News from betterplace.org

Earlier this week I attended an inspiring 2 day workshop at the Berlin Civil Society Center. The topic was “Exploring Mutual Accountability“ and some of the top CEOs and program directors of the large development INGOs (Oxfam, Terre des Hommes, Care, World Vision, Welthungerhilfe etc.) were present, as well as leading civil society think tanks from AccountAbility and Active Philanthropy to Humanitarian Accountability Partnership and Keystone. Accountability to whom? For Civil Society Organisations „accountability“ usually means the accountability of organisations receiving funds to those who provide the financial inputs: their donors (governments, corporations, foundations or private individuals). One of the discussion strands at the workshop concerned how the many different, often conflicting, accountability regimes which different donors demand from organisations and whose fullfillment costs them millions of Euros, can be simplyfied and made more effective. There was a consensus, that there exists a lot of „toxic accountability“ (as Simon Zadek from AccountAbility called it), doing more harm than good. One prominent ongoing attempt to standardise this kind of accountability is the INGO Accountability Charter, which was presented at the workshop by Jeremy Hobbes, Executive Director of Oxfam International. Yet from my perspective, the really important discussions concerned a different accountability: the accountability of development organisations not to their financiers (which consists predominantly of rather technical and financial stuff, such as management procedures), but to the people they are supposed to serve: their clients, i.e. the poor and/or disadvantaged. The reason why aid has failed I have argued again and again that the main reason six decades of development aid have failed has to do with the fact, that aid organisations are NOT sufficiently held accountable for their performance. And all too often programs are badly designed and/or executed. What do you – as a donor – know about the quality of the charity you support? Some, of course, know a lot, as they are involved in volunteering for a specific organisation. But the majority of us, don’t know much about how effective a development program has been. This is a result of the huge power imbalance between NGOs – mostly Western organisations with millions to spend and their clients – often poor, illiterate and badly organized. The latter simply lack a voice. They can’t say what they need, nor complain if the services they recieved were inadequate or even harmful. In order to empower the poor they need voice, yet this would automaticall take power away from the organisations. As Burkhard Gnärig, former CEO of Save the Children and Director of the Berlin Civil Socitey Center writes: Many civil society organisations talk about partnership, many talk about human rights, children’s rights and self determination but very few grant their local partners and beneficiaries tangible rights comparable to the rights they have to grant their own donors. One of the results is, that in many non-Western countries, development organisations are considered less trustworthy than corporations: The 2007 Edelman Trust Barometer shows that in Asia and Latin America Civil Society Organisations (CSOs) are considered as less trustworthy than business. This is especially significant as CSOs spend hundreds of millions of Euros/Dollars in Asia and Latin America for the supposed benefit of the local population. The discrepancy between resources allocated and trust obtained indicates a strong lack of accountability, with a resulting lack of appropriateness of the projects CSOs run. Give your clients a voice Only beneficiary feedback can redress this situation. And some of the participants were very frank about badly run projects of their own organisations or that of others. Nevertheless there seemed to be a real gulf between the large INGOs and the participants representing leading think tanks and expert organisations. Whereas the former acknowledged: yes, the situation is bad and we definitely need to incorporate more feedback from our „primary constituents“, the latter tend to look for more radical solutions. The key questions revolved around: How much power are you willing to yield to others? How much voice are you willing to give to others, which – very probably – will challenge your work? Thinking about it, it seems unlikely that INGOs will change fundamentaly. It seems very difficult to truthfully incorporate negative feedback, without completely undermining an organisation. „What do you do“, asked one participant, „if in a beneficiary evaluation, you find out that 85% or more of the recipients state that your organisations work has been useless or even harmful to them?“ Giving truthfull feedback might hugely undermine an NGO brand. Yet, as the concept paper of the workshop rightly pointed out: Empowering beneficiaries to seriously hold their donors accountable will do more for raising the average quality of projects than any other single step. Here I obviously get very, very excited about the potential of betterplace.org and our web of trust. Because already now recipients can give feedback on services recieved. If the intervention they receive is on betterplace.org, they can post a statement as a visitor or advocate (well, the terminology for these roles will have to be rethought, as a refugee in a camp is hardly a „visitor“) on the project page. So far only a few do so, such as the Namibian Benson Muramba, who wrote a visitors statementabout what the funds received meant to him. Or the palestinian project Cinema Jenin, were (so far) 15 advocates, among them a number of local inhabitants, and 3 visitors voice their interest in the project and follow its realization. But it is not hard to imagine, how this feature can be used for massive real-time reporting. **Better capital allocation Thus it is with great excitement, that we are planning a cooperation between Good Root and Keystone International, with the aim of bridging the power gap by giving more people a voice and thus making it possible for donors to get a much more reliable impression of project quality. The result would be that more money is spend on those projects which deliver effective social change and that ineffective projects would feel the need to change their approaches. This is hardly as easy as it sounds, as social change is often difficult to measure. Still this is no excuse not to use those state of the art impact tools which sit around, waiting to be implemented. **

