Social-networking phenomenon makes it easy for donors to promote their favorite causes online
By PAUL B. CARROLL

For most people, networking on the Web means keeping up with friends or building business contacts. Now a number of charities — and thousands of ordinary people — are starting to use online networks to reshape the world of philanthropy.
Charities are setting up sites that make it easy for people to pass along information about causes to their friends and urge them to donate. And people on traditional networking sites such as Facebook and MySpace are using the sites to send charitable requests to friends (and friends of friends).

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Supporters say the movement has one powerful advantage: the personal appeal. People are 100 times more likely to donate when asked by a friend or family member than an anonymous solicitation, according to a recent survey by the blog Social Actions, which advocates for charitable networking.
Meanwhile, the ease of online networking makes it simple to pass along pitches and recruit new donors. Potential contributors are just a click away from all the information they could want about a charity and perhaps an emotionally wrenching video. And donating money is usually as easy as making an online purchase.
It All Adds Up
To be sure, charitable networking is still in its early stages. Over roughly the past two years, the networkers raised about $44 million, according to Social Actions. That’s just a drop in the philanthropic bucket; overall, charitable giving hit a record $306 billion in the U.S. last year, according to the Giving USA Foundation, a nonprofit educational group in Glenview, Ill.
But there are signs that charitable networking may be due for a boom. For one thing, overall online giving — which currently represents 2% to 3% of giving in the U.S. — is increasing by some 50% per year. So, the charitable networkers may rise along with the Internet tide.
In addition, charitable-networking sites are reaching a group of people, typically in their 20s, 30s and 40s, who haven’t previously been donors. Advocates for online philanthropy hope this group will evolve into a mainstay of funding, much as an army of small donations has sustained Sen. Barack Obama’s presidential campaign.
The goal isn’t to have someone give $10 million to a specific cause; it’s to “reach out to a million people and have them each put $10 on their credit card,” says Kevin Bacon, the actor.
Mr. Bacon gave social philanthropy a jump start a year and a half ago, founding one of the first big charitable-networking sites — because of a bottle of Paul Newman salad dressing.
Mr. Bacon’s wife, actress Kyra Sedgwick, was often away from their New York home so she could film her TV series, “The Closer,” in Hollywood, and their two teenage children were increasingly independent, so he found himself with time on his hands. “I was recently orphaned, at 48 years old,” he says. He found himself “looking at my life and thinking I coulda, woulda, shoulda done more to give back.”
As he poured dressing on a salad one day, Mr. Bacon thought of the hundreds of millions of dollars that Newman food products have raised for charity and wondered what his “brand” could do — specifically, “Six Degrees of Kevin Bacon.” The object of the game, devised by some college students over a decade ago, is to link actors with Mr. Bacon through as few movie connections as possible.
Mr. Bacon wondered if he could use a six-degrees approach to get people to become champions for causes and line friends up behind those causes. He bought the domain name SixDegrees.org in 2006 and later joined forces with Network for Good, a nonprofit formed by AOL, Yahoo Inc. and Cisco Systems Inc. to make it as easy to donate money online as it was to buy something.

A Shared Mission

• What’s Happening: Charities are setting up Web sites that make it easy for people to pass along information about causes to their friends and urge them to donate.
• The Background: Online giving is rising strongly, helped by young people who hadn’t donated to charity in the past. Some nontraditional charities are already starting to benefit.
• What’s Next: Online giving could help charities cut expenses by making them more efficient.

SixDegrees.org launched in January 2007. On the site, people set up “badges” that show their name and the cause they’re raising money for. Someone clicking on the badge gets access to information about the cause — plus, perhaps, a video appeal — and can immediately donate money via credit card or the PayPal service.
People can find badges by going to the SixDegrees site and searching in any number of ways, including the name of the person who is championing the cause, the name of the charity being supported, the type of charity being supported or the popularity of the badge. People can also email their badges to friends and appeal for donations.
SixDegrees raised $1 million in its first year and has added almost $1.5 million more so far this year. In all, more than 6,500 people are using the site to solicit donations for charities, including ones that support research into autism and multiple sclerosis; lobby for laws more favorable to gay families; and finance animal rescue.
Some of the success of SixDegrees is straight celebrity appeal. Not only have Mr. Bacon and his wife set up badges advertising their favorite charities, but so have Nicole Kidman, Ted Danson, Bradley Whitford, Rosie O’Donnell and many other recognizable names. Mr. Bacon has also promoted the effort at the Sundance Film Festival, college campuses, “The Tonight Show” and concerts with his band, The Bacon Brothers.
Old Friends Come Through
SixDegrees is just one of dozens of charity sites that offer users the chance to recruit friends as donors. The sites have sprung up in the past few years, and many of them boast fund-raising success stories.
Take Reality Charity, a site based in Baltimore. Before signing up with the site, a woman with Parkinson’s disease tried to raise money for research the old-fashioned way — by talking to friends, says Alexander Blass, the founder of Reality Charity. The result: $100 in donations for a 2006 walk in New York City. The following year, she posted an appeal on Reality Charity — and raised $1,650 from 25 people.
Much of the money came from people she knew but hadn’t seen in 20 years, according to a posting on the site’s Donor Wall. She could only surmise that friends had kept passing her appeal around until it reached those she’d lost touch with.
Users of traditional networking sites are also getting into the act. A group called Causes, founded by some of the early employees at Facebook, is weaving itself into the fabric of the major social-networking sites, such as Facebook and MySpace, by encouraging members to use their pages to solicit charitable donations. The group says roughly 12 million people have signed up and have thus far donated $2.6 million to charity. (News Corp., which owns MySpace, also owns Dow Jones & Co., publisher of this newspaper.)
Causes says one strategy has been particularly effective: giving donors a pat on the back. On Facebook Inc.’s network, for instance, users’ home pages show the charities they’ve given money to, and the charities’ own Facebook pages list donors by the size of the donation.
“You’re more likely to be altruistic if you get social credit for it,” says Joe Green, a co-founder of Causes, which is based in Berkeley, Calif.
Mr. Green says that top fund-raisers have even gotten attention from other charities that need help. One user, Mr. Green says, was extremely successful at raising money for breast-cancer research. Another nonprofit noticed and contacted the man to see if he’d raise funds for their group.
Networking for Good
These Web sites focus on using social networking to promote philanthropy

• sixdegrees.org
Founded by actor Kevin Bacon and the Network for Good, sixdegrees.org lets individuals solicit donations for a wide range of charities.
• Causes at Facebook, Causes on MySpace
Causes enables members of social-networking sites to post appeals for donations, recruit members for the cause and keep everyone up to date on progress.
• realitycharity.com
The site lets people request donations either for charities or for individuals, such as a veteran of the Iraq war who lacks the money to pay all his medical bills.
• chipin.com
Users can create widgets that request and process donations for a cause and that can either be posted on an existing Web site or can be set up as a separate Web site.
• firstgiving.com
Users can set up Web pages on the site and steer friends there. The site provides tips on online fundraising.
• givemeaning.com
Like firstgiving, givemeaning hosts Web pages where people can solicit donations. Unlike many sites, givemeaning doesn’t deduct credit-card fees or other processing fees from donations; advertisers and donors cover those costs.
• justgive.org

This site allows visitors to volunteer time and donate goods, as well as contribute cash. It suggests a different sort of wedding registry, where the couple can suggest that friends and family donate to a particular charity rather than buy wedding gifts.
Source: WSJ reporting
How Much Good?
The question is how much social networking, together with the other technological capabilities of the Internet, will actually increase giving. There is reason for caution. Over the past few years, researchers say, the increase in charitable giving has stayed fairly constant, at about the rate of inflation, even as the Internet has become a bigger part of the equation. So, the Internet may not be attracting all that many new donors; regular donors may simply be making their pledges online.
But some boosters say that social networking is already having an effect on charitable giving beyond simply increasing the amount of money given. For one thing, they say, it’s beginning to steer money to nontraditional charities. Because of the personal nature of networking, people can get their friends to listen to appeals for obscure causes they might not otherwise notice. For instance, Mr. Green says that a charity called Love Without Borders recently raised $150,000 through Causes. The group isn’t exactly well known: It provides heart surgery to orphans in China.
Some hope that the move toward online giving will, at the very least, help charities cut expenses. Charities are considered efficient if they spend just 25% to 30% of their budget on fund raising, but online charities pretty much just pay 5% or so to credit-card companies for processing transactions.
Looking out a bit, Mr. Bacon hopes technology will lead to a sort of Netflix of charities. People would pledge $20 or so a month on their credit cards, while having the option to change the charities that receive their donations as easily as they move through their movie queues on Netflix.
Perhaps the biggest hope among advocates of social philanthropy is to move beyond the Internet and onto cellphones. Bill Strathmann, chief executive officer of Network for Good, asks, “What if, at the end of a film about a specific issue, maybe blood diamonds, before the lights come up there’s a message that says, ‘Turn on your cellphones and text $10 to a site to fight this problem?’ ”


—Mr. Carroll, a former Wall Street Journal reporter and editor, is a writer in Granite Bay, Calif. His latest book is “Billion-Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years.” The book will be published in September. He can be reached at reports@wsj.com.

