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Towards a Model of Micro Philanthropy

Tom Munnecke (Tom@munnecke.com)

Heather Wood Ion (heather@givingspace.org)


May 21, 2002

A little girl was walking along the seashore after high tide, tossing starfish back into the water. She passed a man, who said: "What are you doing? You do realize that it is impossible to save all those starfish don't you?" She leaned down and picked up a starfish lying at their feet and tossed it back into the waves.

"I saved that one," she said.[1]

The Internet and improvements in global communications have created new opportunities for global transformation. Two forms of giving are compared: a single million-dollar donation versus a million one-dollar donations. The transformational energy raised by the increased number of “micro philanthropists” is greater than the single gift, and the beneficial effects on a community may be even greater. Smaller scale giving has many other advantages, including greater intimacy and feedback, discovery of other beneficial forms of interaction, lower risk, and more effective giving in corrupt environments. The early days of the grass roots movement to find a vaccine for Polio is discussed as a role model for this kind of interaction.

GivingSpace is technical infrastructure to support many new forms of philanthropy. It creates a scalable web of interaction, in which participants are rewarded for their earned trustworthiness. By creating a massively scalable infrastructure for small philanthropic activities, we can create a self perpetuating, self-generating explosion of philanthropic activity at many social and economic levels.
Micro Philanthropy

Consider two scenarios, both involving a $1 million aggregate gifts:

Scenario A: A wealthy donor gives one million dollars to a philanthropic organization, which is used build wells, build capacity in developing world, build a wing in a hospital, or support a local symphony.

Scenario B: One million donors give $1 gifts. These people may be of ordinary means, or even below the poverty level. One gift may purchase 50 vitamin A tablets, which restore the sight of 50 young children in Southeast Asia. Another might buy two oral rehydration solution doses which save the lives of two babies in Africa. Another might help fund a Women’s’ Empowerment Program circle in Nepal, which teaches the donor the amazing power of savings and literacy.

While both of these scenarios should be encouraged, they have different net effects. Which of these two scenarios has the greater net effect for humanitarian uplift?

Towards a Transformational Calculus

From a transactional accounting perspective, both scenarios distribute $1 million in gifts. The cost of delivering a $1 million check to a charity is minimal, but the cost of delivering a million or more tiny gifts worth less than a dollar quickly swamps the value of the gift. From a transactional perspective, Scenario A’s single check for $1 million is far more efficient than the profusion of tiny, inefficient gifts of Scenario B.

Let us assume that through our new electronic tools, however, we are able to efficiently distribute micro gifts with reasonable shipping and handling charges. People can use email, instant messages, mobile phones, and other communications technologies to connect with each other in novel forms of community.

If we construe the act of giving to be transformational for both the donor and the recipient, then we have expanded the net transformational effect immensely. A million donors and a million recipients are now somehow connected.

If we accept the Dalai Lama’s statement that we should view wealth as measured by our ability to give, then one million people have become wealthier. Will these micro donations change the donor’s view of the world? Will they be a little more able to overcome the seduction of cynicism that bombards us daily?

Imagine a thank you message appearing in a Susan’s email one morning. The previous day, she donated $1 to Southeast Asia students who were blinded by a vitamin A deficiency. The message included a video clip of a dozen girls her age that could now see as a result of her gift, thanking her for her gift.

This simple interaction – a gift of one dollar offering sight to 50-blinded children – would likely change the lives of all concerned. The children can now see, and Susan looks at the world very differently. She might look at a discarded soda bottle’s refund value and see it as sight for 5 children in Thailand. She might see waste paper as a precious classroom material far away from her home. She might see the world as filled with the potential to be a better place than the violence, distrust, and negativity portrayed on the television screen.

In this case, to Susan the value of the gift is not measured by the “outside” value of the transaction, but rather the “inside” difference it made to her. Instead of some authority teaching her the value of generosity, she would have internalized the virtue of generosity as part of her perspective on the world. She may even recognize this in others, as well, a kind of membership within a club of others who understand transformational energy.

