Another One Bites the Dust

Greg Mortenson and the Central Asia Institute are now on the chopping block. They will never recover from the 60 Minutes expose. What's worse, the non-profit community will be slow to recover, if what Mortenson has been accused of is true. Sadly, the girls and young women of Afghanistan will suffer, the very ones he intended to help get an education. But is it necessarily the case that the fall of one non-profit means the eclipse of others? Mortenson's organization is world class, perhaps like the Red Cross or the United Way. He has attracted the support of presidents and corporate executives. So will they now be less sanguine about philanthropies and other saviors?

Google's Culture Clash

Recently The New York Times reported on DotOrg, a philanthropy founded in 2004 by Google and endowed with tens of millions of dollars. Its mission: to tackle major problems like climate change, global poverty and the spread of pandemic diseases. DotOrg would be unconventional. It would operate as a business, free of the constraints placed on other nonprofits. Seven years later, DotOrg is now involved only in engineering-related projects that are often the outgrowth of Google products. What happened?

A clash of cultures. A confrontation of two minds: non-profit humanism vs. engineering meritocracy. Simply put, the engineers at Google could not fathom that African health problems could not be resolved once and for all by applying a health algorithm derived from analysis of Google data.

The ambitions of DotOrg were vast: "to completely reinvent philanthropy and, in doing so, reinvent the world and address a hugely important set of problems with solutions only Google with its immense intellectual talent and resources could find by aggregating information." In short, Google engineers thought they had the solution to the world's problems, if only these problems would hew to their data analysis.

DotOrg is now a one-project philanthropy and most of its budget has been re-purposed. In the clash between engineers and development professionals, the engineers, who now have given up on the project because it no longer interests them, are the victors.

Gates Foundation Equity Partnerships Multiply

The Bill and Melinda Gates Foundation reports that they are investing $2 million in a California education group called Inigral, a startup that uses Facebook to help college students avoid dropping out of school. This may be a new strategy by the Foundation to show that social networks and social media can have an impact on post-secondary success, according to Michael Staton, CEO of Inigral.

The news could be significant for socially motivated entrep0reneurs who work in the same areas as the Foundation. In 2009, it said it would invest $400 million out of its $35 billion endowment in companies working in the fields of health, development and education.

An interesting aspect of the deal is that it may be the first time the Foundation has used a portfolio company to collect data that will be used to improve its charitable work.

Brand Health and PepsiCo

I remember some excitement and some controversy when huge corporations began running contests for grant money. You prepared your pitch and emailed it. You waited. If enough people "voted" for your cause, you won. If your project didn't win the competition, you didn't win. American Express and others got involved in this competitive scheme for the public good, and won some brand recognition.

Today, the New York Times published an account of PepsiCo, makers of Pepsi Cola and other brands, going into the market of selling their brand on social networks by offering money if you can collect enough votes for your cause. PepsiCo, in a surprise move, withdrew its advertising from the 2010 Superbowl, and they will do it again this year, better to invest the $23 million in something more worthy, and more advantageous.

If you read the New York Times article carefully, you will see that the corporation is not trying to finagle a purchase out of you and not even a heartbeat of affection for their product. No, they want to promote the health of their brand by getting it in front of the Millennial Generation. I'm for it, number one because it will benefit a wide array of worthwhile causes, and also because it presents a new way of getting grants, besides the old way, to which I have become accustomed, of working very hard on the proposal and then tossing it out there to see what happens.

Graft Strikes At The Heart of Giving

Yesterday's announcement that contributors to the Global Fund to Fight AIDS, Tuberculosis and Malaria, notably the Bill and Melinda Gates Foundation, were victims of fraud came as no surprise to those of us involved in international work, especially in the developing world where governments and economies are shaky and corruption is a way of life. I'm reminded of work I did for causes in Ethiopia, where graft is rife. I quickly learned that the USAID and the World Bank had reduced funding there because their grants were being passed along to officials whose approval was needed to dig for water, build clinics or distribute food and clothing. Now, because of this latest controversy, foundations that might have felt it necessary to go ahead with the extortion, bribery and assorted lesser crimes just to get their missions accomplished, see the downside: not only public embarrassment but harm to their relationships with donors.

The Gates Foundation issued a statement late yesterday (1/24/2011) saying that "the Global Fund is doing a tremendous job of ensuring that critical health interventions reach those who need them most. Fraud allegations that have recently been reported in the news refer to a small portion of the Global Fund's resources - only four of 145 countries and $34 million out of a total disbursement of $13 billion. This fraud was discovered and reported publicly by the Global Fund, which has a rigorous audit and investigation system in place...we know that dealing with these hard-to-reach places is challenging, but not trying to save these lives is unacceptable." If the last sentence reads a little defensive, it may be that it foretells what everyone may expect to hear: "how much of my donation will go to graft?"

It appears that dozens of supporters who have pledged over $30 billion, are now holding off on fulfilling their commitments "until money is recovered or more is known about alleged misappropriations". What effect will this trend have on smaller donors, foundations and organizations that are doing good work in the developing world?

Rise of a New Giving Elite

In the January/February 2011 issue of the Atlantic you'll find an essay by Chrystia Freeland titled "The Rise of the New Global Elite". I can recommend it if you have a strong stomach for hubris. According to Ms. Freeland, who has impressive creds, the very, very, very wealthy are not among us, they are floating somewhere very high up there, well beyond the stentch of our pathetic needs and desires. I'm only mildly exaggerating this. Anyway, of interest to us is the author's description of these Masters of the Universe coming to the realization that they have some sort of obligation to share their money with the rest of humanity. It's all the rage since the formation of the Gates/Buffett alliance, except these new foundations are being formed by people who are oddly, sadly out of touch. They are funded to support conclaves (like the one in Davos) or pet projects (like endowments for ski resorts). You see, these folks don't think our worthy causes are worthy enough for them. Read the article, it's alarming.

Social Network Philanthropy

The Social Network, a movie about a true nerd's revenge, features a fictional portrayal of Mark Zuckerberg, the founder of Facebook. The movie was released in October and a few days prior to the release, Zuckerman announced that he had pledged $100 million to the schools of Newark, New Jersey. Given that the film shows a man desperate for the approval of women and greedy for the money that will attract them, his charitable gift could be seen as a bit of makeup on the old tart's face.

For more, see Zadie Smith's article in teh New York Review of Books (11-25-2010).