„In the past fifty years, over US$ 1 trillion in development-related aid has been transferred from rich countries to Africa. … but has (this) made African people better off? No, in fact …the recipients of this aid are worse off; much worse off. Aid has helped make the poor poorer, and growth slower.“ This is the verdict of Dambisa Moyo, a Zambian-born, Harvard- and Oxford-trained economist, who worked at the World Bank and was until recently Global Economist and Strategist at Goldman Sachs. Moyo has written Dead Aid, a devastating critique of the aid ideology and industry, which has been in place ever since the meeting in Bretton Woods (which saw the creation of the World Bank and the IMF) and Truman’s inaugural address in 1949 (in which he called upon the industrialized nations to share their scientific and economic advances with the „underdeveloped“ world). For readers familiar with the history of development aid, Moyo doesn’t offer new insights, but sums them up nicely: she recounts the chain of ideologies following one another – from the big infrastructural policies of the 1960s and 70s (the dams, the green revolution) to the structural adjustment doctrines of the 1980s. Most of them with negative consequences for the countries in which they were implemented (a few hints will have to do: badly mismanaged resettlement, decreased biodiversity, dramatic cutting back of social systems, uneven trade regulations, huge debts). It is a depressing read: Despite the millions flowing into the continent, Africas economic growth declined continuously, poverty levels rose and the level of corruption reached unbelievable heights. While asking President Reagan for debt relief, Zaire’s Mobutu leased Concorde to fly his daughter to her wedding in the Ivory coast. Moyo is equally critical of the rise of glamour aid in the 2000s – „the army of moral campaigners – the pop stars, the movie stars, new philanthropists… to carve out niches for themselves, as they took on the fight for more, not less, aid to be sent to Africa. … One disastrous consequence of this has been that honest, critical and serious dialogue and debate on the merits and demerits of aid have been atrophied. As one critic of the aid model remarked, „my voice can’t compete with an electric guitar“. Aid is easy money The main problem with aid is that it is easy money: it comes without conditions and accountability: a Word Bank study found that as much as 85% of aid flows were used for purposes other than that for which they were initially intended. Aid is like oil, enabling powerful elites to embezzle public revenues. Yet this diversion doesn’t have any consequences – the same countries who badly misuse funds, end up receiving even more. Many studies point to the fact that aid increases corruption and dependency, prevents the emergence of trustworthy legal and civic institutions, thus making domestic and foreign investment in poor countries unattractive. Because aid flows are viewed as permanent income, policymakers in African countries have no incentive to look for other, better ways of financing their countries development. Yet regardless of these findings, the aid industry dishes out more and more aid. Moyo, rightly, I believe, explains this with the internal dynamics of the aid institutions - The livelihood of approx. 500.000 people employed by aid organizations depends on lending. And for most development organizations, successful lending is measured by the size of the donor’s lending portfolio, and not by how much of the aid is actually used for its intended purpose. As shocking as it is, outcomes don’t seem to matter. **Cut of Aid permanently What is special about Moyo’s book is not so much her critical take on aid – others such as Paul Collier and William Easterly have voiced the same arguments. What I liked about her book is that it offers a detailed alternative: cut off aid completely over the course of 5 years and develop alternative financial sources to finance the development agenda of African countries. ** Governments could find money for development through financial markets, both international and domestic, by issuing bonds. Historically, the governments of those countries that have successfully developed funded investment by recourse to international markets. In order to borrow, they needed decent credit ratings; to get the ratings, they had to be transparent and prudent. The discipline of transparency and prudence were as important as the money in promoting development. Some of the stronger African governments have at last started down this road. She also sees huge scope for innovations in micro-finance, such as the group borrowing pioneered by the Grameen Bank in Bangladesh. Moyo also advocades fairer trade rules for African countries, citing that Africa loses around US$ 500 billion each year because of restrictive (mainly Western) trade embargoes (largely in the form of subsidies by Western governments to Western farmers). In a chapter „The Chinese are our friends“, Moyo is also optimistic about the impact the Chinese are having on Africa, writing that no country has made as big an impact in the economic and social fabric of Africa as China has since the turn of the millennium. (As of mid-2007, China’s FDI to Africa was US$ 100 billion.). As Paul Collier in a review of Dead Aid, points out, Moyo is probably too optimistic, especially in view of the current financial climate. Nevertheless, I recommend the book as a valuable overview of why aid has failed and what could come to replace it to finance Africas development.