1/24/2008
Written by Nicole Ferraro

The evolution of the Internet has been full of surprises – surprises that have sometimes resulted in radical changes in the commercial landscape, such as the arrival of Amazon, eBay Inc. (Nasdaq: EBAY), Google (Nasdaq: GOOG), YouTube Inc., and Skype Ltd.
Could one of the next big surprises turn out to be linked to developing countries?

At first glance, the idea seems implausible (laughable, even) because of the low penetration of PCs and Internet infrastructure in developing countries. And what would people in desperately poor conditions do with the Internet anyway?

However, the picture is changing fast. The key is to look at the rollout of mobile telephone infrastructure which is already widespread and growing rapidly in developing countries. “For the developing world, the Internet experience is going to be a wireless experience,” says Susan Schorr, the head of the International Telecommunication Union (ITU)’s Regulatory and Market Environment Division, noting that 61 percent of the world’s 2.7 billion mobile phone users are in developing countries, compared to 10 percent of the world’s 1 billion Internet users.

It’s worth understanding how costs have been driven down to affordable levels for people on very low incomes in India (see Sidebar 1). It’s also worth looking at how online markets are emerging in Africa, albeit with people using low-cost cellphones rather than PCs as “user appliances” (see Sidebar 2).

There’s also another perspective to consider – how the Internet is changing fundraising at home for projects in developing countries. It’s “personalizing” giving, by appearing to link donors directly to individuals looking for help, and it’s harnessing social networking developments to reach out to many more potential givers.

The Internet is also spawning Websites that analyze charities – something that’s sorely needed, bearing in mind that Americans gave away nearly $300 billion last year, according to The Giving USA Foundation. Getting a better idea of how effectively that money was spent promises to encourage more giving and also spur charities to do a better job (see Sidebar 3).

Next Page: Telemedicine: No Panacea

Telemedicine: No Panacea

First off, however, it’s worth resetting expectations by looking at a few frequently cited examples of how the Internet could transform conditions in developing countries.

Chief among those is telemedicine and its potential for tackling HIV/AIDS, malaria, and other epidemics blighting Africa. However, the advice provided by remote experts in telemedicine projects is often unworkable in African circumstances, according to Philippa Saunders, a consultant specializing in health and pharmaceutical services in Africa, who works for a number of charities and sits on some World Health Organization panels.

“Giving advice without a thorough understanding of local conditions and weak health infrastructure can be dangerous,” says Saunders. “African doctors often have limited equipment and few supplies of health commodities such as essential medicines. Keeping up to date with training and the latest health information is difficult; textbooks are prohibitively expensive.”

An example of an inappropriate application of telemedicine is given by Maria Musoke, an information specialist who worked on trials of different technologies in a pilot health project in Uganda “It’s impractical to supply Internet facilities to traditional birth attendants who can’t read or write,” she says. Radios and walkie-talkies, on the other hand, “worked wonders.”

Saunders says successful telemedicine projects in Africa are down-to-earth and usually don’t rely on the Internet. She gives an example of a small team in the Poisons and Toxicology Unit of a Zimbabwe university, which gives emergency advice over the phone on accidental poisonings. A common cause of death among African children is the ingestion of kerosene, which is often stored in drink bottles, says Saunders.

Costs can rule out telemedicine services in many cases. “While governments of countries like Canada and America spend $1,500 – $2,000 per capita per annum on health, most African countries can allocate less than $10,” writes Professor M. Mars of the Department of TeleHealth in the University of KwaZulu-Natal in South Africa, in a conference paper. “Africa is not in a position to buy telemedicine services from the developed world.”

Next Page: People Power

People Power

The Internet also holds out the promise of bypassing government control of the media and unleashing “people power” that could lead to the overthrow of despots and the exposure of corruption, another huge problem for developing countries.

However, this really depends on Internet developments like blogs finding their way into mobile phone environments, as the following example demonstrates. This is an edited entry from http://www.whiteafrica.com, a blog written by Erik Hersman, who grew up in Kenya and Sudan but now lives in the U.S. It’s dated December 31, 2007, shortly after elections in Kenya that were widely considered to be rigged:

If anyone doubts the power of the internet in Africa, they need to look no further than what is happening in Kenya right now. Kenya is balanced on the precarious edge of a cliff that could quickly descend into even more riots, bloodshed, and government heavy-handedness.

As of yesterday there was a media blackout. The only way to get any up-to-date news for the past 24-48 hours has been through the blogosphere (like Kenyan Pundit, Thinker’s Room, Mentalacrobatics), Skype and Kenyan populated forums (like Mashada). The traditional media has been shut out and shut down for all intents and purposes.

Two thoughts were racing through my head last night as I was trying to sleep.

First, though the internet is good for us in the diaspora and a few in Kenya, it just doesn’t have the reach to the wananchi (average citizen) in Kenya. The government knows that shutting down radio, TV and print is still the most effective way to squash news.

However there is still the mobile phone, specifically SMS messaging. The problem with mobile phones is that they’re so disbursed [sic] – there’s no central core for users to all tune in to. Of course, that’s the strength in mobiles too. The trick is to leverage the strength without destroying the medium.

I went to bed trying to think of what I could do. Situations like this are where technology can really shine. The government can squash traditional media, but not technology that it barely knows exists.

Anyone can see that the problems in Kenya right now (both news blackout and general communication) also represent a real opportunity. There is a great need for a service that can’t be easily controlled by the government. How about a platform that serves as a centralized repository for on the ground reports from any Kenyan via SMS? The ability for people to upload videos and images with some text to a web-based and mobile phone accessible site.

The full blog entry is available here.

Finally, it’s worth mentioning another program that’s been much in the news recently, the One Laptop per Child association that aims to boost education in developing countries by the mass-production of $100 laptops.

It’s early days for this project, but the first versions of the laptop have had a mixed reception, largely because of software stability problems. Also, a number of vendors are now planning low-priced children’s laptops. The India government has gone as far as rejecting an offer of millions of One Laptop per Child appliances in favor of its own developments, which aim to deliver laptops costing a mere $10 apiece. Researchers in Bangalore say they’ve already designed a laptop that could be produced in small quantities for $47 each. For more, check out this Wikipedia entry: One Laptop per Child.

Next Page: Donation Developments

Donation Developments

While issues of poverty and repression make the evolution of the Internet unclear in developing countries, Web innovations closer to home are already revolutionizing the way money is being raised to help the developing world.

Perhaps the most interesting development concerns microloans, lending small amounts of money to people setting up businesses. In developing countries, the initial loans are often no more than $100 and are repaid in a matter of a few months. After that, borrowers might be lent larger sums, and, in the end, they might get a good enough credit history to get a regular loan from a bank.

Microloans have existed for more than 30 years, and scores of commercial and charitable microfinance institutions now work with groups of impoverished people all over the world. However, a relatively new development has been spawned by the Internet in the form of Kiva.org, a Website that enables individuals to lend money to specific people and projects.

“Kiva partners with microfinance institutions around the world, [encompassing] 60 partners in 36 countries,” says Fiona Ramsey, Kiva’s public relations director. “We give them access to the Kiva site, they post funding needs, and individuals can browse loan apps, check out using PayPal, and when funds are repaid, they get money back.

“Microfinance really targets the vulnerable poor – not so much the starving, but more those that have enough to eat that day but not for the next day,” says Ramsey. The aim is to enable people to help themselves out of poverty traps.

Kiva implements social networking capabilities such as the option for lenders and business entrepreneurs to post photographs and detailed profiles. It also generates code for some lender pages that can be transported to an Internet user’s Website, social networking site, or blog, thus utilizing Web 2.0 features to virally spread a message across platforms. It has a presence on two of the largest social networking sites, Facebook and MySpace , and recently partnered with Flip Video to incorporate videos on its Website in 2008.

These facilities turn loans into a person-to-person experience. “There is a feeling with a lot of people in Africa of isolation, and the clients on Kiva feel like for the first time they have this international online ID,” says Ramsey.

“In Afghanistan, we can’t put a picture of a woman, just her husband, or her brother, usually, and we write a note saying this is due to cultural reasons.” In Iraq, on the other hand, keeping entrepreneurs’ identities hidden online can be a matter of life or death. “You’ll see every Iraqi entrepreneur name is ID protected, and every face is PhotoShopped out,” says Ramsey. “You can barely lend to Iraqis on Kiva’s Website because they get snatched up so quickly.

“Lots of time we’ll hear: ‘Oh we don’t have electricity now.’ We’ve enabled our partners to be able to post an update from a camera phone… Power goes out in East Africa all the time, but cellphones never go down.”

More than 99 percent of loans are repaid, and Kiva has loaned nearly $20 million to date, according to statistics on its Website.

