Karma Update: I Won a Free iPad!

I haven't been particularly diligent about updating this blog, I know, but this recent news was of such import that I thought it was worth sharing:

I won an iPad!

How I Won an iPad
My company has recently had a couple of contests which have offered iPad 3Gs as prizes. I signed up for their Twitter contest, but did not win. Then I signed up for the Facebook contest ... and I won!

The iPad itself hasn't arrived yet, due to a backorder situation, but still ... very cool! I'm not saying that this is karmic payback for the giving experiment, but the iPad is cool, I wanted one, and I would not have shelled out that much money for a fancy electronic toy. I'm not saying it's karma, but I'm not saying it ain't, either!

Karma's a Bit... Weird
Also last week I had a flat tire, which was unrepairable and required the purchase of a new tire, but that was just a little over $100. And twice my car refused to start and required a jump, so very likely needs a new battery. Still, in total, I consider myself way ahead on the rewards versus losses chart.

Microfinancing Student Loans

I recently stumbled upon a new take (or at least new to me) on microfinancing, in which you offer relatively small amounts of money to impoverished people, so that they can help themselves out of poverty and pay you back. These programs have proven incredibly successful since they were initiated by Muhammad Yunus, who founded the Grameen Bank as a means of providing them in his native Bangladesh. The Grameen Bank and Yunus were jointly awarded the 2006 Nobel Peace Prize "for their efforts to create economic and social development from below."

Student Loans

Many people have looked into new way expand the microfinancing model into new areas, but this is one of the most interesting that I've see. Vittana allows you to search for a student in a country that does not have many college loan opportunities, so that you can help microfinance student loans.

I don't have the experience with Vittana that I have with some other microfinance organizations discussed below, and since Vittana's new there's little on record about it. They don't yet have a Charity Navigator profile and only a very barebones GuideStar profile.

• Crunchbase - Vittana Profile
• Huffington Post - Faces of Vittana, March 26 2010
• Politics Daily - Crowd-Funded Student Loans: Vittana Brings Microfinance to Campuses Worldwide, April 28 2010

What is Microfinancing?
In short, it provides those in extreme poverty a way to get money for start-up capital to get ahead in their small, entrepreneurial businesses. For example, Yunus found that poor craftswomen were being charged such extreme interest rates by loan sharks to borrow money that, by the time they bought the materials and paid back the interest, they had no money left. Even worse, many money lenders demanded that the women could only sell their wares to them, which essentially gave the money lenders a bank of slave labor ... for as little as $27, as he discovered. Yunus paid this money out of his own pocket to break the hold the money lenders had on the women, and sought to expand the program.

However, because these were poor women, they could not get loans from any other source. Many were illiterate, and therefore had barriers to completing the required paperwork to get loans. His story of expanding this program is really inspirational, as you can learn in his Nobel Lecture. Here's an excerpt, discussing how the emphasis of our current economic system robs us of some essential elements of our humanity:

I am in favor of strengthening the freedom of the market. At the same time, I am very unhappy about the conceptual restrictions imposed on the players in the market. This originates from the assumption that entrepreneurs are one-dimensional human beings, who are dedicated to one mission in their business lives − to maximize profit. This interpretation of capitalism insulates the entrepreneurs from all political, emotional, social, spiritual, environmental dimensions of their lives. This was done perhaps as a reasonable simplification, but it stripped away the very essentials of human life.

Human beings are a wonderful creation embodied with limitless human qualities and capabilities. Our theoretical constructs should make room for the blossoming of those qualities, not assume them away.

Now, microfinance is becoming a very popular form of philanthropy. Individuals can take part through Kiva (a non-profit which provides no interest back to the individual lender) and Microplace (a for-profit which does provide an interest-yielding return on the investment). There are some other differences, too. On Kiva, you choose a specific person or group to loan money to, while on Microplace you're investing in a lending note that will be provided through a separate agency to needy people in the region chosen without ever knowing precisely who the money actually goes to.

There are several nice aspects to microfinancing. First, you don't actually lose your money. Assuming that the borrowers don't default on you (and the overall default rate is low, at around 2%), the money is paid back. You can either re-loan it out to a new borrower or withdraw it. This makes these sorts of programs a nice place for socking away some extra money as part of your nest egg. It's not highly leveraged, and is far less volatile than the stock market.

