Bill & Melinda Gates, photo © 2009 Kjetil Ree, some rights reserved

For the second year in a row, Bill Gates has published a rather sprawling annual letter. It is about what the Bill & Melinda Gates Foundation is seeing in all of the worldwide data they have access to, and the foundation’s activities. Gates is frank, appreciative and optimistic about what we can achieve together with our generosity. In light of the tough problems the foundation is directly confronting, this is inspiring.

Despite the tough economy, I am still very optimistic about the progress we can make in the years ahead. A combination of scientific innovations and great leaders who are working on behalf of the world’s poorest people will continue to improve the human condition.
- Bill Gates

The Bill & Melinda Gates Foundation takes a more global view than countries or even groups of countries (the European Union or United Nations for instance), so the letter is pretty broad in perspective. The 2010 Annual Letter from Bill Gates covers 12 “chapters”, including of the foundation priority areas. This makes it easy to read the parts that are of most interest to you on the web.

One thing that particularly concerns Gates is the amount of foreign aid given by individual countries. He measures this “generosity” by taking foreign aid as a percentage of gross domestic product (GDP). By this measure, the United States, although the largest giver in total dollar amounts, falls far below other industrialized countries.

The United States is the biggest giver in absolute terms, but in percentage terms gives only 0.19 percent. In recent years, a significant portion of this assistance went to reconstruction in Iraq, Afghanistan, and Pakistan. If Congress passes President Obama’s proposal to double giving, however, the United States will get up into a very respectable range.
- Bill Gates

Here is the chart showing the 2008 figures:

As part of their efforts, Bill and Melinda Gates are working to spread the word about how highly successful aid effort have been. Gates says,

The public may not prioritize keeping foreign aid at high levels because so many of them have not heard how effective it is. Some formed their image of foreign aid during the Cold War, when money was sent to buy the allegiance of a dictator with very little control to make sure it was well spent. We need to get the successes to be far more visible than they are today.

To that end, they created the presentation, Why We are Impatient Optimists. This is available in its entirety on the web, in parts according to topic and there is a highlights video if you want get an idea of what type of information is covered. I have embedded the entire video below but if you click through on the hotlink above, you can select just a potion to watch if you wish. Enjoy!

Photo www.giselagiardino.com.ar

Generosity is more charitable than wealth.
- Joseph Roux

This is the time of year when many people are focused on giving gifts, be they Christmas, Hanukkah, or year-end gifts from many other traditions. It is a time to be generous to the people we care about. It is also the time to think about our final charitable gifts of the year; for many people December is when they give most of their donations. So how do you decide where to give your charitable donations? If your resources are more precious this year, in light of economic challenges, your focus may be even more important. Here are some ideas.

First of all, your resources are not limitless so give your gifts to causes and organizations that you really care about. You can make a difference in the world with your charitable gifts, as you can with your time, energy, intelligence, and muscle. The greatest benefit will occur where you give all of these, so learn to say no to charitable causes that you don’t care about and give your all to those you do.

Take a risk! Be more generous than you think you can be and be willing to fund efforts that may or may not “cure” the problem. Organizations that are really trying to make a difference may be trying new tactics or may be taking a real risk themselves. That is when they need our generosity the most. If you care about an issue, do not let your need for success limit the creativity and vision of people who are committed to addressing that issue.

Consider making fewer and larger gifts instead of many smaller gifts. This will allow you to make a real connection with the organizations you support and be more thoughtful in your contributions. It will not only make more of a difference, it will also reduce the amount of solicitation mail and other wasted communications you get from other charities.

Do you want to support organizations that work outside of systems or those working inside the system? For instance, if you are interested in childhood education, you may want to support a charter school, which works outside of the public school system. Or you may want to support an organization like Teach for America, which places talented young people in low-income area public schools. Almost any issue will have organizations that are finding a new way, and ones that are trying to support the systems in place to work better.

