Readings (February 9, 2011)

Here are some items that caught our attention over the last couple of days:

• Thomas Friedman: Up With Egypt (New York Times)
• Quentin Hardy: A Billionaire's Plan for More Egypts (At Your Servers)
• Aaron Hurst: It Slices! It Dices! (Pro Bono Junkie's blog)
• Beth Kanter: Integrating A Network Mindset Into Your Daily Work (Beth's Blog)
• Nicholas Kristof: George Clooney Answers Your Questions About Malaria (New York Times)
• Peter Osnos: Three Cheers for Muhammad Yunus (The Platform)
• Kari Dunn Saratovsky: Can Super Bowl Commercials Move Us From "Where's the Beef" to "Where's The Good?" (Social Citizens)
• Sean Stannard-Stockton: The New Normal Economy & The Social Sector (Tactical Philanthropy)
• Derek Thompson: The 4 'Metaforces' Driving The Next Economy (The Atlantic)
• Krissah Thompson: With Detroit in Dire Straits, Mayor Invites Big Thinking (Washington Post)

What have you been reading?

Two Cheers for the Giving Pledge!

(Bradford K. Smith is the president of the Foundation Center. This post originally appeared on the center's Transparency Talk blog.)

Two cheers for the Giving Pledge! Why not three? The answer lies in a simple, yet challenging word: transparency. As it stands now, the Giving Pledge is pure potential. And unless we are able to track how all the new money it injects into philanthropy is actually spent, its impact on the world will never be known. But first, the cheering.

More money -- Hooray!

Anyone who cares about philanthropy and its ability to increase opportunity and transform lives cannot help but be ecstatic about the Giving Pledge. You've seen the predictions: if all the billionaires on the Forbes 400 list of the richest Americans signed the pledge, it would double the $600 billion currently devoted to philanthropy in the U.S. But the architects of the pledge -- Bill and Melinda Gates and Warren Buffett -- would undoubtedly be pleased if others around the globe got the bug. The second largest group on the Forbes World Billionaires list are, in fact, Chinese. That explains the Gates/Buffett trip to China and their plans for a similar sojourn to India.

Of course, not everyone will take the Giving Pledge. The China trip got mixed reviews, and Carlos Slim has found a way to get publicity by stating proudly that he will not sign on (because he is too busy improving the world by making money from his businesses). But even Mr. Slim does more philanthropy today than anyone ever expected, so this move may be semantics or a reflection of his desire -- as the world's richest man -- to do things differently than his closet competitors. Anyway way you look at it, though, the Giving Pledge can turbo-charge philanthropy for decades to come, and that is great news.

Readings (February 7, 2011)

Here are a few items that got our attention today:

• Nancy Gibbs: To Fight Poverty, Invest in Girls (TIME)
• Tim Ogden: Dark Skies After All (Philanthropy Action)
• Mitch Joel: Content Is Everywhere - the Changing Tide of the Internet (Six Pixels of Separation)
• Jeff Jarvis: AriannaOL (BuzzMachine)
• Lucy Bernholz: Synecdoches, Predictions and Being Wrong (Philanthropy 2173)
• Rahim Kanani: Judith Rodin, President of the Rockefeller Foundation, on the Evolution and Promise of Social Innovation (World Affairs Commentary)

Anything on your radar you'd like to share?

Q&A With Aaron Dorfman, National Committee for Responsive Philanthropy

The National Committee for Responsive Philanthropy was created thirty-five years ago to encourage foundations to do more to address public needs that were then -- and often still are -- underfunded. The organization works to promote philanthropy that serves the public good, is responsive to people and communities with the least wealth and opportunity, and is held accountable to the highest standards of integrity and openness.

Aaron Dorfman has served as executive director of NCRP since 2007. Prior to joining the organization, he worked for fifteen years as a community organizer, spearheading grassroots campaigns to improve public education, expand public transportation for low-income residents, and improve access to affordable housing.

Recently, PND spoke with Dorfman about the public education crisis in America, how foundation support of nonprofit advocacy has changed in recent years, and the likelihood of new legislation affecting nonprofits and the nonprofit sector.

