, you have an effective communication plan in place, and you have capacity on both sides of the partnership to fulfill obligations with honesty and transparency.  Values serve as signposts guiding the way through difficult discussions, like whether crowdfunders should vote on projects or get gifts in exchange for their funding.

Projects + general operating=healthy org.  Every social change organization needs money to pay for the projects that deliver key services.  They also need general operating support to work their magic around the edges of these projects.  Social change results from the transactional and transformational needs of communities being met, and transformational needs are rarely funded through project grants.  I have come to believe that significant social change happens on the margins of funded projects as staff members exercise their informal power within their communities and unscripted relationships flourish.  Traditionally, individual donor funds tend to be used for general operating costs.  As organizations grow their individual project-based funding, they need to grow general operating funding to support critical capacity building.

Ownership.  The issue that first gave me pause with crowdfunding is the issue of ownership.  When people give money towards the production of an indie movie, they collectively own that movie.  They get a copy of the movie on DVD.  Crowdfunding applied across cultures requires a more nuanced and transparent position on ownership based on organizational values.  I think about the many organizations that use child sponsorship or animal underwriting as fundraisers; we must ask ourselves critical questions about human dignity, power, and individual vs. collective and local vs. foreign ownership.  Last year a crowdfunding organization told me that I could get $500 or so in donations in exchange for itemized food receipts from an impoverished community who buys all of their food in a public market.    This would have undermined the value of local investment and control, and $500 staff time would have been expended hunting down scraps of paper.

Organizations can chase crowdfunding much like they chase any funding; many non-profits sadly experience mission-creep because the money can be found just beyond the scope of their existing work.  With effective tummlers  in place, however, these same organizations can make the most of self organization, diversity of knowledge, and indirect collaboration  while keeping a clear sense of values and capacity to deliver.  They can take advantage of innovative opportunities to convert crowd members into “smart swarm” community members with the collective energy of a hive of honeybees and the unified focus of sparrows in flight.

What do you think?