Next Page: Enter eBay

Enter eBay

In October 2007, eBay Inc. (Nasdaq: EBAY) entered the microfinance market by acquiring MicroPlace, a Website founded by social entrepreneur Tracey Pettengill Turner in 2005. Turner says MicroPlace is different from Kiva because “we’re a Web-based investment service, we’re a brokerage firm regulated by the SEC. That took a huge amount of time and effort to put the infrastructure in place.” The bottom line is that loans made through MicroPlace earn interest and can be traded.

Turner couldn’t cite specifically how much has been collected in loans thus far, as MicroPlace is very new. “Hundreds of thousands of dollars are flowing in,” she says. “We’re on track to hopefully be a new source of capital for microfinance world. Today microfinance organizations access capital to help them grow from institutions and big multilateral organizations, like World Bank, but the power of the everyday investor is so huge because there’s so many of us.”

Turner points out that microfinance repayments average above 97 percent worldwide, much higher than American consumer lending repayment rates of around 85 percent. “The assumption [is] that [it’s] poor people and it’s extremely risky. In reality, it’s much safer than natural assumption might lead to think.”

At least one observer is leery of statistics such as this. “We believe that microfinance may have great potential to improve people’s lives, but we’ve also found that empirical data on its effects is hard to come by,” says Tim Ogden, board member at GiveWell, a charity evaluation Website (see Sidebar 3). “Most studies of microfinance’s effects have major methodological problems, and those with fewer problems show encouraging (but smaller) effects.”

Ogden suggests that donors and nonprofits work together to determine if and when microfinance works. “Outside of Innovations for Poverty Action and MIT’s Abdul Latif Jameel Poverty Action Lab, we have seen few attempts to do this.”

Next Page: Cutting Out the Middlemen

Cutting Out the Middlemen

As it happens, another organization in the area of Internet-based fundraising, RealityCharity, likes to style itself as “the eBay of giving” because it aims to disrupt the status quo by supporting both organizational and individual fundraising in an automated, transparent, and collaborative Web 2.0 format, whereby funds are instantly disbursed electronically directly to the fundraiser, without a middleman.

RealityCharity invites organizations and individuals to raise funds by posting appeals and using its Website’s numerous social networking tools, including Facebook , Twitter, StumbleUpon, and Slashdot, to spread the word to potential donors. “It’s a really easy and automated way for fundraising to be conducted through the Internet, where people cannot just support a cause emotionally but respond to a direct call of action to pitch in,” says Alexander Blass, RealityCharity’s founder and CEO.

Individuals post to “donor walls” on the RealityCharity Website, comprising photographs, bios, and visitor-contributed messages of hope, and potential donors search for causes that pull at their heart-strings by using a menu of needs and regions. Organizational fundraisers get a Website branded exclusively to them that’s hosted on the RealityCharity platform, so that visitors can make use of all of its social networking tools and other facilities.

Each fundraising site has a bar graph that shows how much money still needs to be collected. “This allows people to really feel they’re part of a community of givers that support a particular cause,” says Blass, “whether it’s an individual in need or an organization such as a church or a hospital. They can really see the immediate impact of their contributions. That gets people excited.”

Blass gives a recent example of a young mother in Wisconsin faced with a $20,000 bill for cancer treatment and loss of pay while she couldn’t work. “She initiated a fundraiser on our site, spread word to friends and family – they pitched in and spread word, and it initiated a domino effect. Within 18 days she raised $25,000 from over 180 donors in eight countries.”

RealityCharity was only launched in 2007, so it’s perhaps not surprising that most of its 487 current fundraisers are in the U.S. and it’s had little or no impact in developing countries. However, that should change this year now that it’s clinched a deal to host a global fundraising campaign to fight HIV/AIDS with the Woyome Foundation for Africa (WOFA), based in Ghana.

“There’s a sense that, although money may be raised on a global basis, by the time it trickles down to Africa – if ever – it’s pennies on the dollar,” says Blass. The way projects are funded in developing countries frequently involves a string of charities, each taking a cut for administration charges. It’s been necessary up until now because the charity collecting money needs a local presence in, say, the U.S., while the one spending it needs to have workers on the ground in, say, Africa, and there are often “grant-giving” charities in between.

The thought of multiple admin charges taking a big bite out of every donated dollar deters potential donors, according to Blass. RealityCharity’s deal with WOFA aims to cut through this, linking donors directly with local African charities. “It makes people feel good knowing their money is going where it was intended with a far more efficient process and collaborative process.” Blass thinks the WOFA deal will mark the beginning of many other fundraising campaigns in developing countries.

There’s a big downside to cutting out the middlemen, according to Philippa Saunders, the consultant with down-to-earth views about telemedicine. “How do you get the quality assurance without spending the money?” she asks. It’s tough to measure the effectiveness of any charity, even ones that are tightly regulated. “Without personal knowledge of the work of unregulated ones, donors are exposing themselves to some risk that their money will be lost or used in poorly run schemes,” says Saunders. Losing a fraction of a dollar on costs – providing there is transparency about overhead – may be a reasonable price to pay to avoid these pitfalls.

Next Page: Match Funding

Match Funding

While RealityCharity aims to make sure to maximize the impact of every dollar, other Internet initiatives are aiming to multiply the amount given – or raise money almost out of thin air.

The multiplication idea is being pursued by David Pitchford, founder of a U.K. charity evaluation Website called Intelligent Giving (see Sidebar 3). “We are developing a simple, challenge-funding mechanism called ‘Double Your Donation’ that will do something which only the Internet allows: list – eBay-style – all match-funding offers of all U.K. charities in real-time on a central Website,” says Pitchford. The concept will embrace corporate match-funding as well as pledges made by individual wealthy donors.

Pitchford compares this process to an offline example of going to a restaurant or another establishment where, if you donate to a cause they are promoting, the establishment will match your donation. Double Your Donation will disrupt what Pitchford says are the “two negative aspects” of standard fundraising: “One, the size of a charity’s marketing budget normally determines the profile it gets. On this Website, the time-based listing is a great democratizer, so tiny charities like the Norwich Puppet Theatre Trust will get exactly the same eyeballs as, say, Oxfam. Two, it offers a free and easy jump for charities (especially smaller ones) from analog to digital fundraising.

“The Internet has immense potential, allowing easy, fast, inventive donations, which simply weren’t an option in the past. As far as impact is concerned, however, only a handful of savvy charities have picked up on it. However it is early days yet, and the graveyard of failed online donation projects – many of them affiliate shopping sites – continues to grow. I suspect that the real action is going to be around combined giving in online communities.”

At least two other Websites – goodsearch.com and goodtree.com – are aiming to raise money almost out of thin air. They’re search engines that have undertaken to donate half of their advertising revenues to the charity of your choice. So the more you search, the more you give, albeit in tiny amounts.

Next Page: Mass Collaboration

Mass Collaboration

Taking a similar approach to RealityCharity is Firstgiving, the U.S. counterpart of Justgiving in the U.K. Mark Sutton, CEO of Firstgiving, describes the site as “a Website that enables anyone to raise money for a charity/NPO of their choice around whatever inspires them.”

Firstgiving generates funding from a service fee attached to donations and a subscription fee of $300 for non-profit organizations wanting to use the premium version of the Firstgiving platform. “Our business is geared for volume and the long tail of charities and individual users,” says Sutton. “Worldwide, we have over 5,000 charities using the platform and have collected over $300 million in donations for these organizations.

“Corporations can work with Firstgiving to enable their employees to create their own fundraising pages,” Sutton adds. For example, John Hancock Financial Services employs Firstgiving as a platform to raise funds for the Boston Marathon through its John Hancock Boston Marathon Employee Program. Participating employees are required to raise at least $1,000 and use Firstgiving to do so online.

Similar to RealityCharity, Firstgiving relies on a viral approach whereby fundraisers reach out to friends and family who are then expected to reach out to their extended groups. Sutton cites Facebook, MySpace, and the Firstgiving widget, a portable item that can be embedded into a Web page, as drivers of the site’s Web traffic. “Many charities don’t know a lot about the social networks. It’s about the fundraiser. If the fundraiser runs a blog or has a lot of MySpace friends, that’s really the thing that matters.”

One example of this viral method specific to Firstgiving is Menu for Hope, a fundraiser started by food writer Pim Techamuanvivit, who writes a food blog called Chez Pim. Techamuanvivit started Menu for Hope using Firstgiving as a way to raise funds for the UN World Food Program, which works with more than 1,000 other organizations in over 75 countries. “Using a service like Firstgiving means that no money passes through my hands and everything is completely transparent,” she says.

Techamuanvivit uses her own blog to promote Menu for Hope, but since her fundraiser’s commencement four years ago many other viral techniques have caught on, particularly among food bloggers from across the world. “There is a natural synergy between an organization that’s helping to alleviate world hunger and a social network of people who care so much about food… I think of it as our responsibility to do our part to help.” This year Techamuanvivit says Menu for Hope is reaching out through blogs, Feedburner subscribers (of which she has over 60,000), her personal email mailing list of over 5,000, and a Facebook group. Last year Menu for Hope raised $62,925.12.