Philanthropy News Digest: Confronting Systematic Inequity in Education, a recent NCRP report written by Kevin Welner, a professor of education at the University of Colorado at Boulder, and Amy Farley, a doctoral candidate at CU's School of Education, argues that the American public education system is in crisis and that foundations working in the education space are likely to have the greatest impact if they focus on marginalized populations. That's difficult, expensive work. How much of an education funder's grantmaking budget should be devoted to educational equity and access efforts?

Aaron Dorfman: I agree it's difficult and expensive work. And I think most education funders are in it for the long haul and want to see long-term, sustainable results. But there's no right way to determine how much of a particular funder's portfolio should be devoted to these kinds of efforts. At the end of the day, it has a lot to do with the comfort level of trustees when it comes to funding advocacy and focusing on long-term change versus achieving short-term results. One of the points we were trying to raise in the report is that, on the whole, there is far too little funding for efforts that confront systemic inequity in education. So I would encourage each foundation to think about its own long-term goals and how the high-impact strategies offered in the report might help them achieve those goals.

PND: In the report, NCRP recommends that foundations consider allocating at least 50 percent of their grant dollars for the benefit of marginalized communities. At the time of the report's publication, I believe you noted that roughly 11 percent of foundations in the U.S. were meeting that goal.

AD: That's right. The 11 percent figure was based on the thousand or so foundations in the Foundation Center's database that have given an average of a million dollars or more for education. Our analysis also found that only about 2 percent of foundations were allocating 25 percent or more of their grant dollars for advocacy efforts, another recommendation in the report. Again, we did not intend for the recommendations to be inflexible benchmarks -- obviously, what individual foundations can and are willing to do varies a great deal. The point is to encourage funders to have a serious discussion, at the board and staff levels, about whether or not they are devoting enough of their portfolio for the explicit benefit of underserved groups and whether they are investing enough in strategies with the potential to produce long-term systemic change. We think if funders do that, it will lead to positive change.

PND: Education reform has been a major theme of the Obama administration. Is the administration doing enough to address educational equity and access issues in low-income communities? And how would you rate its efforts to work collaboratively with foundations and nonprofits to advance educational reform?

AD: Well, the Obama administration has taken a good first step, in that it recognizes the serious and ongoing education needs in our nation's most vulnerable communities. However, it hasn't really made a meaningful attempt to break the cycle of systemic inequity or address the power imbalances we talked about in the report. Its approach has been more one of promoting favored solutions rather than focusing on policies that enhance the political voice of those most likely to be affected by reform. A focus on these kinds of participatory issues is very different than, say, devolving power to individual parents through school choice, which tends to leave schools in low-income neighborhood stuck in a cycle of decline. So, while I think the administration has done some things well, I would be more impressed if it recognized the importance of supporting active, engaged constituencies willing to fight the systemic inequities that exist in the system.

PND: How is the shift in the balance of power in Congress likely to affect nonprofits and the nonprofit sector? And how does NCRP plan to insert itself into that conversation?

AD: It's clear to me from recent events that discussions about deficit reduction are going to include changes to or elimination of the charitable deduction. I think we'll hear a lot of talk about that in 2011 -- indeed, my guess is that that will be the number-one policy issue affecting the nonprofit sector in the new Congress. And we're working on establishing a position with respect to that. We've always felt that it is important to incentivize charitable giving, and we would be open to changes in the current system that actually improve the regulatory framework for giving.

PND: Nonprofit advocacy and the need to support it is a huge concern of NCRP's. How would you rate the work of foundations in terms of advancing advocacy over the past few years?

AD: They're making progress. Foundations are much more comfortable talking about funding advocacy, and they've made some real headway in terms of where the dollars actually go. So while I'm looking forward to the opportunity to analyze 2009 data to see how much progress we have made, I do feel as though there has been movement in terms of funders recognizing the importance of funding civic engagement, community organizing, and policy advocacy work.

-- Matt Sinclair

Weekend Link Roundup (February 5 - 6, 2011)

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Communications/Marketing

On her Getting Attention blog, Nancy Schwartz chats with Nonprofit Marketing Guide author Kivi Leroux Miller about Miller's new report detailing "the most important (and least important) communications tools for [nonprofits in] 2011."

