Thursday, September 29, 2005

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Wednesday, September 28, 2005

Beat the Red Cross at their own game.

I don't know if any of you recently read Richard Walden's article (he's the CEO of Operation USA, an international disaster relief agency based in LA.)

It was published this past weekend and has then been followed by articles like this one

To distill this down to its essence, there are two important issues here:

The first is the brand ubiquity of the Red Cross versus other relief and development agencies and the second is the issue of donor preference to fund relief efforts as opposed to development efforts .

Survival of the biggest?
According to the Chronicle of Philanthropy, $1.2 billion has been raised amongst all reporting relief groups in the US for Hurricane Katrina Victims. Of that $1.2 billion, the Red Cross has received $826m (70% of all donations). Red Cross has succeeded in establishing itself in the minds-eye of the average donor as THE disaster donation destination. Having never stepped behind the curtain of their operations, I could nevertheless describe with a certain degree of confidence the PR/Communications aspect of their disaster response team. Their messaging is instantaneous and ubiquitous. Their total fundraising expenses exceeded 110 million dollars according to recent financial records published on their website. Because of a combination of existing brand recognition combined with proactive messaging, the Red Cross will continue to attract the majority of donations in disaster relief efforts.

Relief versus Development
The argument is that donors prefer to fund relief efforts as opposed to development. Statistically this is true today but not because of true desire but because of a lack of compelling packaging of what development means. Development agencies must co-opt the "knee-jerk" appeal of relief messaging to "strike while the iron is hot" and by contrast, show that development dollars will get "more bang for the buck" than relief efforts.

In fact, I would even suggest that development agencies make the point that between government funds and relief agencies, donors can be sure the relief effort will be covered. The fact is development IS sexy. It's the money that returns normalacy to a place where chaos and devastation ruled.

There are so many "wins" that come out of development that "relief" can't possibly match. Sure a doughnut, a cup of coffee and a sympathetic ear are helpful but isn't his ability to return to his home, regain employment and begin mending the psychological scars of what he endured even MORE helpful? It's the duty of development initiatives to co-opt the knee-jerk moments that fuel relief donations and turn the tables. Recast the role of relief all the while showcasing the power of development. The Red Cross states development isn't their business. They draw the line and that's currently their weakness.

Outcome focused initiatives
The Red Cross is the Microsoft of the Relief Agencies but small, nimble, creative agencies should be able to successfulyl chip away at the Red Cross' share of the donor relief dollar. They must exploit the perceptual issues that plague the Red Cross. Scandals aside, the red cross has by no means evolved its messaging in-step with advances in messaging and communications. The Red Cross is an administrative fund: You make a donation and hope that they allocate it efficiently. This is an increasingly antiquated mode of giving as more people want accountability, transparency and more importantly, instant gratification . The way you showcase you deliver this is not through fund-based fundraising but outcome-based fundraising. You raise money for specific projects, with specific timelines, budgets and outcomes. You use the internet to deliver in "near real-time" these results which delivers a "Return On Generosity" and builds a relationship with your donor-base in a way that a fund never could. As a small development agency, you emphasize that you're small, you've been in-country for years, have your developed networks and are trusted by local factions. This is what donors are craving.

I've created a platform by which to host this kind of fundraising which you can learn more about at

No successful entrepreneur complains that Microsoft has a huge head-start. The ones that have beaten Microsoft are the ones who used its burreaucracy, brand and reputation against it.

The Piggy Is Getting Full

Watching the Piggy Grow
I have such a feeling of pride and satisfaction everytime I look at the little piggy getting closer to 100%. We're all familiar with the thermometer to indicate the progress of a charitable capital campaign. Others have used sideways progress bars (like the ones associated with computer tasks) but these and other "progress bars" didn't reflect the spirit of GiveMeaning and the personal connections that are the spirit of each GivingGroup.

So we created a piggy. It starts off "empty" and slowly it builds a pink/purple hue. My girlfriend calls this "Piggy Juice" and so around the office, that's what we've all taken to calling it. "Anymore piggy juice?" is something asked by one of us every couple of hours.

The start of a revolution? was officially the second GivingGroup we launched. There are about 80 GivingGroups that we started as testers but welovemeghan and then are the only two so far that we've created with the new site up and running.

In 11 days, 22,000 has been raised
Meghan's GivingGroup was started 11 days ago. As I write this, we have received over $22,000 in donations for her GivingGroup. For the whole GiveMeaning team this is really our first validation of the premise of the GivingGroup. It says that when you combine the powerful effect of viral marketing with a tangible, personalized act of charity, the response will wow you.

Design versus Efficiency
The success of Meghan's GivingGroup has also given us opportunity for lots of incredibly useful feedback. Site design, especially for a charity site is incredibly difficult because we've put so much emphasis into making the design warm and intimate but then people give preference to transactional efficiency. So we have to work extra hard to give people the transactional efficiency they expect from a good website but not let efficiency kill the design (a very difficult balance). At the same time, the whole point of the GivingGroup is to introduce a new way of giving and while we certainly aren't looking to reinvent the wheel, we are wanting to shift people's perceptions about what charity means, what it means to be involved in a cause and so on... Anytime you're trying to change someone's point of reference even slightly, it poses the question of how to shift their understanding in the most evolutionary way possible. We're still working on this but we're making breakthroughs in our own understanding of this everyday.

