20 dollars, 61 authors, fight malaria

It couldn’t be simpler: today is End Malaria Day.  A million people a year still die from malaria.  Bednets keep out mosquitoes and save lives.  You can help.

So here’s the deal: for $20 (Kindle) or $25 (paperback) you can buy a copy of End Malaria.  $20 of the proceeds for every copy go to Malaria No More.  Full details on the End Malaria Day website.

This is worth doing because the cause is worthwhile, the organization is the real deal, and you can actually save lives with your $20.

If you need more motivation, you’ll be getting essays from the likes of Tom Peters, Dan Pink, Brene Brown, Gary Vaynerchuk, Seth Godin, Sir Ken Robinson…. (there’s 61 of them.)

This is the exact moment when you think “this is a good idea, I should probably do this” and then you don’t.  Go ahead and do it.  You’ll feel great about it, you’ll be part of something important, and you’ll get a great book in the process.

BUY THE BOOK.

Seriously, BUY THE BOOK.

Then post to Facebook and Twitter (for example: I just bought End Malaria to celebrate World Malaria Day: http://ow.ly/6nFUS).  Email this post to 10 people.  Tell a friend.

The generosity muscle

As we start to spread the word about Generosity Day 2012 (thanks to all who signed up to be part of the core group  – more coming soon!!), we’ve naturally gotten a lot of “why” questions – mostly from enthusiasts who want to be able to explain the day to others, and some from (friendly) skeptics.

If anything came from the heart for me, it is Generosity Day, so unpacking “why” has been an instructive exercise in reverse engineering of an intuitive decision.  Therefore, this (and subsequent) reflections aren’t answering the question “why did I do it in the first place?” (meaning: this was the plan all along), they’re answering, “what insights have I gained along the way?”

One of the core insights is that for many of us – especially those who are more cerebral (and in this I include a big swath of the “smart philanthropy” crowd, whether donors or social enterprise enthusiasts) – our thinking around smart social change is crowding out our natural instincts about how we want to be in the world.  Put another way, we are letting our thinking about what’s best get in the way of how we want to act.

Ironically, in our pursuit of better solutions, we continually reinforce our own practice of turning things down – things that don’t meet our “evolved” criteria of good social work.  The end result of this is atrophy of our generosity muscle, since anything that is underused withers away in time.

The intentional practice of generosity is a way to strengthen this muscle, to get us more comfortable using it, and to make using it a more regular part of our lives.

That’s very different from claiming that saying “yes” to everything is the best kind of philanthropy.  It isn’t.  But philanthropy that doesn’t incorporate generosity doesn’t make sense in my book.

If you’re the equivalent of muscle-bound when it comes to generosity – if it’s part of who you are and how you walk through the world every day – then you probably don’t need Generosity Day.  But I suspect many of us could use a generosity tune-up.  Indeed, my wager is that a large group of people taking the same leap of faith around generosity, pushing themselves to do something outside of their comfort zone, and then coming back together to share and reflect on that experience, will generate new insights for all of us.

For those in our core group (could be you!) who want to help spread the word about Generosity Day, we’re going to propose undertaking a one week generosity experiment, before October 31st, to see how it feels.

You could give it a go too.

Go ahead, flex the generosity muscle, reflect on the experience, see how it affects how you go through the world.

History of Monopoly

I’ve just gotten back in to playing the board game Monopoly (now with my kids).  The game is truly no worse for the wear 30 years since I last played every chance I could – including early in the morning, alone, before anyone else in the house woke up.

I had forgotten that Monopoly was made by an out-of-work game-maker and inventor, Charles Darrow, trying to scrape by during the Great Depression.  And I’d never known that the first few hundred copies of the game sold by word of mouth after late-night games at Darrow’s kitchen table; or that Parker Brothers rejected the game, telling Darrow that it had “52 fundamental errors” (nice job, experts); or that the history of who really invented the game is hotly disputed.

Here’s a picture of the earliest complete version of the game, handmade by Darrow on oilcloth, and recently sold at auction for $146,500 (HT: The History Blog).

To give (at all) or where to give?