Dane Bodien Low uses the Firstgiving platform to raise funds for “Room to Read,” a charity aiming to raise $17,000 to build a school in Vietnam. The fundraiser is available at www.firstgiving.com/danelow. Thus far, he’s raised $5,530.00.

Low says the Facebook Group, Facebook for Education in Developing Nations, has played a big role in getting his project widely known. YouTube has also been critical. “A lot of people would rather watch a promotional video for something rather than read about it.” Low says Web 2.0 makes it easy for people “to make a massive difference through mass collaboration,” but this has yet to be recognized by many charities targeting the developing world.

Unlike RealityCharity, Firstgiving only allows U.S.-based charities to host fundraisers. Thus, the developing world can only benefit from Firstgiving through a middleman, but as noted, this can have advantages.

— Nicole Ferraro, Site Editor, Internet Evolution, and Peter Heywood, Founder and Editor Emeritus, Light Reading

Next Page: Sidebar 1: Lessons From India

Sidebar 1: Lessons From India

In developing countries, the mobile phone has become the key to rolling out low-cost Internet access. Up to 7 million people a month are subscribing to mobile services there. So it’s worth taking a closer look at how the technology has been made affordable for poor people in India, the world’s fastest growing mobile market:

1) Unbundle services from equipment
This allows Indian carriers to charge less for the service plans, since they are not subsidizing the costs of handset devices as many U.S. carriers like Verizon and AT&T do.

The open market has also led to big reductions in the cost of handsets. “If you look at what’s happened in the past two years, Nokia, Motorola, LG, and others have decided to capitalize on this market by putting in manufacturing sites in India,” says Sridhar Pai, founder and CEO of Tonse Telecom , an advisory and consulting firm based in India. This localization of component manufacture to India, where costs are much cheaper, has resulted in lower handset prices. Nokia currently offers a number of basic mobile phones in the $20 to $30 range.

One India
One India tariff plans are available for Idea Cellular’s pre- and post-paid customers.
Image courtesy of kiwanja.net

2) Share infrastructure among operators
At the current growth rates, India’s mobile phone subscriber population will grow from 226 million today to 450-500 million in 2010. Pai estimates that to meet this demand, India needs to add another 210,000 cell towers to the 75,000-80,000 it already has. That’s 200 cell towers per day at a cost of about $70,000 each.

No Indian operator can afford to roll out this infrastructure on its own, so many of the carriers have begun to employ a clever strategy of spinning off their tower businesses into standalone companies that will in turn share the new infrastructure with all operators. Pia says that with the massive demand for towers, some of these companies have had IPOs with valuations in the hundreds of millions of dollars, which has in turn attracted lots of foreign investment.

3) Promote prepaid tariffs
About 85 percent of all Indian cellphone contacts are prepaid, which makes it easier for the customer to pay for service and also brings more cash up front for the operator. As an added bonus, prepaid contracts make it easy to introduce more Internet services via mobile devices.

— Raymond McConville, Reporter, Light Reading

Next Page: Sidebar 2: The Internet, African Style

Sidebar 2: The Internet, African Style

Here are some examples of the Internet coming to Africa, often via the cellphone:

Agricultural eBays in the making
Source
A former dotcom entrepreneur, Mark Davies, has set up a Website, Tradenet, in Accra, Ghana, which enables people in several West African countries to trade a variety of agricultural products. Traders use SMS messaging on their cellphones to communicate.

Cellphone in, Internet out in Kenya
Source
This project aims to encourage Kenyan farmers to grow crops for export by providing loans and marketing information. The initial goal of providing a Web-based portal proved impractical because too slow, unreliable, and expensive. A second phase, now under way, is developing a cellphone-based system.

Pay Phone
Example of a local village phone station.
Image courtesy of kiwanja.net

It takes a village
Source
In some African countries, thousands of tiny carriers are emerging, piggy-backing the major mobile carriers. Known as the Village Phone Model, individual people are becoming standalone mobile phone operators through the aid of microloans. With the loans, they purchase a single mobile phone and a rooftop antenna that picks up cellphone signals from 25 kilometers away. They then set up shop with this equipment in their own home and sell phone calls to fellow villagers. The BBC reports that at least 13,000 of these businesses exist today in Uganda and earn an average of $23 per month – a good living by that country’s standards. The overall result for the rest of the population has been cheaper and more convenient phone service for villagers who once had to travel miles just to use a single payphone.

Village Phone
Grameen Foundation’s Application Lab initiative is working to give poor, rural communities
in Uganda access to the Internet through the Village Phone network.
Image courtesy of Grameen Foundation

A cybercafe on the cheap
Source
“Harry” was challenged to set up a cybercafe in a remote Kenyan town on a budget of a mere $4,285. Conventional Internet access (dialup, DSL, leased line) was far too expensive, but mobile EDGE technology, shared among multiple PCs (costing $178.50 apiece), enabled him to deliver decent speeds “almost as good as my 256-kbit/s broadband connection in Nairobi.”

No government? No regulations? No problem!
Source
The lawlessness of some countries like Somalia has, ironically, aided in the development of telecom services. Without any stable government to enforce any regulatory barriers to entry, mobile and fixed-line service providers have emerged with relative ease. And since without a formal government there are no taxes, service prices are among the lowest in Africa. An hour in an Internet cafe costs only 50 cents. On the mobile front, some operators are even planning to roll out higher-speed 3G networks this year.

Wireless activists bypass Benin’s import tariffs
Source
A bunch of activists in Benin has built a community network based on mesh WiFi technology using wireless routers and open-source Linux software, having discovered that DSL was far too expensive. They bought equipment in France to sidestep Benin’s eye-watering import tariffs.

Mozambique healthcare uses cellphone net
Source
This project aims to support frontline health workers with the collection and dissemination of information. Low-cost, hand-held computers will be used in conjunction with the existing cellphone network.

Expert advice on low-cost wireless Internet
Source 1, Source 2
A group of experts has written a book entitled Wireless Networking in the Developing World that can be downloaded for free from http://wndw.net or viewed in more readable HTML format on http://www.vias.org/wirelessnetw. It gives practical guidance on building low-cost Internet infrastructure using wireless mesh technology and contains a number of case studies.

— Raymond McConville and Peter Heywood

Next Page: Sidebar 3. Which Charities?

Sidebar 3: Which Charities?

One of the biggest challenges facing those wanting to help people in developing countries is picking the most appropriate charity. It’s particularly tough because charities tend to work together on such projects, so it’s difficult to see who’s doing the good work and who’s causing problems. On top of that, the benefits are often intangible. In other words, they can’t be measured.

All the same, some small steps towards helping donors evaluate charities have been made recently, much of which has been made possible by the Internet. Some examples:

Charity Navigator
Founded in 2001, Charity Navigator assesses the financial health of more than 5,000 of America’s best-known charities, using a rating system to evaluate annual reports. It lists 176 charities involved in development and relief services.

GiveWell
Recently launched by ex-hedge-fund veterans, GiveWell aims to help donors find the best charities in their areas of interest. It notes that small donors matter – GiveWell claims it gives more than 100 times as much in total as the Gates Foundation.

Guidestar
Guidestar lists 1.7 million non-profit organizations in the U.S. Good for identifying charities in different sectors, it’s not so good for judging their effectiveness and efficiency. It has a sister site in the U.K. – www.guidestar.org.uk.

Intelligent Giving
Launched in November 2006, Intelligent Giving helps smaller donors by rating the U.K.’s biggest charities, using a scoring system to evaluate the transparency of their annual reports. It will be linked to a match-funding Website under development.

Philanthropy Capital
Funded by former Goldman Sachs staff, it targets wealthy donors with research, reports, and case studies to help them pick worthy causes. Its main focus is on U.K. charities.