Today is World Malaria Day and I am advocating a project which I feel is worthy of our support: German actress and comedian Anke Engelke and medeor do mind malaria. Every 30 seconds a child dies of malaria, which is especially scandalous since with the right tactics malaria can be prevented or at least greatly diminished. The use of mosquito nets (in order to prevent bites) and herbal medicines (to treat the illness) are a successful combination and one which action medeor pursue in various parts of Africa. I am impressed that Anke Engelke feels so strongly about the subject that she posted the project on betterplace.org herself. Thus with 5 Euro you can buy an insecticide-treated mosquito net. Together with my girlfriend-team I decided to sponsor a bag of plant seeds: the medicinal plant Artemisia Annua offers a very effective remedy against Malaria. As the production of the medicine happens locally, the project strengthens local structures providing new jobs.

We invite all betterplace fans to attend the Cinema Jenin Nighton Tuesday, 21. of April, at Radialsystem, Berlin. Together with German Foreign Minister Frank-Walter Steinmeier (whose ministry generously donated 172.000€ for the renovation of the cinema), the initiators of “Cinema Jenin” Ismael Khatib, Fakhri Hamad and Marcus Vetter, supported by Désirée Nosbusch and Carolin Emcke, we are planning to raise 39.280 € for the sound system of the cinema, to be opened in spring 2010. Buy a Social Share and you are part of the project! But even if you are unable to attend the event, you are very welcome to support the sound system. Every Euro is welcome!

The title of this years Skoll Forum, 25 – 27 March in Oxford was “Shifting the Power Dynamics”. The discussions centered around dealing with and overcoming the challenges faced by social entrepreneurs, especially in today’s economic climate. The Skoll Forum was 3 intense days of “information overload” - an exchange of thoughts, ideas and business cards. But looking back, there are two powerful messages that continue to resonate in my mind: The Power of Paradox The first powerful message comes from the opening plenary, where Roger Martin used a quote from Obama’s inauguration speech – “We reject as false the choice between our safety and our ideals”. The quote was used to demonstrate that great thinkers and leaders must reject the notion that existing models equal reality, but rather to look for newer models that will change the world. The challenge is to seize the power of the paradox and use this tension to create a better model. This is applicable not only for our current banking and market system, which is in desperate need of a newer model, but also when looking at poverty and the failing models we have used for decades in the name of development. Jeff Skoll finished his closing speech at the final plenary with a quote from economist Paul Romer: “A crisis is a terrible thing to waste.” The Skoll Forum presented some great initiatives that are seizing the moment of crisis to confront the challenges of increasing poverty and forge a better model for change. Creating reality The second powerful message came from an unexpected source. I was standing in the lobby of the Said Business school feeling indecisive at the sheer scope of options as to which session to attend, so I decided to go “off the beaten track” and attend a session on Religion, Social Entrepreneurship and Philanthropy. The speakers represented 4 of the world’s great religions: Christianity, Islam, Hinduism & Judaism. All gave a very open-minded view of their beliefs and need for the world religions to cooperate and work together for the betterment of humanity (as to be expected). However the most powerful message came from David Green. In his talk he did not subscribe to any one religion, but rather spoke of an inner transformation that enables each individual to be outwardly transforming. He quoted the words “Thinking makes it so” and used his personal success experience of providing affordable eyeglasses to the poor as an example of how he used the power of his will to create reality. Through meditation and focus on what he truly wanted to achieve, he was able to touch on something far greater than who he thought he was. These comments struck a cord with almost all who were attending the talk. A Muslim man from Jordan, stepped up and thanked David Green for cutting through the cultural and religious boundaries that divide us, reinforcing that we are not only part of a whole, but also that the whole is a part of each of us, and that another man’s pain is also our own. It reminded me of Ghandi’s inspiring quote “Be the change you want to see in the world”, and reinforced the realization that change begins with the individual, and the time is now.