Diversity

Writing on the NCRP blog, Meredith Brodbeck offers some reflections about the Kellogg Foundation's work to address racial disparities in the United States.

Leadership

Case Foundation VP for Social Innovation Kari Dunn Saratovsky disagrees with Special Olympics CEO Tim Shriver, who said at a recent conference that past generations "have failed at inspiring the big ideas of the next generation." Not so, writes Saratovsky. "The rising generation is inspired to fight the good fight -- we just have a different way of going about it. Perhaps," she adds,

we forget that it’s the Millennial generation who in large part moved social technologies into the mainstream -- and are now moving them to mobilize around social issues through platforms like Facebook and Twitter. We were the first segment of users who discovered the utility of the technology and exploited it in ways that our parents would have never dreamed. Perhaps this quality of creative thinking when it comes to technology, comes from not being taught or forced into institutional thinking or traditional business cultures, but instead by living lives in a very open and transparent ways -- always searching for answers and willing to take risks. Something that parents like Tim allowed us to do....

On her blog, Beth Kanter shares a few takeaways from a recent discussion on the art of reflection.

Microfinance

Philanthropy Action's Tim Ogden explains why there may yet be sunny days ahead for the microfinance industry. While a study released at the 2010 Microfinance Impact and Innovation Conference found "little evidence that borrowers significantly increase their incomes, invest heavily in their businesses, or that children attend more school or women become empowered," writes Ogden, the findings are "driven by unrealistic expectations. The studies have thoroughly exploded the myth that microcredit is a silver bullet for eliminating poverty. But believing that microcredit -- or anything -- is a silver bullet for poverty was silly in the first place...."

Philanthropy

World Affairs Council president and CEO Jane Wales responds to a New York Times article that criticized the leadership of Google.org, the philanthropic arm of the search giant, for making bold claims "and raising expectations to a level that could not be met in a period short enough to match our attention span....While that criticism may be fair," writes Wales,

in the scheme of things, it seems unimportant. Like the rest of us, Googlers could not and cannot foresee the full social, economic and political implications of providing the world’s knowledge to those who were previously isolated by poverty or politics....But Googlers do know one thing, and that is the level at which large decisions will be made -- and that is at the level of the individual....

Social Media

In this month's installment of her Social Good podcast, Allison Fine chats with Network for Good's Katya Andresen and UC San Francisco's Lena Shaw about how nonprofits can use social media in their annual appeals.

And on her blog, Fine, co-author (with Beth Kanter) of The Networked Nonprofit, responds to a blog post by New Yorker writer Malcolm Gladwell, who in October touched off an Internet firestorm with an article that seemed to minimize the importance of social media as a driver of social change, in which Gladwell says that the use of social media by Egyptian protestors is "less interesting, in the end, than why they were driven to [protest] in the first place." Fine couldn't disagree more and argues that the "advent of social media provides three critical resources for protesters today":

1. The ability to initially organize as the Egyptian protesters did on Facebook and Twitter to connect with their friends, but more importantly, the friends of friends, the network.
2. The power to change meeting places or times in real time using tools like text messaging, Twitter or Foursquare.
3. The ability to share their stories, pictures, and videos with the rest of the world.

Writing in the Harvard Business Review, Jeffery Rayport argues that Facebook, the social networking super site, has become a sort of ubiquitous branded utility that not only is changing business, but is "changing us in ways that are arguably out of anyone's control...."

Technology

Last but not least, Netsuite philanthropy program manager David Geilhufe makes a case on the Nonprofit Technology Network blog for hiring experienced technology experts rather than relying on the limited knowledge of "accidental techies."

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a great week!

-- Regina Mahone

Absolute Transparency: An Illuminating Approach to the Grantmaking Process

(Karen Topakian was executive director of the Agape Foundation for sixteen years. The foundation merged in 2010 with the Peace Development Fund. She currently is the owner of Topakian Communications, a writing and communications consulting firm. This post originally appeared on the Foundation Center's Transparency Talk blog.)

Transparency in clothing can be provocative. Transparency in decision-making can be illuminating. That's what the founders of the Agape Foundation thought when they decided that their grantmaking process must occur in the light of day, in an environment of complete transparency.

