Time for a Donor Funding Charter?

Innovation isn’t about green bean bags and whacky idea sessions. It is a long term business development strategy
Lucy Gower

Behind almost every good social entrepreneur you’ll find a donor. These donors come in all shapes and sizes – family members, friends, companies, CSR departments and sponsors are the most typical, increasingly followed by the crowd funders among us. While plenty of great things get funded, pretty crazy stuff does, too. Zack Danger Brown just raised $55,000 on Kickstarter to make a potato salad, for example.

More often than not, the really big bucks come from government and philanthropic foundations. The UK’s Department for International Development will hand out £10.765 billion this financial year, funding all manner of projects that help those in greatest need. The Bill and Melinda Gates Foundation, the biggest private foundation in the world, gave $3.6 billion last year. The world has plenty of problems – big problems – and these budgets reflect that. Donors get to choose which ones they fix, too. The Rockefeller Foundation, for example, currently focuses on resilient cities, digital jobs in Africa, food security, gender equality and universal health coverage, among a few others.

Donors also pay attention to what other donors do, and to what and who they fund. They love, for example, the idea of matched funding where two or more will put in an equal share of funds for a project. It spreads the risk, and gives them all comfort that they’ve not made a silly decision. If the project is good enough for someone else’s money, it’s good enough for theirs. Getting funded by one of the bigger foundations often makes it easier to get money from the others – a sort of shared due diligence, if you like.

Despite all the money and resources – and attempts to apply them to all manner of projects and initiatives – problems remain. During my “Rise of the Reluctant Innovator” book talks, I draw on some of the bigger challenges and failures of international development. Yes, a lot of good work has been done, but I often wonder if we’re getting value for money. Over the past 60 years, we’ve sure spent a huge amount of it.

Plenty of things have been tried, and continue to be tried. Much of the failure is put down to the people and projects (who in turn often blame the target communities), but in many cases responsibility also needs to fall on the people who backed them. Under pressure to support ‘innovative’ (often crazy) ideas, and often under pressure to spend their large budgets, Programme Officers often resort to funding projects they shouldn’t be going anywhere near.

What we end up with is a sector full of replication, small-scale (failed) pilots, secrecy and near-zero levels of collaboration. This negatively impacts not only other poorly-planned initiatives, but it also complicates things for the better ones. On top of all that, it confuses the end user who is expected to make sense of all 75 mobile data collection tools that end up on offer. The policy of funding many in the hope that the odd one shines through – the so-called “let a thousand flowers bloom” scenario – belongs to an earlier era. Today, we know enough about what works and what doesn’t to be far more targeted in what is funded and supported.

Given the vast majority of projects would never get started without some form of funding, donors are the ideal position to put this right. So here’s my proposal.

All major philanthropic foundations – and, where appropriate, government development/aid agencies – sign up to a Funding Charter which encourages much greater scrutiny of the technology projects they’re considering funding. This Charter will be available online, offering considerably more transparency for projects looking for money.

In the first instance, project owners will need to answer the following questions before their grant application is considered:

Preliminary questions

  1. Do you understand the problem? Have you seen, experienced or witnessed the problem? Why are you the one fixing it?
  2. Does anything else exist that might solve the problem? Have you searched for existing solutions?
  3. Could anything that you found be adapted to solve the problem?
  4. Have you spoken to anyone working on the same problem? Is collaboration possible? If not, why not?
  5. Is your solution economically, technically and culturally appropriate?

Implementation questions

  1. Have you carried out base research to understand the scale of the problem before you start?
  2. Will you be working with locally-based people and organisations to carry out your implementation? If not, why not?
  3. Are you making full use of the skills and experience of these local partners? How?

Evaluation and post-implementation questions

  1. How do you plan to measure your impact? How will you know if your project was a success or not?
  2. Do you plan to scale up or scale out that impact? If not, why not? If yes, how?
  3. What is your business/sustainability model?

Transparency questions

  1. Are you willing to have your summary project proposal, and any future summary progress reports, posted on the Donors Charter website for the benefit of transparency and more open sharing?

Not being able to answer these questions fully and reasonably needn’t be the difference between funding or no funding – donors would be allowed wildcards – but it would serve two purposes. First, it would force implementers to consider key issues before reaching out for support, resulting in a reinforcement of best practice. And second, it will help the donors themselves by focusing their resources and dollars on projects which are better thought out and less likely to fail.

The simple adoption of this kind of Charter might do more to solve many of the niggling problems we regularly write, talk, complain and moan about in the ICT4D sector. Any takers?

A more concise version of the proposal is available on the dedicated Donors Charter website.