When you’re talking to a philanthropist about giving to your organization, you’d better know what question they’re answering for themselves.

Are they deciding whether to give above and beyond what they had planned to give (…this year …in their lifetimes) or are they deciding where to give money that they’ve already (psychologically) pre-allocated as philanthropic money?

Because a conversation about a philanthropic allocation is very different than a conversation about overall level of giving: the allocation conversation is more straightforward, but also a lot more bounded; the conversation around total giving is much deeper, more profound, more personal and protracted, and potentially much more powerful.

Your organization is probably much better at one of these than at the other.  Both can work, you can excel at both, but first you have to know which conversation you’re having and which conversation you’d like to have.

The screwdriver

Last week, while on vacation in the South (a few days before hurricane Irene upended our plans), I’d managed to pull down a venetian blind in the house we were renting and I needed a Phillips head screw to fix it.

I made my way to the hardware store, picked out five screws of varying sizes, and told the owner that I’d like to buy a cheap screwdriver to screw in one of these screws.

Rather than sell me a $10 screwdriver and charge me another buck for the screws, he lent me a screwdriver and asked me to bring it back.  I then reached into my pocket to pay for the screws and he said, “Don’t worry about it.”

That just about made my day.

And it got me thinking, again, about generosity, about how our analytic minds mess with us so much when we are steeped in so many intelligent discussions about philanthropy and the best ways to practice it.  It’s easy, when we are talking about giving to others, to critique generosity and soft-headed or impractical.  But I bet there’s not a person out there who, when someone is irrationally kind to them, stops to say, “well, that didn’t make an awful lot of sense, and that person shouldn’t have been so generous to me.”

It’s like the old adage about comedy and tragedy: comedy is seeing someone walking down the street fall into a manhole; tragedy is when I stub my toe.

When we talk about ourselves, and our own experiences, there’s no amount of generosity that feels like too much.  When we talk about others, everything is supposed to be bounded and thought out and make sense.

Generosity is a way of walking through the world and spreading joy.  Nothing more, nothing less.

It’s up to you to decide how much you want of that in your life.

Fast Company Interview

I was excited to be profiled by Lydia Dishman in her Innovation Agents column in Fast Company. Here’s the full copy of the piece.

Innovation Agents – Sasha Dichter, Director of Business Development, Acumen Fund

BY Lydia Dishman  Fri Aug 26, 2011

Sasha Dichter wants you to know that social impact investing is anything but a crock. He talks to Fast Company about making a difference for global social good.

The economy may be slumping and the markets fluctuating wildly, but Giving USA recently reported that over $290 billion in charitable funds was raised in the U.S. last year, an increase of nearly 4 percent. What’s more remarkable is that the majority of those dollars came from individuals, accounting for a whopping 73 percent of overall giving.

Talking with Fast Company, Sasha Dichter asserts that we aren’t running out of money for worthy causes, we just need “a different mechanism that will outlast an individual philanthropic funding system.” As the director of business development at the nonprofit Acumen Fund, Dichter understands there are huge, public problems such as clean water, sanitation, and affordable, preventative health care that can be solved by social impact investing.

“At Acumen Fund we’ve been asking ourselves this question since 2001: How can we combine the best investing and philanthropy for the 3 billion people living on less than $2 per day?”

Dichter rattles off statistics and outcomes such as how Acumen Fund’s already invested $60 million in more than 44 enterprises and touched 40 million lives, that illustrate how well-versed he is in the decade-old world of impact investing. Or, as he explains it, that space “somewhere between pure philanthropy and pure investing where there’s a class of capital that’s willing to get a lower expected economic return for a higher expected social return.”

As a graduate of both Harvard’s business school and its Kennedy school as well as doing stints as global manager of Corporate Citizenship at GE Money and as a senior program manager at IBM, Dichter has spent longer than that raising both philanthropic and sub-market return capital. He’ll be the first to tell you that social impact investing is far from “a crock.