In todays_ New York Times_ there is an interesting article about Online donations: Study shows first-time online donors often do not return. The internet should be considered a highly important tool for fundraisers. Not only are an increasing number of people spending more and more time online. Due to demographic factors the average donations of Internet users (being more educated and thus earning more) are also higher than in the offline world. Also, in cases of disasters, such as hurricane Katrina, the internet has been extremely effective at soliciting financial support. “How you get people to routinely give online is a nut no one has yet cracked.” Is that really so? Nevertheless many charities envolved in a new study viewed Online-fundraising rather critical. The reason being that according to their experience, most people who donate online, only do so once. How you get people to routinely give online is a nut no one has yet cracked. says Tobias Smith, director of Online Communications at CARE. One reason for this seems to be that non-profit organizations, once they have solicited the support of new donors online, tend to prefer to drag them back into the offline world and target them with their direct mailing. Direct mail may not be a Maserati, but it’s very effective because it is very highly evolved,” said Lori Held, membership marketing director at Trout Unlimited. “We know how to ask for money using the mail, but most organizations are still trying to figure out how to do that online. Less Control vs. more Liveliness and Relevance Sure, most non-profit organisations don’t have much of a clue how to use the internet effectively. I believe this to be an area where betterplace.org can really make a contribution. On betterplace, repeat-donors are common. As far as my informed guess (based on our data analysis) goes, a main reason for this are the constant feedback loops, which keep one-time donors continuously updated about the projects progress. Everytime the project manager writes in his/her project blog, uploads new photos or videos, donors are informed about this by mail (of course, only if they wish so). Experience Giving, is what Moritz calls it. The community features and the open marketplace create a really lively environment for projects posted in the plattform. A liveliness which is very hard to establish on charity websites, which are designed as enclosed spaces. I can see that charities are afraid of presenting their projects next to those of many other - the next similar (better presented? more effecutive?) project may be just one click away. This apparent loss of control is amplified by the fact that betterplace.org doesn’t disclose donors addresses. But there is much more to be gained than lost: new donors can be found online. Especially young people, who suddenly see social initiative in a facebook format can be real fun. Granted that it is easy and fun, as one knows who is receiving the money and what is being achieved with it matching between donors (with at times very specific interests) and suitable organisations is much, much easier (wait for my upcoming blogpost about “The long tail of charity”). Consequently organisations will get more “customized” donors, who will - if the organisation delivers what it promises - be faithfull partners. transparency and a culture of accountability will become standard requirements and efficient and effective organisations, which live up to these standards, will get a much bigger piece of the donation-pie. This can (may I say, should?) be a real incentive for organisations to improve their work, as more and more people are looking over their shoulders and have a voice in the public evaluation of their work. And this is a good thing, as we all want to get better at what we are doing. Last, but not least, one small advice for Tobias Smith, CARE’s online communications director. Get in touch with Astrid Marxen from CARE Germany, as she is experimenting with the use of the internet in order to gather support for medical assistance to Gaza, microcredits in Peru or survival packages for Burma. And we are just at the beginning. To really maximize on the web’s use for non-profits, I am really thankful for every organisation, be it small or large, to share with us at betterplace.org their interests and experiences, so that we can jointly make the world a betterplace.

Interesting post from todays Private Sector Development Blog: Waiting for the bus and have nothing better to do than play around with your phone? Games are no longer the only options - now you can volunteer. The Extraordinaires (hat tip: Chris Kreutz) “delivers micro-volunteer opportunities to mobile phones that can be done on-demand and on-the-spot.” Here’s some examples of what you could do while waiting for your doctor’s appointment: translate micro-finance loan applications (Kiva); transcribe subtitles for human rights videos (Witness) or help immigrants improve their English (Phone ESL). A nice example of tapping into the collective “cognitive surplus” for social innovation purposes.

It took a long time, but finally we managed to unite nearly the whole team on one foto – from the „part-timers“ and pro bono members right up to the CEO. Here it is: On the day, some were feeling a little ill (Till, looking quite white), some were a bit tired and others looked a bit silly into the camera. But over all, we are happy with the result (our thanks go to Tina, the photographer). Here are the names, starting from the rear left and continuing clockwise: Angela Ullrich, Michael Tuchen, Stephan Breidenbach, Hans-Jürgen Cramer, Stephan Schwahlen, Matthias Pries, Jörg Rheinboldt, Axel Kuzmik, Sean Buttinger (who, in a quiet moment, will have to explain to us what’s on the T-Shirt), Josefina Petrus, Till Behnke, Yvonne Andreas, Anja Kalb, Joana Breidenbach, Moritz Eckert, Renée Fetscher, Christian Illner. Guya Merkle, Line Hadsbjerg and Bodo Sieber could unfortunately not attend the shooting.

Incredible how many social action platforms have come into existence over the last year or so!