give mart

we want your two cents

+ + =best

intentionsbig

bucksbrightideas

[ [Alexander Berger, Aaron Kalb, Alex Romanczuk

Stanford University

a few influential, savvy investors

masses of naïve investors

effective institutions

ineffective institutions

the problemIn the for-profit market,‣ Smart investors grow in influence, controlling more money, because

‣ wiser investments yield larger returns

‣ and naïve investors entrust their money to reputable investors

‣ So the most effective institutions get the most capital and can do the best work

However, in the nonprofit space,‣ investor influence is uncorrelated with investor intelligence, because

‣ giving is a one way street (i.e., investment in both effective and ineffective institutions yields zero monetary return)

‣ and naïve investors do their own (naïve) investing

‣ So most of the capital doesn’t get to the most effective nonprofits

the market

why aren’t nonprofit markets efficient?

these aremissing in the

nonprofit funding market

If we fill in these missing links, we can create an efficient social

capital market, in which savvy social investors direct money to the most effective

nonprofits...

‣ A web platform that harnesses cutting-edge game mechanics to identify effective social investors and give them more control over the distribution of funding

‣ Similar to traditional online giving challenges, except that users are strongly encouraged to comment and evaluate each other’s comments

‣ Positively reviewed commenters receive progressively more weight in both their evaluation of other comments and in their votes for the eventual winners

‣ This ensures that the most effective nonprofits—not just the ones with the most friends—receive funding

‣ Users donate to a specific issue challenge because it gives them incredible leverage, in the form of

‣ more voice in the eventual distribution of funds and

‣ assurance that a challenge they care about “tips.” With a $50 contribution, you could make a $5,000 challenge meet its goal and go live. That’s effectively a 99x match for each individual donation.

our solutionPutting more money under the control of effective social investors

The giveSmart Solution sources

Crazy diagram showing connection to other non- and for-profit resources, and what we're taking from each of themGiveWell/Philanthropedia (expert input)Pepsi Challenge/America's Giving Challenge (crowd attraction)Yelp/GreatNonprofits (everyman reviewers)Google/Amazon (review ranking system; top reviewers)Wikipedia/Quora/MetaFilter (community dialogue & production)

give mart

inspirationour project will

draw on the strengths of

successful sites

crowd attraction

expert input

distributedreviewing

collaborativefund-raising

communitydialogue

reputation calculation

A user starts a challenge‣ Example: “$5,000 for the Best Youth

Organization in Atlanta”

‣ The initiator

‣ offers, say, $500, provided that other users will contribute $4,500

‣ writes a catchy, evocative profile for the challenge

‣ and invites friends and relevant nonprofits

Others agree to contribute provided the goal is reached‣ (like Kickstarter or Groupon)

‣ Adding to a challenge

‣ earns them karma points (which translate to more votes when the challenge goes live)

‣ and feels highly leveraged: “my $50 can direct $5,000 to great charities by tipping a challenge”

The challenge goes live: votes, reviews, and karma accumulate

‣ Nonprofits join and solicit their contacts for votes

‣ Users

‣ come to the site for the first time to vote for their favorite nonprofits

‣ and stay to read, write, and evaluate comments, contributing to the karma system

‣ Some users add money to the challenge, which earns them extra karma

‣ A ranking of nonprofits by effectiveness emerges

‣ The best comments are promoted

The challenge closes and funding is distributed‣ Votes are weighted by the users’ karma and the

amount of money contributed

‣ GiveSmart distributes the challenge’s pot proportionally among the top 5 vote-recipients

Challenge screenshot

the dynamics

I

II

III

IV

exampleof a nonprofit’s

pagePOSTComment Board

Type your comment heregive your two cents,

User123!

This organization saves lives. It should win all the challenges.

Yes, this charidy is DA BOMB!!1

While certainly well-intentioned, LifeSavers was shown in this study to be incredibly ineffective. The Save-A-Life Initiative targets the same population but yields far better results, according to expert research.

esteemedcontributor

Thanks for referencing those great studies! I’ll vote for The Save-A-Life Initiative, instead.

My friend told me this was a wonderful group doing great work.

