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On this 9/11

On this 9/11, unlike that 9/11, my attention was divided. On that 9/11 I could not escape a blinding telescopic focus on the senseless loss of lives and the pain experienced by loving survivors. On that 9/11 I could not look away from the roiling abyss of hatred that had lashed out with such a deafening roar. On that 9/11 I felt like love was like the air that gasping lungs could not regain.

On this 9/11, my attention was divided. My mind kept going back to that 9/11 as I listened to snatches of conversations sharing our “where I was” stories like beads on a rosary. I spent time with friends I love. I smiled while watching my son play soccer with his friends in a steamy tropical rain. I celebrated an incredible, brilliant, loving boy’s 10th birthday.

And I reminded myself that if that 9/11 couldn’t destroy the love in me, then this 9/11 I need to redouble my commitment to manifesting what is great about the ideals of America. To not allowing intolerance and hatred to seem bigger than love, equality and our shared humanity.

This piece, ‘A Letter to My Son on the Tenth Anniversary of September 11’  really speaks to me. Thank you Terry Keleher for writing it.

So I am glad that on this 9/11 my attention is divided between the past, the present, and the future. Because history is not destiny and though that past shapes, it does not have to define our future.

It’s Not (Just) About the Money

Elegant and well-heeled would be the best way to describe them. I smiled at these two women of indeterminate age who I had just met at the launch of the UBS-INSEAD Study on Family Philanthropy in Asia. As I moved to introduce them to one another, they both laughed and said, “We’ve known each other since…” putting the flat of their hands forward at small-child-height.

“ We were neighbors,” the petite Chinese woman said.

“Our apartment was here, and their apartment was there,” said the smiling Indian woman, pointing her finger in the upward diagonal.

“Didn’t you play marbles?” One asked the other with a mischievous grin.

“Oh yes, all the time. And with the boys!”

“And every day your mom—rest her soul.  She was a real force of nature. She would go to the market over there on…”

“And my father, he’s not well now, but we take care of him at home…”

“Yes, we knew each other.”

“ But it’s not like that anymore.”

“ No nothing is like that anymore.”

There was silence as I imagined them thinking about all the changes—education, jobs, marriage, kids, and clearly wealth—that had happened since those long-ago days. For a brief moment I could almost see the bustling apartments these women described, in the brand-new nation Singapore was 30 or so years ago. Where families knew one another, children played in empty lots, and what bound everyone together was that they were all strivers.

We drifted apart as the 150+ person crowd wandered into the auditorium to hear the current state of family philanthropy as described by the recently completed study. Despite the fact that we are all living in the midst of Asia’s economic engine, the stats were still mind-boggling.

  •  China now has over 1 million US dollar millionaires.
  •  In recent years, Indian households have witnessed the highest absolute gains in wealth in the world.
  • By the end of 2009 there were some 3 million Asian Pacific high net worth individuals, equaling the number in Europe for the first time, and their wealth totaled US $9.7 trillion.

But the rising tide has not raised all boats.

  • In sheer numbers the region is still the largest locus of poverty and deprivation in the world. In 2005 there were over 660 million people in India and China alone who lived on less than US $1.25 per day.
  •  In India, the wealthiest 5% of the population control 40% of the country’s wealth.

All of these statistics from the report were only the prelude to the substance of the discussion.  Through 200 quantitative surveys and over 100 in-depth interviews, the report’s author Mahboob Mahmood, Adjunct Professor of Entrepreneurship and Family Enterprise captured themes on motivations for giving, priorities, and philanthropic approaches.

The image that emerges is a charitable sector led by closely held family businesses with a strong entrepreneurial ethos, complex intergenerational relationships, delicate succession and legacy challenges, and a deep awareness (particularly on the part of the patriarchs and older generations) of the power of education to change the course of lives in a single generation. Philanthropy is a useful mechanism for reinforcing shared values with the goal of supporting family cohesion and harmony.