Second, it's not a hand-out, but instead a business agreement. There is no social stigma or loss of dignity for someone who accepts a business loan.

Third, the systems in place allow you to really have a lot of options in how you direct your money, moreso than with some other charities. In general, a charity is either local or global, and either way you don't have a ton of say-so in how your donation is spent. This, however, often lets you target a specific type of entrepreneur or borrower, so that you can be sure you're supporting a project that you really want to support.

Finally, the benefit of microfinance is that it's based upon the actual needs of the local people in impoverished areas. They need the money to achieve necessary goals, and are asking for the money. It isn't a case where someone in the United States just decides that these people need a certain sort of service. (Not that there's anything inherently wrong with these programs, such as One Laptop Per Child, but the fact that they are not locally-centered is a bit of a drawback.)

What do you think about Vittana, or about microfinancing in general? Have you had experiences with any of these programs?

Charity Navigator Upgrade

One of my favorite resources to check prior to donating to a new charity is Charity Navigator. They rate non-profits on a four-star rating system. Each organization has an overall rating, which is obtained from evaluations of two sub-categories:

• Organizational Efficiency
• Organizational Capacity

New Accountability System
This week, though, Charity Navigator announced an upgrade their site involving a new rating system which begins to add a dimension of accountability that has been missing from the existing rating system. Here is a description of the new accountability and transparency system and the factors that will now contribute to their analysis.

The first charity that they've rolled out with this new accountability rating system is Nurse-Family Partnership. Their only negative mark on accountability is that the organization does not post their latest Form 990 (the form that non-profits must file with the federal government) to their website, which is an ethical best practice but not an actual requirement for non-profits.

Issues with Current System

There are still some issues with the current evaluation system, of course, as with any evaluation process. For example, Heifer International has a bit of a hit on the site, having only a three-start rating, in part because:

• The CEO makes a fairly large salary ($258,246)
• They spend a large percentage of their budget on fundraising (16%)
• They don't have a big Working Capital Ratio (they couldn't run off of their savings if donations dried up)

However, when you consider that this charity is a massive international project, requiring a substantial amount of coordination among diverse groups, the CEO's salary doesn't necessarily seem out of line. And they don't have much working capital because the majority of the money is immediately spent on livestock, per the organization's mission. Their expenses are directly linked to the donations, in other words, and if donations dried up, then the purchase of animals would also slow down in proportion. The work of education and the Pass on the Gift program would continue in these cases, but the purchase and distribution of livestock would cut back significantly, so they'd last a lot longer than their current financials would really indicate.

The current rating system doesn't take all of this into account, and there are other issues - some of which are even more important - which have been left out.

Other Non-Profit Vetting Resources
Guidestar - Guidestar's mission: To revolutionize philanthropy and nonprofit practice by providing informaiton that advances transparency, enables users to make better decisions, and encourages charitable giving.

GiveWell - GiveWell attempts to look beyond the financial data, to evaluate organizations on how well they effectively accomplish their mission. I admit, I haven't delved into this site too much. They are, admittedly, fairly strict in their evaluations - of the over-400 charities they have evaluated, only 11 have received any stars in their rating system.

Philanthropedia - Philanthropedia brings together experts in fields such as climate change, education, and microfinance (as well as some San Francisco Bay Area local issues) to evaluate charities seeking to have an impact on these issues. They have created "Expert Mutual Funds" based on these suggestions, which have distributions among the top organizations for each issue. Donations to a fund are split accordingly among the various individual organizations, but you only have to worry about going one place to donate (which also helps keep track of things for tax purposes, if you happen to itemize your deductions).

Other Resources of Note
Charity Navigator Blog
Tonic - Getting the Most Bang for Your Charitable Buck
Newsday - State eyes possible fraud in car donation charities

The Face of Empathy

If you've ever known an older couple who just look like they fit together, you aren't just imagining it. Our bodies are wired to recognize and mirror the emotions of others, including the physical way those emotions manifest, and this results in these similarities, according to biologist Frans de Waal in his book The Age of Empathy: Nature's Lessons for a Kinder Society:

Mood transfer via facial expressions and body language is so powerful that people doing it on a daily basis literally start to look alike. This has been tested with portraits of longtime couples: One set of pictures was taken on their wedding day and another set twenty-five years later. Presented with separate portraits of these men and women, human subjects were asked to match them on similarity. For the set taken at an older age, they had no trouble deciding who was married to whom. But for the pictures taken at a younger age, subjects flunked the task. Married couples resemble each other, therefore, not because they pick partners who look like them, but because their features converge over the years. The similarity was strongest for couples who reported the greatest happiness. Daily sharing of emotions apparently leads one partner to "internalize" the other, and vice versa, to the point that anyone can see how much they belong together.

