Archive for March, 2011

Independent Sector Co-Founder Dies

The New York Times reports: “Brian O’Connell, who helped found Independent Sector, an organization that represents the interests of charities, foundations and nonprofit giving programs in the United States, often before Congress, died March 21 at his home in Chatham, Mass.”

The Independent Sector, now with 550 member nonprofits, was an innovation:

At the time, such groups were united by type — for example, arts, colleges or museums — or by the service provided. Mr. O’Connell and Mr. Gardner, who died in 2002, saw the need for an umbrella organization that could speak for all charities and other nonprofit groups and represent their interests in Washington, where the threat of unfavorable tax legislation often loomed.

March 30, 2011 at 7:09 PM Leave a comment

“Freemium” Exists, Causes Philanthropy

As bloggers, we at Giving Click pride ourselves on our up-to-minute knowledge of twee new buzzwords appearing daily across the interwebs. However, “freemium” – according to Wikipedia, a “business model that works by offering a basic product or service free of charge…while charging a premium for advanced features, functionality, or related products and services” – is a new one on us. This is especially embarrassing since the term seems to be at least five years old.

Nevertheless, we learn from Mashable that one software company has leveraged the freemium model to raise a cool million for charity:

Atlassian recently announced a donation of $1 million to Room to Read, a global non-profit aimed at improving literacy and gender equality education in developing countries. They did this through their “Causium” campaign, a twist — and portmanteau — of “freemium” and “cause marketing.” The name fits: Rather than just give away its products for free, Atlassian charged a minimal amount of money and donated all proceeds to the non-profit.

Freemium runs on the premise that if you give away a curtailed version of your product, your fans will enjoy it enough to then upgrade to a paid subscription. Causium, for all intents and purposes, is freemium in the sense that Atlassian doesn’t receive any money from the heavily discounted sales. It does, however, give the product a nominal value and help brand Atlassian as a charity-minded company.

Okay, so we missed the bus on “freemium”; at least Giving Click is getting in on the ground floor with “causium.”

March 30, 2011 at 6:59 PM Leave a comment

The Giving Pledge Abroad

While recognizing the generosity of their own donations and the influence they have wielded with their Giving Pledge, Vanity Fair suggests the Bill Gates and Warren Buffett have erred in their evangelizing overseas:

If there is a flaw in the pair’s otherwise admirable undertaking, it’s exporting their vision for philanthropy to China and India. Last week, news broke that Buffett and Gates delivered the message of the Giving Pledge at a meeting in New Delhi…the New Delhi summit is seen by many as an extension of the philanthropic mission established in the U.S.; it also followed a similar meeting held with Chinese billionaires in September of last year.

Even with the best intentions at heart and sensitivity to respecting cultural differences, the conference carries a slightly condescending message. It implies somehow that Indian billionaires require the guidance of American billionaires to act responsibly, and in the best interest of their own society.

Our own feelings are that the newly rich in fast-developing economies like India’s will find their path of philanthropic development. However, if encouragement from abroad can hasten the development, Gates’s and Buffett’s initiative is worthwhile.

March 30, 2011 at 6:49 PM Leave a comment

Doing Well by Doing Good?

At the WSJ’s Market Watch blog, we find a not entirely convincing report claiming that two recent studies prove corporate social responsibility increases profits.

The first supporting evidence is a recent survey of 5,000 members of the informed public, which the research firm Edelman defined as “college-educated folks with incomes in the top quartile for their age.”

When asked what was most important for a company’s reputation, nearly two-thirds of those Edelman interviewed cited “transparent and honest business practices.” Half said that a highly regarded company needed to be a “good corporate citizen.” Meanwhile, only 39% mentioned financial returns to investors as important to a firm’s reputation.

Anyone who knows college-educated folks with incomes in the top quartile for their age knows they’re not about to tell some stranger on the phone that they don’t care about corporate social responsibility. But this tells us little about where they actually spend their money.