Education is by far the largest area of investment, with poverty alleviation and health distant seconds and thirds. Arts/culture (4%), the environment (4%) and civil rights (1%) were small also-rans.

Among the challenges cited was lack of experienced staff, the perception (and sometimes reality) of a limited number of high-impact NGO partners, and difficulty in finding philanthropic co-investors who are aligned in mission.

The incredibly generous families who participated in the study are to be lauded for their leadership. They are impressive fonts of giving but as yet there exist few networks of strategic philanthropy that can achieve what the authors called, “sustained transformational impact in Asia.”

I was struck by the words of panelist Laurence Lien, CEO of Singapore’s National Volunteer and Philanthropy Centre and a member of one of Singapore’s most philanthropic families when he said, “The most important use of philanthropy is social innovation and social change. Charity is important, but there is much more to do.”

His comments took me back to the conversation I’d had earlier with those two elegant, well-heeled ladies. Money provides privilege to those who possess it but it also changes everything. It can create fractures in families, as well as in societies. It can disconnect people from their broader community. And the relentless drive for economic growth can take a deep toll on cultural traditions as well as our physical environment.

The challenge ahead for philanthropists in Asia, indeed philanthropists everywhere, is to engage with communities in developing solutions.  Charity is usually top-down, highly transactional and rarely transformative. It is important, but not enough. Transformational impact can be achieved by moving beyond charity with strategic analysis, community engagement, and emphasis on our shared vision and common destiny. Networks and collaboration are required. Civil society can play an essential role in reweaving the fabric of society. But it requires more than charity. It requires vision more than just money.

The title of this post was at least partially inspired by the Jesse J. song my kids adore which is on a regular loop in our house…

Tempest in Three Teacups: Magical Storytelling

Storytelling is big. Our world seems alive right now with  some of our best experts extolling the power of storytelling. Business schools have switched from ‘pitches’ to stories, Dan and Chip Heath’s compelling Made to Stick is required reading for NGO leaders, and politicians keep mining the power of Reagan-stories for inspiration. But let’s be clear, stories are complicated.

The reason most of us aren’t regularly regaling people with perfectly timed and eloquently described stories of our lives is because life rarely unfolds that way. It is only upon reflection that we recognize that x led to y, or that ‘this’ was the beginning and ‘that’ was the end. Yet leadership these days seems to demand that we pluck from the whorl of our past a sequence of logical facts that magically blend together into poignant lessons and an inspiring can-do tale.

But as researcher Elizabeth Loftus describes in her book Memory: Surprising New Insights into How We Remember and Why We Forget,

Memory is imperfect…The memory traces can actually undergo distortion. With the passage of time, with proper motivation, with the introduction of special kinds of interfering facts, the memory traces seem sometimes to change or become transformed. These distortions can be quite frightening, for they can cause us to have memories of things that never happened. Even in the most intelligent among us is memory thus malleable.

One particularly powerful influence in truth-bending is the desirability of outcome. People are prone to report what they believe the researchers wants to hear or report data that puts them (the subject) in a more positive light. What is critical to note is that over time, people actually believe the ‘adjusted’ facts to be true.

Greg Mortenson‘s unravelling is a cautionary tale for all leaders, especially those of us in the social sector where the self-revelatory, enlightening, ever-progressing origin story has almost become a requirement of the job. Where the desirability of outcome may tend towards exaggerated heroism.

Seems to me, this individualistic storytelling ‘heroism’ is partly the undercurrent of what distinguishes social entrepreneurs from mere executive directors? True stories are powerful and inspiring. But so are great managers.

The most discouraging thing about Mortenson was that he was too focused on being a celebrated founder and not at all focused on being a good manager. He didn’t understand that the inspiration story needs to be followed by the education story: testing one’s theories against data, research and outside expertise. He didn’t understand that the education story has to be followed by the institution story: building an organization capable of acting on the dreams he inspired. And mostly he did not understand that the job of an NGO leader is to surround yourself with staff, board, donors who can build upon AND save you from your own mythology.