—Nicole Ferraro

New mom fighting cancer featured on philanthropic Web site
By ERIN RICHARDS

Posted: July 12, 2007
When LeeAnne Sherrod heard that her friend had been diagnosed with cancer seven weeks after giving birth to her first child, she experienced a common sense of helplessness.
“Everyone who knew them got this feeling: What can we do to help?” said Sherrod, a veterinarian at Mukwonago Animal Hospital. Her 32-year-old friend, Kim McCann-Swanson of East Troy, developed colon cancer during the pregnancy.
Neighbors donated money and delivered meals to McCann-Swanson and her husband, but it was their story on a new Web site called RealityCharity.com that prompted dozens of people around the world to contribute more than $20,000 in less than a month to help pay the family’s medical bills. The Web site, which launched in April, combines social networking with instantaneous giving in a new model of e-philanthropy.
Essentially, it’s “six degrees of separation” meets “pay it forward” generosity.
The site now hosts about 600 fund-raisers – not all of which have been successful – and lets individual fund-raisers post, for free, an explanation of the situation, a biography and a request for charitable donations. Non-profit organizations pay to use the platform. Fund-raisers then send out mass e-mails to friends and family, and a link lets donors contribute securely with a credit card. The fund-raiser accepts the donation through a PayPal account linked to a personal bank account.
McCann-Swanson’s story, repeatedly forwarded via e-mail, resulted in posts such as this on her “New Mommy Battles Cancer” page:
Martina Dalton from Newcastle, WA, USA gave $50 on 25-Jun-07
Hi Kim,
We are friends of LeeAnne and Steve Sherrod. They love you and your family very much . . . and we love them, so we want to help in whatever way we can! Our thoughts and prayers are with you.
And this post from June 27, which came with a group donation of $350 from employees at the Mukwonago Animal Hospital, where McCann-Swanson is a client:
Kim, David and Emma,
Our entire staff wishes you the best in your healing journey. Your incredible spirit is an inspiration to us all.
McCann-Swanson, who is from South Africa, is undergoing chemotherapy after surgeons removed part of her colon this year. The cancer spread to her liver, abdomen and lungs. She said the response has been “unbelievable,” and that the site has helped her connect with people she hadn’t heard from since high school. Other donors she likely will never meet, she said.
She said she had told a friend, who encouraged her to post her story on the site, that she didn’t “want people giving me money.”
But her friend told her, McCann-Swanson said, “That’s your problem; if I give you a check, you won’t take it. But nobody has 20 grand laying around for medical expenses.”
RealityCharity.com founder Alexander Blass is a Baltimore native who used to work in a venture capital firm.
“Until now, there hasn’t been a way for individuals in need to initiate fund-raisers in this fashion and let people make direct contributions,” Blass said. “It gives them a global megaphone.”
But louder shouts for attention don’t guarantee you cash. In fact, said a representative from the Better Business Bureau, such seamless online giving could be vulnerable to exploitation.
JoEllen Wollangk, vice president and northeast Wisconsin manager of the bureau, said she hadn’t yet heard of the site, but that when giving to an individual instead of a charity, there’s no way to know if a person is truly in need.
“It’s difficult to tell with the sophistication of Web sites,” she said. “I would warn people to be cautious. I don’t want to prevent people with real needs, but I’m not sure that broadcasting requests for donations is the answer, even though it sounds like it has worked well” for McCann-Swanson.
Blass said he is in partnership with Equifax to provide credit checks and secure transactions, and that donors are e-mailed a tax receipt. Donations to individuals, unlike donations to non-profits, are not tax-deductible.
“This is not a stranger-to-stranger platform,” Blass explained. “Whether you are an organization or an individual, you have to have a base of supporters to start with, online or offline. The people with successful fund-raisers are not the people putting up minimal information and then sitting back and waiting for an altruistic Australian to write a check.”
Browsing through RealityCharity.com reveals users pleading for thousands of dollars to cover credit card debt, home foreclosures, medical expenses and student loans. Many seem bogus; one man even uses his bio space to chide users for not donating “even a cent to me” during his fund-raiser.
Most of these sites list “0% raised” – RealityCharity.com shows how much money has been raised for each user, as well as a list of who donated and a place for them to leave a public message. Users decide how much of their personal information to make available.
Christy Gervais, a 29-year-old single mother from Texas who was displaced by Hurricane Rita and needed $1,660 to cover her back rent, received help through RealityCharity. A stranger, 27-year-old Theresa Mayer, gave Gervais $1,650 and left two words of encouragement on her donor wall: “Keep going.”
“Something about her story just touched me,” Mayer said in a telephone interview from Oakland, Calif. She added she was hesitant to give at first, but that the woman’s story “felt real.”
“I can sympathize; my mom was a single mom of four, and I know what it’s like not to be able to make rent,” Mayer said.
As for McCann-Swanson, her fund-raiser is still active. On Thursday, her donations had exceeded $23,000.

By Joe Burris

May 9, 2007

Montgomery Wallis of Sumter, S.C., hasn’t spent a day out of the hospital since being born prematurely in March. He weighed 1 pound, 11 ounces at birth, and since then his feeble body has often been covered with crisscrossing wires and ridged tubing. You cannot look at his eyes without wondering if there’s something you could do to help.

Which may be why people are donating hundreds of dollars for his medical care on a Web site called RealityCharity.com.

They’re also giving to Christy Gervais, who requested $1,660 to cover back rent she owed after her family left the Gulf Coast after Hurricane Rita destroyed their home and she lost her job. She received all of it in one day from Teresa Mayer of Oakland, Calif., who wrote “keep going” on Gervais’ donors page.

And also to Anne Campbell of Summerside, Prince Edward Island, Canada, whose entry on the Web site asks for $5,000 for dental repairs so she can take pictures at her June wedding “showing a beautiful, healthy smile.”

Web sites like the Baltimore-based RealityCharity.com are infusing age-old philanthropy with the modern social-networking techniques that have made YouTube, My Space and Facebook so popular.

“This is 2007. There’s a Web site for everything,” said RealityCharity.com’s founder, Alexander Blass, 32, of Fells Point. “This is the new way to give. It’s gratifying. It’s personal. It’s community-oriented. It’s a viral-giving platform, because it’s contagious in a sense.”

Some of the donors say they prefer giving this way because they can see their gift going directly to someone in need, even if they can’t write the donation off on their taxes. (The RealityCharity.com site points out that donations made to individuals are not tax-deductible.) Even some established nonprofits, to which contributions are tax deductible, pay to host fundraisers on the site because it lowers administrative costs, they say.

“People respond to compelling stories, not necessarily cold data and facts but personal stories about people,” said Anne Glauber, executive vice president for Ruder Finn, a global public-relations firm that has worked with philanthropic groups. “What that Web site is doing is offering a potpourri of stories that affect our heartstrings, and we emotionally respond. And you’re able to establish relationships with someone, which is what so many people want to do on the Internet.”

Many traditional charitable organizations raise money on the Internet, but RealityCharity.com is part of a wave of so-called e-philanthropy that has raised a few eyebrows.

“I would be extremely careful of this type of arrangement because it makes it easy for a donor to be defrauded,” said H. Art Taylor, president and CEO of the Better Business Bureau’s Wise Giving Alliance. “We’re going to have to see how this new approach to philanthropy works out. We’re going to have to monitor it and hear from people who have used this type of service before we’re in a position to say that this is a better way of doing things than we have [done] in the past.”

Since its April 2 launch, RealityCharity.com has received more than 1.3 million hits and more than 300,000 page views. Though registration for individuals is free and not required, the site has more than 1,000 registered users. Scores of donors have given anywhere from the minimum $10 to more than $1,000. The average donation is about $50.

Nonprofit organizations must pay a fee to hold fundraisers online: $995 for one year, $595 for six months. Already, more than 400 organizations and individuals have conducted fundraisers on the site.

“I feel fundraising on the site is one of the best investments I’ve made, running an organization on a shoestring budget,” said John Sakacs of the Los Angeles-area-based Kids & Fishing Inc., which gets urban kids involved in caring for the environment.
The eBay model
The site conducts identification verification through the consumer-credit-reporting agency Equifax. Donations are made via credit card or PayPal account, the payment system used for many eBay transactions. In some ways, the mechanism resembles the eBay model: Users take a little leap of faith that the seller of something – or a personal story – is on the up and up.

Blass said he believes that the bulk of the giving on Reality Charity.com so far comes from the recipient’s friends and family, who tell others in their circles, creating a viral effect of giving that stems mainly from those who can vouch for the recipient.

“Our most successful fund-raisers are not those reaching out to complete strangers first, then sitting back and expecting a large response. Though heartwarming when it occurs, that is not any more realistic en masse in the online world than the offline world,” Blass wrote in an e-mail last week.

“When being referred by a mutual friend you have known for 10 years, or a friend of a friend, any questions of fund-raiser credibility are immediately eliminated and the results are very powerful.”

After the site’s first month in business, the users seem to act as its filter, aiding some solicitors while refusing to respond to others whose requests might appear excessive. Some people on the site have asked for as much as $100,000 for everything from automobile repairs to student-loan debt to down payments on a house. Most of those requests have yielded a few page visits but no assistance.

“People are looking for legitimate cases with legitimate problems, and not someone who spent too much money needing money to get out of a hole, because we’ve all done that,” said Peter Chasse, associate pastor at the Main Street Baptist Church in Saint John, New Brunswick, Canada. His church requested $7,000 to help fund an initiative to dig wells and construct rainwater collection and filtration systems in Kenya. A donor quickly pledged $7,000 on the condition that the church match that amount through its fundraising.

Blass said he was motivated to launch RealityCharity after hearing about how millions of dollars raised to help victims of the Southeast Asia tsunami and the Gulf Coast hurricanes never made it to the needy.

‘A better way’
“Frankly, I was tired of sitting on my couch yelling at the TV saying, ‘What’s going on?’” he said. “I felt there has to be a better way of doing this.”

After spending years in the corporate world at Legg Mason, Bearing Point and the Maryland Venture Fund, Blass quit his job 2 1/2 years ago and began planning a company that, he told his friends, would have a worldwide impact. He launched it with his own money as well as donations from family and friends. He is currently seeking corporate sponsorships for the site.