Agape's full name, The Agape Foundation–Fund for Nonviolent Social Change, indicated its commitment to the practice of nonviolence in word and deed. The foundation believed that those with the power, grantmakers, needed to act with openness and accountability toward those without, grantseekers.

Most foundations conduct their grantmaking process behind closed doors, shrouding grantmaking activities in a secrecy that can perpetuate a perception of elitism. Such a perception damages the sector, and can breed ill will and mistrust.

By making the process transparent, grantmakers can speak directly to grantseekers and forge a partnership around shared values and actions. That transparency also provides an opportunity for grantseekers to see what parts of their proposal and organization resonate with funders, and what parts may be unclear or misunderstood.

It was this philosophy of transparency and partnership that drove the grant decision-making process among Agape's board of trustees. This body of activists and nonprofit leaders read, reviewed, and discussed the proposals after the staff eliminated those organizations which did not meet our guidelines. (Agape only funded young, California-based, grassroots social change organizations.)

The board then winnowed the docket down to five to eight proposals that best matched Agape's mission and funding criteria. The real show, however, took place at the next phase of the grantmaking process: the session where the applicants made their presentations, live and in person.

These final candidates received an invitation to attend a day-long session. Often groups were invited because the board had questions that weren't answered in the proposal. An invitation did not guarantee funding, however.

At the granting session, the grantseekers were required to make a ten-minute presentation and answer questions from the board. Their participation need not have ended there. They were also invited to listen to other groups' presentations, join the board for lunch, witness their deliberations and final granting decisions, and participate in an evaluation of both the process and the session at the end of the day.

Board members and grantseekers had to abide by two rules of engagement:

• Board members were expected to use the question time to raise any outstanding concerns or questions about the proposal so that the grantseeker could address them
• Grantseekers could not speak during the board's deliberations

The lunch session that followed allowed board, staff, and grantseekers to build community by sharing food and camaraderie as partners and fellow activists -- further breaking down the barriers between the grantmaker and grantseeker. This informal part of the meeting also allowed grantseekers to meet each other and learn more about each other's work, with the hope that they would develop relationships, collaborations, and community.

After the presentations, the board began their official deliberations, deciding on grantees and grant amounts by consensus. Not all decisions came easily. Sometimes the board chose not to fund a proposal because they felt the organization was not capable of completing the work as described. Other proposals were declined because the presenter could neither adequately answer the board's questions nor address major concerns.

If that happened, the grantseeker would have known why from the questions and discussion that took place during their presentation. Those moments were always the hardest for all involved, but provided a valuable learning experience for the grantseeker.

Sometimes the board had difficulty reaching consensus on the amount of the grant. But through open and honest discussion, they eventually came up with an amount upon which all could agree.

The final item on the agenda, the evaluation of the process, included everyone. Most importantly, the grantseeker could share their thoughts and feelings about the experience, allowing Agape's board and staff to learn how their actions were seen and felt by others. This stage, like all the others, was always done with an eye toward improving the process the next time -- and always with an eye toward transparency.

-- Karen Topakian

Chart of the Day: 'The Kindling of Change' (NY Times)

Was Tunisia the first domino in a chain reaction that results in the fall of authoritarian governments across North Africa and the Middle East? No one can say for sure, but New York Times columnist Charles M. Blow has assembled a fascinating statistical portrait of the region that sheds light on some of the socio-political variables likely to influence the outcome.

(Click for larger version.)

 

And how about that income inequality number for the U.S.?

Philanthropy on the Edge: Foundations, Egypt, and Press Freedom

(Bradford Smith is president of the Foundation Center. In his last post, he wrote about George Soros' $100 million gift to Human Rights Watch.)

Whoever said philanthropy is not relevant to the issues of the day?

Take Egypt. Many, who as recently as a week ago may have known little about Egypt, have been riveted to television, Facebook, and Twitter as the drama of a people challenging a government -- and that government pushing back -- unfolds. But foundations have been funding projects in and about Egypt for years, and many of the people, ideas, and institutions they have supported will be vital to that country’s future.