While I certainly don't want my wife to begin "converging" toward my own ugly mug, I do think there's something beautiful and profound about this scientific evidence. It shows that the connections between us reach every level, down into our very flesh.

Despite being profoundly (and thankfully) emotional and mental, love is also, if you'll pardon the phrase, skin deep.

Gates, Buffett, and Philanthrocapitalism

In the last couple of weeks, there's been no shortage of coverage about Bill and Melinda Gates, together with Warren Buffett, offering a Giving Pledge. The goal: to convince their fellow billionaires to pledge to give away 50% (or more) of their net worth to charity during their lifetime (or, at the very least, upon their death). If you've missed the coverage, then here is some of it.

• Fortune - The $600 billion challenge, June 16
• Fortune - Billionaire peer pressure: Behind the Buffett-Gates challenge, June 16
• NY Daily News - Bill Gates and Warren Buffett ask Oprah, Bloomberg, other billionaires to give big money to charity, June 16
• Charlie Rose interview, June 16

(This Bill & Melinda Gates video is from January 2010, before the challenge was made public.)

Coincidentally, this announcement came as I was reading the book Philanthrocapitalism: How the Rich Can Save the World by Matthew Bishop & Michael Green. (The newer version of the book, according to Amazon.com, has been rebranded with the subtitle "How Giving Can Save the World" and an introduction by Bill Clinton.) The book begins, understandably enough, with Buffett's 2006 decision to give the majority of his vast fortune to charity - the bulk of it to the Gates Foundation, for their work in world health and development.

In the Charlie Rose interview on this new challenge, Buffet lays out some of his philanthropic thoughts (also detailed in this article):

So the truth is I’ve had everything in life, everything
in life I’ve ever wanted.  I have never given away any
money that’s caused me to give up a movie or dinner or
trip to Disneyworld or anything of the sort.

So it’s cost me nothing.  So I have these little pieces
of paper in safe deposit box which I bought about 40 or
45 years ago and they’ve grown in value enormously.
And what they are is they’re claim checks on something
in the future.  

I don’t have anything I need in the future.  All kinds
of other people have all kinds of needs.  And it’s a
way of cashing those claim checks in a way where
people’s lives are changed for be the better.  Mine’s
already changed for the better.  It couldn’t get better.

If those little pieces of paper translate whether it’s
into children avoiding diseases, becoming better
educated, people having a better life in their own age,
whatever it may be, that’s terrific.  I think a lot of
people feel the same way. 

This is a profound statement, and certainly true ... for billionaires.

For most of us, of course, choosing to give something does mean that there are some sorts of desires that we have to pass up. People with this degree of wealth don't run into this problem (financially, at least), but when you think about things on a global scale, this situation extends to the majority of people in America.

Worldwide: The poorest 75% of the world lives on only 25% of the resources! At least 80% of the human species lives on less than $10 a day.



By extension, living on $3,650 a year means that you are among the wealthiest 20% of the people on the planet Earth! (Note: This is 2005 data, so the number would be a bit higher now ... but not much.)



Depressing, isn't it?



So the arguments that Buffett make are all, by extension, arguments that could apply to the majority of us. We can all afford to give a bit more, even if all we can give is of our time or our sympathy.



Elsewhere in the interview, Bill Gates recounts an early dinner party where these three billionaires gathered with other billionaires in an effort to help convince them to give more. The group of billionaires share their stories of philanthropy - how they got involved, what causes they're committed to, and so on - and there was a tangible energy and enthusiasm among the group, which Buffett and the Gateses wanted to harness. Gates makes the observation:

And one thing more I would like to say is no one said that they felt bad they’ve given the money. Everybody felt more fulfilled, were able to use their creativity in some special ways.

I would certainly agree with this. There have been a handful of people who have come forward to me, saying that they were motivated give in part thanks to my 40 Days of Giving project. Not a single one of these people has said, "You know, I gave this money, and just think it was a waste!"