“He sat me down for two hours and explained the idea to me,” said David Patrician, Blass’ friend from undergraduate days at the University of Maryland, College Park.

“I told him not to leave his venture-capital job altogether, give yourself something on the side,” Patrician said, “but he said, ‘To do this right, I have to give it 100 percent.’”

Blass’ father, Thomas Blass, is a Holocaust survivor and a psychology professor at the University of Maryland, Baltimore County. He is known for his research on Stanley Milgram, the late social psychologist credited with the “six degrees of separation” theory.

As a teenager, Alex often was skeptical of solicitors who’d show up at his Pikesville home. Once, a man from Romania interrupted the dinner hour and conveyed a tale that Alex believed was bogus. Still, his father gave the man some money. Why fall for such a phony story? Alex wanted to know.

“I would much rather err on the side of caution and run the risk of giving money to someone who doesn’t deserve it, rather than turning away someone who really needs my help,” the father told the son.

That moment still resonates with Blass, who later visited the Auschwitz concentration camp where many of his relatives perished. “Just being born in this country I’ve had so many opportunities academically and professionally, and if I couldn’t leverage all of that to do more than just get myself a job I would be very disappointed in myself,” he said.

He has created a donating platform for those whose needs are all but overshadowed by harrowing tragedies that make headlines. No donation request, it appears, is out of bounds.

Dr. Tali Shokek of Baltimore, who was recently diagnosed with young onset Parkinson’s disease, aimed to raise $1,000 for the New York-area Parkinson’s Research Unity Walk, which she participated in on April 28. Shokek exceeded her fundraising goal on RealityCharity.com, raising $1,654.22 from 26 donors (including an anonymous gift of $100).
A fast response
“Last October, I ran in a 5K in Baltimore where I raised about $150,” Shokek said. “On Reality Charity, my goal was originally $500, but I spoke with Alex, who I met through a friend, and he said, ‘Why not put up $1,000? Give yourself a loftier goal.’
“I posted my Web page at about 3 in the morning, and within the first 15 hours, I had raised more than $500.”

The RealityCharity.com site makes reference to a Wall Street Journal/Harris Interactive survey that said only 15 percent of people who contributed to charity last year were motivated by tax write-offs.

“We don’t write off our contributions anyway, so it doesn’t matter to us,” said Mary Hovis of Cowder, Ill. She and her husband, Gary, have 12 children, including five who were adopted. Last month, they chose to give to John Caroleo, a 35-year-old from Loveland, Colo., who wrote that he hasn’t seen his mother since he was 2 and wants money to hire a private investigator to find her.

Brandon and Roxanne Wallis, the parents of baby Montgomery, posted a personal page, complete with photos, for their son. They appealed for help with financial problems tied to Montgomery’s premature birth and stay in a neonatal intensive-care unit more than an hour from their home.

Their page has received more than 750 visits and helped raise nearly $600. The Wallises also received encouragement from friends and family they hadn’t heard from in years, as well as from strangers.

“May you both be lifted up and energized by knowing that there are hundreds of people across the United States checking your [page], sending messages of love, and saying prayers for the two of you and little Montgomery,” wrote a woman who identified herself as Rose Rudisill of Fayetteville, Ark.

She sent $100.
Alexander Blass
Age: 32
Residence: Fells Point
Founder: RealityCharity.com, a Web site that matches donors to people or groups in need.
Education: Bachelor of arts degree in Jewish studies from the University of Maryland, College Park, 1996; bachelor of arts degree in history from the University of Maryland, College Park, 1997; master’s degree in electrical engineering from the University of Pennsylvania, 2000; master’s degree in business administration from Oxford University, England, 2003.
Previous work: Venture capitalist at the Maryland Venture Fund; member of the equities division at Legg Mason; systems analyst and software developer at Bearing Point.
Little-known fact: As an undergraduate, Blass built free Web sites for nonprofit organizations on campus.

joseph.burris@baltsun.com

SOURCE: BALTIMORE SUN

Web entrepreneurs have an eye on social need — not personal greed
Jessica Guynn, Chronicle Staff Writer
Sunday, April 15, 2007
Ryan Mickle’s life was the stuff young bourgeois dreams are made of. He had a lucrative career as a management consultant, drove a flashy car and lived a few blocks from the beach in an exclusive neighborhood on the Newport Beach (Orange County) peninsula.
Then a year ago he bought a lottery ticket. While jotting down all of the things he would do with the winnings, from spending more time with family and friends to making a real difference in the world, Mickle began to take stock of his life. He was earning a lot of money but was giving very little of himself. And he was the one who was poorer for it.
“I won the lottery that day by realizing that I had everything I needed to start living that life, right then and there,” Mickle said.
So Mickle ditched his high-paying job to brainstorm a new venture with friend Rod Ebrahimi. On a napkin they scribbled their goals: Build an online community that changes the world; make a socially responsible business more profitable; and have fun while doing the right thing.
The result was Dotherightthing.com, a San Francisco startup that allows users to rank companies based on their social impact on the world.
Mickle, 26, and Ebrahimi, 25, are among a growing number of entrepreneurs betting they can build ventures that deliver both financial and social returns. Ebrahimi calls it the double bottom line. “We see more and more people and companies focus on doing good socially while still doing well economically,” he said.
The online grassroots trend has taken some by surprise. Silicon Valley hasn’t always been known for its largesse. Sharing the wealth with the less fortunate usually means issuing more stock options to employees. And the Web 2.0 generation, with its YouTube and Twitter mania, has gotten a particularly bad rap for self-obsession and indulgence.
But social activism is rising among entrepreneurs who are using ambition, creativity and daring to fuse their personal values and career goals.
“In some senses, these entrepreneurs are fusing ’60s consciousness and activism with ’80s market savvy. In the process, they are creating a hybrid which is the best of those polar opposites,” said Paul Frankel, an investor who lectures on social entrepreneurship at UC Berkeley’s Haas School of Business.
The practice has precedent. EBay founder Pierre Omidyar has dedicated much of his fortune to helping for-profits and nonprofits alike discover their power to do good. And Google has evolved a novel brand of philanthropy, setting up a foundation without tax-exempt status so it can invest in for-profit as well as nonprofit groups.
Like the first Internet entrepreneurs, this generation of caring capitalists is harnessing the power of technology from social networking, the ability to create online connections and communities that spread virally, to online shopping to video games.
Take James Elsen, a former Silicon Valley software executive who, after making a lot of money, hit a wall in 2003. “I was in an unhappy place. I was unhealthy physically. I was in unhealthy relationships. I was working 130 hours a week. I had always been told that if you work hard and climb the ladder to the top, you will be happy. But I wasn’t happy,” Elsen said.
Thinking back to his happiest moments, volunteering at the local elementary school or in the environmental movement, Elsen turned to the Esalen Institute near Big Sur, a lush refuge for self-discovery and improvement, to figure out how to combine his background in technology with his passion for sustainability.
The result is SustainLane.com, a San Francisco business geared to promoting green living to people, businesses and government. The concept is fueled by growing interest in green initiatives from major corporations, local and state government, and the public at large.
“The ultimate goal is to feed a new economy of green businesses,” said Elsen, 41.
Caroline Bernadi, a 29-year-old refugee from the luxury goods industry in France, felt compelled to help nonprofits raise money. She and Jonathan Xu, a 30-year-old technologist who shared her passion for social change, started Palo Alto’s FreePledge.com, a socially minded shopping site that has formed partnerships with 165 retailers from Amazon.com to Target.
At www.freepledge.com, shoppers buy the same products from the same merchants for the same price, but a percentage is donated to the nonprofit of their choice.
“We help the consumer feel good when he or she shops online, we help the retailer in cause-related marketing and we help nonprofits raise money,” said Bernadi.
Darian Hickman, 28, is designing an online strategy game that turns the players into entrepreneurs who help bring prosperity to impoverished villages in underdeveloped countries.
Players can choose from a number of tools — micro-credit loans, solar panels, irrigation pumps, affordable lighting — to help villagers build sustainable futures.
Hickman, a devoted Christian who graduated from Johns Hopkins University with a degree in computer science in 2001, spent several years writing “boring code” for defense contractors while trying to figure out how to combine his computer skills and his interest in social enterprise.
Inspired by Muhammad Yunus, the Nobel prize-winning micro-finance pioneer, and the Skoll-sponsored documentary “The New Heroes,” which tells the stories of 14 entrepreneurs combatting social ills around the globe by pioneering innovative technologies, Hickman hit on the idea for Village the Game.
“I just started experimenting with the things that Jesus taught. Fighting for the poor is important for God and also really rewarding. So I wanted to figure out clever ways of doing that,” said Hickman, who lives in Pasadena and has begun collaborating on a nonprofit that will help villages in the real world.
Brian Johnson, 32, also found his calling in an unusual amalgam of altruism and business. A disciple of Eastern philosophy and spirituality, Johnson said he felt uncomfortable with capitalism until he hit on the concept of “using economics as a force for good.”
“It is what so many people in the world are conflicted on,” he said. “How do we live our spiritual ideals and make money?”
Now Johnson tries to have it both ways with Zaadz.com, which he describes as MySpace for people who want to change the world. Johnson started Zaadz, which means seed in Dutch, out of his Topanga (Los Angeles County) home.
The site now has a handful of employees and 50,000 registered users, and recently landed funding from Whole Foods CEO John Mackey. Johnson, the site’s CEO and philosopher, seeks to bring together a passionate group of conscious consumers with conscious businesses, making money from sponsorship and advertising deals.
But the hybrid doesn’t sit well with everyone. “Some people call us tree-hugging, granola-eating hippies; others call us greedy capitalists,” Johnson said.
Therein lies a potential challenge facing these aspiring ventures. Not only must these entrepreneurs find a way to develop viable businesses, they must convince consumers that greed and good are compatible. Not everyone is convinced these ventures are the best way to tackle poverty, disease and environmental degradation.
“It remains to be seen how they walk that line. How do you inspire Barak Obama-like fervor around an idea when there is potentially someone profiting from it?” said Premal Shah, the former PayPal executive who is president of online micro-lender Kiva.org.
Shah weighed the pros and cons before deciding to run Kiva as a nonprofit. A survey bore out his wisdom: 74 percent of Kiva’s users would disapprove and 48 percent of those would no longer lend money to developing countries through Kiva if it morphed into a for-profit venture.
But those attitudes may be shifting. “The market is actually the best way to make the highest impact most quickly,” Frankel said.
That’s what Dotherightthing.com founders Mickle and Ebrahimi hope as their savings accounts dwindle and they work to raise money to expand their endeavor.
Their site, which launched in January, seeks to create a dialogue between consumers and corporations, allowing consumers to influence corporate behavior and companies to build brand loyalty.
“By executing our vision to create a business that fulfills both our career and personal aspirations, we’ve found our sweet spot, located at the intersection of passion and work,” Mickle said.
The sentiment is summed up in Dotherightthing.com’s T-shirt slogan: “It’s cool to care.”

