Unlocking the Potential of Online Social Marketplaces

Later today, I will participate in a panel discussion on the future of micro-philanthropy. The discussion is part of Online Social Marketplaces 2008, a closed event organized by and for grantees of The Omidyar Network.

The Omidyar Network is the philanthropic arm of eBay founder Pierre Omidyar and his wife Pam. Over the last several years, the Network has made significant investments in many of the websites that facilitate micro-philanthropy. Grantees include GlobalGiving, DonorsChoose.org, Modest Needs, and a host of other philanthropic marketplaces. The Omidyar Network-supported philanthropic marketplaces meet up each year and invite a few non-grantees (this year, myself included) to reflect on the state of micro-philanthropy.

This year’s meet up will be followed by a one-day public conference called Online Giving Markets, hosted by the Stanford Social Innovation Review. Below is a draft of the introductory remarks I plan to share during today’s panel. I’ve been asked to help the “participating organizations step back and consider the larger ecosystem that we're all operating in.”

I’m not sure how many minutes I’ll have to introduce myself and to share my vision. This blog entry contains the key points I want to make. Even if I run out of time in the actual event, I can refer people to the blog for a glimpse of where the micro-philanthropy sector could be headed if all goes well.

Note: This is the first time I have been invited to step back from Social Actions and share my vision for micro-philanthropy in an organized forum. I’m extremely honored to have the opportunity, and am still surprised that I’ll be sitting on the same panel with William F. Meehan (a Senior Director of McKinsey and Company, Inc), Jacob Harold (a Program Officer with the William and Flora Hewlett Foundation), and Barbara Dunn (the Advisor to Social Ventures at the Skoll Foundation).

My introductory remarks:

Hello and thank you for inviting me to participate in this panel.

I’m the founder and project lead of Social Actions, a website that helps individuals find and share opportunities to change the world.

I’ll use most of my time to respond specifically to the invitation from Lloyd and Clam to share my vision for the micro-philanthropy sector. But I would be foolish to not take thirty seconds to explain what Social Actions is and where it’s headed.

The briefest possible recap of what we’re doing:

1. Creating a search engine for finding ways to take action on any issue , whether it’s donating, making a loan, volunteering, signing a petition, or just pledging to change one’s individual behavior, and
2. Making the entire dataset of action available for free through an open API, so that any third party developer or website can create web applications that embed relevant and high impact actions on websites, social networks, and mobile phones.

For me, the open API of action is the more exciting of the two things we’re working on. Using the API, we’ve already developed a number of applications that enable individuals to embed opportunities to take action in their blogs, websites, and even their twitter streams. These applications have been very well received.

The long-term goal of Social Actions is to ensure that wherever there’s static content on the web, there are also relevant and meaningful invitations to make a difference.

A number of the philanthropic marketplaces in the room are already partners in the Social Actions project, having endorsed our mission and terms of collaboration, and added their latest actions to the Social Actions search engine and open API.

Everyone is welcome to join Social Actions. It’s as easy as publishing an RSS feed of those invitations to make a difference.

Okay, the thirty second explanation of Social Actions ends there.

***

Your websites are all hubs of philanthropic activity. It’s not surprising that when I decided to create a public repository of opportunities to take action, I gravitated to sites like yours.

But there could be many more sources of action and places to be micro-philanthropic.

In explaining my vision for our sector, I’ll get into the details of those alternatives sources and locations for carrying out micro-philanthropic activity and how they are also transforming philanthropy.

***

At the moment, we’re creating philanthropic sites that serve as stand-alone hubs of action. Before interacting with these sites, you first have to know that the hubs exist.

This approach limits the people who are using these sites to a self-identifying subset of the population that chooses to go out of their way to visit an online social marketplace.

In a number of cases, we’ve been proactive and successful in recruiting these people. The strategies that I’ve seen implemented successfully to attract users include:

1. Running a contest within in a social network; and
2. Attracting the attention of the mainstream media.

The logic of both strategies is “if we can create a tipping point of awareness for our brand, then we’ll have the users we need to scale our operations and we’ll reach sustainability.” As a result, a tremendous amount of time and resources is getting invested in “capturing” users for individual online social marketplaces.

Both strategies, while successful in the short-term, create a competitive environment between established philanthropic sites and assume a zero-sum of micro-philanthropic dollars and users.

To use Stanford Business School language, I’d say this approach to scaling our sector is inefficient and self-defeating. Fortunately, new technology and meta-networks like Social Actions are creating an opportunity to move from a scarcity-approach to micro-philanthropy to one that presumes abundance.

***

Here’s what I see emerging for the micro-philanthropy sector in the coming year:

• Marketplace-neutral tools and services that encourage participation from existing nonprofits and informal groups, in the form of white label products and trainings on network effectiveness;
• Marketplace-neutral tools and services that transform corporate philanthropy from making donations to the general fund of a well-known nonprofit into engaging real people to take action.
• Systems that allow individuals and referring websites to track their impact across marketplaces.
• Thematic entry points, equipped with transactional APIs that enable individuals to engage first around specific issues or geographies.
• And relationships with foundations and banks that facilitate direct donations from donor advised funds.

This is just the tip of the iceberg when it comes to scaling micro-philanthropy by investing in collaborative opportunities.

As a whole, these bullet points are going to create the critical infrastructure and increased awareness of micro-philanthropy. Individual marketplaces will then build from that common infrastructure and increased awareness instead of building from scratch.

The marketplaces represented in this room are going to be the major nodes in a much larger ecosystem of micro-philanthropy. Emerging, smaller nodes will focus on localized, personalized, and otherwise niche opportunities to get involved.

Institutions that are currently struggling with new technology and lone bloggers in the wild are going to be able to tap into this common micro-philanthropic and enlarged participant base.

The net impact of this new phase in micro-philanthropy is that non-philanthropic spaces online are going to be transformed into vibrant sources and places to be micro-philanthropic, powered by the technologies we’re all creating.

To encourage these trends, we have to reduce our investments in short-term efforts to increase the activity in our marketplaces and start investing more in the underlying infrastructure and increased awareness for social markets in general.