Innovative philanthropy and the quest for unrestricted funding

“In the real world, if you were to invest in a company you thought would make you a tidy profit, you wouldn’t tell the senior management they had to make a product of your choosing, restrict the number of vehicles they purchased, or expand operations into a new country. Why should we do any differently in the social sector? Why not simply invest – fund – on the basis of return in the form of impact? Isn’t that the point?”

Kevin Starr, Stanford Social Innovation Review

Just as Kevin Starr “stumbled into philanthropy”, I stumbled into running an organisation. I’ve been fortunate to meet Kevin on a number of occasions, and we have a fair bit in common. For a start, we ended up in places we weren’t expecting, and we’re both graduates of the School of Learning by Doing. Although this approach can be painful at times, you often find yourself stumbling across answers you wouldn’t have if you’d followed a more traditional, established route. There’s a danger if all you ever do is stay in your comfort zone.

(I remember talking to my mother back in November 2002 when I’d just been offered my first piece of mobile consultancy. I was supposed to build a conservation portal on Vodafone live! but had never done anything with mobile before (very few people had back then). I accepted the gig, although I had absolutely no idea if I’d be able to deliver. A simple fear of failure drove me on over the proceeding twelve months).

Kevin has largely figured it out for himself, too (in between extended bouts of surfing) and the end result – the work of the Mulago Foundation – is as inspiring as it is simple. If you’ve not seen his Pop!Tech talk from last year, do yourself a favour and check it out.

In short, the Mulago Foundation looks for “the best solutions to the biggest problems in the poorest countries”. These projects need to answer four quite simple questions:

  1. Is it needed?
  2. Does it work?
  3. Will it get to those who need it?
  4. Will they use it correctly when they get it?

None of this is rocket science, of course, but it’s what comes after a project answers with four “Yesses” that you might argue was most innovative. Mulago provide unrestricted funding, the holy grail of fundraising. Funding is provided based on a vision, and a path to scale, and it’s down to the organisation to decide how best to spend the funds to achieve that. The rationale is really quite simple. As Kevin puts it:

If you don’t think an organization is smart enough to use your money well, don’t give them any

We’ve been very fortunate to have received critical – essential – funding for FrontlineSMS over the past four years (for the first two it was largely self-funded). Grants from a number of donors have enabled us to continually develop and build on what we started in 2005. The end result? A piece of software in use today in over a hundred countries, driving a dizzying array of projects.

Of course, there’s little use in developing such a useful piece of software if the organisation behind it isn’t able to survive and thrive in tandem. And this is one of the biggest challenges facing many organisations in the non-profit world, not just those focusing on mobile. Rightly, in most instances, there’s a growing expectation that NGOs need to figure out how to live without donor money, but that’s easier said than done (something I’ve also written about before).

About half-a-dozen donors can rightly lay claim to being a key part of the FrontlineSMS story, but when it comes to our organisational development there’s – so far, at least – just the one.

In the past 18 months there have been massive changes in how we go about our business. With roots in camper vans and kitchen tables, today we have offices in London and Nairobi, with another opening soon in Washington DC. We’ve gone from one person to around ten – with a dedicated developer team based in the iHub in Nairobi – and a single US Foundation to a UK-based Community Interest Company and a sub-branch in Kenya. We’re well on the way to resolving complex governance issues, appointing a Board and developing a number of exciting non-donor income streams, not to mention new mobile-based social change tools. A majority of this work has been orchestrated by an excellent senior management team, with Laura Walker Hudson driving things from the UK and Sean McDonald doing the same for us in the US.

Project-based funding is still a critical part of our growth and development strategy, but all of this has happened thanks to the fantastic support of the Omidyar Network who, like Mulago, fully appreciate the value of also providing unrestricted funding to their grantees. The Omidyar Network’s investment criteria is based on five key areas. According to their website:

  • Alignment. We look for organizations aligned with our mission of creating opportunity for people to improve their lives. We seek for-profit companies and nonprofit organizations that use innovative, market-based approaches within our investment areas.
  • Impact. We identify organizations that intend to develop new markets or industries, influence policy or practices among existing institutions, alter public perception, or demonstrate the power of business to create social and financial returns. Ideal partners will inspire further entrepreneurial activity in their field.
  • Potential for scale. We look for organizations with significant growth potential, with the ability to scale operations and develop new markets. We ask for-profits to have the potential for a highly successful business model and nonprofits a path toward operational sustainability.
  • Leadership. We invest in management teams with a proven track record in their field of operation and an ability to articulate a clear vision and strategy, reinforced by a viable business plan. The organization must practice exemplary governance with operational efficiency and controls, transparent practices, and disciplined financial planning.
  • Innovation. We seek organizations that employ creative, entrepreneurial strategies to accomplish their goals. Investees may disrupt the status quo, establish a new business paradigm, or pioneer services for untapped markets.