When I worked at Apple, we had a specific process in launching a new product. As soon as development was initiated, we'd print a T-shirt. My collection of Apple t-shirts could probably fetch a pretty penny on eBay if my mum hadnt taken most of them as work-out clothes. Anyway, as soon as we the first test version of the new product was ready for testing, a party would be thrown, with another party for the beta version and culminating in a full-on, campus wide beer bash for a final product release.

I guess it's my Apple Heritage but I feel we should throw a party for all the GivingGroup members each time a GivingGroup is successfully completed. Of course, this is difficult to afford but it seems like a compelling idea. The secret objective of GiveMeaning is to use a system that has been accused of making the world less intimate to foster a greater amount of real intimacy. GivingGroups achieve this to the extent permissable by staying in the "online world" but a party connects these people together in the real-world too.

Wednesday, September 21, 2005

What is the $5 Philanthropist

The genesis of GiveMeaning was a site for me. I'm web-savvy, a media junkie, I'm quasi-informed on most of the major crisis' and conflicts in the world and can make great dinner-party conversation on a wide range of topics and yet I give little to no money away and haven't volunteered in years. The reason for this is not that I became selfish or mean-spirited but that I thought what's the point? I'm not a millionaire, I don't have a lot of time on my hands. The small contribution I can afford couldn't possibly make a difference to any cause.

Online Communities
But then I started thinking about eBay and how it started. Pierre Omidyar's wife was a Pez Dispenser collector. Difficult to find other pez dispenser collectors but when you create a common space where they all congregate, suddenly you have a dynamic community where trading can occur. If you create the platform to allow people to create their own communities, certain groups will thrive and accomplish things whereas others will never gain the critical mass needed.

Don't hope. Get what you want
What if there was a website that envisioned donating not as just givig to a charity and hoping they use it effectively but where you could specify exactly what you would financially support? Whether it's a water-well in an African village, or raising money for a friend's medical treatment or giving art supplies for therapy sessions, whatever you want to do, imagine a site where you could say "I'll support THIS outcome." That's the first step. And then other like-minded people join you because the outcome you've described is what they most want to see happen too. So you make your small donation, and she makes her small donation and you each tell 10 friends what you've done. We forward emails all the time to friends. Would we tell our friends what we're most passionate about? Would some of those friends be inspired to join us in trying to accomplish that goal?

A more intimate voice
One of the most powerful aspects of a GivingGroup is that it changes the way we communicate about charity. There are a lot of brilliant advertising people within charities and at ad agencies that have created some great Public Service Ads but the question is "is it too much?" These ads often share the same tone: Serious, guilt-inspiring, urgent. If these ads appear in the middle of the nightly news where we're being bombarded my bad news, are we as viewers likely to take action? Or worse, if they appear in my favorite tv show, am I going to allow myself to get out of my bubble and think of something serious?

The "voice of charity" may be getting lost on us. But one voice that is surely never to be ignored is that of your friend. If a friend sends you an email telling you a story of why they are supporting a specific GivingGroup, that's not only an email you'll likely take the time to read but you'll likely visit the website. On the left hand column of each GivingGroup profile is a listing of each person who has made a contribution to that GivingGroup. Each contributor is asked to say briefly why they care about that GivingGroup. Each story is a personal testament to why these people have contributed. These stories are highly inspiring and it just takes the one you connect with to inspire you to act.

The dreaded admin fee
There is an increasing amount of discussion regarding the percentage taken out of a person's donation by fundraisers and charities' own expenses. I'll leave my personal opinions on this controversial topic for another blog entry but we knew that if we wanted our site to be really different that we had to find a way to ensure that 100% of each donation to a GivingGroup is used in accomplishing the GivingGroup goal so that's what we've done. That's a huge differentiator for us and we can afford to do it because of our business model.

How we get paid
Basically a GivingGroup is a mini web portal for a specific charitable purpose. With new people coming to the site and with existing donors regularly visiting for updates and progress reports, we've got a pretty valuable commodity to advertisers big and small. Every company wants to communicate that they are "caring companies" the question is how to do it credibly and effectively? What's the point in spending thousands to advertise you supported a cause that only a small % of your customers care about and how would you ever know what your customers really care about?

Everyone supporting a GivingGroup is saying they care about that specific cause. Now we can offer an advertiser the ability to say "This cause is important to us and we're ensuring 100% of your donation is used to achieve this goal." That's a powerful message for an advertiser.

Cost Comparison
Companies big and small allocate a percentage of their budget to sponsoring events. We think that as soon as people leave the event, most of them forget who sponsored the event. But a GivingGroup is a charity event that lasts months on end. People are continuously checking on the progress and when all the money is raised, they're logging in to see for themselves the difference their coontribution has made. Everytime someone visits that GivingGroup they're reminded of the corporate sponsorship. So for the same cost as a one-day event sponsorship (and in some cases less), they are getting months of exposure to a very targeted audience.

Will it work?
I think we have a concept that can truly revolutionize philanthropy. There is so much power in numbers. If GiveMeaning can mobilize the $5 philathropist in all of us, well... As my grandfather said anytime anyone would make a big pronouncement, "Time will tell..."

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