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Give Smart
- 1. [ + give mart we want your two cents + = [ best bright big intentions ideas bucks Alexander Berger, Aaron Kalb, Alex Romanczuk Stanford University
- 2. In the for-profitmarket, ‣ Smart investors grow in influence, controlling more money, because the problem ‣ wiser investments yield larger returns why aren’t nonprofit ‣ and naïve investors entrust their money to reputable investors markets efficient? ‣ So the most effective institutions get the most capital and can do the best work these are missing in the effective ineffective nonprofit institutions institutions funding market the market a few influential, masses of naïve savvy investors investors However, in the nonprofit space, If we fill in these missing links, we can create an efficient social ‣ investor influence is uncorrelated with investor intelligence, because capital market, in which ‣ giving is a one way street (i.e., investment in both effective and savvy social investors direct ineffective institutions yields zero monetary return) money to the most effective ‣ and naïve investors do their own (naïve) investing nonprofits... ‣ So most of the capital doesn’t get to the most effective nonprofits
- 3. our solution Putting more money under the control of effective social investors ‣ A web platform that harnesses cutting-edge game mechanics to identify effective social investors and give them more control over the distribution of funding ‣ Similar to traditional online giving challenges, except that users are strongly encouraged to comment and evaluate each other’s comments ‣ Positively reviewed commenters receive progressively more weight in both their evaluation of other comments and in their votes for the eventual winners ‣ This ensures that the most effective nonprofits—not just the ones with the most friends—receive funding ‣ Users donate to a specific issue challenge because it gives them incredible leverage, in the form of ‣ more voice in the eventual distribution of funds and ‣ assurance that a challenge they care about “tips.” With a $50 contribution, you could make a $5,000 challenge meet its goal and go live. That’s effectively a 99x match for each individual donation.
- 4. reputation calculation inspiration our project will draw on the strengths of community successful sites dialogue give mart distributed reviewing crowd attraction collaborative fund-raising expert input
- 5. the dynamics I A user starts a challenge ‣ Example: “$5,000 for the Best Youth III The challenge goes live: votes, reviews, and karma accumulate Organization in Atlanta” ‣ Nonprofits join and solicit their contacts for votes ‣ The initiator ‣ Users ‣ offers, say, $500, provided that other ‣ come to the site for the first time to vote for users will contribute $4,500 their favorite nonprofits ‣ writes a catchy, evocative profile ‣ and stay to read, write, and evaluate for the challenge comments, contributing to the karma ‣ and invites friends and relevant system nonprofits ‣ Some users add money to the challenge, which II earns them extra karma Others agree to contribute ‣ A ranking of nonprofits by effectiveness emerges provided the goal is reached ‣ The best comments are promoted ‣ IV (like Kickstarter or Groupon) ‣ Adding to a challenge The challenge closes and ‣ earns them karma points (which funding is distributed translate to more votes when the challenge goes live) ‣ Votes are weighted by the users’ karma and the amount of money contributed ‣ and feels highly leveraged: “my $50 ‣ GiveSmart distributes the challenge’s pot can direct $5,000 to great charities by proportionally among the top 5 vote-recipients tipping a challenge”
- 6. “ example LifeSavers DONATE While certainly well intentioned, ” We save lives by utilizing good intentions. LifeSavers was shown in this more > study to be incredibly ineffective — Expert of a nonprofit’s page Currently Comment Board POST Top-rated competing in nonprofits give your Type your comment here in this domain two cents, User123! SALI though they may arrive at the site in response to a chain email request comment quality issued by a particular nonprofit, Stop Malaria users will be exposed to top-ranked While certainly well-intentioned, The Save-A- Challenge Life Initiative competitors before they can offer a LifeSavers was shown in this study to $50,000 naïve vote or donation be incredibly ineffective. The Save-A- esteemed VOTE Life Initiative targets the same contributor for LifeSavers population but yields far better results, according to expert research. REPLY