LifeSaversWe save lives by utilizing good intentions.

more >

DONATE

newcomernonprofitsin this domain

7 BillionFutures

more >

Top-ratednonprofitsin this domain

The Save-A-Life Initiative

SALI

Longevity Seekers

more >

Currently competing in

Stop Malaria Challenge

$50,000

VOTE

for LifeSavers

Eligible for

Save Senegal$100,000

NOMINATE

LifeSavers

— Expert

“ ”While certainly well intentioned, LifeSavers was shown in this study to be incredibly ineffective

though this contributor’s one-star rating represents a minority view, it bears extra weight due to the high karma she’s gained by getting many “thumbs up” votes on her thoughtful comments

though they may arrive at the site in response to a chain email request issued by a particular nonprofit, users will be exposed to top-ranked competitors before they can offer a naïve vote or donation

the site will detect references to other nonprofits and users, and replicate posts on the relevant pages

to ensure that everyone gets a fair shake, users will be encouraged to visit sites with few comments and ratings

comment quality

comment quality

comment quality

comment quality

comment quality

REPLY

REPLY

REPLY

REPLY

the build-upcreating the site

IMPLEMENTATION · STEP 1

implementation logisticsmaking the idea real

‣ Development Costs (one-time)

‣ $50,000 for web design / $50,000 for web development

‣ $5,000 for miscellaneous expenditures (e.g. domain names, legal fees)

‣ Maintenance Costs (annual)

‣ $120,000 for permanent staff (conceptual, financial, technical)

‣ $15,000 for web hosting

‣ First Year Budget: $250,000

implementation detailspreserving the idea in reality

‣ Karma: A user’s influence must be an accurate function of that user’s reputation‣ The system will add in-house algorithmic innovations to the best ideas from other well known reputation

measurement schemes (e.g., Google’s PageRank, Reddit, Amazon Top Reviewers)

‣ Integrity: Malicious actors should not be able to influence distribution of funds‣ A well-designed karma system and a set of simple checks makes large-scale gaming of the system nearly impossible

‣ Stickiness: The site design must entice users to stay, comment, and donate money ‣ Known techniques for increasing front page conversion rates will draw the users in

‣ Cutting-edge game mechanics will keep them actively engaged

a

b

bowling pinsFacebook style

‣ Start small. Say, on one college campus.

‣ Get people talking about it with their friends. Match small challenges.

‣ Spread slowly. Build user base and reputation, then expand to a new community.

‣ Partner with Philanthropedia and Great Nonprofits. Populate the site with their reviews to ensure that it is helpful to users at launch time.

big bangApple style

‣ Go big. Find a large partner and announce a million dollar challenge.

‣ Continue to provide some (gradually declining) matching funds for new challenges.

‣ Transition slowly to challenges funded solely by individuals, as described in slide 5.

the roll-outattracting users

2two-phase approach

I

II

Rollout / How to get people to use it

IMPLEMENTATION · STEP 2

corporations(as in the Pepsi Refresh model)

‣ Charge hosting fees for branded challenges at the intersection of traditional advertising and corporate social responsibility

foundations(as in America’s Giving Challenge model)

‣ Charge hosting fees for challenges created by community foundations or small family foundations

‣ Give the foundations final say on the distribution of funds among the top 5 organizations

individuals(as in the Kiva model)

‣ Solicit micro-donations from individuals when they contribute to a challenge

stayin’ alivesources of revenue

3sources of revenue for our operations

I

II

Rollout / How to get people to use it

IMPLEMENTATION · STEP 3

III

Dot plot of alternatives

feasibility

imp

ac

t

eBay for impact

nonprofits bid directly: “You’ll save a life for $700? I can do it for $600.”

the issue: neither buyers nor sellers know the right prices because there is not enough research to make precise claims about impact

your perfect non-profit

asks users for preferences (e.g. “educating East African women”), then suggests the

“perfect” match

the issue: the top hit in characteristics may be an ineffective charity

giveSmart data on nonprofits’ effectiveness could be a key under-the-hood factor in

each suggestion

change4change

Visa or MasterCard rounds purchases up to the nearest dollar

and “donates the difference to make a difference” via the charity

of the customer’s choice

the issue: customers might make an ineffective choice

giveSmart

is high impact, feasible, and hopefully coming soon.

how do we stack up?here are some other possibilitieswe considered, and how giveSmart fits in

the plot thickens

“Give Like a Billionaire”

a sophisticated marketing campaign aimed at getting people to think about how to be more effective in their giving

the issue: the Markets for Good study shows that people are really reticent to conduct research

giveSmart could make the research process painless