What is the foundation "line" on Egypt? Well, there isn't just one; American foundations are private institutions, so it all depends on the interests, values, and expertise of each donor. Using the Foundation Center's database, I did a simple keyword search for "Egypt" and found more than five hundred grants awarded since 2003. The largest number has gone for higher education, either to U.S. or European universities or directly to Egyptian institutions like the American University in Cairo or Cairo University. Whatever the outcome of the current crisis, Egypt will still depend on skilled human resources to build a modern, competitive society. Other grants have gone for issues that speak more directly to current events such as human rights, personal liberty, and the status of women. These can be controversial anywhere, and in Egypt addressing such issues takes skill, a keen sense of politics, and, well, courage. Even supporting cultural activities, where certain artists are state sponsored and others are not, can represent risk for a funder -- and more so for those who do the work on the ground. Research grants we found help to better understand the complexity of Egyptian politics, transformations in the region, and the role of religion. Good data is lacking, but there are also African and European foundations that consider Egypt important to their programming.

Take Press Freedom: While in Tunisia and the early days of the Egypt protests everyone was celebrating the liberation of information through Twitter, Facebook, and CNN, authorities quickly shut down the Internet and mobile networks and angry pro-Mubarak mobs began to target journalists. A free press is one of the pillars of a democratic society and a favorite target of authoritarian leaders of all persuasions. Even in democracies, where the press remains largely free (though subject to commercial interests), it is frequently accused of one bias or another. Here, some foundations have also translated their values into grants. The same kind of quick search in Foundation Directory Online yielded hundreds of grants made since 2003, most to a select group of organizations created precisely to combat press censorship and persecution. They include the Committee to Protect Journalists, the World Press Freedom Committee, and the Reporters Committee for Freedom of the Press. Not surprisingly, among the foundations that support them are several like the John S. and James L. Knight Foundation and the Gannett Foundation with origins in the newspaper business. For a glimpse into how such grantmaking might strike a raw nerve, check out Silence or Death in Mexico's Press: Crime, Violence, and Corruption Are Destroying the Country's Journalism, produced by the Committee to Protect Journalists with support from the Knight, McCormick, Oak, and Overbrook foundations.

Imagine what it's like to be a foundation that has staff and grantee partners in Egypt at the moment. Imagine what it's like put your foundation's money behind press freedom and see journalists arrested, beaten, and harassed -- in Egypt and elsewhere. This is philanthropy on the edge: driven by a sense of justice and a willingness to take risks.

-- Brad Smith

Pepsi Refresh, You Fooled Me

Over the past twelve months, the nonprofit sector has watched Pepsi hand out hundreds of thousands of dollars each month as part of its Refresh Project, which was launched with the $20 million it would have spent on advertising during last year's Super Bowl.

Some bloggers have commended Pepsi for its contest innovations, while others have been less enthusiastic.

Recently, Pepsi announced that it would stage the competition again in 2011 and would also introduce it in China and parts of Latin America. At the same time, a Wall Street Journal article over the weekend revealed that the company is revamping the project in light a number "of complaints of vote-rigging and other irregularities," including the formation of "informal alliances" by community organizers, health interest groups, and religious organizations. In response to the complaints, the company plans to eliminate the $250,000 grant category, which seemed to generate the largest share of irregularities; reduce from ten to five the number of causes for which people can vote in a twenty-four hour period; eliminate the environment and health categories; and implement a lottery system to select the charities that will compete each month.

Pepsi -- which has seen declining beverage sales for a decade -- plans to promote the new-and-improved project on Pepsi bottles and cans, and will run a bottle-cap promotion that rewards an undisclosed number of winners with up to a hundred votes.

In a recent New York Times article, Shiv Singh, head of digital for PepsiCo Americas Beverages, said that the Refresh Project was "not a corporate philanthropy effort. This was using brand dollars with the belief that when you use these brand dollars to have consumers share ideas to change the world, the consumers will win, the brand will win, and the community will win...."

I don't buy it.