Challenge – Talent

It’s also why, when he talks about how maximizing every philanthropic dollar should be a profit seeking, not necessarily profit maximizing, endeavor, he doesn’t try to sidestep the challenges. For instance, he points out how funding is not the biggest issue in giving people safe drinking water. “When the model starts to work the money will find its way there. The challenge is finding people willing to slog it out. The scarce resource is talent on the ground, not just in leadership but teams,” he explains.

This was in evidence when Acumen Fund invested in A to Z Textile Mills in Tanzania, a manufacturer of low-cost bednets treated with long-lasting insecticide (LLINs) which are effective for up to five years to prevent malaria, a disease that kills nearly one million people in Africa every year.

Acumen Fund’s initial investment in 2002 catalyzed a public-private partnership between A to Z, Sumitomo Chemical, ExxonMobil, the World Health Organization (WHO), and the United Nations Children’s Fund (UNICEF)–all heavy hitters. So no one expected to have difficulty getting the nets sold.

But they did–at least through traditional sales methods such as “Tupperware” parties, church and hospital sales, and door to door. Even corporations invested in having healthy workers refused to purchase nets for their employees.

By listening to the community and experimenting with different retail venues, A to Z became an Acumen Fund success story. The company is now the largest manufacturer of LLINs in Africa, producing 29 million bednets each year, protecting millions of people from malaria, and providing jobs for more than 7,000 people, primarily women.

Challenge – Storytelling

Even with those numbers, it’s likely that you haven’t ever heard of A to Z or any of the other businesses focused on social good that Acumen Fund investments are supporting in Africa, India, and Pakistan. Which brings up another challenge: communicating the cause and “making the ask” for funding.

Even as the guy who wrote a manifesto for CEOs of nonprofits, an impassioned diatribe for them to grow a pair and not be ashamed to ask for money. Dichter acknowledges that paving the path for people to understand impact investing is key to the future of the sector.

In his blog, Dichter describes the potential philanthropist/investor as having two pockets for two types of capital. One is for investing for financial return, the other is for philanthropy. He writes, “Asking someone to make an impact investment isn’t a move along a rational economic scale, with each step proving marginally more attractive. It’s asking someone to do two things instead of one: create a new pocket and invest out of that pocket with us.”

He puts most of the onus on impact investors, though. “We as a sector have a responsibility to not be apologetic about what the [investment] story is. There is no tradeoff,” he explains, the way there was a generation ago with the screened investment funds of the 1990s that peddled various “vice-free” stocks. “A certain amount of results have to be proven,” he adds.

Challenge – Analysis

But not quite in the way most MBAs would think. Dichter’s not opposed to applying metrics and analysis to the warm fuzziness of investing funds for social good. In fact, the Acumen Fund uses something called the Best Available Charitable Option (BACO) model as an analytical tool created to help evaluate investments against other charitable options delivering comparable products and services. Donors always know where their dollars would be most effectively placed.

Instead, Dichter believes that when impact investing does what it should, ie: tackle poverty, metrics will be beside the point. And this is where impact investing takes a sharp turn away from traditional philanthropy. He writes, “What if we get to the point when it becomes pointless to ask if an intervention works because, like the cellphone, it will be ubiquitous, so the question will feel purely academic?”

Dichter maintains there is no skipping hard work and the way to affect change on global social issues is to get close to the problem. One impact investment at a time.

Time to be a little pushier

A friend of mine who’s a media executive described a recent meeting thus:

“At the end of the meeting, their CEO agrees we’ll have a decision by Friday. Then she said, ‘…and you may need to bug me a lot before then, send me a lot of emails on Thursday, call me…go ahead and do it, I won’t mind and I’ll probably need to be reminded.”

*sigh*

My friend’s take on this well-intentioned statement was that we’ve gotten to such a level of media (email, web, social media, etc.) overload that senior folks in all walks of life are simply abdicating responsibility for being functioning, capable people who stick to deadlines, reply in a timely manner, remember what they say and follow through on their promises.

It’s a sad state of affairs which basically says: I leave it up to you to bug me enough that I pay attention.

There are lots of directions we could go from here – about people not spending time on the right things; about how more information is leading to less effective leadership; about fighting this tooth and nail in your organization by creating cultural norms that are the exact opposite of this tidal wave of abdication of responsibility.