Consider what kind of results you are looking for. Are you interested in engaging as many people as possible, in leveraging the most resources to make a difference, or are you more interested in measurable change for those who are affected? For instance, if you are passionate about childhood hunger, would you support an organization that works worldwide and moves a large amount of food aid into needed areas? Or would you support an organization that works more directly with a specific population area to reduce the number of children living with malnutrition? These are complex situations and help is needed everywhere; you must decide what makes the most sense to you.

You may also want to think about your own role over time. Are you someone who wants to support an ongoing issue and see it through your entire lifetime or are you more inclined to try and do something about an urgent and topical problem? If you are someone who needs to see clear results quickly, you might keep that in mind when deciding on an organization to support.

An organization’s cost to raise a dollar (CTRD) is something donors are often encouraged to consider. However, this equation is not as simple as it appears. All donors want to ensure that most of their donation is going to the cause of beneficiaries, and there are industry standards about the maximum amount that should go to fundraising expenses. However if an organization is changing it scale to try to have a broader effect, or is reorienting its mission, the CTRD may for a time be justifiably higher. If it is an organization that uses has a public communication mission (to raise awareness of AIDS for instance), their fundraising may be more costly, since it may include public campaigns as well. The best way to understand these issues is to know as much as you can about the organization you are supporting.

Many donors also want to know that their donations are going directly to a program and not to pay for running the charity; thinking this will ensure their donation will have the greatest effect on the problem. Although this may be true, it is also important to consider that if you support the capacity-building of a nonprofit, they may be better able to address the issue you care about. After all, you are contributing to an organization because they do something. Without the capacity, they cannot do it.

This list of factors to consider may be overwhelming. However, if you are willing to do a little research and communicate with nonprofit organizations that you are considering, you will gain the knowledge that will make your decisions easier:

• Learn as much as you can about the issue you care about; this will inform you about which organizations are making a difference and how
• Find an organization’s annual report on the web or request that it be sent to you
• Research the organization on the web and on charity rating websites
• Make a small initial donation to see what kind of information is provided to donors
• Volunteer with the organization; this personal contact will tell you a lot about the issue and how the organization is addressing it

This is also the season for thanks. Thanks to you for carefully considering your charitable gifts – and for being so generous!

If you have come here to help me, you are wasting your time.
But if you have come because your liberation is bound up with mine,
then let us work together.
- Lilla Watson, Murri (Aboriginal Australian) visual artist, activist and educator

Over time a theme has emerged on this blog; that is the relationship between charitable contributors, organizations who engage them, and the beneficiaries who are supported by their efforts. This can be seen in many of the postings under the category Contributor Relationships (in the gold bar on the left).  Kim Samuel-Johnson recently posted a frank and poignant essay about her struggles as a philanthropist to be in relationship as a contributor. She says:

I’ve noticed that isolation, or at least a feeling of bleak separation, can occur in the very act of philanthropy; that sometimes the manner in which the gift is made diminishes and isolates both the person who is seen as giving and the person who is seen as receiving.

Ms. Samuel-Johnson is the president of the Samuel Foundation and a board member of The Synergos Institute. Synergos publishes the online newsletter Global Giving Matters and this essay is the first to look at the inner journey of a philanthropist.

Samuel-Johnson is concerned with the isolation that comes from having financial resources out of scale with others; this can make her feel like an outsider. She is advocating that the contributors, service providing organizations, and beneficiaries join together as a community of concern. This is reflected in postings on this Generosity Path blog such as A Relationship with Beneficiaries. She says is beautifully here:

So, far from feeling separated out as “the person with the money,” or the outsider in some other way, I feel the boundaries between the “me” and the “they” disappear. I feel welcome as part of, if you like, the family. This means a lot to me.
And yet – and this is important – there has to be a clarity and an honesty about what it is that each of us can bring. In my case, I try to bring a lot of passion and very high standards, two qualities I consider essential for philanthropy, because we all need to engage both the heart and the mind. I’ve also brought monetary resources, which are generally not unimportant.
In the case of others, though, they have brought resources of comparable or greater value, including knowledge of the community, management or other skills, creativity, hard-won knowledge, or a commitment to see the project through. In a way, mine may have been the easiest contribution to secure!