How to Buy a $1 Million Watch

My $1 Million Watch?

On Christmas Day I was delighted to receive a unique gift from my husband: a watch made of an iPod Nano. (see gorgeous photo) I love this watch. It makes me look infinitely cooler than I am, it rocks my favorite songs without worrying that my dancing is going to jerk the earplugs out of my computer, and I don’t know anyone else who has one.  It was the gift trifecta. All this for about 30 bucks. (OK I forced him to tell me this)

On December 16, 2010 TikTok+LunaTik raised just shy of $1million making it the single highest fundraising success story of the incredibly compelling crowdfunding website Kickstarter. As you know, Kickstarter’s tagline “Find and Fund Creativity” pretty much sums up their approach: people can post projects/ideas/plays/films/books almost anything, and ask for financial support to get the project done. Investors pay only when sufficient funds have been raised for project completion.

And what was TikTok’s record-setting project? To manufacture a wristband that turns an iPod Nano into a wristwatch. Their original fundraising goal: $15,000. So, some might say, TikTok raised close to $1 million to produce a product that already existed on the market.

You should know that I LOVE Kickstarter. I have funded a few of their projects  – ones with knock-your-socks-off originality and potential for human connection and impact. And have no regrets.

But the story of TikTok’s incredible fundraising success raised questions for me about crowdfunding. Some of these questions may have some implications for philanthropic crowdfunding which is also experiencing a meteoric rise.

Consider:

  • Enthusiasm should not be confused with due diligence. Crowdfunding depends upon friends telling friends. So if a friend sends you a link and says, “I’m really excited about this and you should be too!” it can create a groundswell of activity. A groundswell isn’t inherently good or bad, so how do we tell whether the underlying principle is one or the other?
  • The one-at-a-time nature of a project’s presentation and consideration (often via email or Twitter) means that the ability to compare the strengths and weaknesses of one project idea against similar projects is almost non-existent. It can heighten our belief in the radical uniqueness of the project before us, which may or may not be true. Traditional philanthropy which gathers all the proposals and reviews them side-by-side skews SLOW whereas crowdfunding skews FAST. How do we take the best of both?

But it is also true that:

  • TikTok offered people a chance to feel like insiders in the creative process of a well-designed product, something more and more people value. It also gave the company a clear indication of product demand. Is there a way to harness the predictive capacities of crowdsourcing to enhance philanthropy and social innovation? Perhaps new giving sites such as Crowdrise, Groupon (with its Kiva partnership) or Philanthroper will show us the way.
  • Updates and information are critical. The fact that TikTok included photos and video from its manufacturing plant in China was probably compelling for people who are interested in being included in the whole chain of production from design to delivery.
  • Crowdfunding is fun! It’s what I like to call excited philanthropy. Ultimately, Kickstarter helps people feel a part of a community of like-minds. That feeling of community is the jet fuel in the “crowd”-engine. And maybe the crowd doesn’t have to do it perfectly every time, just better than the other alternatives.

My hat is off to Kickstarter and these other pioneering sites for being platforms for a new type of funding. They are pushing the boundaries of collective thinking and giving. And hats off to TikTok for passing a huge crowdfunding milestone. But I can’t help wonder if any of the 13,512 TikTok investors might feel a little ticked-off when they see me walking down the street in what looks like their million dollar watch.

What excites you/gives you pause in the rise of crowdfunded philanthropy?

Full Disclosure: My husband works for Apple which makes the iPod Nano. Apple does not make an iPod Nano wristwatch holder.

Farmers or Merchants?

Once upon a time, there was a farmer with a goose that laid golden eggs. When he first got the goose, he was delighted. What could be better? Without doing anything, each morning he woke to discover a new golden egg. He was rich! Soon he was richer than his neighbors and got infinite pleasure in buying new, expensive toys for himself and his family. After awhile, the farmer was spending so much money on frivolous things that he stopped farming. He bought cheap corn for the goose —which resulted in smaller golden eggs. He stopped feeding the other geese and as her friends and family began to die, the farmer’s special goose became unhappy and stopped laying eggs altogether. Soon the thin, sad goose laid down and refused to get up. The next day she died.