I understand that for-profit companies are in the business of selling. Let's face it, without a net profit, there would be no money for a company's charitable efforts. I also understand that, because of their size and the absence of a formal application process, the grants being awarded through the Refresh Project are different from traditional corporate philanthropy efforts. But now that everyone has witnessed its powerful appeal, isn't it time to treat the $20 million project more like a CSR effort and less like a branding initiative? And that would include, as Rachel Bellow and Suzanne Muchin of ROI Ventures suggested in a PhilanTopic post earlier this week, "meaningful, 'custom designed' metrics for success that are specifically meaningful to the company, its actions, and its scale of investment."

What do you think? Should the food and beverage giant be doing more to align the project with its own CSR goals? Or is that asking too much of these kinds of crowdsourced popularity contests?

-- Regina Mahone

What a Winter...

A colleague's daughter reports that they have two feet of snow in Massachusetts....

 

Ba da boom...

Egypt: A PubHub Reading List

As historic protests and calls for democracy in Tunisia, Egypt, and elsewhere in the Middle East continue, here are a few reports from our PubHub catalogue to help you put recent developments in context.

The role of social media in inspiring, spreading, and amplifying the demonstrations has been much discussed. Global Publics Embrace Social Networking, a survey by the Pew Research Center's Pew Global Attitudes Project, shows that as of spring 2010, 18 percent of those surveyed in Egypt used social networking sites -- compared with 24 percent of Jordanians and 18 percent of Lebanese -- 6 percent did not, and 76 percent did not have Internet access.

What might the fall of authoritarian regimes that have suppressed all opposition, including Islamist movements, mean for the intersection of democracy and religion? Based on a spring 2010 Pew Global Attitudes Project survey, Muslim Publics Divided on Hamas and Hezbollah offers findings from Egypt, Indonesia, Jordan, Lebanon, Nigeria, Pakistan, and Turkey regarding respondents' views of Hamas, Hezbollah, and al Qaeda, as well as the role of Islam in politics.

Deradicalizing Islamist Extremists, a study by the RAND Corporation with support from the Smith Richardson Foundation, analyzes the processes through which Islamist extremists become disengaged and deradicalized, and outlines best practices, implications, and policy recommendations.

A Five-Year Review of Scholarship on Islam 2005-2009, a report from the Carnegie Corporation of New York's Scholars Program, profiles six recent fellows and their research on Islam. They include Brian T. Edwards, who explored the circulation of "American civilization" in North Africa and the Middle East; Noah Feldman, who examined recurring themes and features of constitutional initiatives in majority-Muslim countries such as Afghanistan, Iraq, Pakistan, Bahrain, and Nigeria; and Bruce Lawrence, who researched the role of Christian and Muslim minorities in Africa and Asia. The work of two fellows is of particular interest, in light of recent events: Amaney Jamal's research focuses on the type of "political agency" Islam produces among ordinary citizens in the Arab world -- i.e., how different "frames" shape levels of civic engagement and which formal political institutions are best equipped to meet the demands of citizens within the Arab world; and Vali Nasr's work, which examines prospects for the rise of Muslim democratic political parties and platforms in Bangladesh, Indonesia, Malaysia, Pakistan, and Turkey.

Could the current instability spread to other countries in the region? Saudi-Iranian Relations Since the Fall of Saddam: Rivalry, Cooperation, and Implications for U.S. Policy, another RAND Corporation report made possible with support from the Smith Richardson Foundation, examines how structural, sectarian, and ideological tensions and differences over energy interests between Saudi Arabia and Iran have evolved since 2003. The report also analyzes the roles of the United States and Iraq and makes policy recommendations.

What is the role of Turkey as a majority-Muslim "functioning democracy" struggling to balance secularism and Islam? Getting to Zero: Turkey, Its Neighbors and the West, a Transatlantic Academy report funded by the Lynde and Harry Bradley Foundation,  examines Turkey's changing global and regional role; its foreign policy agenda of "zero problems with neighbors" as well as its energy policy and promotion of democracy, trade, and migration; and underlying domestic and regional trends.

Global Restrictions on Religion, a report from the Pew Forum on Religion & Public Life, analyzes government and social restrictions on religious beliefs and practices worldwide, including the percentage of countries with "low," "moderate," "high," or "very high" limitations; the percentage of the global population living in those countries; and the types of limitations in religious belief and practice.

