December 10, 2007
By Sarah Murray
This year, some people will be receiving rather unusual Christmas presents. Among the gifts will be goats, condoms, agricultural fertiliser and schoolbooks. The gifts – which can be purchased on Oxfam Unwrapped, part of the UK-based charity's website – are not delivered to the friends and family of the giver, but to needy communities in the developing world.
Oxfam Unwrapped is just one example of how the internet is changing philanthropy. Not only is it giving individual donors an easy means of sending money or gifts to remote parts of the world. The web allows the rapid spread of information about pressing social and environmental problems. Moreover, it is providing a forum for the exchange of knowledge and ideas between charities and non-profit groups, facilitating a more "open source" approach to coming up with solutions to seemingly intractable problems.
Some online resources are well established. GuideStar and GuideStar International provide web-based databases of many thousands of non-profit organisations, allowing users to search for information about a specific charity or look for organisations working in an area of interest, such as healthcare or humanitarian relief.
Increasingly, the matching power of the internet is helping connect donors not just with charities but also with individual recipients in far-off countries. As well as Oxfam Unwrapped, there are sites such as globalgiving.com, where donors can find a cause that means something to them, make a gift and see progress reports about the project they have donated to.
Microfinance is part of the trend. Once managed by non-profit institutions, microfinance is now taking place in cyberspace, with websites such as kiva.org acting as a channel for person-to-person loans. Microfinance institutions vet the borrowers who can post their profiles on the site to attract lenders. Once a loan has been made, individuals can receive e-mail updates from their borrower.
Another online microfinance initiative, MicroPlace.com – launched by eBay working with the Calvert Foundation – allows users to lend as little as $100, which are then deployed by groups in the developing world, which make loans to poor farmers, shop owners or craftspeople – many of them women – without access to other forms of finance. The individual lenders receive interest payments, allowing them to reap both a financial and a social return.
Crucially, most of these sites make it clear that they will provide regular updates on how the money is being used and the difference it is making to the recipients. This reflects a new wave of accountability in the philanthropy sector, driven by the desire of donors to track the impact of their gifts – and the internet provides a powerful tool for doing so.
"There's a new evaluation and monitoring that goes on with online transactions, which is lost in government aid projects," says Carol Adelman, director of Hudson Institute's Centre for Global Prosperity. "So this new-age global philanthropy is accompanied by the benefits of technology, transparency, accountability and hands on directness that's never been seen before."
As well as channelling and monitoring funds, a growing number of website are offering donors a chance to become involved in an issue. At Razoo.com, a social networking site, users are invited to "learn", "connect" and "take action" on causes about which they care. The idea, says the website, is to "see people become more socially conscious and entrepreneurial by focusing on action, practical solutions, and enterprise".
For Witness, an organisation that uses video and other technology in human rights campaigns, the internet provides a distribution tool through which anyone who has taken video of human rights abuses or captured witnesses' testimonials can publish to a global audience. To provide a forum for these videos – and for information giving them context – the organisation is launching the Hub, a website where people can upload videos in the way they do on YouTube.
Suvasini Patel, communications and outreach manager at Witness, believes technology will alter the way issues such as human rights abuses are addressed. "It's really about user generated content and empowerment," she says. "So far change has been in the hand of a select few. And 2.0 technology is taking it out of the hands of experts and putting it into everyone's hands so everyone has the power to make a difference."
While Witness is drawing on the YouTube model to create communities of activists, others are turning to Second Life, the 3D virtual site. American Cancer Society holds regular walkathons on the site, with avatars doing the walking. As well as providing a new source of fundraising – a walk in July raised almost $115,000, with about 1,700 participants from around the globe – the organisation uses the site for education and raising awareness.
More charities and foundations are starting to explore the potential of online communities such as Second Life. The MacArthur Foundation in June announced a year-long exploration of how virtual worlds could enhance the impact of philanthropic activities – not only in terms of fundraising but also by providing a channel for education on issues and causes.
However, the web is not only a means of informing, communicating with and convening individual donors. It is also becoming a forum for the exchange of ideas between philanthropy professionals, the managers of non-profit groups and corporate executives engaged on social and environmental issues.
One such site – the Change for Good Network launched in July by Corporate Culture, a UK-based communications consultancy – offers users access an online database of tools, applications and articles. "Technology is opening the possibility for everyone to contribute to real change," says John Drummond, chief executive of Corporate Culture.
However, Mr Drummond stresses the fact that supporting this online knowledge exchange are monthly meetings and seminars. "It would be a mistake to think of networks like these as stopping on the web," he says. "Because effective networks have to link the virtual to the real."
The web is also helping charities and non-profit groups with practical tasks. The Development Executive Group – which now serves more than 100,000 people, including executive members that include large NGOs such as the American Red Cross, World Vision, Catholic Relief Services and Care – allows those working in the development sector to search for appropriate candidates for positions they are seeking to fill.
Development Executive Group also helps NGOs keep track of the funding being made available from multilateral institution and government development bodies. "Our model is low fees for high impact by bringing together all these people from around the world," says Raj Kumar, president and co-founder of the Development Executive Group. "It's the network effect."
The network effect can also be put to use in coming up with new solutions to social and environmental problems. An online competition launched in June by the Case Foundation solicits "citizen-centred" approaches to solving community problems. The top 20 finalists in the competition will each receive a grant of $10,000. Awards of $25,000 are to be made to the top four finalists, who will be selected by ordinary people using an online voting system.
"In so many ways, the internet can be a tremendous tool for giving and for joining forces with others," says Beth Cohen, director of the Global Philanthropists Circle at Synergos. "And when it comes to mobilising young people, they live in the internet world, so you have to speak their language and use their tools."
Copyright The Financial Times Limited 2007
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