Monday, January 14, 2013

Charity:Water - A Case Study in Venture Philanthropy

I first heard of Charity:Water when a student sent me a Mother’s Day card representing a $20 donation in my name. I responded with a $20 donation of my own and was intrigued by the young organization’s use of email and video--and the very personal involvement of founder Scott Harrison--to cement donor relationships. This was about 2007, well before most other charities understood the power of digital media.

The business model of Charity:Water is also exemplary. They call it the 100% model; 100% of what they raise from public donations goes directly to water well projects. There are few non-profits with the kind of charismatic leader who can raise all the funds necessary to run the charity. The Clinton Global Initiative is one other that I know of and it makes the point about a well-placed leader. In recent years Charity:Water has been using GPS to locate projects on Google maps and to provide proof of successful completion to donors. Overall, it is a model of how to run a charitable organization in the Internet age. One thing you quickly notice is that they encourage supporters to raise money for them and that’s where a lot of social media comes in.

This is why we featured them as an Internet marketing “best practices” case study in the first chapter of the Internet marketing text. The organization has lessons, not just for other non-profits, but also for commercial organizations that wish to remain close to their customers.
GPS is useful but Charity:Water has just taken another big step. According to an article by the AP, “Harrison, a former New York promoter for nightclubs and fashion events, didn’t want to guess at how many water projects were actually working. He wanted to give donors more assurance, knowing as many as a third of hand pumps built by various governments or groups stop functioning later. His solution: why not create sensors to monitor the water flow at each well? But raising millions for a new innovation could prove impossible.” That, perhaps, is the drawback of the 100% model; if a large operational investment is needed it could strain the fund-raising ability of even a charismatic leader.

Enter Google. In December it announced a new charitable grants program to fund organizations that are using technology in innovative ways. It’s first 7 grants are fascinating—from DNA barcoding of endangered species to educational programs for under-represented students and for math and science education. All have a major technology component.

Matt Bannick, managing partner of the (Pierre) Omidyar Network says this represents a new approach to philanthropy. He describes the new approach: 

“Seeking out ideas to fund, rather than existing projects, turns traditional notions of philanthropy on its head,” Bannick said.

“Rather than looking for organizations that could do this specific work that we’re hoping to get accomplished, let’s look for fabulous entrepreneurs … that have a new and innovative idea that we can get behind,” he said.

These are two developments to follow with interest. Charity:Water continues to innovate in ways that bond with its donors. Entrepreneurial high tech firms like Google are looking for ways to use technology for social good. The approach of taking a risk by funding innovative uses of technology by leading-edge non-profits is the idea behind “venture technology.” Will we see more—and even more effective—ways to use technology in the future? Hopefully we will!

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