As the farmer sat despondently at his kitchen table, he glanced across the road at his neighbor’s farm. How had he not noticed that his neighbor had become successful? The farmer wandered over in the hope of discovering his neighbor’s secret.  When he walked into the gate he saw miles of fields planted with healthy crops, trees lush with fruit, and then he saw the most surprising thing of all: a large, clean coop full of happily clucking geese laying lots of golden eggs. The farmer was astonished. He found his neighbor and asked him where he’d bought all those geese because he wanted to go buy more. His neighbor looked at him and laughed. “I didn’t buy all these geese, I grew them. I started out with one. With careful cultivation, I found out what foods helped her grow, which foods helped her lay golden eggs. Soon she was raising a family and heading up a community of geese all laying golden eggs.” He looked at his friend’s ramshackle farm across the way and said, “Surely you haven’t forgotten. We are farmers not merchants. Our job isn’t to buy things to sell, it is to prepare the soil for things to grow.”

This adaptation of the well-known parable came to me as I was thinking about the ongoing debate of whether capitalism can or should be a driving engine for social change. I wholeheartedly believe it can. Capitalism can develop “mission along with margin” but the success of the venture in creating lasting social change is, I believe, dependent upon understanding who you are: a farmer or a merchant.

In this oversimplified parable, farmers are concerned with creating the conditions for growth, because an organic increase in soil fertility creates a farm that is a better ecosystem of productivity. Merchants are primarily concerned with creating products that, when sold, give some immediate benefit. Both are good. Both are necessary. But they are necessary in different situations. In microfinance, for example, farmers may be needed, but in the development of solar panels, we may need merchants. As a grantmaker, one will likely set different financial and programmatic objectives based on whether a grant is funding a merchant or a farmer.

Here in Asia, the contrast between creating conditions for long-term growth or products for immediate benefit is being played out in daily news reports on the rapid rise, and equally rapid decline, of SKS Finance, the microcredit company with backers such as by billionaire Vinod Khosla and George Soros. SKS raised $358M in its closely-watched IPO. But the rockstar rise of SKS has been matched by the rapid tumble its stock has taken. Reports of a rash of suicides allegedly caused by high interest rates, clients who were overextended on credit, and tough repayment requirements are said to have affected the crash.

In a matter of one month, a company that had been the exemplar of microfinance-going-to-scale stands on the brink of major changes that may dramatically reshape the players and the way microcredit operates.

SKS has been contrasted with other players in microfinance such as Grameen or ACCION. To be clear, these two organizations charge high interest rates. And they also engage in the practice of collecting repayment on a weekly basis. But some evidence suggests that the differences between them and SKS are as important as the similarities. Microcredit organizations that fall into the “farmer” category focus on social support as a key element of success and repayment. They develop long-term relationships with clients. They recognize that microcredit may be an ideal central organizing tool, but it is only one tool that poor women need to get closer to self-sufficiency. These microfinance organizations use their profits to create farm insurance products that help the poor avoid losing everything due to bad weather. They create savings programs and educational loans to build skills that take people beyond subsistence. In other words, they use revenue to cultivate the soil, not prematurely take profits.

Don’t misunderstand me: profit-making and profit-taking are not bad. However, the idea of calling a purely capitalistic business that “also happens to do good” a social enterprise seems to be a bit of a fantasy. There are always trade-offs. The social enterprise makes profits while asking what more it can do to re-invest those profits into the communities, people and relationships it is helping to build.

The story of SKS is not over. Some say this incident is but a stumbling block on the path to even greater microfinance expansion. But the question I would ask is, are those changes technical or fundamental? “Merchants” may look at Grameen or ACCION and say, “We can sell that product too,” but they are missing the point. “Farmers” focus on all the inputs needed for long-term growth in the community, not just the products that generate short-term profits. It remains to be seen whether SKS and others are nurturing or killing the golden goose.

