Wednesday, May 26, 2010

Emotional Transactions

There is no sector of the Participation Economy – and no corner of the world – that is untouched by the startling power of the 21st century consumer. This radical shift in the business power dynamic is unmissable as well as unstoppable.

GlobalGiving is a wonderful and inspiring new model of philanthropy, and also a useful way of understanding these profound and exciting changes.

The founders of Washington DC-based GlobalGiving, Dennis Whittle and Mari Kuraishi, used to work for the World Bank, which funds development projects aimed at reducing hunger, poverty and disease. They joined the Bank determined to make the world a better place. But they learned over time that, although the World Bank does a lot of good, it is highly centralized and bureaucratic – and this meant that too many opportunities passed it by. Dennis Whittle describes an encounter with a bank executive who was in tears of frustration that even his ideas were not getting a hearing. Dennis and Mari asked themselves, "Imagine, if it was so hard for a World Bank economist to have his ideas heard, what does this say about people outside the Bank, including in the developing world?"

That's where GlobalGiving was born: an online marketplace for philanthropy that allows development projects to compete for the support of an army of potential donors. By project type and region, people can target their donation with precision and confidence. It removes the awkward but inevitable question that flashes through every donor's mind: "is this really going to where it is needed?"

Since 2002, GlobalGiving has inspired over 100,000 donors to contribute to 2,600 projects: bicycles for schoolgirls in India, literacy projects in Guatemala, relief for Haiti … the list is impressive and daunting. Whereas the World Bank adheres to the institutional view that information and choice is best kept in the boardroom, GlobalGiving leaves the front door wide-open. To allay fears about corruption and out-of-control administrative costs, they let competition and transparency work their magic – and they back it with a consumer guarantee. They understand the power of stories and personal connections. Above all, they get that the act of giving is far more an emotional transaction than a financial one.