How microphilanthropy is changing giving

by: Ruth Richardson

On March 9, Peter Deitz, Anil Patel and I spoke at a Social Venture Partners Toronto lunch on How Microphilanthropy is Changing Giving. In my last entry I posted a description of the event and Peter’s fancy prezi presentation. It was a great overview of the development of online microphilanthropy platforms and he made a very strong case for support for these innovative intermediaries like Small Change Fund (thank you Peter!).

My presentation focused on outlining a few early lessons learned – very early lessons given we just launched in December. I’m not sure they are actually lessons but they are things we are definitely thinking about as we explore the potential of www.smallchangefund.org. These are posed as questions since it’s too soon to have answers. 

1. How to be beta?

How do we continuously foster a beta frame of mind? Jo-Ann McArthur from Fish Eye Corporation talks about what this means: “It means not waiting until “it” is perfect.  There is no final prototype.  Instead, there is “pretty good” followed by continually monitoring, learning, tweeking and improving. We never launch a product or marketing campaign that is 100% set.  We believe in continually learning, listening, refining. It’s a continuous improvement loop.  It’s not risk free – but what is?” At Small Change Fund we are in a true beta phase but I’m now thinking this phase may not end. We might always be beta. It’s the space of social innovation, new technologies, new applications of those technologies. The world of social investment is  moving rapidly so we will need to continue to embrace the beta frame of mind since there is no fixed address. The other perspective we like to talk about around the office is that of Katherine Fulton from the Monitor Institute. She said “We are not thinking our way into news ways of acting but acting our way into new ways of thinking.” We think this is the right approach.

2. How to build community?

How do you create a community and not just a website? Early feedback on our site has included comments like: “Show me, don’t tell me.”  “People want experiences built for them.” “We need to build a community of people-powered networks built on trust.” But how do we do that effectively? We believe this is a priority but it’s a challenge in a age of over-stimulation, constant demand, and media saturation. We are working hard to figure out how to do this well, and how to do it with integrity and depth. If anyone has advice on this front, we welcome it!

3. How to raise enterprise value?

What level of investment is needed, or is optimal, for “intermediary organizations” like ours? We’ve done a lot with a little and have held up the principle of keeping our administrative burden low. We aren’t trying to build the titanic but a nimble, elegant organizational structure. But we have lots to do and we are already bumping up against the limits of our technology. Recently our programmer sent us an email he found about DonorsChoose – an organization often held up as a primo model of online platforms. Turns out that Donors Choose “willl now be a lot cheaper and more efficient due to a donation by Ariba of fulfillment software and services to DonorsChoose that the site values at over $2 million. That follows a donation by Filo of five Yahoo engineers who were lent to DonorsChoose full-time for five months to rewrite its code base.” Wow! This is fantastic but it did spark the question “How do we raise the whole enterprise value of Small Change Fund?” How do we find the balance between the dollars going to the infrastructure and the dollars going out to change agents at the local level? How – as my colleague Karim Harji co-founder of socialfinance.ca asked in a recent blog – do we build the right incentives and funding to establish and sustain these intermediaries? The platforms, the intermediaries, the facilitators are not free goods. They need to be supported and sustained. 

4. How to create a more enabling environment?

Climate change, indigenous people’s rights, water scarcity – these are some of the complex challenges we face as Canadians. How do we confront them? There is a growing belief that there is no silver bullet, no one solution, no big solution as evidenced in the breakdown of the climate change talks in Copenhagen. But there are small solutions – in order to solve some of our most pressing social and environmental issues “we need to stimulate the edges of the social innovation space.” In other words, we need to catalyze the efforts of local change agents across the country who are giving birth to grassroots solutions for global impact. To do this we need critical seed capital, and yet that capital’s flow is highly restricted by current policy and practice in Canada. We are governed tightly with respect to how foundations, charities, not-for-profits, and Canadians as active participants, invest in social change. We need to more fully explore the current opportunities, future possibilities, and practical implications of new forms of innovative finance in order to open up the space for creative solutions to flourish.

Ruth Richardson is the co-founder of Small Change Fund, a fund at Tides Canada.