This piece is co-posted at the Center for Effective Philanthropy blog.

Giving As Good As We Get

This piece was originally posted  on the Center for Effective Philanthropy’s website where I have been a guest blogger. The Center for Effective Philanthropy (www.effectivephilanthropy.org) provides foundations with comparative data to enable higher performance.

A recent Harris Interactive poll suggests that Americans intend to give less in 2010 than in 2009. A combination of high unemployment and economic uncertainty have caused generous people to feel slightly less so. Despite this fact, it is also clear that Americans are giving more in new ways this year than ever before. Five years ago, we didn’t have the option to Tweet for Change, or, through Foursquare, Check-in for Change.*

One young woman who was interviewed about “check-in giving” through the CauseWorld app said, “CauseWorld makes me feel like I’m doing some good in the world every day. I don’t have much money to give to charity these days, like most people, so having a chance to direct money to some really important causes means a lot to me.” Declines in charitable giving have occurred in the past, but never before has that decline been coupled with the rise of so many other quick-hit ways to express generosity.

If the desire to be generous can be assuaged by directing someone else’s money, will we still feel compelled to give? Will we be willing to sacrifice our own money to support the causes we care about? For example, Starbuck’s has tested making charitable contributions as a benefit of checking-in. While this may be an appealing experiment to Starbucks regulars, it should be noted that these $4-latte-lovers are not offering to drop their Starbucks habit in order to direct those funds to charity.

Questions such as these were raised by Malcolm Gladwell’s New Yorker piece as well. Will casual support displace deep commitment? The jury is still out, but I think the potential difference in how nonprofits receive funding from individuals could, over time, be quite important. In aggregate, annual giving—usually defined as contributions from individuals—represents a core, stable funding base for many nonprofits. In fact, annual giving is often the counterweight to time-limited or non-renewable funding from corporations and foundations.

If, over time, nonprofits receive more and more funding from these embedded giving/contribution consolidators, will that negatively affect nonprofits’ cash flow? One recent study by Network for Good suggests the answer is yes. When offered a gift, the question nonprofit leaders often ask is not just “how much?” but “how often?” They all know that a consistent gift of X is almost always more valuable than a one-time gift of X+. So that leads to another question, how can nonprofits convert those casual givers to become regular givers?

In order to help nonprofits do this, foundations need to support the development of fundraising practices that help nonprofits engage with these new giving vehicles. Nonprofits shouldn’t simply be passive recipients of grants from social media philanthropic aggregators, they should be active participants. But as Beth Kanter regularly points out in her blog posts, an effective nonprofit social media fundraising strategy requires thought and time (and funders, that means money).

Nonprofits will need to learn how the ease of transaction (“Press # now on your cell phone to give a dollar to Haiti relief efforts”) can be maintained without nonprofits having to cede the entire relationship to a charity portal. In his recent Harvard Business Reviewpost, Dan Pallota also points out the importance of foundations placing strategic emphasis on their grantees’ fundraising capacity. While I am a strong advocate of general operating support, I think that foundations should go further to engage with grantees about fund development and adapting to the changing technological landscape.

Those of us who fund nonprofits can often be heard criticizing the lack of strategy and financial planning among nonprofits. But if embedded giving allows people to express support for many groups, will that lessen people’s allegiance to specific groups? Maybe funders should be putting more thought, research, and money into helping nonprofits creatively respond to these new fundraising challenges and amazing opportunities.

* Geo-location sites like Foursquare and Gowalla are game-like mobile phone applications that invite people to “check-in” when they have arrived somewhere and give a quick status update, similar to Facebook. On most sites, people gain points or credits the more often they check-in. Companies are beginning to offer coupons or time limited deals when people check-in. Causeworld is a similar site which gives people points they can use like frequent flyer miles to make donations to charities.