Folks in need can post appeals, let donors decide whom to support

The Associated Press

April 2, 2007
NEW YORK – Ken and Kristie Sigler have sold cookbooks and football tickets to raise $16,000 for an adoption. For the final $8,700, they are appealing directly to strangers — through a new online clearinghouse that bypasses traditional charities.
Reality Charity LLC’s Web site, to be unveiled April 3, promises to be an eBay for fundraising. Those in need post appeals to pay off student loans, recover from a natural disaster or avoid a foreclosure. Those wishing to give respond to them directly.
The idea is to let donors choose their causes and beneficiaries and make sure their gifts aren’t diverted for overhead costs that most charities incur.
“We should cut out the middlemen and let the people decide,” said Alexander Blass, the site’s founder. “If I want to help sponsor your high-definition television, why not? But I may see your listing and I may reserve my sympathy for the Katrina victim or wounded veteran or adoption couple.”
The Siglers are hoping enough visitors will be moved by their financial plight to help them adopt a boy from Guatemala. The Hilliard, Ohio, couple say they are turning to the direct appeal after striking out with their church and traditional charities.
“There are a couple of places that provide grants for adoption, but they are few and far between and so many families are adopting,” said Kristie Sigler. The couple has raised about $200 of the $8,700 from seven donors during a private testing period on the site.
Using the Internet for direct appeals is hardly new. The practice, which skeptics have termed “cyberbegging,” gained momentum in 2002 after a 29-year-old New Yorker claimed that strangers sent enough money to her Web site to help pay off more than $20,000 in debt.
Scores of sites followed with pleas from single moms, recent college graduates with student loans and maxed-out credit cards and childless couples seeking treatment for infertility.
Reality Charity wants to be a centralized place for such appeals — the “matchmaker,” in Blass’ words. Otherwise, he said, donors might not know of giving opportunities, and those in need might not know where to plead their case.
Donors from around the world can browse listings by type or location, search by keyword or click on a direct link passed along by a relative or friend. They can respond with a credit card or eBay Inc.’s PayPal payment service, with any transaction fees deducted and disclosed. Recipients must live in one of about 50 countries served by PayPal.
Contributions won’t be tax deductible because IRS rules prohibit earmarking of gifts to specific beneficiaries. Reality Charity is being run as a for-profit company, though it plans to make money from ads and groups that want to raise money — not from donors or individual recipients.
To give donors more confidence, would-be recipients who, for a small fee, submit to identity verification through credit-reporting agency Equifax Inc. will get a green check mark in their listings. Those in need may also post documents supporting their cause.
Relatives and friends who already have donated will be able to add words of support — similar to the comments section on social-networking sites like News Corp.’s MySpace.
But ultimately, Blass said, the site will be self-policing. Similar to policies at eBay’s auction site or Craigslist’s classified listings, users will be the ones responsible for reporting suspicious appeals. Donors and recipients will also be allowed to withhold their full names.
Patrick Rooney, director of research at the Center on Philanthropy at Indiana University, warns donors against giving to strangers online, saying direct appeals work best when friends, neighbors and family are the ones in need.
An online clearinghouse wishing to eliminate fraud and abuse would need to vet potential recipients so thoroughly that it becomes its own charitable organization with overhead costs, not simply an enabler of direct appeals, Rooney said.
Steve Jones, a professor at the University of Illinois at Chicago, questioned whether anyone ever received much through cyberbegging, short of a few cases that had garnered media attention.
“One of the things that compel some people to give money in some cases is the uniqueness of the situation,” he said. “If you’re confronted with many dozens of such cases on one site, I don’t know if people will find it as compelling to give to any one of those. It dilutes the impact of any individual story.”
But Blass, 32, whose background is in technology and finance, said his approach should make credible appeals easier to find, and people more likely to give.
“We feel that by offering a central place where people in need and potential donors can meet each other, we are growing the philanthropic pie,” he said. “We are engaging new donors who may feel there is little or no impact of their donations when they are giving to a large organization.”

Baltimore-based Web site allows direct contributions to individuals, organizations

By Aaron Cahall
Examiner Staff Writer

March 5, 2008

Just six hours old, Tali Shokek’s second fundraising effort was already going better than her first.

The 28-year old psychologist from Baltimore has Parkinson’s disease, and last year sought to raise funds for the Parkinson’s Foundation by participating in the Unity Walk in New York City.

In 2006 she had raised $100 in pledges from friends and family. For her second effort, she aimed for $1,000 and created a profile on Baltimore-based RealityCharity.com, posting pictures, her story, and directing friends and family from other social networking sites to the page.

Her page went up late that night. The next morning, Shokek said her cause had already received $500 in donations.

“I was shocked at who donated, people from my graduate program who I wasn’t that close to,” Shokek said. Having a name and a face and a story I’d written about living with Parkinson’s, I think that touched a lot of people.”

Shokek was among the first to use RealityCharity.com, a first-of-its-kind Web site started last April that lets individuals or organizations post content and turn their social networks into fundraising platforms.

As the site approaches its first anniversary, founder Alexander Blass said 1,200 campaigns have been started, exceeding his first-year goal of 1,000.

“It’s been an extraordinary response,” Blass said. “We’re really just very moved by the response from the global community. It’s just a testatement to how people are excited about giving.”

Blass said he doesn’t think the site’s second-year will be derailed by worsening economic conditions.

“We actually don’t see evidence of that in our space,” he said. “Giving is all about a personal connection, getting donors to be moved and to sympathize with organizations and individuals in need.”

John Valenti, of Bel Air, sought out donations through the Web site when his son was diagnosed with leukemia and he took time off from work to care for him.

“It’s a difficult thing to tell people that you need money,” he said. “We got a very strong response.”

New Web site sparks virtual communication between donors and recipients.

Barbara Pash
Associate Editor

Alexander Blass wants you to give, and he’s found a new way for you to do it. Last April, Mr. Blass founded the Web site, RealityCharity.com, which has already racked up 5 million hits and won him the Daily Record’s 2007 Innovator of the Year Award. Mr. Blass, a Baltimore native who grew up in Darchei Tzedek Congregation and graduated from Beth Tfiloh Dahan Community School, holds undergraduate and graduate degrees in electrical engineering and business from a number of prestigious universities, including England’s Oxford University.

He could have taken several different career paths and, in fact, did. Before founding RealityCharity.com, he was a software developer. A principal in the Maryland Venture Fund (a venture capital firm focusing on early-stage companies), and an investment banker with Legg Mason Wood Walker.

“My experience is the technical side, not just technology for its own sake but how to leverage its impact,” said Mr. Blass, 33 and single, now a Mount Washington resident who is active in young professional activities at Beth Am and B’nai Israel congregations.

But Mr. Blass, despite his cheerful and enthusiastic manner, has an unusual background. His father, Dr. Thomas Blass, is a child Holocaust survivor, having lived with his mother in Budapest, Hungary, in hiding during World War II.