Mapping the Global Muslim Population: A Report on the Size and Distribution of the World's Muslim Population, also from the Pew Forum on Religion & Public Life, highlights findings from a demographic study of the Muslim population worldwide, including data and maps on the geographic distribution of Muslims by country and territory, region, sub-region, sect, and majority status. Interactive maps also show the distribution of Muslims worldwide as well as each countries' relative "size" based on its Muslim population.

Last but not least, the Women's Foreign Policy Group's Faces of Contemporary Islam: Fresh Perspectives on Theory, Practice, and Foreign Policy summarizes the proceedings of a November 2008 conference convened to promote understanding between the Muslim world and the West. Among other things, the report examines perceptions about the compatibility of Islam and democracy, Muslim women, Western attitudes toward Islam, and the role of the media in the Muslim world.

-- Kyoko Uchida

Lessons From 'DotOrg'

(Rachel Bellow and Suzanne Muchin are partners at ROI Ventures, a strategic advisory firm that works at the intersection of social impact and market opportunity. In October, they wrote about Mark Zuckerberg's $100 million investment in Newark public schools.)

Philanthropy News Digest: The New York Times ran a long article over the weekend about the failure of Google.org, the main driver of the search giant's ambitious attempt to "reinvent" philanthropy, to deliver on those ambitions. Did anything in the article surprise you?

ROI Ventures: It's no secret that Google.org has been struggling to define and execute its impact for some time. But even for those of us who have been following the organization closely since it launched, it's surprising what a big miss DotOrg represents on the social impact landscape. In fact, we believe Google failed to apply to DotOrg nearly every basic business tenet that made the search company itself a monster global success.

As a company, Google built its success on leveraging the intellectual capital and passion of its employees to create online tools that transform the way information is shared. The company is nimble, innovative, and quick to respond to the changing demands and challenges of our modern age.

As a dot.org, Google completely ignored these fundamental principles of success.

DotOrg was created as a separate entity, physically and conceptually isolated from the core company and its executive leadership. It lacked both the strategic and executional discipline that Google applies to all its products. And it never exposed its ideas to market forces -– Google didn't focus on the demand (the "pain points") of the actors and organizations devoted to social purpose that defined its domain of operation.

Google is not alone in failing to apply these basic business principles to its social impact activities. Too many companies think having a social impact is an afterthought, a side business, or one where all the rules of business don't apply.

PND: The article notes that Google, a company obsessed with numbers and metrics, struggled to measure DotOrg's accomplishments. Is the growing emphasis on numbers and metrics in the nonprofit sector misplaced?

ROI: Google's mistake was never defining what "having an impact" meant to the company at large. The result is that it actually had no meaningful metrics to measure success and instead resorted to fantastical and hubristic objectives about changing the world.

PND: Are "dot.orgs" more likely to fail than traditional corporate direct giving programs or corporate foundations?

ROI: If a dot.org is seen as a separate concept, with no connection to the core values and executive leadership of a company, it will struggle to succeed.

Dot.orgs can be far more innovative and effective than traditional giving programs because they are raising the bar on both the methods and meaning of social impact.

For example, conventional corporate giving programs use check writing as the principal tool for social impact, while a dot.org looks to leverage its intellectual capital to make a difference. In the case of Google, its core strength lies in its unparalleled ability to aggregate and disseminate information. Had Google leveraged this specific capacity on behalf of the social sector, its potential for impact would have been exponentially increased.

PND: The lines between profit and not-for-profit seem to be blurring. What's driving that phenomenon?

ROI: Today, more and more businesses are recognizing that their social impact activities must be baked into their core business strategies. This is social entrepreneurship at its best. As a result, the lines are being redrawn between profit and nonprofit businesses: it's not actually about the lines blurring, but instead about redefining traditional territories of action and impact.

PND: What lessons should other large, for-profit companies take away from Google's experience with DotOrg?

ROI: Companies looking to make an impact should build upon their fundamental strengths and collective passions. Whatever a company excels at is what it should leverage to make a difference. Companies should also make sure that any social impact undertaking includes meaningful, "custom designed" metrics for success that are specifically meaningful to the company, its actions, and its scale of investment.