Before Strategy was Strategy

This piece is my first post for the Center for Effective Philanthropy as a guest blogger. The Center for Effective Philanthropy (www.effectivephilanthropy.org) provides foundations with comparative data to enable higher performance. Over the years, CEPs surveys of grantees has changed the way the foundations I have worked at have operated. And CEP provides benchmarking that helped us compare ourselves to similar foundations and to our own performance over time. Despite my move to Singapore, I continue to sit on CEPs board. These blogs will be a few of my thoughts on philanthropy, NGOs, aid, Asia and effectiveness.

When I was fresh-faced and just starting to work in philanthropy at a woman-focused community foundation, I made lists. I would write down the problem or issue I wanted to tackle, then make a list of reasonable solutions. For example:

Domestic Violence

  1. Make it a crime
  2. Lock up the criminals
  3. Get women legal services for safety & to pay for the divorce
  4. Provide counseling for the kids
  5. Get mom a job

Then I would look at the money I had available (never enough) and divide it equally among each of the reasonable solutions. Confident I was doing all I could to address the problem of family violence, I talked earnestly with the board of directors about the importance of our “multi-faceted” approach.  (now, that word looks quaint, but trust me you used it a lot in the 80s too).

Next, I would turn to the giant map of Los Angeles we’d hung on the wall and divided into what we called neighborhoods, but which were really more economic descriptors than geographic locations—South Central LA (Compton but not Ladera), Westside (Venice, but not Santa Monica), Hollywood (but not West Hollywood).

We would push pins into the places where we made grants—red for violence prevention, blue for economic development, green for arts, etc.—and we aimed to distribute those pins fairly and evenly from the San Bernardino mountains to the shining sea.

I did due diligence – financial assessments and site visits – on every organization that received a grant. We gave project but not general operating support. And we considered ourselves partners with the groups we funded.

And that’s how we did it.

This was what we called our strategy if someone had asked us that question, which really no one ever did. Far more frequently, what people wanted to know was “why should I give to a women’s foundation?”

Why I could talk about passionately:

– Because the status of women is a barometer of equality in any society

–Because if women flex our giving muscles to demand that solutions have a gender lens we will develop better solutions

– Because women are the backbone of financial decisions in most families and communities

– Because well-educated women give a lot more of their joint wealth to their husbands’ alma maters than they do their own

– Because sisters are doin’ it for ourselves.

The list went on and on.

At the core of the answers to “why?” was a belief that women didn’t want to be saved. Women wanted tools to make good decisions for themselves and their families. Women wanted the opportunity for hard work to result in something more than 63 cents on the dollar.

And that belief saved us from ourselves. It put us in partnership with the (mostly) women’s organizations we funded. Over the years, those partner nonprofits joined our grantmaking committee and our board of directors. They challenged our approach—why not general operating support? They challenged our funding partners—can Virginia Slims buy a table at an event? Uh, no. Their staff members wrote checks contributing their hard-earned dollars to the Women’s Foundation* because they felt like we were all part of the movement. And they helped us to understand how to prioritize “solutions” by telling us which ones mattered most in which communities, which ones were dead wrong in others, and how to add ones we’d never thought of ourselves.

We practiced an early form, I think, of what Peggy Saika recently called “democratic philanthropy.” Now not every foundation is willing or able to be as fully participatory, but it makes a huge difference if you can be. I learned, in those early years, that folks did not take kindly to the notion that their communities or their lives were problems to be solved. By starting from a place where we stated our “why” values and listened to theirs, we found we were in alignment. And that alignment allowed us to be on the same side of the table in determining “how.” And even working through massive disagreements on “how.” But that’s what partnerships are about.

In short, we found that good strategy starts with listening. And not just sporadic listening, but listening that is built into the processes of our grantmaking. If we understand how our grantees see the world, it makes us smarter, better partners.

* I am pleased to say that the Women’s Foundation of California has come a long way since my early days of strategy development at the Los Angeles Women’s Foundation 24 years ago. The Women’s Foundation of California is one of the most thoughtful, grassroots and policy oriented foundations I know and I owe them so much for helping me learn what I know about philanthropy and social change.