Afterward, with most of the family dead, mother and son made it to Canada, where Dr. Blass, a psychologist and author, grew up. Mr. Blass proudly points out that he is named for his late grandfather.

The experience had a lasting impact on the family. “I grew up in a philanthropic household. Giving back, tzedakah, was important,” said Mr. Blass, who still remembers the many shlichim, emissaries from Israel, who traveled through his childhood Orthodox neighborhood seeking donations for various worthy causes.

“My parents never turned anyone away,” he said.

In 2004, just back from getting an MBA at Oxford University, Mr. Blass decided to take a different path.

During his previous jobs, he had sat on many organizations’ boards, where he had seen first-hand the unmet charitable needs.

“The vision of RealityCharity came to me, a centralized place for organizations, non-profits and people to come together,” said Mr. Blass, who then spent three years developing the technology. Patents are pending in the United States and abroad.

RealityCharity.com has been described as the “eBay of giving.” Mr. Blass calls it “the world’s first person-to-person philanthropic community.”

Through RealityCharity.com, donors make their donations directly to the organizations and non-profits in the United States and abroad that list their fund-raising campaigns on the platform.

“It doesn’t prevent [the organizations and non-profits] from seeking funds by traditional methods “like mailings and phone-a-thons, said Mr. Blass, “But it helps them publicize their fund-raising, gives them credibility” and reaches a wider audience than they otherwise would have.

Mr. Blass financed the privately owned RealityCharity.com himself. He has a staff of 10 that verifies the accuracy of the information from the organizations and non-profits, which pay a subscription fee and an operating fee to be listed.

Individuals also can get a listing on RealityCharity.com. They are verified through another company and pay no subscription fee.

RealityCharity.com is designed with numerous functions to help donors. There are 40 categories of causes, 50 tools to link up with fund-raising campaigns, and continuous financial updates on the progress of the campaigns.

“I wanted to create something that was easy, fun and direct,” said Mr. Blass, who has entered into a partnership with PayPal, the first of its kind, he notes, that allows donors to contribute in different currencies via credit card.

Steve Kozak was on the judging panel for the Daily Record’s 2007 Innovator of the Year award. Mr. Kozak, executive director of the Greater Baltimore Technology Council, said Mr. Blass’ RealityCharity was chosen because “it’s the beginning of a trend. He is on the front end of a trend” that is changing the way charitable donations are made.

“What struck the judging committee is that RealityCharity provides an easier and more transparent way for people to give,” said Mr. Kozak.

“It’s the social and business aspects coming together. Like FaceBook [a social networking Web site], these new communities are providing more ways for people to network socially and professionally, and now they can also do it philanthropically.”

Mr. Blass has ambitious plans for RealityCharity. He talks about seeking corporate sponsors for the site. He doesn’t discount collaboration with the “right partners.” He mentions expanding to Africa, where he has been invited to speak at a Pan-African conference.

“We could leverage interest in and RealityCharity to raise money for global research on HIV/AIDS,” a major health threat in Africa, he said.

But there is no doubt that Mr. Blass is happy with what he has accomplished so far. “I really wanted to do something that truly mattered, given my background,” said Mr. Blass, who has visited Auschwitz, Dachau and Birkenau concentration camps.

Now, thanks to his creaton, RealityCharity, “in the future every organization will be conducting fund-raisers in this fashion,” he said.

Charitable Facts

30 cents: The average amount U.S. charities spend to raise $1
$300 billion: The amount of charitable donations Americans made in 2006
86 percent: The number of Americans who gave to charity in 2006
1000: The number of fund-raisers RealityCharity.com has hosted since April 2007

– Facts according to Alexander Blass

Alexander Blass:
Top Winner
Innovator of the Year Award
Educated by Wharton and Oxford, venture capitalist turned entrepreneur Alexander Blass grew up in a family that knew the importance of giving and helping others in need. Because he grew up in a religious neighborhood in Pikesville, people who had come from overseas would often go door to door for donations to feed their family. His parents never turned anyone away, sometimes inviting them in for dinner and always giving them money.
During a backpacking trip through nearly 40 countries, Blass had a chance to see some of the world’s most impoverished areas. And after a trip to Auschwitz in 2004 to pay respect to his ancestors, Blass knew that life was truly a gift and decided to use his background in technology and finance to “pay it forward.”

RealityCharity.com wants to revolutionize charitable giving by making “doing good” more socially rewarding. Lauded as the “eBay of Giving” since its public launch in April 2007, RealityCharity.com is the world’s first direct-giving Web site and philanthropy community.

RealityCharity cuts out the middleman between donor and recipient in a fashion similar to eBay and a concept not unlike FaceBook. The Web site has a centralized fund-raising platform to help individuals in need by providing a voice to those who may not have one. For example, individuals who have been left destitute by Hurricane Katrina no longer have to wait for huge charitable organizations to find them.

For organizations, RealityCharity’s platform helps them dramatically lower their fund-raising costs and engage more donors by leveraging their base of supporters. Other donors prefer to give this way because they can see their gift going directly to someone in need. Though its platform is patent-pending, the Web site has a partnership with Equifax for real-time identity verification of fund-raisers, and a partnership with PayPal to perform instant deposits of donations received.

RealityCharity.com not only provides easy tools for people to pitch in financially and provide momentum for a fund-raiser but it also allows users to post words of encouragement and support on a virtual Donor Wall. This can enhance the social network of the individual in need and can create what Blass calls a “viral giving” effect, reaching more people more quickly and, ideally, raising more money.

Blass believes that everyone has a story worth hearing and respecting, and RealityCharity.com is providing the megaphones.
- Elizabeth Stocklin

Alexander Blass set out to change the fundraising world. Why? Blass tries explaining his motivations in an open letter posted at RealityCharity.com. That Web site, which Blass started developing about three years ago, launched publicly in April and has since hosted more than 1,000 fundraisers. It is approaching the 4 million-hit mark, according to Blass. “The inspiration is rooted in my family and upbringing.” Blass wrote in his letter. “My father is a Holocaust survivor from Budapest, Hungary. I never had the opportunity to meet most of his family, as many of his relatives didn’t survive the war. For this reason, I feel that life is a miracle and a gift.”

He goes on to describe how he was affected by seeing poverty in countries he has visited such as Burma, Laos and Thailand. Blass, who has an MBA from Oxford, also explains the lessons in charity he learned at home. And he writes about how disasters like Hurricane Katrina solidified his belief that something new was needed to connect people who need help with those who want to give it.

Blass can now talk about countless RealityCharity.com connections. There was the woman whose home was destroyed in Hurricane Rita who was able to catch up on owed rent for her new home, thanks to a stranger in California who decided to pay it all. There was the Wisconsin woman who got more than $20,000 from donors across the globe to cover medical bills. Whether it’s an individual or an organization trying to raise money, Blass wants his Pikesville-owned RealityCharity.com to be the forum in which it happens.

“When you think of auctions, you think of eBay. When you think of books, you think of Amazon.com,” Blass said in a telephone interview. “If you think of philanthropy and fundraising, to date, people have probably drawn a blank. There has not been that one-stop shop. And that’s how we see ourselves.”

Few are surprised that Blass would be making his mark through technology. “Alex was doing business on the Internet before most people had an e-mail address,” said Steven Klapper, Blass’ sophomore-year roommate who watched his friend run a mail-order business over the Internet. “Our dorm room looked like a FedEx hub.”

Blass said all his experiences, including his previous career as a venture capitalist, prepared him for RealityCharity.com, which makes money charging fees to fundraising organizations that use the site. There is no fee for individuals raising money.

“You can really see the human element on the Web site even after spending just a minute on it,” Blass said.

The site has attracted media coverage in several countries.

“There’s nothing that I’ve done professionally that has been more rewarding than seeing the true impact that our company is having on the lives of other people,” Blass continued. “And I would imagine that’s what makes others curious as well. Because they’re equally excited about having the ability to contribute to somebody’s life.”

Alexander Blass
Title: President and founder
Company: RealityCharity.com
Age: 33
Education: Bachelor’s degrees in arts and humanities from the University of Maryland, master’s degree in electrical engineering from the University of Pennsylvania, MBA from Oxford University
Family: Single
Volunteer activities: He speaks to high school students through the Maryland Business Roundtable for Education; advises college students in local business plan competitions; and serves on emerging technology funding review panels at the National Science Foundation
Advice for young people in the work force today: “Find something you are truly passionate about. If you love what you do, other things will fall into place.”
What’s on your iPod: “I seem to be one of the lone holdouts without an iPod. I’ll probably give in eventually.”
Text, e-mail or cell phone: BlackBerry, but I think a phone call is always best.”
Last book read: “[I am ] more of a news junkie.”
Favorite TV show: “Entourage”
Downtime: “Traveling to fascinating parts of the world, learning about – as well as from – other cultures.”

Rebecca Logan is a Kansas-based contributor.