In the essay Samuel-Johnson also connects giving and receiving into one dynamic, where both givers and receivers benefit in their own way. She says,

I finally understand that if the giving and receiving is done with the right spirit, from all corners, bearing in mind that we are all giving and receiving simultaneously, then money is a facilitator, not my “gift” per se but instead an expression of my commitment, and an important one at that.

And here she lays out a vision of how this contributor/beneficiary relationship can honor everyone’s contributions and reduce isolation for all of the collaborators:

If the giving and receiving is shared and if everyone is able to come to the table, roll up his or her sleeves, and work together with an understanding of the interests, experience, passion, and goals that brought us together, then each of our needs will have already been factored into the initiative.
What is left then is simply a group of people creating something new together, in harmony, where no one at the table and from there outwards to the various partners or constituents feels like they are ever alone. I interpret this kind of collaboration as stemming from a wholesome and generous spirit of giving and receiving, a place of being included.

This is beautiful, brave, and counter-cultural work Samuel-Johnson is doing. It is also a spiritual journey, where she is working to live out her values. BRAVO!

A true vision of peace sees a continuous mutuality between giving and receiving. Let’s never give anything without asking ourselves what we are receiving from those to whom we give, and let’s never receive anything without asking what we have to give to those from whom we receive.
- Henri Nouwen

People are spending lots of time in online social networks and many nonprofit organizations are looking for ways to engage those networks. Nonprofits know that they can help with advocacy efforts; can they also support the organizational fundraising? A recent study using Facebook and Harvard undergraduates explored financial altruism behaviors within existing social networks. The results may not surprise you: people are more altruistic to those closer to them in the network, and friends who cluster together tend to have the same relative level of altruism.

In the study, Directed Altruism and Enforced Reciprocity in Social Networks, a group of researchers from Harvard , Iowa State University, and Singapore Management University (Leider, Möbius, Rosenblat, & Do), engaged Harvard undergraduates, examined their online social network (to decipher how near or distant they are were to friends), and then engaged them in a number of games. Surprisingly, a total of 5,576 out of the 6,389 undergraduates at Harvard participated, either by being a player in a given task or in being named by a participant. In these online games, subjects made unilateral allocation decisions for several types of named partners and one anonymous partner (a randomly selected participant from the subject’s dormitory).

These experiments with real subjects in their own social network were conducted solely online. All communication with the subjects was by email and they submitted all of their choices to a password protected website through their own web browsers.

Here is how one of the games went:

In the helping game, each decision-maker was endowed with $45, and each partner was endowed with $0. The decision-maker was asked to report the maximum price that she would be willing to pay in order for the partner to receive a gain of $30. A random price between $0 and $30 was determined, and if her maximum willingness to pay was equal or greater than the random price the partner received $30 and the random price was deducted from the decision-maker’s endowment. Otherwise, the decision-maker’s payoff equaled her endowment of $45, and the partner’s payoff equaled his endowment of $0. Effectively, the decision-maker revealed how much she valued a $30 gain for the partner.

Results:

• Close social ties induce directed altruism (toward someone you know). Allocations to friends are substantially higher (on average 52 percent more money) than allocations to distant partners/strangers.
• Giving is motivated by the prospect of future interaction. The data showed that future interaction effects increase giving by an additional 24 percent. This implies that the partner would rather repay the favor than damage the friendship.
• Baseline altruism and directed altruism are correlated, that is subjects with higher baseline altruism have friends with higher baseline altruism. Subjects who give more to nameless partners also give more to specific named partners, and are treated more generously by their friends. However, the data shows that friends do not reward intrinsic kindness, but rather, that kind people tend to have friends who exhibit greater baseline altruism themselves.