though this contributor’s one-star rating represents a minority view, it Eligible for bears extra weight due to the high comment quality Longevity karma she’s gained by getting Thanks for referencing those great Seekers many “thumbs up” votes on her studies! I’ll vote for The Save-A- thoughtful comments Life Initiative, instead. REPLY more > Save Senegal the site will detect references $100,000 newcomer comment quality to other nonprofits and users, nonprofits and replicate posts on the NOMINATE This organization saves lives. It should in this domain relevant pages LifeSavers win all the challenges. REPLY comment quality to ensure that everyone gets a fair Yes, this charidy is DA BOMB!!1 shake, users will be encouraged to REPLY 7 Billion visit sites with few comments and Futures ratings more > comment quality My friend told me this was a
- 7. IMPLEMENTATION · STEP1 the build-up a creating the site implementation logistics making the idea real ‣ Development Costs (one-time) ‣ $50,000 for web design / $50,000 for web development ‣ $5,000 for miscellaneous expenditures (e.g. domain names, legal fees) ‣ Maintenance Costs (annual) ‣ $120,000 for permanent staff (conceptual, financial, technical) ‣ $15,000 for web hosting ‣ First Year Budget: $250,000 b implementation details preserving the idea in reality ‣ Karma: A user’s influence must be an accurate function of that user’s reputation ‣ The system will add in-house algorithmic innovations to the best ideas from other well known reputation measurement schemes (e.g., Google’s PageRank, Reddit, Amazon Top Reviewers) ‣ Integrity: Malicious actors should not be able to influence distribution of funds ‣ A well-designed karma system and a set of simple checks makes large-scale gaming of the system nearly impossible ‣ Stickiness: The site design must entice users to stay, comment, and donate money ‣ Known techniques for increasing front page conversion rates will draw the users in ‣ Cutting-edge game mechanics will keep them actively engaged
- 8. IMPLEMENTATION · STEP2 the roll-out attracting users 2 two-phase approach I bowling pins Facebook style ‣ Start small. Say, on one college campus. ‣ Get people talking about it with their friends. Match small challenges. ‣ Spread slowly. Build user base and reputation, then expand to a new community. ‣ Partner with Philanthropedia and Great Nonprofits. Populate the site with their reviews to ensure that it is helpful to users at launch time. II big bang Apple style ‣ Go big. Find a large partner and announce a million dollar challenge. ‣ Continue to provide some (gradually declining) matching funds for new challenges. ‣ Transition slowly to challenges funded solely by individuals, as described in slide 5.
- 9. IMPLEMENTATION · STEP3 stayin’ alive sources of revenue 3 sources of revenue for our operations I corporations (as in the Pepsi Refresh model) ‣ Charge hosting fees for branded challenges at the intersection of traditional advertising and corporate social responsibility II foundations (as in America’s Giving Challenge model) ‣ Charge hosting fees for challenges created by community foundations or small family foundations ‣ Give the foundations final say on the distribution of funds among the top 5 organizations III individuals (as in the Kiva model) ‣ Solicit micro-donations from individuals when they contribute to a challenge
- 10. the plot thickens how do we stack up? here are some other possibilities we considered, and how giveSmart fits in impact eBay for impact “Give Like a Billionaire” nonprofits bid directly: a sophisticated marketing campaign aimed at getting people giveSmart “You’ll save a life for $700? I can do it for $600.” to think about how to be more is high impact, the issue: neither buyers effective in their giving feasible, and nor sellers know the right the issue: the Markets for Good hopefully prices because there is not study shows that people are really coming soon. enough research to make reticent to conduct research precise claims about giveSmart could make the research impact process painless your perfect non-profit change4change asks users for preferences (e.g. “educating East African women”), then suggests the Visa or MasterCard rounds “perfect” match purchases up to the nearest dollar and “donates the difference to the issue: the top hit in characteristics may be make a difference” via the charity an ineffective charity of the customer’s choice giveSmart data on nonprofits’ effectiveness the issue: customers might make an could be a key under-the-hood factor in ineffective choice each suggestion feasibility