If you need living proof of what a strategy like this looks like, check out Omidyar‘s and Mulago‘s impressive grant portfolios. You can also follow Omidyar on Twitter.

There is much talk of innovation in the technology arena but less, it seems, on innovation in philanthropy. Thank goodness this is beginning to change. We are, after all, all in this together.

Customer? Care!

At a recent ‘Technologies for Conservation and Development’ (t4cd) Conference I attended in Cambridge, I asked the delegates what I thought was an important yet often under-asked question – where and who were our ‘customers’? The conference was concentrating on the use of technology in global conservation and development work, and there was an interesting mix of technical and conservation people. Having them all in the same room for a couple of days was certainly a unique experience, and something which most of us agreed should happen more often.

For those who don’t know the focus of my work, my key area of interest is making technology work for the NGO community, mainly those working on the ground in places such as Africa. The reasoning for this is simple – although I can hardly class myself as a conservationist or a development practitioner, I have spent a bit of time working on various projects on the continent and take a keen personal as well as professional interest. Not only seeing, but experiencing over the years the wide range of basic problems that ICTs could easily help solve out there has got me wondering why more isn’t being done, and if it is why we don’t hear that much about it.

I have always believed that I’m never going to save a species from extinction, or a tropical forest from becoming a palm oil plantation. But what I can do is support someone who can. It is the same with technology. Alone it won’t achieve much, but if applied appropriately it has absolute potential to positively assist worthy conservation and development causes. It is its ability to empower individuals and groups at all levels – international, national and local – that makes the potential impact so exciting. Hearing of a small NGO in South America using simple text messaging to mobilise local communities against illegal logging is no less inspiring than hearing about the international effort to create complex early warning systems, and may in fact be more so. The problem, as far as I see it, is that too much focus is put at the top-level. As a good friend Simon Hicks once put it, we mustn’t forget the foot soldiers, the guys on the ground eating and breathing conservation day after day.

Here’s an interesting one for you: While much of the international donor community commit to helping those in extreme poverty – defined (by someone – always wondered who) as having an income of less than $1 a day – significant numbers of local people employed through internationally-funded community projects get somewhere around just that – $1 a day, or its equivalent. If anyone can explain this, please let me know. (Okay, I know it’s a complex subject – point me to the debate).

When you look at the philanthropic actions of many of the bigger technology companies, most of the focus remains at the higher end of the spectrum, the larger, expensive, complex, sexy stuff that looks good in the Corporate Social Responsibility Yearbook. You could point to many reasons for this, including prestige (bigger project means bigger headlines). The fact of the matter is that much more can be done with your dollar if you spend it on the ground. There’s nothing new there. But that’s not to say the global monitoring systems, big fat databases and biodiversity analytical tools aren’t useful – they are – but useful to different sets of people.

There are, it goes without saying, problems when you start spending your money on the ground – accountability is one – but this also applies when you give millions of dollars to third world governments. It can still vanish, and it often does. Just in much larger quantities.

When small, tightly run local NGOs struggle to raise a few hundred pounds to equip their rangers with HF radios, or mobile phones, you can see the problem. We managed to re-build an education centre in Nigeria during my time there. The impact was immense – no more cancelled lessons in the rainy season (leaking raffia roof, muddy floor), no more re-doing posters which were regularly blown away or trashed in flash storms, a place to have meetings, for the staff to go, proper electrically wired plugs and lights (done by me, so maybe not so proper). And the cost? A mere £200 (or $300 if you want to talk ‘real’ money).

So, who are we doing what we’re doing for? And why? Even worse – are we doing it for ourselves? Who is the ‘customer’? Who will benefit most from the work we do, the systems we create, the hardware we build? I notice a slighly worrying trend of projects being run for projects-sake, of people doing things because ‘they’ want to, or because ‘it will be interesting’ or because they want to be first to something. Where does the need lie in these scenario’s?

A lot of current talk is of broadband- server-intensive applications, ones which would only serve the top of the conservation practitioner pyramid. Don’t get me wrong, many other people have the same view. But what do we do about it? How do we shift the mindset?

Finding out what the real conservation need is, and where it is, is absolutely vital. How we join the dots, and help make this happen, is the challenge. Thankfully there are enough people out there trying. As for the success stories, since we’re often talking small-scale, very little news gets out except on a local level. “Hey, Wayas has got a camera phone and can collect actual evidence of illegal logging activities. What if we could give our tiger patrol teams one?”.

This lack of news isn’t necessarily a problem – it’s still a success story and, after all, some of the foot soldiers will have slightly easier lives because of it. But, by knowing about it we could maybe replicate it and help our entire army?

Then you’d be talking…