The collective effect of having one million new donors is difficult to understand or measure. We cannot always understand collective actions by looking at only individuals.

Similarly, we cannot understand the “outside” transformational effects of a million “inside” transformations by studying each individual. At this scale, a “network effect” takes over. We have witnessed this effect with the Internet, as the value of the network increases with the square of the number of elements. As more elements are added to the network, the value of the network increases at an increasing rate.
The Network Effects of Transformation

Is there reason to think that our transformational network of a million small donors exhibits the network effect? Do people experiencing an inner transformation interact with each other in ways that reinforce each other? What is the network effect of being in a community in which people feel a deep-rooted internal sense of generosity? Does an appreciation of generosity create other virtues, perhaps compassion, joy, peace, love, or happiness? If so, what might be the network effects of these virtues-turned-values if they were to become more prevalent in a community? These values would arise within the community, rather than being imposed through some form of moral or political authority. Perhaps people might just start being appreciative of each other and discover that compassion is contagious on their own accord.[2]

Scale is critical when discussing the network effect of transformation. What is needed is a very large scale, global “space” within which very small scale, intimate transformational activities can occur. The more scalable the space, and the tinier the potential transactions, the greater the overall transformational effects will be. There are a number of considerations driving this.
Bad Apple Effect

There is a popular saying, “A bad apple spoils the whole barrel.” If we are to create an open space for giving, we can be certain that there will be those who will seek to abuse it. For example, I receive about 2 unsolicited emails per week supposedly from someone in Nigeria offering me millions of dollars if I contact them to help them transfer money. I have been to Nigeria (on other business) and have had to bribe my way through the airport to get home. I have seen Nigerian police shake down fellow visitors to a conference, claiming that a twenty-dollar bill in the visitor’s wallet was “counterfeit” and had to be retained as “evidence.” It is abundantly clear that not everyone and everything in the world is trustworthy. There are bad apples to be found everywhere.

However, if we shrink the barrel, the likelihood of a bad apple appearing decreases. If a group of six women in the same village all become responsible for each other’s micro finance loans, they are strongly motivated to work together. If any of them threatens to become a bad apple, then the other 5 will diligently work to correct the situation. Their visibility one to another increases the mutually reinforcing responsibility and accountability. In the experience of shared purpose they also share reputation.

Shrinking the barrel also has the effect of minimizing the nefarious effects of the bad apple. Lower risk allows less formality and more trust.

A micro philanthropic action may be a way for people who are otherwise shielded by cynicism to appreciate a small transformation. Someone who saves the eyesight of a girl in Thailand may move on to saving a life of a baby to Africa, and perhaps even larger activities. A simple act may be the fuel for an explosion of transformational energy. Micro philanthropic interaction does not require moral or political authority to be experienced as valid. It can simply be viewed as an emergent property of people acting humanely towards each other. Those who may be distrustful of formal institutional protocols can find themselves appreciating humanity through direct micro philanthropic interaction. Those who do hold strong religious beliefs may find that micro philanthropic interaction strengthens those beliefs.
Risk/formality effects

Someone shipping a package of books to a school in a less developed country might do so without needing any verification or insurance that they arrive safely. If, however, the gift were a $500 for a new roof on a house, they might be more concerned about formally acknowledging that their gift made it properly to its destination. If the gift were a $1,500,000 hospital, the donor would likely be extremely cautious with contractual specifications for the delivery of the funds and the construction of the hospital.