Instead, let’s be overwhelmingly practical and take this moment to remind ourselves that the ability to stand in front of a person and get their real attention is more at a premium than ever.

That you need to master multiple channels of communication to get through to different folks (texting in Europe and the developing world; email plus phone plus text here in the U.S.; etc.).

That, instead of sending the eleventh email and waiting, you’d best have your top customers/clients/relationships on speed dial. (Really.  Do you?  Do you have the cellphone number of all your Board members in your phone and at your fingertips?  Why not?)

On the margin – sadly – I bet you have to be a little pushier than you’d like to be in order to break through.

Gifto reducto ad infinitum

A donor with $50,000 to give faces a surprising conundrum: she knows, intellectually (and perhaps in her gut) that $50,000  is itself not enough to make lasting, large-scale change.  However, we can all agree that $50,000 is an awful lot of money, and the donor is well within her rights to ask what will happen as the result of her donation.

Donors who push hard on this question may be asking one of three things.  It could be about accountability (“I’m going to make sure you’re not going to waste it”); it could be about comparison shopping (“the nonprofit down the street told me they could buy __________ with this money”); or it could be about the story they need to tell someone (their board, their spouse, themselves) about what they “bought” with the gift.

The real challenge here is that a number of seemingly contradictory truths happily co-exist: if you give someone in need $5 worth of ________ (de-worming; safe drinking water; emergency shelter), their lives will absolutely be significantly better for a period of time – so 10,000 “significantly betters” are potentially on offer for this $50,000 donation. OR a few medium-sized things can be built (a library, a well, a school) for $50,000. AND we also know that large-scale, lasting change comes in much bigger bites – whether to fill that school with teachers; to transform the educational outcomes for a community; to dig not one well but instead to build an organization that’s going to solve the water problem for a village or a hundred or a thousand villages.

So $5 and $50,000 and $5 million and $50 million all co exist.

More complicated still, each of those numbers is, alternately, either really big relative to the problem ($5 is a lot for a subsistence farmer making $1-2 a day), and small for the problem ($50 million doesn’t hold a candle to the annual health budget of even a very small, very poor country).

Echoing a theme from yesterday, the only truly satisfactory answer I’ve found is around solidarity: this is a change we are making together, this is what success looks like, let’s make this happen…and you figure out the piece that you can do relative to your own ability to give.

I recognize that this isn’t the strongest sales pitch, and that part of our job as people who mobilize resources is to right-size the solution to the funds being given – since it is 100% true that a gift of any size, when given to an effective organization, makes a significant impact.  But I still feel at some level that the game of optimizing a message to a particular giving level inevitably falls short of all the honest-to-goodness complexities of solving real problems in the real world.

Whence solidarity?

Here’s a simple idea on what to do about taxes for the wealthiest Americans:

For those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

Before arguing the merits of this proposal, I should point out something important: it’s not my proposal.  No, this is Warren Buffett’s proposal as detailed in his courageous Op-Ed in yesterday’s NY Times, Stop Coddling the Super-Rich.

Some shocking (to me) tidbits from the Op Ed: Warren Buffett paid 17.4% of his taxable income (about $7M) in federal income tax last year, less than the other 20 people in his office – this because most of his income is in the form of “carried interest” rather than (for a regular working Joe) in payroll taxes.  This is why, even though the aggregate income of the 400 richest Americans has increased more than five-fold in the last 20 years – from $19.6 billion to $90.9 billion (an average of $227 million in annual income!) – the tax rate paid by this group has dropped over this period from 29.2% to 21.5%.

Of course the tempting headline to write is something like: “FEDERAL TAXES PAID BY THE RICHEST AMERICANS HAVE DROPED BY ONE THIRD IN THE LAST TWO DECADES.”

But that’s exactly the approach that’s not going to work – think of the cries of “class warfare” that would result.

In fact the whole narrative around the budget stalemate in Washington is completely stuck, and part of the reason is because we have no shared language to talk about this problem.  Republicans talk about “raising taxes on the rich” and “killing jobs,” while Democrats, at best, talk about the super-rich “paying their fair share” and about “increased revenues.”