Using online methods, the researchers are able to document and distinguish altruism to close friends, more distant acquaintances, and strangers. However, the results correlate with what traditional fundraising experience and donor studies in other formats document. That is, people tend to give more to people they know, that the idea of future engagement also increases giving, and that if there is no personal connection, giving can be expected to be low. What is true in traditional methods of personal interaction is mirrored on line. What is not studied here is how easy or difficult it is to create social closeness online as compared to developing social closeness in live meetings, phone calls, and other formats. That is where many nonprofits see the advantage of online relationships lies, and where, since the phenomena is so new, not as much is known.

Our result that friends cluster by baseline altruism raises another interesting question for future
research: do our friends shape our social preferences (treatment effect), or do we seek out friends with similar social preferences (selection effect)?

Often people attempt to live their lives backwards;
they try to have more things, or more money,
in order to do more of what they want, so they will be happier.
The way it actually works is the reverse.
You must first be who you really are,
then do what you need to do,
in order to have what you want.
– Margaret Young

This is another posting about how our social networks affect our financial generosity. In this case, a study was done at a large US bank organization and analyzed giving to the United Way, which allowed the researcher to track giving behaviors based on where someone worked (and who worked near them), by the team she/he was assigned during the United Way campaign, and by demographic factors.

The researcher, Katherine Grace Carman is an economics professor at Tilburg University in the Netherlands. She did the study while she was at Harvard University as a health policy research fellow.

Carman found that the individuals in the study were strongly influenced in their decision to give or not give based on the participation of their colleagues.  She also found that when workers were deciding what amount to give, they were also influenced by both the people that worked near them (mail code in the building where they worked) and by the people on their United Way team:

A $100 increase in the mean contribution of the mail code is associated with a $1.70 increase in individual contributions, and a $100 increase in the mean contribution of the team is associated with a $7.00 increase in individual contributions.

Carman also found that people with the same salary range tended to have more influence on each other’s giving behavior; this also held true for people of the same gender. However, interacting with people in the same age did not seem to influence giving behavior.

Most interestingly, Carman actually tracked individuals when they changed physical office locations to work around a new set of people. What she found that when these people moved from an office area where people did not contribute as much to an area where people gave more, that their giving increased toward the giving of the new work group they joined. Her study might lead us to conclude that not only is our giving behavior influenced by the people who we interact with on a regular basis, but that our friends shape our social preferences (sometimes called treatment effect), more than our social preferences being determined by the people we seek out (sometimes called the selection effect).

You may know a man by the company he keeps
- Proverb

Halton Region Employees, Ontario, Canada

Michelle Obama and Dr. Jill Biden volunteering for Feeding America | Photo by Paul Morigi/Getty Images North America

We’re at the beginning of a generosity high, a sense that we can make a difference.
- Claire Gaudiani, historian of philanthropy at New York University

Today the Corporation for National and Community Service released a report called Volunteering in America, which shows that a total of 61.8 million Americans volunteered through an organization in 2008, up one million from the previous year. That translates into 8 billion hours of service in 2008, worth an estimated $162 billion.

In this time of economic distress, we need service and volunteering more than ever to build a new foundation for growth. This report suggests that Americans are responding to the hardship around them by reaching out in service to others, giving their time when they cannot give their money. It reminds us of the generosity of the American spirit, and challenges us to work harder to make service part of the daily life of every American.
- First Lady Michelle Obama

Less-formal ways of serving in communities have increased dramatically compared with organizational-based volunteering. 19.9 million people volunteered with their neighbors to fix a community problem in 2008 (up from 15.2 million in 2007). This suggests an emerging trend of self-organized ‘do-it-yourself’ service led by young adults. According to the report, the millennial generation (ages 16-24) are indicating a strong service ethic - over 8.2 million volunteered in 2008.