Larger gifts therefore engender greater administrative, legal, and accounting overhead. They rely less on trusted relationships within a community, and offer less opportunity to create interpersonal trust webs. Similarly they have long-term consequences in the institutionalization of the overhead and verification they require.
Below the Radar Screen Effect

Corruption is certainly active element in many countries. If a transaction is too small to be of consideration for corrupt officials, then the gift is less likely to be purloined. For example, a pair of shoes sent through the mail to someone in Kenya is not likely to arrive. If, however, the pair is broken up into two packages, each sent separately, it is much more likely that the recipient will get the pair delivered. The value of each shoe individually is below the radar screen of those who would steal them.

If we lower the value of each gift and increase the quantity, it is possible that we can increase the probability of the gifts making it to their destinations. If the gift is actually encoded in a bit stream and is merely an electronic communication, it becomes even more difficult to thwart the delivery of the gift.
March of Dimes Effect

The National Foundation for Infantile Paralysis, called the March of Dimes, was created in 1938 to seek a cure for polio and alleviate the suffering of crippled children. Largely fueled by Franklin Delano Roosevelt’s polio and interest in a cure, the organization tried to alleviate the national fear by involving the population in minimal contributions. Community organizations, schools, movie theaters and churches collected coins accumulating $1,823,045 in 1939 increasing to $67 million in 1955.

The research resulting in Jonas Salk’s successful Polio vaccine was funded in this manner. When the effectiveness was announced on April 12, 1955 what happened was

"More than a scientific achievement, the vaccine was a folk victory, an occasion of pride and jubilation. A contagion of love swept the world."[3]

The grass-roots enthusiasm for the cause, collecting support in community settings, and the demonstrated public benefit of the research was a powerful stimulus for society, creating the “contagion of love.” Jonas Salk was a consistent proponent of these dynamics, advocating them to create an “epidemic of health:”

Only a few are needed to visualize and to initiate an epidemic of health that would become self-organizing, self-propelling, and self-propagating, as is characteristic of evolutionary processes.[4]

We can consider everyone including the donor and recipient (or helper and doer) to be trustees of the giving transformation. The trustworthiness of each trustee is continuously visible via the network, not unlike someone’s reputation as a seller on eBay. Those who perform in a trustworthy manner earn a higher reputation, and are more likely to be chosen to be trustee for future activities. Those who prove untrustworthy find themselves with diminished opportunity. This creates a self-organizing mechanism in which the community rates itself and its partners over time.

Trust can be transitive. For example, if Bob trusts Alice, and Alice trusts Joe, then Bob will have a certain level of trust for Joe. It can also be attributed. For example, Judy may be a Peace Corps Volunteer recently returned from Senegal, and volunteer to review giving opportunities that may appear in GivingSpace. As a disinterested, yet experienced, third party, her opinions could figure prominently in chains of trust. For example, she might note that someone was asking for an electric well pump in an area, which she knew, had no electricity.

A scalable network of trust is essential for this mechanism of trustraising to work. Some people may trust Judy’s opinions in Senegal, or they might decide to deal with a friend. The space per se does not endorse or recommend any particular trustee. It only seeks to make each trustee’s trustworthiness visible to the community.

Micro philanthropy affords each of us the opportunity to contribute to whatever need evokes within us a sense of compassion, and as a scalable phenomenon helps us to participate globally in celebrations and appreciations which can be a contagion of love, or an epidemic of health.

Creating an infrastructure which allows a massive amount of small scale interaction can have an explosively powerful effect. A means of supporting micro philanthropy on a global scale could be one of the most powerful uses of Internet technology.

[1] Story recounted by Jonathan Falk at http://www.projectempathy.org/site/epage/3258_238.htm as part of his experiment in “micro philanthropy.” Falk is an 18 year-old documenting his travels and giving on the Internet.

[2] We first heard the term “compassion is contagious” from Nipun Mehta of CharityFocus.org

[3] Carter, Richard, Breakthrough: the Saga of Jonas Salk, Pocket Simon and Schuster, 1967, p.1.

[4] Munnecke, Tom, and Wood-Ion, Heather, “Creating an Epidemic of Health,” US Medicine Magazine, Washington, DC August 1995.
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