What’s the next best web-enabled social innovation idea since Kiva? Brad Burnham, a VC with Union Square describe what he sees as the collision between the market forces that govern technology innovation and the underlying stasis of philanthropy, where it’s very tough to break through with a new model.
According to Brad: “Philanthropy markets have a number of significant advantages over traditional nonprofits but they will need to find ways to increase the amount of information available to donors and lenders if they are going to continue to grow. Cell phones may become the portal through which the third world participates in philanthropy markets. As the Facebook/Craigslist generation becomes a larger part of the donor community, they may be willing to exchange the radical efficiencies of the marketplace approach, for a less perfect, retrospective, Craigslist-like approach to fraud. If more transaction data is hosted on servers located in the developed world, there may be enough market data to use the same computerized techniques the credit card companies use today to spot fraud. Kiva and DonorsChoose captured the imagination of the folks at our event, I think, because most people instinctively believe that the immediacy and emotional power of engaging directly with a borrower or recipient and the inherent efficiency of a lean market place approach to philanthropy already outweigh the risks, and that the balance between opportunity and risk will shift further to opportunity as information and information technology becomes more broadly distributed in the developing world”.
I think this is very well said. We need more ideas like Kiva. I’ve read in the New York Times that now Kiva simply can’t keep up with the demand for new projects to support. Can you imagine the demand simply outweighs supply. Kiva’s problem is the best example to show how strongly donors respond when social capital markets are created. This is perfect for the Internet. There are a lot of inefficiencies to connect social capital with those who need it, Kiva was the first one to take out the inefficiencies, expect to see more to come.
Another interesting and big potential idea is an inspiring start-up called Better Better The World (for full disclosure, this is one of Idea Couture incubation start-ups founded by three very smart like-minded MBAs / social entrepreneurs) and then later joined a team of passionate professionals including a head of product development and head of finance. Their strategy is to create new way of giving by calling it “freerasing”, I love this name. They're now focused on creating a global movement which will enable anyone with access to the Internet to be a freeraiser – raise money for a cause, while surfing the web, at no cost to them. The start-up described themselves an innovative, for profit, social venture that delivers new ways to raise money for leading global social causes by connecting a network of like-minded parties that from individuals, to corporations and global charities.
They are working hard developing a comprehensive platform that supports and provides high value and connecting individuals, companies and charities with a vision to create the world’s most innovative fundraising platform. Their mission? To leverage the power of innovation to raise $1 billion for global social causes by 2012. Visit their site and sign up for the movement. I have added a permanent link here. Many now believe that you can make a profit while advancing your philanthropic interests. This includes San Francisco-based Good Capital that operates like a venture capital fund and invests money from wealthy individuals and distributes earnings back to investors. The difference is that Good Capital invests in non-profit organizations as well as for-profit ones that perform functions associated with non-profit charities.
