Three Perspectives on Doing Good Online: Kiva, GlobalGiving & MYC4

For the past six years the Skoll World Forum on Social Entrepreneurship has brought the who’s who in the field together in the famed university town. The theme of this year’s gathering from March 25th to 27th was “shifting power dynamics.” Coverage of this topic would be incomplete without taking into account the changing web landscape. One session, held on March 26th, that related squarely to Web 2.0 dynamics was titled “(Financial) Power to the People.”

The panelists included three Web 2.0 social entrepreneurs: Premal Shah, President, Kiva.org; Mari Kuraishi, President, GlobalGiving.org; and Mads Kjaers, CEO, myc4.com. Each of these social entrepreneurs is having a positive impact in the world, but each with different business models: online micro-lending for Kiva, online giving for GlobalGiving and online investing for MYC4. The moderator was Tom Watson, Managing Partner, CauseWired Communications, who also operates www.socialedge.org for the Skoll World Forum.

Mads Kjaier, of Denmark, is CEO and co-founder of MYC4 which is a Web 2.0 marketplace and a tool for people to end poverty through business. This is a for-profit business with a social purpose. According to the Skoll Forum since its launch in October 2007, MYC4 has funded more than 4,500 African micro and small businesses with over 7.5 million Euro in seven countries with capital from over 14,000 investors in more than 80 countries. MYC4 has 35 shareholders and they have raised $10m. Kjaier’s “big hairy audacious goal” is to list the company with 6.9 billion shareholders with a 1 Euro share each.

I will cover Kiva and GlobalGiving specifically in follow-on blogs. In this blog I will deal with some of the issues that all three of the panelists addressed. One issue that arose was crowdsourcing (which I also covered previously). All three panelists were asked to talk about how crowdsourcing fit into their plans.

Kuraishi of GlobalGiving noted that crowdsourcing “is a great gift as it is a way to get feedback from the customers.” She viewed that value of this process as follows: crowd input is “better than what the CEO thinks; it can cut the discussion short.”

Premal Shah of Kiva view crowdsourcing as an offshoot of volunteer outsourcing. Shah stated that “They are trying to crowdsource from those who are interested in doing the field work.” This is particularly important since they have only 6 staff and there is a ratio of 1 staff to 12 volunteers. He noted that the potential for tapping into a crowd exists since “there is abundant enthusiasm about this [micro-lending] space.”

Kiva is trying to integrate the crowd by letting its community co-create the site. They want to remain a small core staff supported by a huge community. One of their initiatives to tap into the crowd is Kivafriends.org. Once per month Kiva has a community conference call; they even put up an internal PowerPoint presentation for everyone’s viewing. Shah noted that this is a great source of both positive and negative feedback. This approach has worked well at tapping into the wisdom of the crowds.

Kjaiers of MYC4 was enthusiastic about the crowd, but he cautioned that it is “fantastic to use it, but remember that you need to have a strategy; don’t be swayed too much.” In other words, the crowd will not invent your strategy; they are better at responding to a proposed idea.

MYC4 is a for-profit venture, whereas GlobalGiving and Kiva are not. One issue that always arises with a crowdsourcing model relates to the payment of individuals. With MYC4 the commercial orientation is clear and some compensation would be required for some levels of crowd participation. But what about non-profits? How do they tap into the crowd without ruining goodwill? Shah noted that Kiva relies on people helping out and that would likely not happen if it was a for-profit and the founders were expecting to get rich. So, while Kiva has locked itself out of venture funding as a non-profit, they may be able to tap into the crowd for help.