This is all good news for nonprofits, because a study from Johns Hopkins found that between September 2008 and March 2009, more than a third of nonprofit organizations reported increasing the number of volunteers they use, and almost half foresee increasing their use of volunteers in the coming year. In addition, volunteers are more than twice as likely to donate to a charity or nonprofit organization as individuals who do not volunteer, so this increased engagement may assist them in the fundraising area as well.

The report is on line, and gives interactive maps and graphs with volunteering trends, statistics, tools, resources, and information by State and also by city.

• What are you doing to enrich your own and other’s lives through public service?
• If you want do more, visit www.serve.gov and begin the process of engaging.

It’s about touching lives, and the way the volunteer and the community are enriched by the experience.
- Nicola Goren, Acting CEO, Corporation for National and Community Service

photo: www.flickr.com/lieliel

What do they really mean when they say philanthropy? The word literally means ‘love of humankind.’ The definition we use comes from the W.K. Kellogg Foundation, which says philanthropy is ‘the giving of time, money, and know-how to advance the common good.’ This definition complements the one commonly used by scholars, who treat philanthropy in all cultures throughout history as giving outside one’s family.
- from Looking Out for the Future

Katherine Fulton and Andrew Blau have written a wonderful orientation document for people who are making financial gifts now and considering their future roles in philanthropy. The previous post was about Katherine Fulton, so look there for more information on her and click on Mr. Blau’s name above for more information on him.  The guide is partially geared toward an audience in the world of charitable foundations but is well worth reading for anyone who makes charitable donations and plans to continue doing so. Do you consider yourself a philanthropist based on the definition above? Whether you do or not, read on for more information about Looking Out for the Future: An Orientation for Twenty-First Century Philanthropists.

Philanthropy is all about choices: the choice to give, the choice of how to give and who to give to, even the choice of when to declare victory or admit failure. It’s a profoundly voluntary act with profoundly important consequences. The choices matter not just because donors contribute to important causes and inspiring people, but because philanthropists contribute to shaping the future for all of us.
- From Looking Out for the Future

Andrew Blau, photo: Global Business Network

In a section called Seeds of Change in Philanthropy, the Orientation has a series of suggestions as to how you might respond to patterns they see emerging of how innovative philanthropy is done in the U.S. Among the changes detailed in the sub-section Experimenting with Grantmaking Strategies are these that might apply readily to individual donors:

Supporting organizations, not just programs. Concerned that the bias toward project support (that itself emerged from an earlier call for focus and accountability in philanthropy) oft en leaves grant recipients without resources to operate and respond eff ectively, some funders have moved to providing core operating support.

Becoming more focused and persistent. The alignment of interests between the funder and recipient is also reinforced by an emphasis on becoming more focused and persistent, thereby creating a lasting and collaborative relationship between a donor or collection of donors and an organization or group of organizations devoted to a shared set of goals and objectives.

High-engagement giving.

Funder as initiator and operator. Some grantmakers are no longer waiting for ideas from the field, but are initiating their own projects, identifying strategies, and soliciting organizations to pursue those strategies.

In a later section called Imagining the Future, the authors recommend creating scenarios as a way to challenge ‘our assumptions about what might happen and why, and our strategies for adapting to change.’ The document contains a number of provocative scenarios by the authors, which are really worth looking over, before you consider your own.

Two final pieces are worth pointing out. The first is their inspiring list of other resources; some of these are published in hard copy and some are web resources. The other is their helpful diagram of Putting All the Pieces Together, which captures the interrelatedness of our gifts to other forces of positive social change. The whole document is available on the Future of Philanthropy web site and many of the individual pages of the report are also available as individual pdfs on the site. It is a rich resource.

Real generosity toward the future lies in giving all to the present.
- Albert Camus

…once in a lifetime the longed for tidal wave of justice can rise up,
and hope and history rhyme.
- Seamus Heaney

Katherine Fulton at TED | www.leslieimage.com

What do current trends in philanthropy tell us about what we might expect in the future? Katherine Fulton is a speaker and author about philanthropy and social change. In her video lecture on TED, she envisions us – you and I – and all of us, as leaders in philanthropy to effect social change.