I wish there were more talk of solidarity.  A close friend of mine in Tokyo shared that almost no one is turning on their air conditioning in the wake of the Fukishima nuclear plant disaster.  Can we not have the same sense of shared purpose around turning around the U.S. economy – the crisis is real, millions are out of work, people have gone from spending six months looking for a job to, now, more like two years.  (Buffett: “While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks.”)

How long until we turn the budget conversation from one about divvying up a fixed pie to one about collectively solving this problem?  And why is it so hard to talk about the notion that the wealthiest should not, on average, pay a lower percentage of their income in taxes than should middle class Americans?

As Warren Buffett said, “I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them…My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”

FastCompany thinks social impact investing is a crock (with a long aside on cellphones)

In case you missed it (thanks @beckystraw for sharing it), Anya Kamenetz at FastCompany recently wrote a piece titled “Why Social Investing is a Crock.”

It’s a pity that in the effort to grab attention, Ms. Kamenetz crossed the line from an attention-grabbing headline to misrepresenting the position of her story’s protagonist, Dean Karlan, author of More than Good IntentionsDean’s not saying it’s a crock, he’s saying we haven’t done rigorous analysis yet.  For example, Dean says in his book:

The social entrepreneurship world is in a weird spot, to be honest with you. It’s a world full of rhetoric about impact investing, yet I have very rarely seen an investor actually take that seriously. When you look at the actual analysis it lacks rigor.

Let’s be very clear: saying the analysis lacks rigor and saying the sector is “a crock” are wildly different things.  Indeed the analysis mostly does lack the kind of rigor Dean is looking for, specifically because, as Dean rightly points out, “If you want to put a million dollars into a business, are you going to put 33% of that into an impact study?”  The answer is often “no,” except when a funder wants to put up grant money to fund that study (which some are, and more should.)

More interesting, to me, than laying in to the lame title of this article is to think a bit about randomized control trials (RCTs) – the gold standard in the development space – and their application in the social investment space.  I don’t know the answer here, but I’d like to throw out a question to kick off a conversation:

What would Dean Karlan say about the “evidence” around the cellphone?

Meaning, cellphones are an “intervention” (a product, really) that clearly provide benefit to customers.  How much benefit is open to debate, of course, but the question is interesting because the cellphone is the first really new product to achieve mass penetration for low-income consumers (there are now 4.5  billion cellphones globally).

It feels to me that no one would bother asking in a serious way to do an RCT on cellphones, because it’s no longer anyone’s business to ask that question – because the market has taken over.  The product is appealing enough, consumers have spoken, we can all agree that the ability to communicate via a cellphone creates positive externalities – some economic, some social – and since we’re not using up grant money to pay for it, it stops being the purview of development economists to fret about this.

I bring up this example because, put in the simplest terms, what social impact investors (at least the ones who really care about social impact) are trying to do is:

  1. Identify products and services that make a material positive impact on the lives of poor people
  2. Create business models that make the cost of providing each incremental product go down to zero…and beyond (meaning, you make a profit).

Without getting into all of the real complexities of profit maximization versus a “sustainable” rate of return at the firm level; of what to do about all the people who, no matter how cheap the product, won’t be able to pay the full cost; about the role of subsidy; etc; I’d like to posit that there is something fundamentally different about this construct and the construct of analyzing a purely philanthropic intervention.

No matter what scale a pure philanthropic intervention reaches, the total marginal cost of delivering the nth “thing” (any intervention) is always positive, so you’re in the business of figuring out how the impact relates to that cost and how the impact relates to other similar interventions.  Not so if you find the “next cellphone” – except it’s not a cellphone, it’s safe drinking water or a bio-mass powered light on a mini-grid or a safe and affordable place for a mother to give birth.

What if we get to the point when it becomes pointless to ask if an intervention “works” because, like the cellphone, it will be ubiquitous, so the question will feel purely [sic] academic?

What do y’all think?  Am I off my rocker here, or is it possible that creating a scalable businesses that serves the poor is fundamentally different than traditional charity?