The amazing thing about this isn't just the money itself (although Carol Loomis makes a strong case that this will profoundly increase the money going into charitable giving). Many billionaires are self-made entrepreneurs and businessmen, like both Gates and Buffett themselves, and if they turn their eye toward philanthropy, it's unlikely that they will do so in a passive way. The sheer amount of innovation, brainpower, and overall resources that this could turn toward philanthropic goals is astounding.


And this is the the whole point of Philanthrocapitalism, which talks about the way that these powerful capitalists can leverage their talents in that area toward philanthropic goals. A similar case was made by David Bornstein about social entrepreneurs in How to Change the World.


And these sorts of thinkers are crucial, because the problems we face today - climate change, oil spills, clean energy, clean water, diseases such as malaria and AIDS, rogue states, terrorism, and so on - literally cannot be solved solely by throwing money at them. These are real problems that require careful thought by innovators, and it's important to get the innovators engaged.


That is the real goal of the Buffett-Gates challenge, because they know that they are in a position to turn serious people onto these issues. The money can be used for good, but it's the human capital that they really want. They want solutions ... and as businessmen and innovators, they know that you can never predict where the real solutions are going to come from. They want to get as many people as possible into the marketplace of solutions.


It's saving the world, free market style. You've gotta love it, America!

Oenophilanthropy

Oenophile (or Enophile): Someone who appreciates wine. (Wordnet)

Philanthropy: Voluntary promotion of human welfare. (Wordnet)

Oenophilanthropy (or Enophilanthropy): Appreciating wine in a way which actively seeks to promote human welfare. (Coined at 6:02 pm Eastern time, June 6, 2010, by AZJ. Feel free to use to your heart's content, but please link back to this posting!)

So let's imagine - just for the sake of argument - that you like wine. And let's assume that you're the support of person who likes to support worthwhile causes. How can these two things be linked together?

Well, I suppose that one option would be to establish some sort of wine-tasting charitable function to raise money for your favorite cause. And certainly that's a clever and worthwhile goal.

But another action that even the laziest of oenophiles could perform is to orient your wine-buying activities so that the money goes to businesses that themselves support philanthropic activities.

And there's certainly no shortage of them, as I learned when my mother handed me a page form Food and Wine magazine with the clever title "Grape Causes." (Although I think that Oenophilanthropy is clever, too.) They discuss some great wine-related giving programs:


Wine to Water: This group of oenophilanthropists have done just what I suggested above: raise money through benefit wine events, such as tastings, and use the proceeds to support water access projects around the world. The lack of clean, fresh water is one of the biggest world-wide problems, affecting over 1 billion people worldwide. The organization also produces their own wine label as a means of generating funds.


Indego Africa: This organization sells fair-trade handicrafts, with proceeds going to the Rwandan artisans who craft the items, as well as providing training in entrepreneurship, literacy, and computer skills. How does this impact the oenophilanthropist? Well, they have wine coasters and wine bags.


Boisset Family Estates' Fight Against Hunger: Each bottle of wine sold by the Boisset Family Estates winery results in the donation of three meals for families in need! This is an astounding donation, but it may be over. Though the Food and Wine report is from April 2010, the website itself indicates that this was in place for June through December 2009, with no indication (that I can find) that the program has been extended. They exceeded their goal of 1.2 million meals!


Fledgling Wine: A joint project of Twitter and Crushpad's custom winemaking, this new wine label is created to provide funds for the wonderful Room to Read project. Room to Read provides local-language books to impoverished areas around the world.


O Wine Company: 100% of the net profits from this wine goes to fund scholarships for at-risk youth. In 2009, the owners signed a contract with Oregon State University's Science and Math Integrated Learning Experience (SMILE) program to fund 5 scholarships over 5 years, resulting in a total of 25 needy students who will achieve financial assistance from O Wines.


Korks 4 Kids: This wine cork recycling program uses proceeds to support programs that help children, focusing initial efforts on the Autism Society of America (ASA). The organization's Rubber 4 Rugrats program also recycles rubber-based goods, such as tires, to raise money.


Help for Haiti: Wine producers were among the many people donating to Haiti relief, of course. The Spirit of the Americas (funded by Diageo) donated more than 45,000 pounds of food to Haiti. Constellation Brands provided medical supplies through an ongoing partnership with InterVol.