Fulton shows how philanthropy now is moving toward global reach and efforts, it is entrepreneurial, and is democratizing, where the average person has more power than at any time in the past. To show this, she gives 5 categories of experiments, each of which challenges an old assumption about philanthropy. In this list there are many organizations that you may want to look up; I have not hot-linked them for your ease in reading, however a web search will pop up any of them:

• Mass collaboration through sites like Wikipedia and WISER – World Index for Social and Environmental Responsibility and the work of Paul Hawken who wrote the recent book, Blessed Unrest.

We have lived in this world where little things are done for love and big things for money. Now we have we have Wikipedia… Suddenly big things can be done for love.
- Clay Shirky

• Online philanthropy marketplaces: Kiva, Global Giving, Network for Good, Donor Choose, Youth Give, Give India, and many others challenge the idea that organized philanthropy is only for the wealthy.
• Aggregated giving: Acumen fund, New Profit, New Schools Venture Fund, Venture Philanthropy Partners, and Global Fund for Women build philanthropy communities and challenge the assumption that each giver should have his/her own fund.
• Innovation Competitions: Efforts like X Prize place the problem at the center of the effort rather than the giver and the organization.
• Social investing: Organizations like Xigi.net refute the idea that business and philanthropy are separate and distinct. They are creating a way for businesses that have a financial bottom line can use a small portion of their economic clout to develop social capital markets.

Fulton then talks about the future:

Our ability to confront the problems that we face has not kept pace with our ability to create them. It is no exaggeration to say that we hold the future of our civilization in our hands as never before. We are going to need a new generation of citizen leaders willing to commit ourselves to growing and changing and learning as rapidly as possible.

Finally she offers us this way of imagining what we hope for:

I want you to imagine that this is a photograph of you, and I want you to think about the community that you want to be a part of creating, whatever that means to you. And I want you to imagine that it’s 100 years from now, and your grandchild, or great-grandchild, or niece or nephew or god-child, is looking at this photograph of you. What is the story you most want for them to tell?

Photo of you today as seen 100 years from now - imagine...

Here is the video of Katherine Fulton speaking at TED:

Photo by Joey Looch

How do you interact with the charitable organizations that you support, or are considering supporting? Unless your concerns are extremely local, and are being addressed by non-profit organizations right in your own community, you will probably never be in their offices or see them working on the issue you care about. You may never even go to an event sponsored by that organization or benefiting their organization. How do you find out about them and interact with them? In all probability, it will be through the web and your relationship may always be through the web. Forward thinking for-profit businesses are working to “humanize” their interfaces, led by their web communications, and engage their customers. How well do you think you are being welcomed as a human being by the charities you support? And, since many non-profits are addressing the needs of other humans, what does that say about the work these charities do with their beneficiaries?

As both domestic nonprofits and international non-governmental organizations (NGOs) have grown into huge enterprises, they are less bound by the constraints that govern smaller and single-community organizations, while being more dependent on web communications. However, these nonprofits and NGOs also face greater scrutiny and demand for transparency than ever before because they manage complex networks of relationships with internal and external stakeholders at all levels. As contributors expect more humane and permeable interfaces, transparency, and ways to engage with these organizations, how can thier work carry forward productively?

Co-Creation

Taking off from similar dialogues in the corporate community, what I am suggesting to nonprofits, and to their contributors (and let’s not forget their beneficiaries!) is nothing less than co-creation. Fresh Networks is a UK based market research company and online community builder for corporations. Their blog looks at customer interfaces and has been advocating co-creation models for online businesses. Fresh Networks writes that co-creation will make businesses successful because:

1. Customers want to help and work with brands they know are listening to them
2. Customers want to solve problems
3. All too often the solution or idea you need will be really simple to somebody else

This can be applied to nonprofits to read:

1. Contributors want to help and work with nonprofits they know are listening to them
2. Contributors want to solve problems
3. All too often the solution or idea your beneficiaries need will be really simple to somebody else (like your contributors!)

