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Skoll World Forum Take-Away: Funding for Online Social Activism

By Tom Watson on March 27, 20092 Comments

My panel yesterday at the Skoll World Forum, courtesy of MakeGood.

Lifting a pint in an Oxford pub that celebrated its 500th birthday two years ago with several Skoll World Forum attendees may have provided the exclamation point on a notion that developed during my panel on peer-to-peer philanthropy and microfinance platforms earlier in the afternoon yesterday: these are early days for online organizing, volunteering, crowdsourcing and wired causes.

The world economic crisis tends to sharpen the focus at this year’s Skoll confab, nicknamed the ‘Davos of Social Entrepreneurship’ but itself a mere baby against Oxford’s ancient spires (and the King’s Arms as well), yet the panelists in my session took the long view, despite the weekly press of funding challenges.

Together, they represented a fairly broad spectrum of online social enterprises – from the pure philanthropy of Global Giving, to the popular online success of Kiva’s nonprofit peer-to-peer microlending community, to the for-profit start-up MyC4 which syndicates mid-range microcredit directly from investors who can expect a financial return on their social investment.

“Our goal is to become the first public company owned by the world,” said Mads Kjaer, the serial entrepreneur who founded MyC4 two years ago. MyC4, based in Copenhagen, allows users in Europe to bid on microloans to middle-range business owners in Africa, allowing investors to realize a return on their peer-to-peer online lending. Mads has facilitated 14,000 small loans to 4,100 businesses valued at 10 million euro with an average interest rate of 12.9 percent. It’s not charity in any way, yet MyC4’s founder says the site has an inherent social goal that stems from his belief that government aid and philanthropy will never really change the African economic climate.

Premal Shah, the president of Kiva, has a challenge most social ventures would love to have: how to take a small but iconic brand with a model that works to a larger scale. After only three and a half years, Kiva’s numbers are startling: $65 million in microloans from the general public, $25 at a time, with a current average of $1 million loaned per week and climbing and a payback rate of 98%. Yet as Premal noted – with partner Matt Flannery, Kiva’s founder, looking on – that $65 million is still small in the grand scheme of things. When the idea of merging the three platforms at the speaker’s table was used as a stalking horse for more collaboration in the online sector, Premal had a very clear response: these are still the early days – let’s all continue to build and experiment and create brands. His message: collaboration by all means. Consolidation? Not yet.

The collaboration question was taken up by Mari Kuraishi, Global Giving’s president and founder. She said there’s really no reason why the many platforms in the online social sector don’t collaborate more – except for a lack of personal bandwidth in each organization. Like any small organization, said Mari, Global Giving has goals and taking their collective eye off of the goal “would be irresponsibility.” And Global Giving has done some wonderful work, spotlighting projects big and small around the world – the nonprofit, which has been in operation since 2000 and has founded more than 1,200 projects for more than $20 million. Mari talked openly about the challenges of fundraising and the promise of crowdsourcing for the projects the Washington DC-based organization supports. She said that technology should never get in the way of good story-telling and developing trust with donors. And yet simple technology decisions can change the model. Twitter, she told the Skoll audience, has become the channel of choice for workers to file reports from the field.

And Twitter was also the channel of choice at my panel: upwards of 20 people were Twittering during the 90-minute session – and even more are Twittering from Skoll using the #SWF09 hashtag. It’s a huge flow of information that contains everything from the ideas of Ashoka founder Bill Drayton (originator of the term ’social entrepreneur’) and Jeff Skoll, the eBay co-founder who created the Skoll Centre for Social Entrepreneurship here – to the information on locations for our “Tweetup” pub crawl last night. Yet as I stood on a darkened Oxford corner last night with Peter Deitz, founder of online aggregator Social Actions, we joked about Twitter overkill – since it had taken the equivalent of unreliable long-distance shortwave radio to finally connect over pints.

When I wrote CauseWired last year, I argued that online social activism and peer-to-peer philanthropy and microfinance was developing into a real, discreet sector of its own – lodged between social networking platforms and social entrepreneurship, and taking the best of both worlds to increase citizen involvement in changing the world. I’d still make that case, even as the number of online platforms has increased wildly in the 10 months since I handed in the manuscript. This is a sector with real leadership and leading brands (like Kiva and DonorsChoose), a real depth of experience (like Mari and the folks at Global Giving), and a huge grassroots movement of small-scale entrepreneurs creating great projects in their garages. Yes, it should collaborate more – but it also needs support: a group of venture funders willing to lock into online social ventures as an investment area. Any takers?
- Tom Watso

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  • Do you think the problems with “direct” monetizing social media hinder a move toward a more robust integration of the two?

    And is there a way to filter the Twitter chaff so that my brain isn’t so fried?

    Hope Skoll 2009 is going well!

  • Great post, Tom. Don’t want to distract from your final question — the sector absolutely needs (and deserves) attention from venture-type funders — but have a footnote to add to the topic of collaboration.

    Mari’s point is well-taken: organizations give primary attention to reaching their own goals, as they should. The lesson for those of us who would encourage collaboration in this sector is to get much more specific with our ask: encourage specific collaborative efforts that contribute to those goals *and* bring something new and valuable to the table.

    Take the report that Social Actions shared last October, for example, ready to be mined for collaborative program/project opportunities (3rd message on this page):

    So much there to build on. And of course that takes time and expertise and resouces… and this is where the conversation circles back to your point about the need for funding…

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