Andrew Returns with Word of Other Givers!

After nearly a month-and-a-half absence, I'm back to the blog. I wish that I could say the absence was entirely due to my immense giving efforts, or because I was hard at work on the book, but the fact is that I have mostly been distracted by the day job and the coming of spring.

And, to be honest, after 40 days of giving away my entire income, I was slightly burned out, so needed a break from blogging about the subject, for at least a little while. Through this sabbatical, I have had some time to work on the book. From now on, I will continue to use the blog to detail great giving opportunities, as well as to present my thoughts on giving.

My colleague in giving, Brigid Slipka, has been more diligent about continuing to chronicle her giving thoughts and activities on her Actually Giving blog. If you haven't checked it out, it's truly a great, thoughtful read, and well worth the time. Brigid isn't the only giver out there, of course, or even the only giving blogger, and I figure that my return to the blog is as good a time as any to cover some of the other major voices out there talking about this subject!

A Year of Giving
A Washington, DC, gentleman named Reed is doing a Year of Giving project, which involves giving $10 a day for the entire year. Amazingly, he started this project when he got laid off, which shows far more commitment than even my full-income-for-40-days giving plan! If I didn't have an income, I have to admit that I'd find it really hard to give. Kudos to Reed!

Reed is clearly also a more social than yours truly, who tends to be fairly introverted and hesitant to approach people he doesn't know. Reed gives the $10 to individuals by walking up to them and having a prolonged conversation. On his Year of Giving blog, Reed chronicles the stories of these recipients, including a page of people that he's encountered who need some help beyond what he's in a position to offer. With his year-long timeline, he's even caught the attention of CNN.

One of Reed's goal appears to be to establish June 15 as a Worldwide Day of Giving, where as many people as possible give $10 (or more, if able) to a complete stranger. I wholeheartedly endorse this project, and hope that the readers on this blog will join with Reed, myself, and others across the country and world in this endeavor!

Giving One Day's Wages
Eugene Cho believes in giving, so he started an organization called One Day's Wages, which tries to motivate people to give their wages from a single day toward solving problems of severe poverty in the world. The organization was founded by Eugene and his wife, Minhee, who clearly believe in their mission - they donated 100% of their 2009 income (a total of $68,000!) to the cause of fighting extreme global poverty. They continue to give to the organization, trying to reach a personal goal of giving $100,000. This is a major "put your money where your mouth is" step, and lends them a great deal of credibility when they ask others to give just one day's wages.

How much is one day's wages? It turns out to be just about 0.4% of your income. This is certainly an amount which could be given away without a severe hardship on most people, so is something worth considering. And, of course, if you have a more specific charity that you'd like to support than Eugene's, then you can take this philosophy of giving and use it toward the charity of your choice. My guess is that once you start giving, though, you'll find that one day's wages aren't nearly enough, and you'll begin looking for ways to give more.

29 Gifts
Gifts of money are nice, but of course they aren't the only way you can give. In fact, on an interpersonal level, I'd argue that they aren't even the best way to give. Enter Cami Walker, the author of the wildly successful giving book 29 Gifts: How a Month of Giving Can Change Your Life, who began her giving activities while having trouble dealing with the symptoms of Multiple Sclerosis. The gifts she describes are more spontaneous giving activities, which are not focused on the giving of money. Her first gift was, in fact, a supportive phone call to a fellow MS patient. As she details the story, she had amazing mental and physical benefits from this emphasis on giving, and she's founded a 29-Day Giving Challenge to spread the message that she's learned..

This confirms my research - both the reading that I've been doing, and my personal experience with my own giving project. Giving really does have profound, scientifically-proven implications that it will improve many aspects of your life.

Yes, after 40 days I was slightly burned out ... but it wasn't a bad kind of burned out. I imagine that it is sort of how one feels after running a marathon. You're very happy that you've reached the finish line, you probably want to curl up into a nice bed for a few days, but you're immensely satisfied at the sense of accomplishment. That was me.

Now the fatigue has worn off, and I'm looking for the next marathon, the next way to get the rush that comes from giving to others. I've got some great ideas, and I look forward to sharing them with you.

What are your ideas? What givers have motivated you? What is your giving story?