For instance, check out the example from this for-profit toy manufacturer: The Story of LEGO® Mindstorms on Patty Seybold’s blog Outside Innovation. LEGO® literally had its customer’s create their products and then sold them commercially. This expanded their reach, their vision, and their effectiveness (at selling LEGO®). Imagine what could happen in all of the passion and intelligence you hold as a contributor was really unleashed on our charitable needs? What would happen if all contributors were unconstrained in their passion to solve the problems they care about? What could that mobilized force for good do for humankind and our planet?

Many nonprofit organizations are already doing small pieces of co-creation through their web pages; microfinance and direct-funding (like DonorChoose.org) organizations are already engaged. What other non-profits are co-creating with their contributors and beneficiaries? Please comment (below) and trumpet for your own organization’s efforts or share what you know.

Photo by brickartist.com

VRM is about making better customers — on customers’ terms, and in better ways than any vendor makes available today. – Doc Searls

I believe that by giving contributors more ways to engage with nonprofits and more say over that engagement, that these contributors will be more generous with all of their resources (time, muscle, intelligence, connections, and money). These ways to engage include providing the contributors more access options for possible engagement, allowing them to manage and broaden these interactions according to their own preferences, and giving them more options in regulating their own privacy. Many earlier posts on this blog relate to these ideas. Designing for Generosity and What a Nonprofit Web Site Can Say are just a few. How can this work? Will this not leave nonprofits with no way to deepen relationships with their contributors? These are important questions that are being explore in the commercial (for-profit) world as well. This blog discusses one for-profit development area that may lead the way for non-profits in the future.

Because they are involved in rethinking the way business is done in the modern world, and they reference “generosity” regularly, I follow some web-based business thought leaders – like Doc Searls. One of the projects that Searls is involved with is the development of software that will help consumers manage their relationships with the set of vendors where they do business. Right now, companies use Customer Relationship Management (CRM) software to gather and use information about their customers: who buys from them, at what price, and through which outlets (on the web, at a store, catalogue or phone order, etc.). Charitable organizations have something similar in donor management systems and software. Searls and his group are working to create a reciprocal system – Vendor Relationship Management (VRM) – that engages the consumer in having more control over the “demand side” of commercial transactions.

Model of VRM and CRM by Eve Maler in her blog Pushing String

What is intriguing to me is to think about how this VRM model might work for people who have relationships with various charitable organizations. First let’s explore their VRM ideas a bit.

Project VRM has a web page that explains the project and gives these principles:

• Relationships are voluntary.
• Customers are born free and independent of vendors.
• Customers control their own data. They can share data selectively and control the terms of its use.
• Customers are points of integration and origination for their own data.
• Customers can assert their own terms of engagement and service.
• Customers are free to express their demands and intentions outside any company’s control.

These can all be summed up in the statement Free customers are more valuable than captive ones.

Replace the word Customer in the list above with the word Contributor, and I think this list nicely expresses a better model for generosity in a contributor/nonprofit relationship. This is, as the VRM folks say it, user-centric. These concepts may sound somewhat radical, whether in the nonprofit or for-profit world. But consider that eBay and Farecast (cheap airline flight finder) already work in the direction of VRM – they allow the consumer to determine the item they want to buy at the price they want, independent of what the company may want them to buy. And on the nonprofit side, the organization The Hunger Project is moving close to this model by allowing contributors so many options for engagement and giving.

What would it be like if nonprofits could expend fewer resources on courting donors to greater engagement? What might a synergy between the combined energies of contributors, charitable organizations, and beneficiaries of their missions produce? Some of this energy is going to waste today because all of the onus on growing relationships lies with the charitable organizations. Especially in this down economy, where so many people are suffering, and the charitable organizations trying to serve them are short on resources, we cannot waste anyone’s energy.