A bit more convincing is a study by three economists published by Texas A&M Corpus Christi, claiming a “‘statistically significant positive relationship’ between companies that do good and those that do well.”

The authors compared the firms’ financial performances with those of 120 companies that were not members of the [Dow Jones Sustainability Index]. They found that firms that had embraced corporate social responsibility had higher gross profit margins and higher returns on assets than those that didn’t.

To explain the socially conscious businesses’ economic success, the economists cited elevated levels of loyalty and trust among their customers, especially those deemed “morally conscious.”

Could it be that more profitable companies can better afford social consciousness, with the profits causing the consciousness rather than vice versa?

March 24, 2011 at 7:45 PM Leave a comment

Buffet Urges Philanthropic Risk-Taking

Warren Buffet urged philanthropists to take risks and to be prepared to learn from failure, the Omaha World-Herald reported Tuesday. The billionaire investor made the comments during his and Bill Gates’s visit to India this week.

“Intelligent charity, big-time charity should tackle things where it’ll fail,” Buffett, 80, said Tuesday at a press conference in Bangalore, India. “If you succeed in everything you’re doing in charity, you’re attempting things that are too easy.”

As we’ve noted before, nonprofits have long been criticized for an unwillingness to admit failure, potentially short-circuiting any chance to learn from it. In the Nonprofit Quarterly, Rick Cohen takes a critical look at recent increases in openness:

All too frequently, the discussions of failure are really not about failure at all. They are discussions of programs that fell somewhat short of expectations. Even more frequently, the program failures are in fact small successes – the programs that didn’t achieve quite what they were intended to achieve, but still left the communities measurably better than they were before the foundation’s intervention.

Cohen argues that critical review of specific programs is not enough; a more comprehensive reform agenda must prevail. To that end, the NPQ interviewed over two dozen people inside and outside foundations to learn where foundations really fail. Read the whole thing.

 

March 24, 2011 at 7:27 PM Leave a comment

Gates and Buffet in India

Bill Gates and Warren Buffet have made their long-promised trip to India, the Voice of America reports, meeting earlier today with Indian billionaires they hope to recruit for their Giving Pledge.

Although Gates and Buffet will urge the super rich to donate more, they will not push their own ideas on how it should be done.

Buffet says that charitable giving in India does not have to be done the same way as it is in the United States, but will happen in keeping with local culture.

The Wall Street Journal‘s India Realtime blog publishes comments Gates made today in New Delhi, explaining how his experience building tech giant Microsoft informs his philanthropy.

“Giving money and making money have a lot of similarities,” he said, in answer to a question from the media. “In my work at Microsoft, my job was hiring talented engineers to solve tough problems that look unsolvable and backing their work for five to 10 years and understanding what works and what doesn’t work…At the foundation, it is similar.”

Gates made the comments during a joint press conference with India science minister Pawan Kumar Bansal.

March 24, 2011 at 7:13 PM Leave a comment

Meanwhile in Louisiana

Rick Cohen at the Nonprofit Quarterly relays results of a study of one post-Katrina disaster relief effort. Research firm Policy & Economic Research Council (PERC) looked at efforts by the Louisiana Disaster Recovery Foundation to “help small businesses and the self-employed in post-hurricane Louisiana.”

Surveying those who had received aid from the foundation, the researchers findings show that the foundation’s efforts had been effective and delivered sooner than other groups’.

It looks like the Louisiana Disaster Recovery Foundation sponsored this study, so the summary’s emphasis on good news is perhaps not surprising. Cohen notes that “the summary of the data findings doesn’t do justice to the latent richness of the extended survey data.” Maybe the full data gives a more balanced view of results.

Another interesting finding:

PERC also reported significant local business distress due to the moratorium on deep water oil and gas drilling. Those businesses that were impacted by the BP spill and concerned about the moratorium were not confident about their future business prospects.

March 18, 2011 at 6:45 PM Leave a comment

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